Thank you for standing by, and welcome to Fubon Financial's first half 2023 financial results. At this time, all participants will be in listen-only mode. Questions will be taken at the end of the presentation, and this call is being recorded. If you have any objections, you may disconnect at this time. Now, I will hand over to your host, Ms. Amanda Wang, the IR Officer of Fubon Financial Holdings. Ms. Wang, please begin. Welcome, everyone. Thank you for joining Fubon's first half 2023 results call today. In this call, we will have two sessions, including Fubon's performance review, and followed by the Q&A, hosted by President Jerry Harn, and also the senior management team. Firstly, please turn to page 4. Here we can see that Fubon's first half results is quite decent. We have a net profit of TWD 42.9 billion, and total asset that reach over TWD 10.9 trillion. While the book value per share also increased at TWD 52.23, compared to TWD 49.80 in previous quarter. In Fubon Life, the earnings topped among the peers in Taiwan, while its premium is top- two ranked. The earnings performance from its recurring return before hedge has shown improvement year-over-year, and the total investment return reach slightly over 4%. From the capital perspective, the capital ratio remain decent, while its equity to asset ratio at over close to 9%, and RBC at over 300. We plan to issue subdebt that is about TWD 22.5 billion, which will further enhance the capital position. In Fubon Bank, the net profit reach record high. The key drivers, including the net fee income, shows quite meaningful growth of over 27%, which mainly driven by the wealth management and also the credit card business. In terms of credit card, the launch of the Costco A ffinity Card have a meaningful contribution, which we have a new card issuance of around 1.7 million, and out of which 75% contribution of the Costco Affinity Card. In Fubon Insurance, net loss of slightly over TWD 3 billion, mainly still due to the COVID-related policies impact. While we can see the monthly profit starting from April already turned positive. The underlying business in terms of premium grow at 1.9%, and the investment return at 4.84%, which remains stable. Fubon's capital position resumed to 67% after the completion of the capital injection of TWD 16 billion. In Fubon Securities, the net profit dropped in first half, mainly due to investment gains increase as the market turned up. We also expect the merger with Jih Sun will further enhance the growth driver in Fubon Securities, as well as in Fubon Bank. In the following page, we can see the ESG results. Firstly, it's our honor that Fubon won the top of the most honored companies in the Asian insurance sector from the II survey, which we appreciate the recognition from investment community. Also, there are several other awards in this pool, as well as the awards from other organizations. In terms of the actions in decarbonization that we perform in investment and lending that we can see in Fubon Life, Fubon Securities and Fubon Bank, all shows the growth year-over-year, the positive momentum. While in Fubon Insurance, we are the first insurance company in Taiwan to propose a net zero underwriting goal by 2050. On page 7, the net profit, again, that we showed in earlier bullet point, here we can see the trend in data point here. In spite of the decline first half year-over-year, we actually already in the first seven months cumulative net profit that is about TWD 50.4 billion. That is higher than the full year result in year 2022. And in page eight, in terms of the profit composition by subsidiaries, we can see the decline here largely comes from a few, mainly from Fubon Life, but it's more of the market driven factor, as we can see that the capital markets volatility that shows a YOY decline. But in fact, we see a QOQ growth. And while in Fubon Insurance and Fubon Bank China is more of a one-off factors. Fubon Insurance is mainly due to the COVID-related policies claim, and in Fubon Bank China, largely due to the increase in mortgage portfolio, as well as the rise of the general provision ratio due to the regulatory requirement. All the performance in other subsidiaries, including Fubon Bank, Fubon Securities, and Fubon Hong Kong are quite robust. In page nine, the assets and also the book value set up on here that we can see the sequential growth year-over-year. Well, in page ten, the ROA and ROE we show here both on annualized basis for your reference. In page twelve, we start to move on the Fubon Life section. The total premium shows a decline of 13.1% year-over-year, largely because of our FYP declines. We shift our focus from single pay more toward regular pay, and the renewal premiums decline largely due to the payout of the regular pay policy. Okay, so the total premiums decline that is in line with the market trend. In page 18, the composition in FYP actually shows quite a meaningful change as we are in preparation for the IFRS 17 and ICS adoption, and therefore, we transition toward more of a regular paid and also protection-related product. So in terms of the results, we can see the regular pay contribution now go up to 37.7% of the first half FYP, while the health accident and others contribute another 6.4% of FYP. In page 14, we can see the FYPE has a growth of over 30% year-over-year, also on back of the strategy. While we can compare to the market's FYPE growth at only single digit at 7%, Fubon Life shows a