Interim report
Page 1
-1- The Shanghai Commercial & Savings Bank, Ltd. and Subsidiaries Consolidated Financial Statements for the Six Months Ended June 30, 2026 and 2025 And Independent Auditors’ Report Stock code: 5876 Taiwan Stock Exchange Address: 2, Sec.1, Min Quan E. Rd., Taipei, Taiwan Telephone: 886-2-2581-7111
Page 2
-2- Table of Contents Contents Page Notes 1. Table of Contents 2 - 2. Independent Auditors’ Report 3~6 - 3. Consolidated Balance Sheets 7 - 4. Consolidated Statements of Comprehensive Income 8 - 5. Consolidated Statements of Changes In Stockholders’ Equity 9 - 6. Consolidated Statements of Cash Flows 10 - 7. Notes to Consolidated Financial Statements (1) Organization and Operations 11 1 (2) Authorization of Financial Statements 11 2 (3) Application of New Standards, Amendments and Interpretations 11~13 3 (4) Summary of Significant Accounting Policies 13~16 4 (5) Critical Accounting Judgments and Main Sources of Uncertainty in Estimates and Assumptions 16 5 (6) Summary of Significant Accounts 17~46 6~35 (7) Related-Party Transactions 46~49 36 (8) Pledged Assets 49 37 (9) Significant Contingent Liabilities and Unrecognized Commitments 50 38 (10) Significant Subsequent Events 50 39 (11) Others 50~81 40~44 (12) Disclosure Required (a) Related Information on Significant Transactions 81 45 83~86 (b) Related Information on Investee Companies 81、87 45 (c) Related Information on Investments in Mainland China 81~82、88 45 (d) Related Information and Significant Transactions Between the 82 45 Parent and its Subsidiaries 89~91 (13) Segment Information 82 46
Page 3
-3- INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE To the Board of Directors and Shareholders of the Shanghai Commercial & Savings Bank, Ltd. Opinion We have audited the accompanying consolidated balance sheets of The Shanghai Commercial & Savings Bank, Ltd. (the “Bank”) and its subsidiaries (collectively referred to as the “Group”) for the period ended June 30, 2026 and restated as at December 31, June 30, and January 1, 20 25, and the related consolidated statements of comprehensive income for the three months and six months periods ended June 30, 2026 and 2025(after restated) , as well as the consolidated statements of changes in equity and of cash flows for the six months periods ended June 30, 2026 and 2025(after restated) , and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated fina ncial statements present fairly, in all material respects, the consolidated financial position of the Group as at June 30, 2026 and restated as at December 31, June 30, and January 1, 20 25, and its consolidated financial performance for the three months and six months periods ended June 30, 2026 and 2025 (after restated) , and its consolidated cash flows for the six months periods ended June 30, 2026 and 2025 (after restated) in accordance with the Regulations Governing the Preparation of Financial Reports b y Public Banks and International Accounting Standard 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission. Basis for opinion We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants , Jin-Guan-Yin-Fa-Zi Letter No.10802731571 and Standards on Auditing of Taiwan. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of Taiwan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters. Key audit matter for the Group’s consolidated financial statements of the current period is stated as follows:
Page 4
-4- Allowance for credit losses of discounts and loans Description The core business of the Group is grantin g loans, which is significant to the accompanying consolidated financial statements for the current period. The impairment assessment of discounts and loans is conducted in accordance with International Financial Reporting Standards 9 (“IFRS 9”) ‘Financial instruments’ and relevant regulations of allowances for credit losses promulgated by competent authorities. Management evaluates the impairment of discounts and loans using the expected credit loss model, with assumptions made based on past events, curren t market conditions and forward -looking information, to assess whether there is significant increase of credit risk since initial recognition to measure allowance of credit losses. In addition, credit losses for credit -impaired loans are evaluated based on recoverable amounts. Please refer to Notes 4, 5, 14 and 4 0 of the consolidated financial statements for relevant information on impairment of discounts and loans. The evaluation of allowance for credit losses of discounts and loans involves significant ju dgments such as accounting estimates and management’s assumptions, and shall comply with relevant regulations and interpretations. The measurement results would impact the amount recognized directly. Thus, we have determined the allowance of credit losses of discounts and loans as the key audit matter. How our audit addressed the matter We performed the following audit procedures on the key audit matter mentioned above: 1. Obtained an understanding and performed sample tests of internal controls as well as operation procedures related to management’s evaluation of credit losses; 2. Sampled and tested the classification of expected credit loss impairment stages. 3. Sampled and tested whether parameter assumptions adopted in the expected credit loss model including probability of default, loss given default and exposure at default are in accordance with existing policies; 4. Sampled and tested credit -impaired cases with material amounts which were assessed individually; 5. Assessed whether the allowance for credit losses of d iscounts and loans is in compliance with relevant regulations of the competent authorities. Other matter – Parent company only financial reports We have audited and expressed an unqualified opinion on the parent company only financial statements of the Bank as at and for the six months ended June 30, 2026 and 2025.
Page 5
-5- Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidate d financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks and International Accounting Standard 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process. Auditors’ responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of Taiwan will always detect a material misstatement when it exists. Misstatements c an arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with the Standards on Auditing of Taiwan, we exercise professional judgment and professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Page 6
-6- 5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the di rection, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about th e matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Wu, Shang-Tun Wu, Wei-Tai For and on behalf of PricewaterhouseCoopers, Taiwan August 28, 2026 ----------------------------------------- ---------------------------------------- ------------- ---------------------------------- ------ The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than Taiwan. The standards, procedures and practices in Taiwan governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than Taiwan. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in Taiwan, and their applications in practice. As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers, Taiwan cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.
Page 7
-7- THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES Consolidated Balance Sheets June 30, 2026, December 31, 2025 , June 30, 2025 and January 1, 2025 (Expressed in Thousands of New Taiwan Dollars) Codes ASSETS NOTES Amount % Amount % Amount % Amount % 11000 Cash and cash equivalents 6 35,379,209$ 1 28,603,224$ 1 38,705,938$ 2 38,522,816$ 2 11500 Due from the Central Bank and call loans to banks 7 366,383,641 15 418,484,106 17 383,632,017 16 432,246,360 17 12000 Financial assets measured at fair value through profit or loss 8 9,062,097 - 4,432,307 - 8,374,294 - 5,569,510 - 12100 Financial assets measured at fair value through other comprehensive income 9 and 11 596,522,306 24 521,796,038 22 468,812,161 20 475,245,104 19 12200 Investments in debt instruments measured at amortized cost 10 and 11 173,990,206 7 172,989,283 7 212,375,654 9 235,146,758 10 12500 Securities purchased under resell agreements 12 31,823,208 1 32,181,654 1 17,213,801 1 8,408,560 - 13000 Receivables, net 13 29,384,586 1 23,209,899 1 31,139,907 1 24,741,552 1 13200 Current income tax assets 34 1,098,219 - 1,073,339 - 468,523 - 185,113 - 13300 Assets held for sale, net 16 - - - - 483,819 - 547,639 - 13500 Discounts and loans, net 14 1,219,443,667 49 1,185,067,076 49 1,149,464,781 49 1,221,016,517 49 15000 Investments under the equity method, net 16 1,728,655 - 1,657,355 - 1,508,894 - 1,571,185 - 15500 Other financial assets, net 17 15,371 - 5,526 - 5,686 - 1,872 - 18500 Properties, net 18 23,571,539 1 23,683,061 1 23,378,731 1 24,190,840 1 18600 Right-of-use assets, net 19 2,362,306 - 1,483,560 - 1,664,319 - 1,854,237 - 18700 Investment properties, net 20 4,832,885 - 5,322,131 - 5,277,506 - 7,978,542 - 19000 Intangible assets, net 21 3,924,676 - 2,084,443 - 1,932,728 - 2,194,494 - 19300 Deferred income tax assets 34 5,947,042 - 6,246,360 - 5,124,965 - 4,936,128 - 19500 Other assets, net 22 11,128,206 1 12,356,334 1 13,113,412 1 11,251,207 1 10000 Total assets 2,516,597,819$ 100 2,440,675,696 100 2,362,677,136 100 2,495,608,434 100 Codes LIABILITIES AND EQUITY 21000 Deposits from the central bank and other banks 23 64,467,150$ 3 34,339,600$ 2 44,051,680$ 2 44,597,026 2 22000 Financial liabilities measured at fair value through profit or loss 8 5,960,871 - 6,132,148 - 6,924,579 - 5,825,908 - 22500 Securities sold under repurchase agreements 24 10,767,121 1 7,192,305 - 3,955,500 - 4,783,153 - 23000 Payables 25 54,429,541 2 36,630,450 2 44,906,100 2 36,432,169 2 23200 Current income tax liabilities 34 1,502,653 - 727,921 - 1,892,351 - 956,186 - 23500 Deposits and remittances 26 1,989,308,133 79 1,982,543,567 81 1,925,518,369 82 2,046,220,040 82 24000 Bank debentures 27 65,434,615 3 65,275,649 3 57,483,838 2 59,591,987 2 25500 Other financial liabilities 28 18,745,834 1 13,866,786 1 11,427,196 1 9,981,110 1 25600 Provisions 29 3,075,173 - 3,345,520 - 2,773,492 - 2,844,582 - 26000 Lease liabilities 19 2,349,000 - 1,508,848 - 1,676,268 - 1,878,459 - 29300 Deferred income tax liabilities 34 9,498,409 - 9,714,811 - 7,155,162 - 9,973,575 - 29500 Other liabilities 30 4,730,693 - 4,041,994 - 3,884,021 - 6,100,837 - 20000 Total liabilities 2,230,269,193 89 2,165,319,599 89 2,111,648,556 89 2,229,185,032 89 Equity 32 Equity attributable to owners of the Bank Share capital 31101 Ordinary shares 48,616,031 2 48,616,031 2 48,616,031 2 48,616,031 2 31121 Reserve for capitalization 486,160 - - - - - - - Total share capital 49,102,191 2 48,616,031 2 48,616,031 2 48,616,031 2 31500 Capital surplus 27,380,949 1 27,867,109 1 27,705,927 1 27,705,927 1 Retained earnings 32001 Legal reserve 72,607,177 3 68,680,295 3 68,680,295 3 64,476,033 3 32003 Special reserve 7,669,374 - 7,669,374 - 7,669,374 1 7,669,374 - 32005 Unappropriated earnings 38,740,860 2 39,735,490 2 30,069,232 1 39,333,387 2 Total retained earnings 119,017,411 5 116,085,159 5 106,418,901 5 111,478,794 5 32500 Other equity 18,693,213 - 12,495,534 - 4,376,239 - 9,940,734 - 32600 Treasury shares 83,144)( - 83,144)( - 83,144)( - 83,144)( - Total equity attributable to owners of the Bank 214,110,620 8 204,980,689 8 187,033,954 8 197,658,342 8 38000 Non-controlling interests 72,218,006 3 70,375,408 3 63,994,626 3 68,765,060 3 30000 Total equity 286,328,626 11 275,356,097 11 251,028,580 11 266,423,402 11 Total liabilities and equity 2,516,597,819$ 100 2,440,675,696$ 100 2,362,677,136$ 100 2,495,608,434$ 100 June 30, 2026 December 31, 2025 (restated) June 30, 2025 (restated) January 1, 2025 (restated) The accompanying notes are an integral part of the consolidated financial statements.
Page 8
-8- THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the Three Months Ended and Six Months Ended June 30, 2026 and 2025 (Expressed in Thousands of New Taiwan Dollars) Codes Items Notes Amount % Amount % Amount % Amount % 41000 Interest income 18,084,556$ 132 19,063,969$ 135 36,345,289$ 133 39,611,071$ 142 51000 Interest expenses 8,841,634)( 65)( 10,154,133)( 72)( 17,992,419)( 66)( 21,124,953)( 76)( 49010 Net interest income 33 9,242,922 67 8,909,836 63 18,352,870 67 18,486,118 66 Non-interest income 49100 Service fee income, net 33 2,287,079 17 2,021,300 15 4,778,813 17 4,225,631 15 49200 Gain on financial assets and liabilities measured at fair value through profit or loss 33 30,854 - 328,733 2 222,037 1 730,219 3 49310 Realized gain on financial assets measured at fair value through other comprehensive income 33 1,240,951 9 1,545,658 11 1,786,389 6 1,925,459 7 49450 (Loss) gain on financial assets measured at amortized cost 42)( - 9,593 - 8,358 - 68,116 - 49600 Foreign exchange gain, net 512,291 4 433,929 3 1,524,703 6 634,559 2 49700 Impairment reversal gain on assets 11 563 - 22,237 - 5,710 - 8,655 - 49750 Proportionate share of profit of associates under the equity method 16 31,159 - 60,350 1 85,463 - 157,808 1 49800 Other non-interest income, net 33 138,093 1 148,320 1 206,852 1 255,053 1 49815 Gain on investment properties 237,656 2 579,487 4 457,429 2 1,377,500 5 Total non-interest income 4,478,604 33 5,149,607 37 9,075,754 33 9,383,000 34 4xxxx Consolidated net revenue 13,721,526 100 14,059,443 100 27,428,624 100 27,869,118 100 58200 Provisions for bad-debt expense, commitment and guarantee liability 14 1,460,443)( 11)( 5,841,893)( 42)( 2,181,537)( 8)( 7,350,038)( 26)( Operating expenses 58500 Employee benefits 33 3,049,078)( 22)( 3,065,421)( 22)( 6,226,435)( 23)( 6,305,472)( 23)( 59000 Depreciation and amortization 33 515,900)( 4)( 512,124)( 4)( 1,035,322)( 4)( 1,028,579)( 4)( 59500 Other general and administrative 33 1,420,390)( 10)( 1,554,323)( 11)( 2,909,433)( 10)( 3,084,558)( 11)( 58400 Total operating expenses 4,985,368)( 36)( 5,131,868)( 37)( 10,171,190)( 37)( 10,418,609)( 38)( 61001 Profit before income tax 7,275,715 53 3,085,682 22 15,075,897 55 10,100,471 36 61003 Income tax income (expense) 34 1,090,722)( 8)( 76,485 - 2,367,464)( 9)( 1,047,609)( 4)( 64000 Consolidated net income 6,184,993$ 45 3,162,167$ 22 12,708,433$ 46 9,052,862$ 32 Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss: 65201 Defined benefit plan remeasurements 74,060)($ - 1,218)($ - 73,932)($ - 625)($ - 65203 Loss on hedging instruments 48,437)( - - - 95,950)( - - - 65204 Gain (loss) on investments in equity instruments measured at fair value through other comprehensive income 9 7,926,941 58 844,329)( 6)( 8,277,348 30 1,289,441)( 5)( 65205 Financial liabilities designated at FVTPL which the amount of change derived from credit risk 8 452)( - 137 - 1,887 - 45)( - 65206 Proportionate share of other comprehensive income of associates under the equity method 16 225)( - 1,413)( - 36,507 - 5,392 - 65220 Income tax relating to items that will not be reclassified subsequently to profit or loss 34 16,245 - 37,513)( - 63,927 - 65,746)( - Items that may be reclassified subsequently to profit or loss: 65301 Exchange differences on translating foreign operations 792,958)( 6)( 22,746,127)( 162)( 1,600,825 6 20,677,893)( 74)( 65309 Gain (loss) on debt instruments measured at fair value through other comprehensive income 9 976,351 7 2,529,008 18 3,101,077)( 11)( 4,403,107 16 65310 Reversal of impairment loss from investments in debt instruments measured at fair value through other comprehensive income 11 1,390)( - 19,697)( - 4,944)( - 13,118)( - 65320 Income tax relating to items that may be reclassified subsequently to profit or loss 34 99,185)( 1)( 2,410,525 17 310,391 1 1,941,571 7 65000 Other comprehensive income for the period, net of income tax 7,902,830$ 58 18,710,627)($ 133)( 7,014,982$ 26 15,696,798)($ 56)( 66000 Total comprehensive income for the period 14,087,823$ 103 15,548,460)($ 111)( 19,723,415$ 72 6,643,936)($ 24)( Net profit attributable to: 67101 Owners of the Bank 5,056,359$ 37 3,138,846$ 22 10,165,383$ 37 7,803,812$ 28 67111 Non-controlling interests 1,128,634 8 23,321 - 2,543,050 9 1,249,050 4 67100 6,184,993$ 45 3,162,167$ 22 12,708,433$ 46 9,052,862$ 32 Total comprehensive income attributable to: 67301 Owners of the Bank 14,408,371$ 105 7,787,862)($ 56)( 17,880,817$ 65 1,873,502)($ 7 67311 Non-controlling interests 320,548)( 2)( 7,760,598)( 55)( 1,842,598 7 4,770,434)( 17)( 67300 14,087,823$ 103 15,548,460)($ 111)( 19,723,415$ 72 6,643,936)($ 24)( Earnings per share 35 67500 Basic 1.04$ 0.64$ 2.08$ 1.59$ 67700 Diluted 1.03$ 0.64$ 2.07$ 1.59$ For the Three Months Ended June 30 For the Six Months Ended June 30 2026 2025 (restated) 2026 2025 (restated) The accompanying notes are an integral part of the consolidated financial statements.
Page 9
-9- THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the Six Months Ended June 30, 2026 and 2025 (Expressed in Thousands of New Taiwan Dollars) Codes Ordinary Shares Reserve for Capitalization Capital Surplus Legal Reserve Special Reserve Unappropriated Earnings Exchange Differences on Translating Foreign Operations Change in Financial Assets at FVTOCI Loss on Hedging Instruments Change in Credit Risk From Financial Liabilities Designated at FVTPL Treasury Shares Total Equity Attributable to Owners of the Bank Non-controlling Interests Total Equity For the six months ended June 30, 2025 A1 Balance on January 1, 2025 48,616,031$ -$ 27,705,927$ 64,476,033$ 7,669,374$ 39,833,861$ 4,970,909$ 4,740,687$ -$ 1,015)($ 83,144)($ 197,928,663$ 68,956,347$ 266,885,010$ A3 Effect of retrospective application and retrospective restatement - - - - - 500,474)( 9,607)( 239,760 - - - 270,321)( 191,287)( 461,608)( A5 Balance on January 1, 2025 after restated 48,616,031 - 27,705,927 64,476,033 7,669,374 39,333,387 4,961,302 4,980,447 - 1,015)( 83,144)( 197,658,342 68,765,060 266,423,402 D1 Net profit for the six months ended June 30, 2025 - - - - - 7,803,812 - - - - - 7,803,812 1,249,050 9,052,862 D3 Other comprehensive income (loss) for the six months ended June 30, 2025, net of income tax - - - - - 625)( 10,210,677)( 534,033 - 45)( - 9,677,314)( 6,019,484)( 15,696,798)( D5 Total comprehensive income (loss) for the six months ended June 30, 2025 - - - - - 7,803,187 10,210,677)( 534,033 - 45)( - 1,873,502)( 4,770,434)( 6,643,936)( Appropriation of 2024 earnings B1 Legal reserve - - - 4,204,262 - 4,204,262)( - - - - - - - - B5 Cash dividends - - - - - 8,750,886)( - - - - - 8,750,886)( - 8,750,886)( Q1 Disposal of equity instruments at fair value through other comprehensive income - - - - - 4,112,194)( - 4,112,194 - - - - - - Z1 Balance on June 30, 2025 48,616,031$ -$ 27,705,927$ 68,680,295$ 7,669,374$ 30,069,232$ 5,249,375)($ 9,626,674$ -$ 1,060)($ 83,144)($ 187,033,954$ 63,994,626$ 251,028,580$ For the six months ended June 30, 2026 A1 Balance on January 1, 2026 48,616,031$ -$ 27,867,109$ 68,680,295$ 7,669,374$ 39,968,320$ 1,304,126$ 10,930,125$ 32,876)($ 737)($ 83,144)($ 204,918,623$ 70,412,351$ 275,330,974$ A3 Effect of retrospective application and retrospective restatement - - - - - 232,830)( 55,136 239,760 - - - 62,066 36,943)( 25,123 A5 Balance on January 1, 2026 after restated 48,616,031 - 27,867,109 68,680,295 7,669,374 39,735,490 1,359,262 11,169,885 32,876)( 737)( 83,144)( 204,980,689 70,375,408 275,356,097 D1 Net profit for the six months ended June 30, 2026 - - - - - 10,165,383 - - - - - 10,165,383 2,543,050 12,708,433 D3 Other comprehensive income (loss) for the six months ended June 30, 2026, net of income tax - - - - - 73,932)( 783,993 7,058,642 55,156)( 1,887 - 7,715,434 700,452)( 7,014,982 D5 Total comprehensive income (loss) for the six months ended June 30, 2026 - - - - - 10,091,451 783,993 7,058,642 55,156)( 1,887 - 17,880,817 1,842,598 19,723,415 Appropriation of 2025 earnings B1 Legal reserve - - - 3,926,882 - 3,926,882)( - - - - - - - - B5 Cash dividends - - - - - 8,750,886)( - - - - - 8,750,886)( - 8,750,886)( C13 Capital surplus transferred to capital - 486,160 486,160)( - - - - - - - - - - - Q1 Disposal of equity instruments at fair value through other comprehensive income - - - - - 1,591,687 - 1,591,687)( - - - - - - Z1 Balance on June 30, 2026 48,616,031$ 486,160$ 27,380,949$ 72,607,177$ 7,669,374$ 38,740,860$ 2,143,255$ 16,636,840$ 88,032)($ 1,150$ 83,144)($ 214,110,620$ 72,218,006$ 286,328,626$ Equity Attributable to Owners of the Bank Retained Earnings Other EquityShare Capital The accompanying notes are an integral part of the consolidated financial statements.
Page 10
-10- THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2026 and 2025 (Expressed in Thousands of New Taiwan Dollars) Codes 2026 2025 (restated) Cash flows from operating activities A00010 Consolidated net profit before income tax 15,075,897$ 10,100,471$ A20010 Adjustments to reconcile net profit to net cash provided by operating activities A20100 Depreciation expenses 817,933 845,573 A20200 Amortization expenses 217,389 183,006 A20300 Provisions for bad debt expense, commitment and guarantee liability 2,181,537 7,350,038 A20400 Loss (gain) on financial assets and liabilities at fair value through profit or loss 104,065 507,444)( A20900 Interest expenses 17,992,419 21,124,953 A21200 Interest revenue 36,345,289)( 39,611,071)( A21300 Dividend income 1,537,014)( 1,811,233)( A22300 Proportionate share of profit of associates 85,463)( 157,808)( A22500 Loss on disposal of properties and equipment, net 2,317 1,133 A22700 Gain on disposal of investment properties, net 457,429)( 1,377,500)( A23600 Impairment (reversal) on financial assets 5,710)( 8,655)( A29900 Others 125,538 437,499 A40000 Changes in operating assets and liabilities Changes in operating assets A41110 Due from the central bank and call loans to banks 3,824,484)( 25,728,324)( A41120 Financial assets measured at fair value through profit or loss 3,651,588)( 4,433,636)( A41123 Financial assets measured at fair value through other comprehensive income 65,537,520)( 17,420,462)( A41125 Investment in debt instruments measured at amortized cost 665,454)( 21,536,350 A41150 Receivables 6,349,584)( 11,392,854)( A41160 Discounts and loans 33,375,835)( 35,195,187 A41190 Other financial assets 9,945)( 4,439)( A41990 Other assets 2,480,584 2,202,965)( Changes in operating liabilities A42110 Deposits from the central bank and other banks 29,561,582 1,770,064 A42120 Financial liabilities measured at FVTPL 1,245,973)( 3,172,370 A42140 Securities sold under repurchase agreements 3,565,190 827,653)( A42150 Payables 7,656,311 856,925 A42160 Deposits and remittances 1,042,236)( 41,300,816)( A42170 Other financial liabilities 4,879,048 1,446,085 A42180 Employee benefit provisions 339,478)( 131,670)( A42990 Other liabilities 695,448 219,581 A33000 Cash used in operations 69,117,744)( 42,677,295)( A33100 Interest received 36,968,568 39,038,446 A33200 Dividends received 1,537,014 1,811,233 A33300 Interest paid 17,588,614)( 21,570,564)( A33500 Income tax paid 1,199,153)( 2,241,051)( AAAA Net cash used in operating activities 49,399,929)( 25,639,231)( Cash flows from investing activities B02700 Acquisition of properties 591,275)( 636,379)( B02800 Proceeds from disposal of properties 7,959 2,351 B04500 Acquisition of intangible assets 2,033,519)( 120,964)( B05400 Acquisition of investment properties - 292,265)( B05500 Disposal of investment properties - 3,502,641 B09900 Other financial investments - 253,708 BBBB Net cash (used in) from investing activities 2,616,835)( 2,709,092 Cash flows from financing activities C01400 Proceeds from issuance of bank debentures - 2,100,000 C01500 Payments for bank debentures - 3,000,000)( C04020 Payments for principal portion of lease liabilities 345,175)( 539,944)( CCCC Net cash used in financing activities 345,175)( 1,439,944)( DDDD Effects of exchange rate changes on the balance of cash held in foreign currencies 1,888,579 32,130,761)( EEEE Net decrease in cash and cash equivalents 50,473,360)( 56,500,844)( E00100 Cash and cash equivalents at the beginning of the period 327,035,031 369,412,598 E00200 Cash and cash equivalents at the end of the period 276,561,671$ 312,911,754$ Composition of cash and cash equivalents E00210 Cash and cash equivalents in consolidated balance sheets 35,379,209$ 38,705,938$ E00220 Due from the Central Bank and call loans to banks which fall within the definition of cash and cash equivalents under IAS 7 209,359,254 256,992,015 E00230 Securities purchased under resale agreements which fall within the definition of cash and cash equivalents under IAS 7 31,823,208 17,213,801 E00200 Cash and cash equivalents in consolidated statements of cash flows 276,561,671$ 312,911,754$ For the Six Months Ended June 30 The accompanying notes are an integral part of the consolidated financial statements
Page 11