meaningful growth as compared to the industry performance. While the BM growth at 30%, and the margin also increased to 23.3%. That also shows the product mix improvement. In page 15, by channels, in terms of the internal channels are still the main focus that contribute around 70% of the FYP. But at the same time, the bancassurance in Fubon Life also topped in the industry. While on FYPE, on your right-hand side, you can see across all channels, all shows a focus on regular pay and therefore deliver positive growth. In page 16, the investment portfolio, we can see the major change year to date is the increase in equity position, both in overseas and domestic equity. That come from the increase of valuation and also equity allocation. While the cash position that we maintain at an adequate level and in order to respond to the market movement opportunities going forward. Page 17, the migration is quite minimum year-over-year or quarter-over-quarter. While in page 18, we can see the income from investment activity, that the recurring income shows quite meaningful growth at 15.6%. That reflect a higher interest rate environment and also the dividend income from domestic stocks. In the meantime, the challenge comes from the hedging cost increase and also decrease in capital gain this year, that lead to the overall investment return came down to 4.06% first half. In page nineteen, the hedging cost detail here, we can see, the FX gain shows quite a meaningful improvement quarter-over-quarter, and that shows 158 basis point in Q2. While the challenges from the higher hedge costs from CS and NDF, and therefore, the overall hedge costs and FX gain and loss in Q2 is gain of 12 basis point and, or, cost of 88 basis point cost in first half. While the recurring return before hedge shows a meaningful improvement up to 3.5%, and the after hedge basis, again, due to the swap cost is high, and therefore, it came down to 2.57%. In page 20, in terms of spread, Fubon remain a positive spread between cost of liability and the total investment return, as you can see from the upper side of this page. While the recurring return after hedge came down, and therefore, the spread between the breakeven point shows a slightly negative one. In page 22, the unrealized position still carry some losses, but we can see the magnitude gradually narrow down quarter-over-quarter, and by end of June, it was TWD 47.1 billion, mainly from the... Actually, it's comes from the fixed term assets, while the equity side is carry a positive unrealized gains. And in equity to asset ratio also shows improvement at 8.99%, and we see up to over 300%. In page 23, in Taipei Fubon Bank, the total revenue was up 16%. On back of, firstly, the NII growth of 4%. Secondly, the fee income growth of 27%, and thirdly, from the treasury income also shows quite robust growth. And in page 24, the loan composition here, overall speaking, we see retail grow of faster than corporate year-over-year, and that lead to the overall loan growth at 2.9%. In page 25, we further break down the corporate loan. The corporate loan balance shows kind of flattish, slightly down by 0.3%, largely because we adjust the NT-denominated portfolio. While the foreign currency loans continue to show growth, which is 3.6% up, year-over-year or 16% up, year-to-date. And the SME portfolio also shows growth, and the contribution sequentially improved, and now is about 36%-37% of the total corporate credit. In page 26, in terms of the retail portfolio, the mortgage growth is pretty much in line with the previous quarters, while the personal unsecured loan we see the decline gradually mitigate. And quarter-on-quarter speaking, it shows slightly up by about 3%. In deposits, in page 27, and overall speaking, shows a growth of about 4%, mainly comes from retail and T-dollar deposit. The CASA ratio declined as the customer's preference over the time deposit under the interest rate environment. While the foreign currency book, we can see, both the loan and the bond investment shows increase, and that will enhance our margin. In page 28, the margins trend quarter-over-quarter shows five basis points up. As we just described, the foreign currency utilization has been increased, and also the overall asset yield also enhanced. While the spread on year-over-year basis was down, was mainly due to the rise in the foreign currency's deposit cost. In the meantime, if we take into consideration of the swap revenue, the NIM on that basis will be 1.29% in Q2, which is about 17 basis points up year-over-year. In page 29, the asset quality wise pretty much is stable, and we can see the NPL and coverage ratio both outperform industry average. While the general provision increase was the key reason to show that Q2's provision was up. In page 30, in terms of credit card, in terms of the card number and also the card spending, both shows a pretty high growth at over 30% and close to 27% respectively. That's mainly on back of increase in the post-COVID card. On page 31, the fee income in the bank shows quite meaningful growth at 27% up. It comes from both the wealth management at 27, 24.6% and also the credit cards growth. We can also see wealth management from all business lines on a half-on-half year basis shows a growth. For AUM in the wealth management business also shows decent momentum at 7% growth. On page 32, the revenue from overseas branches overall speaking shows quite meaningful growth, with 90% up in revenue and more