11 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Six Months Ended June 30, 2026 and 2025 (Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Stated) 1. ORGANIZATION AND OPERATIONS The Shanghai Commercial & Savings Bank(the “Bank”) is incorporated in Taiwan and engages in the commercial banking businesses under related laws and regulations. The shares of the Bank have been traded on Taiwan Stock Exchange since October 19, 2018. The Bank has its head office in Taipei and 79 branches, including 4 foreign branches sep arately located in Wuxi China, Hong Kong, Vietnam Dong Nai and Singapore. The consolidated financial statements are presented in the Bank’s functional currency, the New Taiwan dollar. 2. AUTHORIZATION OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements were approved by the board of directors on August 28, 2026. 3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS 3.1 Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”). New standards, interpretations and amendments endorsed by FSC and became effective from 2026 are as follows: New Standards, Interpretations and Amendments Effective Date Announced by IASB Specific provisions of Amendments to IFRS 9 and IFRS 7, “Amendments to the classification and measurement of financial instruments.” January 1, 2026 Amendments to IFRS 9 and IFRS 7 “Contracts referencing nature-dependent electricity ” January 1, 2026 IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 “Initial application of IFRS 17 and IFRS 9 - Comparative Information” January 1, 2023 Annual improvements to IFRS Accounting Standards — V olume 11 January 1, 2026 As of the date the consolidated financial statements were authori zed for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. 3.1.1 IFRS 17, ‘Insurance contracts’ IFRS 17 ‘Insurance contracts’ replaces IFRS 4 and establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. The standard applies to insurance contracts (including reinsurance contracts) issued, to reinsurance contracts held and to investment contracts with discretionary participation features issued, provided the entity also issues insurance contracts. Embedded derivatives, distinct investment components and distinct performance obligations shall be separated from the insurance contr acts. An entity shall, at initial recognition, disaggregate a portfolio into three groups of contracts: onerous, no significant risk of becoming onerous, and remaining contracts. IFRS 17 requires
Page 12
12 a current measurement model, where estimates are remeasured in each reporting period. The measurement is based on the building blocks of discounted, probability-weighted cash flows, a risk adjustment and a contractual service margin (‘CSM’) representing the unearned profit of the contract. An entity may apply a mod ified simplified measurement approach (the premium allocation approach) to some insurance contracts. An entity recognises the profit from a group of insurance contracts over the period the entity provides insurance coverage, and as the entity is released from risk. 3.1.2 Amendments to IFRS 17, ‘Insurance contracts’ The amendments to IFRS 17 include the deferral of effective date, expected recovery of insurance acquisition cash flows, contractual service margin attributable to investment services, reinsurance contracts held – recovery of losses and other amendments, and they are not intended to change the fundamental principles of the standard. 3.1.3 Contracts" Amendment to IFRS 17, ’Initial application of IFRS 17 and IFRS 9 – comparative information’ The Group first applied IFRS 17 on January 1, 2026. Please refer to Note 4 for details of the relevant accounting policies. In accordance with the effective date and transitional provisions of IFRS 17, the comparative financial statements for the year 2025 were retrospectively restated to IFRS 17. The relevant impacts of the Group's retrospectiv e restatement on January 1, 2025 and January 1, 2026 are detailed below. The adjustments to the various asset, liability, and equity items as of January 1, 202 5 and January 1, 2026, due to the initial application of IFRS 17 are as follows: December 31, 2024 Carrying Amount Adjustment Arising from Intial Application January 1, 2025 Adjusted Carrying Amount (restated) Unappropriated earnings 39,833,861$ 500,474)($ 39,333,387$ Other equity 9,710,581 230,153 9,940,734 Non-controlling interests 68,956,347 191,287)( 68,765,060 Effect on equity 118,500,789$ 461,608)($ 118,039,181$ December 31, 2025 Carrying Amount Adjustment Arising from Intial Application January 1, 2026 Adjusted Carrying Amount (restated) Unappropriated earnings 39,968,320$ 232,830)($ 39,735,490$ Other equity 12,200,638 294,896 12,495,534 Non-controlling interests 70,412,351 36,943)( 70,375,408 Effect on equity 122,581,309$ 25,123$ 122,606,432$
Page 13
13 3.2 Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group. New standards, interpretations and amendments endorsed by FSC from 2027 are as follows: New Standards, Interpretations and Amendments Effective Date Announced by IASB IFRS 18 “The presentation and disclosure of financial statements” January 1, 2027 (Note 1) IFRS 19 “The subsidiaries without public accountability: disclosures” January 1, 2027 Amendments to IFRS 21 “Translation to a Hyperinflationary Presentation Currency” January 1, 2027 Amendments to IFRS 28 “Amendments to the fair value option for investments in associates and joint ventures” January 1, 2027 (Note 2) Note 1: Enterprises that apply International Financial Reporting Standard 18 (hereinafter referred to as IFRS 18) after January 1, 2028 may choose to apply it earlier. Note 2: Enterprises should apply this in conjunction with IFRS 18. Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 18, ‘Presentation and disclosure in financial statements’ IFRS 18, ‘Presentation and disclosure in financial statements’ replaces IAS 1. The standard introduces a defined structure of the statement of profit or loss, disclosure requirements related to management-defined performance measures, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. 3.3 IFRSs issued by IASB but not yet endorsed by the FSC. New standards, in terpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows: New Standards, Interpretations and Amendments Effective Date Announced by IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint V enture” To be determined by IASB IFRS 20 “Regulatory Assets and Regulatory Liabilities” January 1, 2029 As of the date the consolidated fi nancial statements were authori zed for issue, th e Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4.1 Statement of Compliance These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Under IFRSs, disclosure information included in these consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements.
Page 14
14 4.2 Basis of Preparation The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and pension plans which are measured in accordance with the actuarial assumptions. The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: 4.2.1 Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; 4.2.2 Level 2 inputs are observable parameters other than quoted prices included within Level 1, either directly (i.e. as prices) or indirectly (i.e. derived from prices); 4.2.3 Level 3 inputs are unobservable inputs for an asset or liability. 4.3 Basis of Consolidation The consolidated financial statements contain the financial statements of the Bank and the subsidiaries controlled by the Bank. The consolidated statements of comprehensive income have included the operating gains and losses of acquired or divested companies in the current period from the date of acquisition or to the date of disposal. The financial statements of su bsidiaries have been adjusted to align their accounting policies with the Bank’s accounting policies. In the preparation of the consolidated financial statements, all intra-company transactions, account balances, income and losses have been eliminated. The comprehensive income of the subsidiaries is attributed to the owner of the Bank and non-controlling interests, even if the non-controlling interests have negative balance. For details on subsidiaries, shareholding ratios and business items, refer to Note 15. 4.4 Other Significant Accounting Policies Except for the following instructions, refer to the summary of major accounting policies in the 2025 annual consolidated financial statements. 4.4.1 Impairment of financial assets The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including discounts and loans and accounts receivable), investments in debt instruments that are measured at FVTOCI, lease receivables, loan commitments, as well as contract ass ets at the estimated credit loss on each balance sheet date. For such financial assets, the Group recognizes lifetime expected credit losses (ECLs) when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs. Expected credit losses reflect the weighted ave rage of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12 -month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. The Group recognizes an impairment gain or loss in profit or loss for all f inancial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of such a financial asset.
Page 15
15 Under the guidelines of the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non -performing/Non-accrual Loans” issued by the Banking Bureau of the Financial Supervisory Commission, the credit accounts are categorized into five groups: Normal credit assets, assets that require special mention, substandard assets, doubtful assets and full -amount loss based on clients’ financial conditions. After assessing the value of the collateral, the Group will assess the possibilities of recovery. Under the above guidelines, in addition to the minimum standard allowance for all accounts, allowance is provided for accounts classified as normal (except govern ment accounts), accounts with notice, accounts with warning, difficult accounts and uncollectible accounts at rates of 1%, 2%, 10%, 50%, and 100%, respectively. According to the local statutes, the Group’s allowances for bad debts and guarantee liabilities for the “acquisition of residential home repair loans and construction loans” and “category one credit assets (including short-term trade financing) due from PRC businesses” should be at least 1.5%. In addition, the minimum allowance for bad debts for SM E loans handled in accordance with the “ Regulations for the Central Bank’s Handling of Bank Acceptance of SME Loans Affected by the Severe Special Contagious Pneumonia Epidemic” is 0.5%. Debts that are determined to be uncollectible are written off after being reported to the board of directors for approval. 4.4.2 Retirement benefits Pension cost for an interim period is calculated on a year -to-date basis by using the actuarially determined annual pension cost rate at the end of the prior financial ye ar, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events. 4.4.3 Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period ’s pre-tax income the tax rate that would be applicable to expected total annual earnings. 4.4.4 Hedge Accounting 4.4.4.1 At the inception of a hedging relationship, there is formal designation and documentation of the hedging relationship and the Group ’s risk management objective and strategy for undertaking the hedge . That documentation shall include identific ation of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements. 4.4.4.2 The hedging relationship designated by the Group as a fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset. 4.4.4.3 Fair Value Hedges A When the gain or loss is recognised in other comprehensive income if the hedging instrument hedges an equity instrument for which the Group has elected to present changes in fair value in other comprehensive income. B When the hedged item is an equity instrument for which the Group has elected to present changes in fair value in other comprehensive income, those amounts shall remain in other comprehensive income.
Page 16
16 4.4.5 Insurance Contract/Reinsurance Contract An insurance contract is an agreement in which an insurer agrees to compensate a policyholder for any adverse effects caused by a specific, uncertain future event (insurable event) in order to assume significant insurable risks from that policyholder. 5. CRITICAL ACCOUNTING JUDGMENTS AND MAIN SOURCES OF UNCERTAINTY IN ESTIMATES AND ASSUMPTIONS In the application of the Group’s accounting policies, the management is required to make judgments, estimates and assumptions ab out the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Estimates and assumptions of main sources of uncertainty Estimated impairment of financial assets Estimates of impairment on loans and receivables, investments in debt instrument and financial guarantee contracts are based on the Group’s assumptions about default rates and expected loss rates. The Group considers historical experience, current market conditions and forward -looking information to make assumptions and select input values for impairment assessments. For the important assumptions and input values used, refer to Note 40. If the actual cash flows in the future are less than expected, significant impairment losses may occur. 6. CASH AND CASH EQUIVALENTS June 30, 2026 December 31, 2025 June 30, 2025 Cash in hand and working fund 10,895,320$ 11,429,488$ 10,579,801$ Checks for clearing 765,671 635,624 573,044 Due from other banks 23,718,218 16,538,112 27,553,093 35,379,209$ 28,603,224$ 38,705,938$ For the reconciliation of the periods ended June 30, 2026 and 2025, please refer to the consolidated statements of cash flows . The reconciliation of the amounts of cash and cash equivalents reported in the consolidated statements of cash flows and consolidated balance sheets as of December 31, 2025 is shown below. December 31, 2025 Cash and cash equivalents in the consolidated balance sheets 28,603,224$ Due from the Central Bank and call loans to banks which are categorized as cash and cash equivalents under IAS 7 266,250,153 Due from the Central Bank and call loans to banks which are categorized as securities purchased under resell agreements 32,181,654 Cash and cash equivalents 327,035,031$ The Group assesses the allowance for cash and cash equivalents based on the expected credit loss model. Due to the low credit risk of cash and cash eq uivalents, allowance losses are recognized based on the 12 -month expected credit losses. On June 30, 2026, December 31, 2025 and June 30, 2025, cash and cash equivalents recognized as allowances were in the amounts of $ 166 thousand, $ 109 thousand and $ 138 thousand, respectively. The Group did not take any cash and cash equivalents as pledged assets.
Page 17
17 7. DUE FROM THE CENTRAL BANK AND CALL LOANS TO BANKS, NET June 30, 2026 December 31, 2025 June 30, 2025 Call loans to banks 317,256,624$ 356,589,691$ 327,165,353$ Deposit reserves - II 35,212,616 34,694,936 34,624,845 Deposit reserves - I 7,824,292 20,874,343 16,288,154 Due from foreign central banks 5,881,823 6,118,222 5,368,753 Deposit reserves - foreign currency 208,286 206,914 184,912 366,383,641$ 418,484,106$ 383,632,017$ Deposit reserves are statutory reserves and determined monthly at prescribed rates based on average balances of customers’ deposits. The entire balance of deposit reserves - II is subject to withdrawal restrictions while no restrictions are placed on other deposit reserves. The Group assesses the loss allowance for due from the Central Bank and call loans to banks based on the expected credit loss model. Due to the low credit risk of dues from the Central Bank and call loans to banks, the loss allowance is recognized based on 12 -month expected credit losses. On June 30, 2026, December 31, 2025 and June 30, 2025, the allowances recognized for the due s from the Central Bank and call loans to banks were in the amounts of $7,476 thousand, $6,050 thousand and $6,933 thousand, respectively. For information on the deposit of central bank and interbank pledges, please refer to Note 37. 8. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL) June 30, 2026 December 31, 2025 June 30, 2025 Financial assets measured at FVTPL Financial assets mandatorily classified as at FVTPL Corporate bonds 1,991,641$ -$ 1,170,496$ Forward contracts 1,843,319 1,423,070 2,282,558 Bank debentures 1,477,023 417,728 1,372,215 Currency swap contracts 1,186,593 248,983 1,108,958 Option contracts 871,649 1,281,047 1,055,834 Interest rate swap contracts 712,218 336,600 107,690 Futures 585,697 515,932 681,611 Shares 313,927 208,947 577,787 Government bonds 80,030 - 17,145 9,062,097$ 4,432,307$ 8,374,294$ June 30, 2026 December 31, 2025 June 30, 2025 Financial liabilities measured at FVTPL Held-for-trading financial liabilities Forward contracts 1,581,663$ 1,413,454$ 2,300,227$ Interest rate swap contracts 1,044,991 722,144 403,372 Option contracts 792,529 1,283,646 897,136 Currency swap contracts 702,805 889,108 1,128,359 Futures 6,719 - 11,860 4,128,707 4,308,352 4,740,954 Financial liabilities designated at FVTPL Bank debentures 1,832,164 1,823,796 2,183,625 5,960,871$ 6,132,148$ 6,924,579$
Page 18
18 The Group engage d in derivative transactions mainly to accommodate customers’ needs and manage its exposure positions. The financial assets and liabilities at FVTPL contract (nominal) amounts of derivative transactions were as follows: June 30, 2026 December 31, 2025 June 30, 2025 Forward contracts 485,059,032$ 373,438,550$ 518,977,496$ Option contracts 313,471,225 440,345,585 157,458,621 Currency swap contracts 145,358,630 105,507,373 95,031,255 Interest rate swap contracts 55,386,858 34,919,144 18,746,222 Future contracts 1,469,916 102,983 1,011,403 Information for financial liabilities designated by the Group at FVTPL is as follows: June 30, 2026 December 31, 2025 June 30, 2025 The difference between the fair value and the maturity value－Fair value 1,832,164$ 1,823,796$ 2,183,625$ －Maturity value 1,913,309 1,823,305 2,249,185 81,145)($ 491$ 65,560)($ Effects of changes in credit risk Current amount of change For the Three Months Ended June 30, 2026 452)($ For the Three Months Ended June 30, 2025 137$ For the Six Months Ended June 30, 2026 1,887$ For the Six Months Ended June 30, 2025 45)($ Cumulative amount of change Up to June 30, 2026 1,150$ Up to December 31, 2025 737)($ Up to June 30, 2025 1,060)($ The financial liabilities designated by the Group at FVTPL were the second issuance of unsecured debentures amounting to US$70,000 thousand with a 30 -year maturity and fixed interest rate of 0% on October 29, 2018. On the expiration of 5 years and every subsequent year, the Group may exercise the option at the agreed redemption price. If the option is not exercised during the period, the payment will be made on the ex piration date. The second issuance of unsecured debentures amounting to US$6,400 thousand with a 3 -year maturity and fixed interest rate of 0% on November 1, 2023. The second to third years are combined interest rates, using simple interest calculation, with interest paid once every quarter and repayment of principals at maturity. The first issuance of unsecured debentures amounting to US$10,750 thousand with a 2 -year maturity on March 27, 2024 with a fixed rate of 5.5% of the first year and combined interest rates of the second year. The interest paid once every quarter and repayment of principals at maturity. The Group entered an interest rate swap contract to reduce the interest rate risk of the aforementioned financial bonds. The interest rate swap contract was measured at fair value and the fair value changes were included in profit or loss. The Group designated the aforementioned financial bonds as financial liabilities measured at FVTPL for consistency. The amount of change in the fair value of finan cial bonds attributable to the changes in the fair value of credit risk was calculated as the difference between the changes in the fair value of market risk factor. The amount of change in fair value attributable to the market risk factor was calculated using the benchmark yield curve at the balance sheet date. Fair value of financial bonds was based on the benchmark yield curve on the balance sheet date and the estimated credit risk spread by the creditor ’s interest rate quote on the similar maturity date of the combined company, such that the estimated future cash flow is discounted.
Page 19
19 9. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME June 30, 2026 December 31, 2025 June 30, 2025 Investments in equity instruments measured at FVTOCI Listed stocks 60,492,196$ 42,222,625$ 48,251,180$ Unlisted stocks 4,950,694 4,718,896 4,091,615 65,442,890 46,941,521 52,342,795 Investments in debt instruments measured at FVTOCI Bank debentures 269,116,970 224,003,698 188,271,667 Corporate bonds 148,171,042 153,901,961 146,084,593 Government bonds 80,670,688 84,275,427 73,562,310 Commercial papers 31,368,920 10,165,299 7,485,573 Asset-backed securities 1,751,796 2,508,132 1,065,223 531,079,416 474,854,517 416,469,366 596,522,306$ 521,796,038$ 468,812,161$ The Group holds certain equity instruments that are not held for trading purposes and have therefore been designates as measured at FVTOCI. For the information on credit risk management and impairment assessment of investments in debt instruments at FVTOCI, refer to Note 11. Parts of the aforementioned financial assets at FVTOCI were sold un der repurchase agreements as of June 30, 2026, December 31, 2025 and June 30, 2025. The par value s of bonds and commercial papers sold under repurchase agreements were $9,292,947 thousand, $7,416,095 thousand and $3,974,350 thousand, respectively. The Group, in order to diversity risk by adjusting its investment portfolio, sold equity investments with fair value of $19,343,038 thousand and $28,721,062 thousand for the six months ended June 30, 2026 and 2025, resulting in accumulated disposal losses of $1,591,687 thousand and gains of $4,112,194 thousand, respectively. Amounts recognized in profit or loss in relation to FVTOCI are listed below: 2026 2026 Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income (loss) 7,926,941$ 844,362)($ 8,277,348$ 1,289,441)($ Cumulative gain (loss) reclassified to retained earnings due to derecognition 1,170,566$ 4,060,096)($ 1,591,687$ 4,112,194)($ Dividend income recognized in profit or loss Held at end of period 813,163$ 720,817$ 1,076,491$ 988,079$ Derecognized during the period 410,875 745,042 460,337 820,996 1,224,038$ 1,465,859$ 1,536,828$ 1,809,075$ Debt instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income (loss) 976,351$ 2,529,008$ 3,101,077)($ 4,403,107$ Reclassified due to derecognition 16,913 79,798 249,561 116,383 993,264$ 2,608,806$ 2,851,516)($ 4,519,490$ Reclassified due to reversal gain of impairment recognition (excluding the effect of exchange rate) 845$ 12,760$ 5,454$ 6,958$ Interest income recognized in profit or loss 4,618,599$ 3,963,534$ 8,981,201$ 7,823,378$ For the Three Months Ended June 30 2025 For the Six Months Ended June 30 2025 For the information on financial assets pledged at FVTOCI, refer to Note 37.
Page 20
20 10. INVESTMENTS IN DEBT INSTRUMENTS MEASURED AT AMORTIZED COST June 30, 2026 December 31, 2025 June 30, 2025 Negotiable certificates of deposit 138,800,000$ 135,300,000$ 183,985,000$ Government bonds 24,129,040 22,981,979 14,550,297 Corporate bonds 6,649,682 5,438,282 5,398,901 Bank debentures 1,862,350 4,444,067 4,960,965 Asset-backed securities 1,695,356 4,148,175 755,166 Treasury bonds 856,884 680,117 2,728,786 173,993,312 172,992,620 212,379,115 Less: Loss allowance 3,106)( 3,337)( 3,461)( 173,990,206$ 172,989,283$ 212,375,654$ Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below: 2026 2026 Interest revenue 561,555$ 696,519$ 1,160,229$ 1,486,482$ Gain (loss) on disposal 42)( 9,593 8,358 68,116 Reversal gain (loss) on impairment 282)( 9,477 256 1,697 561,231$ 715,589$ 1,168,843$ 1,556,295$ For the Three Months Ended June 30 2025 For the Six Months Ended June 30 2025 Due to risk management purposes , t he Group disposal some debt instrument investments for the 6 months ended Jun e 30, 2026 and 2025 , and the dispo sal profits were $8,358 thousand and $68,116 thousand, respectively. For information on the credit risk management and impairment of financial assets measured at amortized cost, refer to Note 11. For the information on related investments in debt instrument s measured at amortized cost pledged as collateral, refer to Note 37. 11. CREDIT RISK MANAGEMENT OF INVESTMENTS IN DEBT INSTRUMENTS The investments in debt instruments were classified as financial assets measured at F VTOCI and financial assets at amortized cost. June 30, 2026 At FVTOCI At Amortized Cost Total Total carrying amount 535,641,136$ 173,993,312$ 709,634,448$ Loss allowance 141,204)( 3,106)( 144,310)( Amortized cost 535,499,932 173,990,206$ 709,490,138 Fair value adjustment 4,420,516)( 4,420,516)( 531,079,416$ 705,069,622$ December 31, 2025 At FVTOCI At Amortized Cost Total Total carrying amount 476,328,061$ 172,992,620$ 649,320,681$ Loss allowance 146,148)( 3,337)( 149,485)( Amortized cost 476,181,913 172,989,283$ 649,171,196 Fair value adjustment 1,327,396)( 1,327,396)( 474,854,517$ 647,843,800$
Page 21
21 June 30, 2025 At FVTOCI At Amortized Cost Total Total carrying amount 420,298,974$ 212,379,115$ 632,678,089$ Loss allowance 122,895)( 3,461)( 126,356)( Amortized cost 420,176,079 212,375,654$ 632,551,733 Fair value adjustment 3,706,713)( 3,706,713)( 416,469,366$ 628,845,020$ The Group implement s a policy of investing in debt instruments with investment grade and have low credit risk, For the purpose of impairment assessment , the Group continues to track external rating information and monitors changes in credit risk of the investments of debt instruments and review s other information such as the bond yield curve and the debtor’s material information to assess whether the credit risk of the debt instrument investments has increased significantly since the initial recognition. The Group considered the historical default loss rate provided by the independent rating agencies, the debtor’s current financial status and the industry’s forward-looking forecast to measure the 12 -month expected credit loss or full lifetime expected credit loss of the investments in debt instruments. The Group’s current credit risk rating mechanism and the total carrying amount of each credit rating investment in debt instruments were as follows: June 30, 2026 June 30, 2026Credit Rating Definitions Total Carrying Amount 0.000% ~ 708,700,387$ 1.523% 0.330% ~ 878,375 1.868% 60.980% 55,686 Stage 1 The debtor has a low credit risk and is fully capable of paying off contractual cash flows Stage 3 Evidence of credit impairment 12-month expected credit loss Expected Credit Loss Recognition Base Expected credit loss during the period of existence (credit impairment) Stage 2 Credit risk has increased significantly since the initial recognition Expected credit loss during the period of existence (no credit impairment) Expected Credit Loss Rate December 31, 2025 December 31, 2025Credit Rating Definitions Total Carrying Amount 0.000% ~ 649,059,218$ 1.710% 1.793% ~ 206,552 1.869% 60.980% 54,911 12-month expected credit loss Stage 2 Credit risk has increased significantly since the initial recognition Expected credit loss during the period of existence (no credit impairment) Stage 3 Evidence of credit impairment Expected credit loss during the period of existence (credit impairment) Expected Credit Loss Recognition Base Expected Credit Loss Rate Stage 1 The debtor has a low credit risk and is fully capable of paying off contractual cash flows June 30, 2025 June 30, 2025Credit Rating Definitions Total Carrying Amount 0.000% ~ 632,372,898$ 1.710% 0.418% ~ 305,191 2.507% Expected Credit Loss Recognition Base Expected Credit Loss Rate Stage 2 Credit risk has increased significantly since the initial recognition Expected credit loss during the period of existence (no credit impairment) Stage 1 The debtor has a low credit risk and is fully capable of paying off contractual cash flows 12-month expected credit loss