than doubled in net profit. In Fubon Insurance, the premium growth of 1.9% is slightly behind the market growth, mainly because Fubon is in the process to adjust its business lines. The underwriting profit remained quite decent. If we exclude the COVID-related policies, net combined ratio at 87.6%, that shows improvement on year-over-year basis. Well, on the COVID-related policies, we reserve around TWD 920 million of reserve on balance sheet to cover the future related claims. In page 36, in Fubon Securities, the net profit was up nearly doubled mainly because of the investment gains. While we expect the synergies to deliver going forward upon the merger between Fubon and Jih Sun. The last section about the overseas bank subsidiary. But firstly, on Fubon Bank, Hong Kong, which has a very strong result this first half. The net profit was up by also more than doubled. The growth comes from the balance sheet growth of loans at 3% up, and also the margin of 30 basis points up. While its asset quality shows improvement, and we can also see its NPL ratio and coverage ratio both improved. Finally, on Bank China, the loan growth of over 8% is mainly on the back of the growth in mortgage. While its profit is slightly down, its loss mainly because of the increase in its GPA ratio, which is in line with the regulator's requirement. The margin compression is also a pressure in first half, that's mainly on the back of the rate cut in RMB, as well as the scale back on online lending, as well as the increase in the dollars funding costs. In the meantime, if we look at the NIM, considering the swap revenue, in fact, the contraction in NIM would narrow down to about 20 basis point. Its asset quality pretty much is still at a reasonable level, and we aim to continue its stable asset quality trend going forward. And this is the end of this briefing, and next, we would like to open for Q&A and host by the President of the Fubon Financial Holdings, Mr. Jerry Harn. And thank you for your attention. Thank you, Ms. Wang. Ladies and gentlemen, we are now in question and answer session. If you would like to ask the question, please press star one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. If you would like to cancel your question, you may press star two. Thank you. Now, please press star key and number one on your keypad to ask a question. Thank you. If you would like to ask the question, please press star one on your telephone keypad. Thank you. We're now in question and answer session. If you would like to ask a question, please press star one on your telephone keypad. Thank you. Now we'll have Steven Lam of Bloomberg Intelligence for questions. Go ahead, please. Hi, good afternoon, management. So thank you for the presentation and the strong results. I'm trying to overlap what you already had mentioned in the Chinese call. So I will focus on perhaps two parts. One is on investment, the other one is on life insurance. On the investment side, just a very small question. We noticed that, I think, on your asset allocation, there has been quite a strong increase in terms of the foreign stocks to about TWD 300 billion quarter-over-quarter. And I mean, from a percentage of the total holdings, now it's at about 6.3% versus 5.3% in March. Of course, I suppose there is some sort of mark-to-market increase element in there because, Yep. Global stocks did pretty well. But that increase is probably way higher than the benchmark increase, let's say, I don't know, S&P 500 is up 9% or something like that. So I just want to see if there's an active element in there that you are intending to continue to increase the foreign stocks allocation. And I guess, on the same tangent, just wanna hear more about your outlook for, say, you know, the overseas bond allocation, versus domestic, for example. So that's part one. Part two, very impressive growth in NBV. Your monthly updates provide a lot of color in terms of the product and whatnot. I just want to see if there is anything that you would also add on in terms of, say, strong increase in both margin and the FYPE. I can see that there's a lot of participating policies that you have been selling, and those are doing well, probably into July. But could you give us some maybe outlook in terms of for the rest of this year? How do you think? Would you expect sort of similar growth pace via VOMP, or it may have sort of a slower second half? And if so, any reason behind that? Yeah. Thank you. Okay. We will start with the product strategy first. ... Okay. We have pretty good first half year with the transition from single premium to regular premium. That's why our VNB grow substantially in the first half year. And in the second year, we expect the trend will continue. Because comparing to last year, the last year we have 73% single premium, and this year we successfully reduced to 53%. And for the second half year, we expect the single premium unit-linked sale will drop more. So we expect the regular premium will reach about 60% of total sales. So for the whole year, we expect that the margin will still grow continually. Okay. Foreign stock? Okay. A lot of foreign stock, maybe I actually said that. In terms of allocation, we try to maintain our equity, equities total at around 80 or 15 around percentage, and we did some adjustment within 1-2 assets. So actually, if you see from the top, we have local equity and foreign equity. Again, it's still, you know, around 15%. So I would say that actually