Page 22
22 Information on changes in allowance for impairment loss under the credit risk rating assessment of investments in debt instruments at FVTOCI and at amortized cost is summarized as follows: Investments in debt instruments at FVTOCI Stage 1 (12-Month ECLs) Stage 2 (Lifetime ECLs without impairment) Stage 3 (Lifetime ECLs with impairment) Total Balance at January 1, 2026 103,870$ 8,730$ 33,548$ 146,148$ Stage transfer from lifetime ECLs without impairment to 12-Month ECLs 1,993 1,993)( - - Purchase of new debt instruments 25,150 - - 25,150 Derecognition 15,275)( - - 15,275)( Provisions (reversal) 14,908)( 765)( 344 15,329)( Exchange rate and other changes 902 393)( 1 510 Balance at June 30, 2026 101,732$ 5,579$ 33,893$ 141,204$ Credit Risk Rating Stage 1 (12-Month ECLs) Stage 2 (Lifetime ECLs without impairment) Stage 3 (Lifetime ECLs with impairment) Total Balance at January 1, 2025 110,000$ 26,013$ -$ 136,013$ Purchase of new debt instruments 29,466 - - 29,466 Derecognition 21,153)( 4,105)( - 25,258)( Provisions (reversal) 6,603)( 4,563)( - 11,166)( Exchange rate and other changes 6,970)( 810 - 6,160)( Balance at June 30, 2025 104,740$ 18,155$ -$ 122,895$ Credit Risk Rating Investments in debt instruments at amortized cost Stage 1 (12-Month ECLs) Stage 2 (Lifetime ECLs) Total Balance at January 1, 2026 3,337$ -$ 3,337$ Purchase of new debt instruments 354 - 354 Derecognition 574)( - 574)( Provisions (reversal) 36)( - 36)( Exchange rate and other changes 25 - 25 Balance at June 30, 2026 3,106$ -$ 3,106$ Balance at January 1, 2025 5,220$ -$ 5,220$ Purchase of new debt instruments 148 - 148 Derecognition 1,595)( - 1,595)( Provisions (reversal) 250)( - 250)( Exchange rate and other changes 62)( - 62)( Balance at June 30, 2025 3,461$ -$ 3,461$ Credit Risk Rating
Page 23
23 12. SECURITIES PURCHASED UNDER RESELL AGREEMENTS Securities purchased under resell agreements as of June 30, 2026, December 31, 2025 and June 30, 2025 were $31,823,208 thousand, $32,181,654 thousand and $ 17,213,801 thousand, respectively. The aforementioned securities will be bought back one after another before September 14, 2026, March 12, 2026 and September 12, 2025 at $31,856,882 thousand, $32,214,998 thousand and $17,231,953 thousand, respectively. 13. RECEIVABLES, NET June 30, 2026 December 31, 2025 June 30, 2025 Accrued interest 9,743,155$ 10,632,502$ 8,423,670$ Accounts receivable due from sales of securities 5,067,494 2,022,576 4,699,391 Credit card receivables 4,796,882 4,267,406 3,594,718 Acceptances 3,692,590 2,027,131 2,402,246 Accounts receivable due from sale of real estate 1,411,539 69,181 270,163 Finance lease receivable 602,069 738,648 702,309 Accounts receivable - factoring 204,455 266,318 264,786 Loans held for sale - - 6,951,794 Others 4,698,253 4,157,869 4,402,722 30,216,437 24,181,631 31,711,799 Less: Allowance for credit losses 831,851)( 971,732)( 571,892)( 29,384,586$ 23,209,899$ 31,139,907$ The changes in total carrying amount and the allowance of receivables and other financial assets for the six months ended June 30, 2026 and 2025 (including non-accrual loans and bills of exchange, refer to Note 17) are as follows: For the Six Months Ended June 30, 2026 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Total Receivables and other financial assets Beginning on January 1, 2026 22,185,609$ 158,548$ 300,094$ 1,547,639$ 24,191,890$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 204,541)( 56,503 148,320 282)( - Transfer to ECLs on financial assets 14,369)( 14,541)( 4,066)( 32,976 - Transfer to 12-month ECLs 173,690 57,882)( 115,143)( 665)( - Financial assets derecognized in the current period 3,529,352)( 44,240)( 98,759)( 47,054)( 3,719,405)( Transfer or pay off the original amount 4,202,544 10,238)( 75,928)( 262,682)( 3,853,696 Purchased or originated financial assets 4,817,635 7,589 745,041 2,747 5,573,012 Write-offs - - - 180,139)( 180,139)( Exchange rate and other changes 504,642 9)( 5,396 6,677 516,706 Balance on June 30, 2026 28,135,858$ 95,730$ 904,955$ 1,099,217$ 30,235,760$
Page 24
24 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Allowance Beginning on January 1, 2026 262,179$ 23,992$ 8,256$ 641,137$ 935,564$ 40,901$ 976,465$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 1,037)( 524 667 154)( - - - Transfer to ECLs on financial assets 101)( 386)( 1,027)( 1,514 - - - Transfer to 12-month ECLs 16,514 12,832)( 3,419)( 263)( - - - Financial assets derecognized in the current period 5,688)( 6,118)( 614)( 8,919)( 21,339)( - 21,339)( Provisions (reversal) 38,332 10,319 3,306 175,628 227,585 - 227,585 Purchased or originated financial assets 29,287 1,495 2,854 193,943)( 160,307)( - 160,307)( The difference of impairment under the regulation or decree - - - - - 5,182)( 5,182)( Write-offs - - - 180,139)( 180,139)( - 180,139)( Recoveries after write-off - - - 17,757 17,757 - 17,757 Exchange rate and other changes 21,981)( - 64 2,880 19,037)( - 19,037)( Balance on June 30, 2026 317,505$ 16,994$ 10,087$ 455,498$ 800,084$ 35,719$ 835,803$ For the Six Months Ended June 30, 2025 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Total Receivables and other financial assets Beginning on January 1, 2025 23,673,538$ 162,447$ 191,892$ 1,333,574$ 25,361,451$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 98,565)( 52,491 46,298 224)( - Transfer to ECLs on financial assets 15,764)( 16,016)( 5,341)( 37,121 - Transfer to 12-month ECLs 98,990 38,258)( 59,970)( 762)( - Financial assets derecognized in the current period 2,330,270)( 38,717)( 14,747)( 3,690)( 2,387,424)( Transfer or pay off the original amount 129,390)( 1,909)( 21,543)( 162,180 9,338 Purchased or originated financial assets 10,917,973 41,599 27,108 6,547 10,993,227 Write-offs - - - 31,093)( 31,093)( Exchange rate and other changes 2,037,394)( 160)( 19,101)( 167,030)( 2,223,685)( Balance on June 30, 2025 30,079,118$ 161,477$ 144,596$ 1,336,623$ 31,721,814$
Page 25
25 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Allowance Beginning on January 1, 2025 360,039$ 24,377$ 7,526$ 190,774$ 582,716$ 28,194$ 610,910$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 836)( 475 426 65)( - - - Transfer to ECLs on financial assets 126)( 404)( 438)( 968 - - - Transfer to 12-month ECLs 15,146 11,879)( 2,711)( 556)( - - - Financial assets derecognized in the current period 4,645)( 5,745)( 181)( 8,328)( 18,899)( - 18,899)( Provisions (reversal) 6,237 13,831 1,712 22,913 44,693 - 44,693 Purchased or originated financial assets 6,554 3,247 367 49,761 59,929 - 59,929 The difference of impairment under the regulation or decree - - - - - 4,933 4,933 Write-offs - - - 31,093)( 31,093)( - 31,093)( Recoveries after write-off - - - 17,422 17,422 - 17,422 Exchange rate and other changes 84,440)( - 779)( 26,455)( 111,674)( - 111,674)( Balance on June 30, 2025 297,929$ 23,902$ 5,922$ 215,341$ 543,094$ 33,127$ 576,221$ 14. DISCOUNTS AND LOANS, NET June 30, 2026 December 31, 2025 June 30, 2025 Loans 1,206,520,288$ 1,168,060,000$ 1,133,919,627$ Non-performing loans 12,693,533 14,121,022 13,474,350 Inward/outward documentary bills 11,030,250 12,010,398 11,976,139 Overdrafts 9,096,411 10,413,405 9,574,667 1,239,340,482 1,204,604,825 1,168,944,783 Discount and premium adjustments 150,302)( 126,359)( 134,872)( Provisions for loans and discounts 19,746,513)( 19,411,390)( 19,345,130)( 1,219,443,667$ 1,185,067,076$ 1,149,464,781$ As of June 30, 2026 and 2025, the ratio of bad debts to discounts and loans was 1. 59% and 1.65% respectively. The provision rates for individual entities within the Group for normal and non-performing loans classified into different categories according to the law are in compliance with the relevant laws. The Group discontinues accruing interest when loans are deemed non -performing. For the six months ended June 30, 2026 and 2025, the unrecognized interest revenue on the non -performing loans amounted to $ 9,160 thousand and $38,569 thousand, respectively. The total carrying amount of the Group’s sustainability-linked loan lines as of June 30, 2026 and June 30, 2025 were $52,586,334 thousand and $30,043,704 thousand, respectively The Group's loans are sustainability-linked loan lines. The credit terms should specify the interest rate reduction mechanism for the performance indicators to be linked during the credit period, with a maximum reduction of 0.1% per year and a maximum of 0.3% during the credit period. For the six months ended June 30, 2026 and 2025, the Group had no credit claims that were written off without prior legal action.
Page 26
26 The changes in carrying amount and allowance for discounts and loans for the six months ended June 30, 2026 and 2025 are as follows: For the Six Months Ended June 30, 2026 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Lifetime ECLs (Purchased or Originated Credit Impairment on Financial Assets) Total Discounts and loans Beginning on January 1, 2026 1,154,172,247$ 5,259,282$ 22,795,588$ 22,372,073$ 5,635$ 1,204,604,825$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 10,796,881)( 2,948,986 7,857,921 10,026)( - - Transfer to ECLs on financial assets 701,093)( 637,278)( 1,800,292)( 3,138,663 - - Transfer to 12-month ECLs 2,164,700 284,855)( 1,847,747)( 32,098)( - - Financial assets derecognized in the current period 251,184,880)( 921,840)( 10,169,910)( 1,967,256)( - 264,243,886)( Transfer or pay off the original amount 30,851,177)( 155,493)( 1,158,422)( 724,585)( - 32,889,677)( Purchased or originated financial assets 318,887,129 1,072,008 9,879,001 127,131 - 329,965,269 Write-offs 2,242)( 2,741)( - 2,231,204)( - 2,236,187)( Exchange rate and other changes 3,439,037 8,158)( 282,985 426,301 27)( 4,140,138 Balance on June 30, 2026 1,185,126,840$ 7,269,911$ 25,839,124$ 21,098,999$ 5,608$ 1,239,340,482$ 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non- Purchased or Originated Credit Impairment on Financial Assets) Lifetime ECLs (Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Allowance Beginning on January 1, 2026 3,148,872$ 592,375$ 797,057$ 5,099,455$ -$ 9,637,759$ 9,773,631$ 19,411,390$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 145,733)( 38,629 115,216 8,112)( - - - - Transfer to ECLs on financial assets 9,901)( 147,202)( 62,648)( 219,751 - - - - Transfer to 12-month ECLs 71,028 43,755)( 14,566)( 12,707)( - - - - Financial assets derecognized in the current period 554,567)( 70,009)( 159,402)( 198,771)( - 982,749)( - 982,749)( Provisions (reversal) 90,704)( 400,468 64,673 1,243,469 - 1,617,906 - 1,617,906 Purchased or originated financial assets 586,089 32,604 92,935 980,780 - 1,692,408 - 1,692,408 The difference of impairment under the regulation or decree - - - - - - 151,579)( 151,579)( Write-offs 168)( 949)( - 2,235,070)( - 2,236,187)( - 2,236,187)( Recoveries of write-offs - - - 329,795 - 329,795 - 329,795 Exchange rate and other changes 30,429 1,047)( 5,073 31,074 - 65,529 - 65,529 Balance on June 30, 2026 3,035,345$ 801,114$ 838,338$ 5,449,664$ -$ 10,124,461$ 9,622,052$ 19,746,513$
Page 27
27 For the Six Months Ended June 30, 2025 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Lifetime ECLs (Purchased or Originated Credit Impairment on Financial Assets) Total Discounts and loans Beginning on January 1, 2025 1,168,838,144$ 10,596,615$ 39,664,258$ 19,640,468$ 6,035$ 1,238,745,520$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 6,426,848)( 1,665,494 4,762,920 1,566)( - - Transfer to ECLs on financial assets 6,648,453)( 491,932)( 8,745,072)( 15,885,457 - - Transfer to 12-month ECLs 6,831,405 2,693,966)( 4,072,606)( 64,833)( - - Financial assets derecognized in the current period 252,137,072)( 4,877,804)( 11,586,323)( 850,847)( - 269,452,046)( Transfer or pay off the original amount 27,885,681)( 286,665)( 970,113)( 3,009,988)( - 32,152,447)( Purchased or originated financial assets 262,592,027 4,177,702 9,696,501 499,617 - 276,965,847 Write-offs 6,143)( 662)( - 4,712,921)( - 4,719,726)( Exchange rate and other changes 34,959,027)( 72,608)( 3,323,494)( 2,086,472)( 764)( 40,442,365)( Balance on June 30, 2025 1,110,198,352$ 8,016,174$ 25,426,071$ 25,298,915$ 5,271$ 1,168,944,783$ 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Lifetime ECLs (Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Allowance Beginning on January 1, 2025 1,122,090$ 1,336,250$ 716,669$ 5,508,629$ -$ 8,683,638$ 8,884,106$ 17,567,744$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 12,713)( 3,189 10,025 501)( - - - - Transfer to ECLs on financial assets 12,535)( 41,971)( 52,095)( 106,601 - - - - Transfer to 12-month ECLs 1,042,763 977,875)( 37,466)( 27,422)( - - - - Financial assets derecognized in the current period 246,524)( 194,350)( 110,496)( 339,635)( - 891,005)( - 891,005)( Provisions (reversal) 863,722)( 113,485 55,653 3,892,632 - 3,198,048 - 3,198,048 Purchased or originated financial assets 981,196 73,135 553,608 1,680,389 - 3,288,328 - 3,288,328 The difference of impairment under the regulation or decree - - - - - - 1,721,986 1,721,986 Write-offs 81)( 152)( - 4,719,493)( - 4,719,726)( - 4,719,726)( Recoveries of write-offs - - - 259,888 - 259,888 - 259,888 Exchange rate and other changes 283,912)( 7,278)( 131,697)( 657,246)( - 1,080,133)( - 1,080,133)( Balance on June 30, 2025 1,726,562$ 304,433$ 1,004,201$ 5,703,842$ -$ 8,739,038$ 10,606,092$ 19,345,130$ The details of bad debt expense, commitment and guarantee liability provisions for the three months and six months ended June 30, 2026 and 2025 are listed as below: 2026 2025 2026 2025 Provisions for discounts and loans 1,401,473$ 5,914,071$ 2,175,986$ 7,317,357$ Provisions for receivables and other financial assets 19,259 17,600 40,757 90,656 Provisions (reversal) for reserve of possible losses on guarantees 37,168 89,737)( 38,786)( 57,397)( Other provisions (reversal) 2,543 41)( 3,580 578)( 1,460,443$ 5,841,893$ 2,181,537$ 7,350,038$ For the Six Months Ended June 30For the Three Months Ended June 30
Page 28
28 15. SUBSIDIARIES 15.1 Subsidiaries included in the consolidated financial statements The consolidated financial statements include the Bank and entities controlled by the Bank. Proportion of Ownership (%) Investor Investee Nature of Activities June 30, 2026 December 31, 2025 June 30, 2025 Note Domestic subsidiaries The Bank China Travel Service (Taiwan) Traveling 99.99 99.99 99.99 1. The Bank SCSB Marketing Ltd. Human resource services 100.00 100.00 100.00 1. The Bank SCSB Asset Management Ltd. Purchase, evaluation, auction and management of creditor’s right of financial institutions 100.00 100.00 100.00 1. China Travel Service (Taiwan) CTS Travel International Ltd. Traveling 100.00 100.00 100.00 1. Foreign subsidiaries The Bank Shancom Reconstruction AG Investment holding 100.00 100.00 100.00 The Bank Wresqueue Limitada Investment holding 100.00 100.00 100.00 1. The Bank Paofoong Insurance Company Ltd. Insurance 40.00 40.00 40.00 1. The Bank AMK BANK PLC. Banking 99.99 99.99 99.99 1、3 SCSB Asset Management Ltd. SCSB Leasing (China) Co., Ltd. Leasing operation 100.00 100.00 100.00 1. Wresqueue Limitada Prosperity Realty Inc. Real estate service 100.00 100.00 100.00 1. Shancom Reconstruction AG Empresa Inversiones Generales, S.A. Investment holding 100.00 100.00 100.00 Shancom Reconstruction AG Krinein Company Investment holding 100.00 100.00 100.00 Shancom Reconstruction AG Safehaven Investment Corporation Investment holding 100.00 100.00 100.00 Empresa Inversiones Generales, S.A. Shanghai Commercial Bank (HK) Banking 48.00 48.00 48.00 2. Krinein Company Shanghai Commercial Bank (HK) Banking 9.60 9.60 9.60 2. Shanghai Commercial Bank (HK) Shanghai Commercial Bank (Nominees) Ltd. Nominee services 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shanghai Commercial Bank Trustee Ltd. Trustee services 60.00 60.00 60.00 1. Shanghai Commercial Bank (HK) Shacom Futures Ltd. Commodities trading 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Investment Ltd. Investment in exchange fund bills and notes 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Property Holdings (BVI) Limited Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Property (NY) Inc. Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Property (CA) Inc. Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Assets Investment Ltd. Investment in bonds 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Infinite Financial Solutions Limited I.T. application services provider 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Insurance Brokers Ltd. Insurance broker 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Shacom Securities Ltd. Securities brokerage services 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Hai Kwang Property Management Co., Ltd. Property management 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) Paofoong Insurance Company Ltd. Insurance 60.00 60.00 60.00 1. Shanghai Commercial Bank (HK) Right Honour Investments Limited Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) KCC 23F Limited Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) KCC 25F Limited Property holding 100.00 100.00 100.00 1. Shanghai Commercial Bank (HK) KCC 26F Limited Property holding 100.00 100.00 100.00 1. Right Honour Investments Limited Glory Step Westpoint Investment Limited Property holding 100.00 100.00 100.00 1. Right Honour Investments Limited Silver Wisdom Westpoint Investment Limited Property holding 100.00 100.00 100.00 1. Note 1: The entity is an immaterial subsidiary; its financial statements have not been audited. Note 2: The entity is a subsidiary with material non-controlling interests. Note 3 : On March 11, 2026, the Cambodian authorities approved the restructurin g of the bank's subsidiary, AMK Microfinance Institution Plc, into a commercial bank, AMK BANK PLC. 15.2 Details of subsidiaries that have material non-controlling interests (“NCI”) Name of Subsidiary Principal Place of Business June 30, 2026 December 31, 2025 June 30, 2025 Shanghai Commercial Bank (H.K.) Hong Kong 42.40% 42.40% 42.40% Proportion of Ownership and Voting Rights Held by Non- controlling Interests
Page 29
29 Name of Subsidiary 2026 2025 2026 2025 Shanghai Commercial Bank (H.K.) (excluding NCI in its subsidiaries) 1,128,552$ 23,321$ 2,542,968$ 1,249,036$ Profit Allocated to Non-controlling Interests For the Three Months Ended June 30 For the Six Months Ended June 30 Name of Subsidiary June 30, 2026 December 31, 2025 June 30, 2025 Shanghai Commercial Bank (H.K.) (excluding NCI in its subsidiaries) 72,217,891$ 70,375,357$ 63,994,512$ Accumulated Non-controlling The summarized financial information of the following subsidiaries is compiled based on the amounts before the eliminations of inter-company transactions: Shanghai Commercial Bank (SCB) (H.K.) and its subsidiaries June 30, 2026 December 31, 2025 June 30, 2025 Assets 931,520,072$ 918,584,564$ 854,906,990$ Liabilities 761,579,740)( 752,964,391)( 704,300,801)( NCI of SCB’s subsidiaries 550,749)( 539,489)( 458,756)( Equity 169,389,583$ 165,080,684$ 150,147,433$ June 30, 2026 December 31, 2025 June 30, 2025 Equity attributable to: Owners of SCSB 97,568,400$ 95,086,474$ 86,484,921$ NCI of SCSB 71,821,183 69,994,210 63,662,512 169,389,583$ 165,080,684$ 150,147,433$ 2026 2025 2026 2025 Revenue 6,083,671$ 6,642,448$ 12,256,990$ 13,363,200$ Net profit for the period 2,665,055$ 24,593)($ 6,005,026$ 2,882,378$ Other comprehensive income for the period 2,345,066)( 3,058,082 2,705,410)( 5,795,383 Total comprehensive income for the period 319,989$ 3,033,489$ 3,299,616$ 8,677,761$ Profit attributable to: Owners of SCSB 1,529,455$ 24,370)($ 3,445,994$ 1,648,327$ NCI of SCSB 1,125,849 17,938)( 2,536,634 1,213,352 NCI of SCB’s subsidiaries 9,751 17,715 22,398 20,699 2,665,055$ 24,593)($ 6,005,026$ 2,882,378$ Total comprehensive income attributable to: Owners of SCSB 179,097$ 1,736,682$ 1,888,353$ 4,986,109$ NCI of SCSB 131,835 1,278,390 1,390,037 3,670,330 NCI of SCB’s subsidiaries 9,057 18,417 21,226 21,322 319,989$ 3,033,489$ 3,299,616$ 8,677,761$ For the Three Months Ended June 30 For the Six Months Ended June 30 2026 2025 Net cash inflow (outflow) from: Operating activities 68,039,953)($ 41,445,205)($ Investing activities 26,879,766 18,478,271 Financing activities 520,789)( 215,788)( Net cash inflow (outflow) 41,680,976)($ 23,182,722)($ For the Six Months Ended June 30
Page 30
30 16. INVESTMENTS UNDER THE EQUITY METHOD June 30, 2026 December 31, 2025 June 30, 2025 Investments in associates 1,728,655$ 1,657,355$ 1,508,894$ The Group decreased the carrying value of Kuo Hai to zero and recognized losses on this investment because of the investee’s continuous operating losses over the years. On December 24, 2024, Shanghai Commercial Bank (HK) had passed the meeting of directors in accordance with the policies of all shareholders. The meeting approved the sale of Hong Kong Life Insurance Co., Ltd., and reclassified the original account using the equity method as an asset held for sale, with an amount of HK$129,664 thousand. The transaction was completed on October 9, 2025. Information on comprehensive income of immaterial associates was summarized as follows: 2026 2025 2026 2025 Profit from continuing operations 31,159$ 60,350$ 85,463$ 157,808$ Other comprehensive income for the period 225)( 1,413)( 36,507 5,392 Total comprehensive income for the period 30,934$ 58,937$ 121,970$ 163,200$ For the Three Months Ended June 30 For the Six Months Ended June 30 17. OTHER FINANCIAL ASSETS, NET June 30, 2026 December 31, 2025 June 30, 2025 Non-performing receivables 15,527$ 5,582$ 5,856$ Bills of exchange 3,797 4,677 4,159 19,324 10,259 10,015 Allowance for non-performing credit card receivables 3,953)( 4,733)( 4,329)( 15,371$ 5,526$ 5,686$ The amount of non-performing receivables is made up of unsettled transactional for credit card receivables. The balances of credit card receivables which were reported as non -performing amounted to $ 3,797 thousand, $4,677 thousand and $4,159 thousand as of June 30, 2026, December 31, 2025 and June 30, 2025, respectively. The unrecognized interest revenue on the receivables amounted t o $43 thousand and $60 thousand for the six months ended June 30, 2026 and 2025, respectively. 18. PROPERTIES, NET June 30, 2026 December 31, 2025 June 30, 2025 Land 14,416,885$ 14,708,292$ 14,184,246$ Buildings and improvements 7,377,349 7,536,814 7,669,209 Miscellaneous equipment 854,463 570,420 593,678 Mechanical equipment 513,622 567,702 643,508 Construction in progress and prepayments 374,696 264,658 251,050 Transportation equipment 34,524 35,175 37,040 23,571,539$ 23,683,061$ 23,378,731$
Page 31
31 Balance at January 1, 2026 Additions Disposals Internal Transfers Reclassified as investment property Effects of Exchange Rate Changes, Net Balance at June 30, 2026 Cost Land 15,866,863$ -$ -$ -$ 309,788)($ 37,688$ 15,594,763$ Buildings and improvements 12,157,032 24,988 - - 122,859)( 32,048 12,091,209 Miscellaneous equipment 3,347,961 371,281 60,891)( 1,607 - 23,108 3,683,066 Mechanical equipment 3,435,459 80,917 36,515)( 676 - 11,054 3,491,591 Transportation equipment 109,843 1,856 2,880)( - - 908 109,727 34,917,158 479,042$ 100,286)($ 2,283$ 432,647)($ 104,806$ 34,970,356 Accumulated depreciation Land 1,158,571$ 35,566$ -$ -$ 23,404)($ 7,145$ 1,177,878$ Buildings and improvements 4,620,218 118,655 - - 38,672)( 13,659 4,713,860 Miscellaneous equipment 2,777,541 84,248 53,721)( - - 20,535 2,828,603 Mechanical equipment 2,867,757 134,176 33,649)( - - 9,685 2,977,969 Transportation equipment 74,668 2,579 2,640)( - - 596 75,203 11,498,755 375,224$ 90,010)($ -$ 62,076)($ 51,620$ 11,773,513 Construction in progress and prepayments 264,658 112,233$ -$ 2,283)($ -$ 88$ 374,696 Net amount 23,683,061$ 23,571,539$ For the Six Months Ended June 30, 2026 Balance at January 1, 2025 Additions Disposals Internal Transfers Effects of Exchange Rate Changes, Net Balance at June 30, 2025 Cost Land 15,549,439$ -$ -$ 412,403$ 743,656)($ 15,218,186$ Buildings and improvements 8,659,750 503,648 - 3,579,242 584,900)( 12,157,740 Miscellaneous equipment 3,370,656 77,380 11,267)( 536 280,497)( 3,156,808 Mechanical equipment 3,516,189 53,259 24,030)( - 250,589)( 3,294,829 Transportation equipment 130,768 691 5,223)( - 11,344)( 114,892 31,226,802 634,978$ 40,520)($ 3,992,181$ 1,870,986)($ 33,942,455 Accumulated depreciation Land 1,126,588$ 36,973$ -$ 5,919$ 135,540)($ 1,033,940$ Buildings and improvements 4,585,161 123,054 - - 219,684)( 4,488,531 Miscellaneous equipment 2,738,252 92,469 10,302)( - 257,289)( 2,563,130 Mechanical equipment 2,737,604 164,550 22,547)( - 228,286)( 2,651,321 Transportation equipment 86,080 3,179 4,187)( - 7,220)( 77,852 11,273,685 420,225$ 37,036)($ 5,919$ 848,019)($ 10,814,774 Construction in progress and prepayments 4,237,723 1,401$ -$ 3,986,262)($ 1,812)($ 251,050 Net amount 24,190,840$ 23,378,731$ For the Six Months Ended June 30, 2025 The Group did not have any impairment losses on the properties as of June 30, 2026, December 31, 2025 and June 30, 2025. The land which was owned by SCB (HK) disclosed above is a leasehold interest. Depreciation expense of properties held by SCSB is computed using the straight-line method over the useful life as follows: Buildings and improvements Branches offices 43-55 years Air conditioning and machine rooms 9 years Miscellaneous equipment 5-20 years Mechanical equipment 3-8 years Transportation equipment 5-10 years Depreciation expense of the land held by SCB (HK) is computed using the straight -line method; depreciation expense of the buildings is computed over the lease term or the straight -line method of less than 40 durable years. Other equipment is computed using the straight-line method within the durability of 4 to 10 years.