it's kind of rebalancing between the domestic bank and equity bank. So it's not really increase the total exposure of our equity. But as you just mentioned, that the market value, it increased more than our investment in in terms of the second quarter. So I would say that actually the increase, the incremental, the market value up is more than our invest. And also, in terms of the how we increase our use just foreign equity, actually it's because we see a resilient U.S. economy will couple with the new development in technology such as the AI and its related applications are expected to provide a support for the stock market. That's the reason why we increase the offshore equities. And about the second, you are asking about bank investment for the foreign part. The priority was still when you place in the so-called the Taiwan Dominant ETF, which is because we try to minimize our hedge costs and also with a higher yield actually more than 5%. Okay? Yes, my pleasure. Any more questions? I hope that you have the answers you're asking. Yes, thank you. Ladies and gentlemen, we are now in question and answer session. If you would like to ask the question, please press star key and number one on your keypad. Thank you. Okay. If there's no more question received, then we'll close the call, call the day off for the meeting. Oh, sorry, we have Jimmy of Kikuman Hawaii. Should we continue? Okay. Okay. Okay, that's good. Thank you. All right, Jimmy, go ahead, please. Thank you. Yeah, thanks for taking my question. Just two questions from me. I think the first one, if you look at Taipei Fubon Commercial Bank, we know the bank merged Jih Sun Bank in second quarter. Just try to understand, when we look at the fee income growth over 20%, OPEX also growth over 20%, year-over-year, how much is that due to the merger? If it's very limited impact and just also to understand what's the key reasons behind the OPEX growth. Is that possibly due to the data or anything else? Yeah. And second question is for your Fubon Hyundai Life. I think it's already adopted IFRS 17. So, is there any implications or risk to that you have observed in terms of the underlying insurance operation of Fubon Life that you can share with us? Thanks. Okay, we'll start with the banks. Yeah. Okay. The fee income impacted by this merger is very minimum because the wealth management business in Jih Sun is about one tenth of our size, and the merger effective on April 1, so the impact is very, very minimum for our fee income growth. And on the increase in our OPEX, it comes from two parts for the increase. First, is the... On the merger, we offer a subsidized retirement program for the Jih Sun colleagues, and that probably serve- ... about TWD 500 million for the subsidized retirement program for colleagues in office recently for this year. And for the Costco card, co-branded card issuance, that part we have about TWD 1.1 billion OpEx down for this new business. So that's the main two part of our increase of the OpEx. Yeah, just add a little bit color on this question. Number one, in Taipei Fubon Bank, each branch earned about $80 million wealth management fee. So with the addition of 44 branches, we are expecting the Jih Sun branch will deliver the similar performance in the next, let's say, two years. So we are expecting through the expansion of branch network, there will be a proportionate increase in our wealth management business, not including the productivity improvement. Number two, we are with the merger of Jih Sun, we are expecting a reduction of about $150 million personnel costs on permanent basis moving forward. That's 100. Okay. We expect to inject about $300 million to Hyundai Life in the third quarter this year. After the injection, we expect the capital should be sufficient. In the meantime, we try to adjust the product mix. For the next few years, we try to reduce the pension business and increase more protection product and try to match the SN liability better and create more CSM. So we expect we don't have additional capital requirement for the next few years. Thank you. May I follow up with the Costco co-brand card expenses? I think you mentioned TWD 1.1 billion. Is that in the second quarter as more like one-off or annual cost? And will we still incur similar costs in the following year? Not in the following year, but in the second half of this year. All the existing cardholders converting their card into our co-brand card, then the such kind of expense will increase in the second half. It's primarily the customer migrations benefit program. I see. So, sorry, so it's TWD 1.1 billion in the second quarter, and there is additional in the second quarter, or TWD 1.1 billion is for the whole year? Hold on. Okay. We'll have similar expenditures or OpEx in the second half of this year, rising out of the Costco cards conversions. I see. We do not expect that the same OpEx will occur this year. There will be much less. Very clear. Thank you. Yep. Okay. There appears to be no further questions at this point. We thank you for all your questions. This will be the end of question and answer session, and I'll hand the call over back to you, President Harn. Thank you. Yeah. Thank you very much for your participation, and thank you very much by not asking too many questions. Anyway, if you want to ask some more later on, please contact our IR colleagues. Okay, and then we'll speak again next quarter. Okay. Thank you. Thank you again for your participation.