Page 32
32 19. LEASE ARRANGEMENTS 19.1 Right-of-use assets June 30, 2026 December 31, 2025 June 30, 2025 Carrying amount of right-of-use assetsBuildings and improvements 2,277,069$ 1,399,235$ 1,541,269$ Office equipment 30,139 31,113 41,082 Mechanical equipment 15,354 15,578 37,748 Transportation equipment 38,432 35,167 40,811 Land 1,312 2,467 3,409 2,362,306$ 1,483,560$ 1,664,319$ 2026 2025 2026 2025 Increase in right-of-use assets 412,143$ 208,619$ 1,270,721$ 355,065$ Depreciation expenses of right-of-use assets Buildings and improvements 190,276$ 190,144$ 389,651$ 372,875$ Office equipment 6,529 6,917 13,079 13,857 Mechanical equipment 4,147 5,007 8,611 10,254 Transportation equipment 4,955 3,973 9,632 8,418 Land 595 591 1,177 1,196 206,502$ 206,632$ 422,150$ 406,600$ For the Three Months Ended June 30 For the Six Months Ended June 30 19.2 Lease liabilities June 30, 2026 December 31, 2025 June 30, 2025 Carrying amount of lease liabilities 2,349,000$ 1,508,848$ 1,676,268$ The discount rate intervals for lease liabilities are as follows: June 30, 2026 December 31, 2025 June 30, 2025 Land and Buildings 1.25%~8.57% 0.60%~8.57% 0.60%~8.57% Office equipment 2.00%~5.43% 1.15%~5.43% 1.15%~5.43% Mechanical equipment 1.40%~8.57% 0.60%~8.57% 0.60%~8.57% Transportation equipment 1.25%~2.00% 0.60%~2.89% 0.60%~2.89% 19.3 Other lease information 2026 2025 2026 2025 Short-term lease expenses 27,839$ 29,298$ 64,285$ 60,279$ Leases of low value assets 19,399$ 18,608$ 37,479$ 38,103$ Variable lease payments which are not included in lease liabilities measurements 4,163$ 2,629$ 6,138$ 5,446$ Total cash outflow for leases 180,589$ 232,006$ 453,077$ 643,772$ For the Three Months Ended June 30 For the Six Months Ended June 30 The Group chooses to apply recognition exemption to the rentals of buildings, office equipment, and transportation equipment that qualify as short -term lease and computer equipment which qualify as low value assets, and did not recognize related right-of-use assets and lease liabilities.
Page 33
33 20. INVESTMENT PROPERTIES, NET June 30, 2026 December 31, 2025 June 30, 2025 Land 3,479,269$ 4,041,951$ 4,302,121$ Buildings and improvements 1,353,616 1,280,180 975,385 $ 4,832,885 $ 5,322,131 $ 5,277,506 Balance at January 1, 2026 Additions Disposals Transfer from properties Effect of Exchange Rate Changes, Net Balance at June 30, 2026 Cost Land 4,099,613$ -$ 307,690)($ 309,788$ 539,273)($ 3,562,438$ Buildings and improvements 1,560,402 - 149,739)( 122,859 159,917 1,693,439 5,660,015 -$ 457,429)($ 432,647$ 379,356)($ 5,255,877 Less: Accumulated depreciation Land 57,662 1,629$ -$ 23,404$ 474$ 83,169$ Buildings and improvements 280,222 18,930 - 38,672 1,999 339,823 337,884 20,559$ -$ 62,076$ 2,473$ 422,992 Net amount 5,322,131$ 4,832,885$ For the Six Months Ended June 30, 2026 Balance at January 1, 2025 Additions Disposals Effect of Exchange Rate Changes, Net Balance at June 30, 2025 Cost Land 6,919,762$ -$ 882,631)($ 1,678,424)($ 4,358,707$ Buildings and improvements 1,417,695 292,265 1,242,510)( 785,030 1,252,480 8,337,457 292,265$ 2,125,141)($ 893,394)($ 5,611,187 Less: Accumulated depreciation Land 62,221 1,825$ -$ 7,460)($ 56,586 Buildings and improvements 296,694 16,922 - 36,521)( 277,095 358,915 18,747$ -$ 43,981)($ 333,681 Net amount 7,978,542$ 5,277,506$ For the Six Months Ended June 30, 2025 The land held by the subsidiary SCB (HK) is a leasehold interest. Depreciation expense of investment properties is computed using the straight -line method over useful li fe as follows: Land Period of the lease term Buildings and improvements Period of the lease term or 40 years, whichever is shorter The fair value of investment properties were measured mainly an independent appraiser, on the balance sheet date. The valuation applies popular Level 3 input valuation models such as the “direct comparison approach” and the “income c apitalization approach”. The applied unobservable inputs include sales proofs from market, potential market rentals, and related costs such as building costs, consulting costs, and financing costs. The fair value is stated below: June 30, 2026 December 31, 2025 June 30, 2025 Fair value 14,267,263$ 14,555,432$ 13,925,682$ The rental income from investment properties is stated below: 2026 2025 2026 2025 Rental income from investment properties 40,795$ 65,462$ 80,184$ 123,439$ For the Three Months Ended June 30 For the Six Months Ended June 30
Page 34
34 21. INTANGIBLE ASSETS, NET June 30, 2026 December 31, 2025 June 30, 2025 Bank license 1,435,095$ 1,424,581$ 1,337,111$ Computer software 2,489,581 659,862 595,617 3,924,676$ 2,084,443$ 1,932,728$ Cost Operating license 1,561,140$ -$ -$ 21,869$ 1,583,009$ Computer software 1,615,308 2,033,519 237,482)( 9,169 3,420,514 3,176,448 2,033,519$ 237,482)($ 31,038$ 5,003,523 Less: Accumulated depreciation Operating license 136,559 9,374$ -$ 1,981$ 147,914 Computer software 955,446 207,842 237,482)( 5,127 930,933 1,092,005 217,216$ 237,482)($ 7,108$ 1,078,847 Net amount 2,084,443$ 3,924,676$ Balance at June 30, 2026 For the Six Months Ended June 30, 2026 Balance at January 1, 2026 Additions Disposals Effects of Exchange Rate Changes, Net Cost Operating license 1,629,729$ -$ -$ 173,958)($ 1,455,771$ Computer software 1,538,709 120,964 142,765)( 88,714)( 1,428,194 3,168,438 120,964$ 142,765)($ 262,672)($ 2,883,965 Less: Accumulated depreciation Operating license 123,120 9,552$ -$ 14,012)($ 118,660 Computer software 850,824 169,523 142,765)( 45,005)( 832,577 973,944 179,075$ 142,765)($ 59,017)($ 951,237 Net amount 2,194,494$ 1,932,728$ Balance at January 1, 2025 Additions Disposals Effects of Exchange Rate Changes, Net Balance at June 30, 2025 For the Six Ended June 30, 2025 Amortization expense is computed using the straight-line method over the useful lives as follows: Bank license 84 years Computer software 3-10 years 22. OTHER ASSETS, NET June 30, 2026 December 31, 2025 June 30, 2025 Prepaid expenses 6,622,970$ 6,644,483$ 8,219,281$ Refundable deposits 2,423,291 2,722,788 2,001,978 Temporary payments and suspension 671,155 1,915,243 1,857,763 Prepaid pension cost 595,218 465,804 465,576 Deferred charges 20,947 44,639 18,772 Insurance contract assets and reinsurance contract assets 19,902 20,377 19,218 Others 774,723 543,000 530,824 11,128,206$ 12,356,334$ 13,113,412$ For the information on other pledged assets, refer to Note 37.
Page 35
35 23. DEPOSITS FROM THE CENTRAL BANK AND OTHER BANKS June 30, 2026 December 31, 2025 June 30, 2025 Call loans from banks 48,041,239$ 23,950,238$ 33,611,639$ Due to banks 10,568,297 8,012,103 6,612,470 Bank overdrafts 4,635,815 1,155,460 2,605,772 Deposit from Chunghwa Post Co., Ltd. 1,221,799 1,221,799 1,221,799 64,467,150$ 34,339,600$ 44,051,680$ 24. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS Securities sold under repurchase agreements as of June 30, 2026, December 31, 2025 and June 30, 2025 were $10,767,121 thousand, $7,192,305 thousand and $3,955,500 thousand, respectively. The aforementioned securities will be repurchased by June 21, 2027, November 9, 2026, and December 26, 2025 at $10,848,549 thousand, $7,242,701 thousand and $3,965,557 thousand, respectively. 25. PAYABLES June 30, 2026 December 31, 2025 June 30, 2025 Dividends payable 27,043,427$ 18,292,542$ 26,200,161$ Accounts payable 12,970,543 5,942,542 6,084,811 Accrued interest 7,443,606 6,821,933 7,587,420 Acceptances 3,828,877 2,043,809 2,426,695 Accrued expenses 2,140,887 2,662,822 1,702,717 Others 1,002,201 866,802 904,296 54,429,541$ 36,630,450$ 44,906,100$ 26. DEPOSITS AND REMITTANCES June 30, 2026 December 31, 2025 June 30, 2025 Time deposits 923,056,117$ 901,088,847$ 866,947,658$ Savings deposits 668,397,554 655,022,750 635,503,524 Demand deposits 365,041,353 353,908,218 330,039,373 Negotiable certificates of deposit 23,817,400 62,464,800 83,513,100 Checking deposits 8,694,584 9,826,010 9,061,343 Remittances 301,125 232,942 453,371 1,989,308,133$ 1,982,543,567$ 1,925,518,369$ 27. BANK DEBENTURES 27.1 The Bank June 30, 2026 December 31, 2025 June 30, 2025 The subordinated bank debenture - 7-10 years maturity; first issued in 2017; maturity date is from June 2024 to 2027 $ 4,800,000 $ 4,800,000 $ 4,800,000 The subordinated bank debenture - 7-10 years maturity; second issued in 2017; maturity date is from December 2024 to 2027 3,800,000 3,800,000 3,800,000 The subordinated bank debenture - 7-10 years maturity; first issued in 2018; maturity date is from June 2025 to 2028 2,000,000 2,000,000 2,000,000 The subordinated bank debenture; third issued in 2018; no maturity date 7,000,000 7,000,000 7,000,000 The bank debenture - 7-10 years maturity; first issued 10,000,000 10,000,000 10,000,000
Page 36
36 June 30, 2026 December 31, 2025 June 30, 2025 in 2020; maturity date is from March 2027 to 2030 The subordinated bank debenture - 7-10 years maturity; first issued in 202 1; maturity date is from October 2028 to 2031 5,000,000 5,000,000 5,000,000 The bank debenture - 3-5 years maturity; first issued in 2022; maturity date is from July 2025 to 2027 1,200,000 1,200,000 2,000,000 The bank debenture -2-3 years maturity; second issued in 2022; maturity date is September 2025 - - 1,000,000 The subordinated bank debenture; third issued in 2022; no maturity date 1,070,000 1,070,000 1,070,000 The bank debenture - 3 years maturity; third issued in 2023; maturity date is in December 2026 2,000,000 2,000,000 2,000,000 The subordinated bank debenture - 10 years maturity; second issued in 2024; maturity date is in March 2034 2,500,000 2,500,000 2,500,000 The bank debenture – 5-7 years maturity; third issued in 2024; maturity date is from December 2029 to 2031 4,050,000 4,050,000 4,050,000 The bank debenture – 5 years maturity; first issued in 2025; maturity date is in April 2030 2,100,000 2,100,000 2,100,000 The bank debenture – 3-5years maturity; second issued in 2025; maturity date is from September 2028 to 2030 8,450,000 8,450,000 - The bank debenture - 3 years maturity; third issued in 2025; maturity date is in November 2028 400,000 400,000 - $ 54,370,000 $ 54,370,000 $ 48,220,000 The first issuance of the 2017 bank debenture was classified into two types, Types A and B, in accordance with the issued terms. Their terms and methods of interest accrual were as follows: Type A, s even-year of subordinated bank debenture at a fixed annual interest rate of 1.50%; Type B, ten -year of subordinate d bank debenture at a fixed annual interest rate of 1.85%. The interests were paid annually with the repayment of principals at maturity. The second issuance of the 2017 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms and methods of interest accrual were as follows: Type A, seven -year of subordinated bank debenture at a fixed annual interest rate of 1.30%; Type B, ten-year of subordinate d bank debenture at a fixed annual interest rate of 1.55%. The ir interests were paid annually with repayment of principals at maturity. The first issuance of the 2018 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, seven -year of subordinated bank debenture at a fixed annual interest rate of 1.25%; Type B, ten - year of subordinated bank debenture at a fixed annual interest rate of 1.45%. Their interests were paid annually with repayment of principals at maturity. The third issuance of the 2018 subordinated bank debenture with no maturity date was at a fixed annual interest rate of 2.15% with the interest paid annually. The first issuance of the 2020 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, seven -year of bank debenture at a fixed annual interest rate of 0.62%; Type B, ten-year of bank debenture at a fixed annual interest rate of 0.64%. Their interests were paid annually with repayment of principals at maturity. The first issuance of the 2021 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, seven -year of subordinated bank debenture at a fixed annual interes t rate of 0.60%; Type B, ten -year of subordinate d bank debenture at a fixed annual interest rate of 0. 72%. Their interests were paid annually with repayment of principals at maturity. The first issuance of the 2022 bank debenture was classified into two types in accordance with the issued terms
Page 37
37 and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, three-year of bank debenture at a fixed annual interest rate of 1.60%; Type B, five-year of bank debenture at a fixed annual interest rate of 1.70%. Their interests were paid annually with repayment of principals at maturity. The second issuance of the 2022 three-year bank debenture was at a fixed annual interest rate of 1.40% with the interest paid annually and the repayment of principal at maturity. The third issuance of the 2022 subordinated bank debenture with no maturity date was at a fixed annual interest rate of 3.25% with the interest paid annually. The third issuance of the 2023 three-year bank debenture was at a fixed annual interest rate of 1.60% with the interest paid annually and the repayment of principal at maturity. The second issuance of the 2024 ten-year subordinated bank debenture was at a fixed annual interest rate of 1.95% with the interest paid annually and the repayment of principal at maturity. The third issuance of the 2024 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, five -year of bank debenture at a fixed annual interest rate of 1.90%; Type B, seven -year of bank debenture at a fixed annual interest rate of 1.95%. Their interests were paid annually with repayment of principals at maturity. The first issuance of the 2025 five -year bank debenture was at a fixed annual interest rate of 1.88% with the interest paid annually and the repayment of principal at maturity. The second issuance of the 202 5 bank debenture was classified into two types in accordance with the issued terms and the methods of interest accrual: Types A and B. Their terms were as follows: Type A, three -year of bank debenture at a fixed annual interest rate of 1.64%; Type B, five -year of bank debenture at a fixed annual interest rate of 1.68%. Their interests were paid annually with repayment of principals at maturity. The third issuance of the 202 5 three-year bank debenture was at a fixed annual interest rate of 1.61% with the interest paid annually and the repayment of principal at maturity. 27.2 SCB (HK) June 30, 2026 December 31, 2025 June 30, 2025 The subordinate bank debenture with a 10 years maturity and maturity date on February 2033 $ 11,064,615 $ 10,905,649 $ 10,163,838 The third issuance of the 2023 subordinated bank debenture was at a fixed interest rate of 6.375% with interest to be paid semi-annually and the repayment of principal at maturity. 28. OTHER FINANCIAL LIABILITIES June 30, 2026 December 31, 2025 June 30, 2025 Principals of structured instruments 13,843,879$ 9,970,593$ 7,829,854$ Appropriated loan funds 1,967,033 1,826,009 1,774,488 Bank borrowings 640,000 410,000 180,000 Commercial paper payable 489,020 179,440 199,367 Other financial liabilities 1,805,902 1,480,744 1,443,487 18,745,834$ 13,866,786$ 11,427,196$
Page 38
38 29. PROVISIONS June 30, 2026 December 31, 2025 June 30, 2025 Provision for employee benefits 1,713,150$ 2,049,656$ 1,697,644$ Provision for guarantees liabilities 1,000,208 1,047,027 850,974 Provision for financing commitment 141,335 130,333 128,991 Provision for unexpected losses 3,565 3,565 3,565 Provision for other operations 216,915 114,939 92,318 3,075,173$ 3,345,520$ 2,773,492$ Provisions for changes in financing commitment and guarantee liability of the Group for the six months ended June 30, 2026 and 2025 were as follows: For the Six Months Ended June 30, 2026 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Provisions for commitment and guarantee liability Beginning on January 1, 2026 358,311$ 15,637$ 7,430$ 753$ 382,131$ 795,229$ 1,177,360$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 1,674)( 37 1,637 - - - - Transfer to credit impaired financial assets - - 97)( 97 - - - Transfer to 12-month ECLs 1,278 433)( 845)( - - - - Financial assets derecognized in the current period 198,975)( 1,518)( 11,526)( - 212,019)( - 212,019)( Provisions (reversal) 4,229 3,010 2,752 72 10,063 - 10,063 Purchased or originated financial assets 156,566 - 8,374 97)( 164,843 - 164,843 The difference of impairment under the regulation or decree - - - - - 1,673)( 1,673)( Exchange rate and other changes 2,922 - 47 - 2,969 - 2,969 Balance on June 30, 2026 322,657$ 16,733$ 7,772$ 825$ 347,987$ 793,556$ 1,141,543$ For the Six Months Ended June 30, 2025 12-Month ECLs Lifetime ECLs (Collectively) Lifetime ECLs (Individually) Lifetime ECLs (Non-Purchased or Originated Credit Impairment on Financial Assets) Impairment Under the Guidelines of IFRS 9 The Difference of Impairment under the Regulatory Decree Total Provisions for commitment and guarantee liability Beginning on January 1, 2025 145,999$ 84,589$ 2,733$ 123,769$ 357,090$ 707,199$ 1,064,289$ Changes due to financial assets recognized at the beginning of the period: Transfer to lifetime ECLs 440)( 415 25 - - - - Transfer to credit impaired financial assets 1)( - - 1 - - - Transfer to 12-month ECLs 71,518 70,654)( 864)( - - - - Financial assets derecognized in the current period 34,458)( 361)( 1,678)( 122,958)( 159,455)( - 159,455)( Provisions (reversal) 54,332)( 31,665 232 978 21,457)( - 21,457)( Purchased or originated financial assets 80,493 1,203 2,812 - 84,508 - 84,508 The difference of impairment under the regulation or decree - - - - - 39,007 39,007 Exchange rate and other changes 26,322)( 1)( 379)( 225)( 26,927)( - 26,927)( Balance on June 30, 2025 182,457$ 46,856$ 2,881$ 1,565$ 233,759$ 746,206$ 979,965$
Page 39
39 30. OTHER LIABILITIES June 30, 2026 December 31, 2025 June 30, 2025 Guarantee deposits received 3,295,116$ 2,502,666$ 2,531,113$ Deferred revenue 539,742 590,519 442,431 Insurance contract liabilities and reinsurance contract liabilities 400,041 362,088 367,681 Revenue received in advance 120,853 122,344 160,725 Temporary credit 123,769 65,703 91,235 Others 251,172 398,674 290,836 4,730,693$ 4,041,994$ 3,884,021$ 31. PENSION PLAN The expenses related to the post-retirement benefit plan for the six months ended June 30, 2026 and 2025 were recognized as employee benefit expenses in each period at the cost rate determined by the actuarial calculations as of December 31, 2025 and 2024. The breakdown of employee benefit expenses for the three months and six months ended June 30, 2026 and 2025 was as follows: 2026 2025 2026 2025 Defined benefit plans 143,109)($ 73,948$ 75,698)($ 142,162$ Employee preferential savings plans 7,500 7,500 15,000 15,000 135,609)($ 81,448$ 60,698)($ 157,162$ For the Three Months Ended June 30 For the Six Months Ended June 30 The Group expects to contribute $282,606 thousand for defined benefit plan in 2026. 32. EQUITY 32.1 Share capital Ordinary shares June 30, 2026 December 31, 2025 June 30, 2025 Authorized shares (in thousands) 6,000,000 6,000,000 6,000,000 Authorized capital 60,000,000$ 60,000,000$ 60,000,000$ Issued and fully paid shares (in thousands) 4,861,603 4,861,603 4,861,603 Issued capital 48,616,031$ 48,616,031$ 48,616,031$ The i ssued ordinary share ha s par value of $10 . Each shareholder is entitled with the right to vote and receive dividends. For business development and capital resilience enhancement , the bank resolved in the shareholders’ meeting to issue ordinary shares by capitalizing capital surplus. Please refer to Note 39. 32.2 Capital surplus June 30, 2026 December 31, 2025 June 30, 2025 Share premium 23,563,475$ 24,049,635$ 24,049,635$ Treasury shares transaction 2,084,440 2,084,440 2,074,960 Unclaimed dividends 1,646,298 1,646,298 1,494,596 Recognition of changes in equity of subsidiaries 85,518 85,518 85,518 Proportionate share in investee’s surplus from donated assets under the equity method 1,218 1,218 1,218 27,380,949$ 27,867,109$ 27,705,927$
Page 40
40 The capital surplus from shares issued in excess of par (including additional paid -in capital from the issuance of ordinary shares, conversion of bonds and treasury share transactions) and donations may be capitalized from capital surplus into share capital , which is limited to a certain percentage of the Bank’s paid-in capital. The capital surplus from investments accounted for using the equity method , dividends not yet collected by shareholders has limited use and can only be used to offset losses. Since the shares held by subsidiaries were classified as treasury shares, cash dividend distributed to subsidiaries was then recorded as capital surplus - treasury shares according to the shareholding ratio. When the equity of the company is not actually obtained or processed, the impact of the equity transaction recognized due to changes in the company ’s equity or the company ’s recognition of the adjustment to the capital reserve of the subsidiary identified using the equity method. 32.3 Retained earnings and dividend policy According to the earnings distribution policy of the Bank, where the Bank made a surplus profit in its annual accounts, the profit shall be first utilized for paying taxes and then offsetting losses of previous years. As required by the law, 30% of profit shall be allocated as the legal reserve. However, when the amount of statutory surplus reserve has reached the amount of total paid -in capital of the Bank, the required allocation of 30% of pro fit to the legal reserve is waived and any amount exempted from allocation to capital reserve may be appropriated to or reversed from the special surplus reserve for distribution of special dividends. After the abovementioned appropriations, the balance and accumulated unappropriated earnings of the previous year, including the special reserve shall be available for earnings for distribution . The board of directors drafts a plan for surplus distribution and submits it to the shareholders’ meeting for approval. If the Bank has no deficit and the legal reserve has exceeded 25% of the Bank’s paid -in capital, the excess may be corrected into capital (share capital) or distributed in cash. However, under the Banking Act, if legal reserve is less than its paid -in capital, the Bank is allowed to distribute cash earnings only up to 15% of its capital. For the estimation on the distribution of employees’ compensation and remuneration of directors, refer to employee benefits expense in Note 33(7). The Bank has made s pecial reserves for the adoption of IFRS in accordance with Rule No. 1010012865 issued by the FSC on April 6, 2012 and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”. The Bank held the board of shareholders ’ meeting on June 12, 2026 and June 13, 2025, respectively. The proposals and resolutions for the appropriations of earnings and dividends per share for 2025 and 20 24 were as follows: 2025 2024 2025 2024 Legal reserve 3,926,882$ 4,204,262$ Cash dividends - ordinary shares 8,750,886 8,750,886 1.80$ 1.80 $ Appropriation of Earnings Dividends Per Share (In NT Dollar) The Bank's annual cash dividend of 2025, which was resolv ed by the shareholders' meeting, has not yet been distributed on June 30, 2026. Dividends payable are listed in the book. Please refer to Note 25.
Page 41
41 32.4 Special reserve The Bank made a special reserve due to the transfer of $1,256,859 thousand of its cumulative translation adjustment reported in equity to retained earnings upon first -time IFRS adoption. There was no change in the balance of the special reserve for the six months ended June 30, 2026. According to Rule No. 10510001510 issued by the FSC on May 25, 2016, public banks shall appropriate to a special reserve 0.5% to 1.0% of net profit . Public banks may reverse the same amount of transfers or resettle the expenses starting from 2017. However, in accordance with Rule No. 10802714560 issued by the FSC, starting from 2019, the special reserve method will no longer be used to respond to the development of financial technology and protect the rights and interests of domestic bank employees, and to transfer expenses for employees to pay or resettlement expenses, and employee education and training expenses in response to the needs of financial technology or banking business development shall be returned within the scope of the special surplus reserve balance mentioned above. There was no change in the balance of the special reserve for the six months ended June 30, 2026 at the amount of $189,228 thousand. In accordance with the Securities and Exchange Acts 41 -1 and Rule No.1090150022 issued by the FSC on March 31, 2021, upon the first-time adoption for IFRSs for public companies, special reserve shall be made with the following: (1) With respect to the negative other equity interest for the period in which it arises, an equivalent amount of special reserve shall be set aside from the profit after tax for the period, plus other eligible items that are included in the undistributed earnings of the period. If there remains any insufficiency, it shall be set aside from the undistributed earnings of the previous period. (2) With respect to the negative other equity interest accumulated from prior periods, an equivalent amount of special reserve shall be set aside from the undistributed earnings as at the prior period end. Where the undistributed earnings from the prior period are insufficient, the deficit can be made from the undistributed earnings of the current period which are contributed by the profit after tax of the current period plus any other eligible items. If subsequently there is any reversal of the negative other equity interest, the amount of the reversal may be reversed from special reserve and booked for earnings distribution. 32.5 Other equity Other equity in consolidated company includes exchange differences arising from the translation of financial statements of foreign operations, unrealized gain or loss on financial assets measured at fair value through other comprehensive income, loss on hedging instruments, and the impact of credit risk on financial liabilities designated at fair value. Relevant changes and impacts are detailed in the consolidat ed statement of changes in equity. 32.6 Treasury shares On June 30, 2026, December 31, 2025 and June 30, 2025, Shancom Reconstruction AG and China Travel Service (Taiwan) held 11,370 thousand shares and 27 thousand shares of the Bank, respectively. Under the Company Act, the Bank is not allowed to buy back more than 5% of its issued shares. In addition, the total cost of treasury shares may not exceed the sum of the retained earnings and realized capital surplus. The Bank is not allowed to exercise share holders’ rights on these shares before they are resold. The shares held by its subsidiaries are treated as treasury shares , except for participating in the Bank ’s cash addition and voting rights, the rest is the same as the general shareholder’s rights.
Page 42
42 32.7 Non-controlling interests 2026 2025 Beginning balance（IFRS4） 70,412,351 $ 68,956,347 $ Effect of retrospective application and retrospective restatement 36,943)( 191,287)( Beginning balance（IFRS17） 70,375,408 68,765,060 Attributed to non-controlling interests Net income 2,543,050 1,249,050 Translation adjustments for foreign operations 668,818 8,074,600)( Unrealized gain on financial assets measured at FVTOCI 1,422,873)( 2,181,477 Realized gain on financial assets measured at FVTOCI 93)( 21,194 Gain on investments in debt instruments measured at FVTOCI 857 1,105 Share of other comprehensive profit and loss under the equity method 15,472 2,269 Income tax effect 78,162 150,929)( profit and loss on Hedging Instruments 40,795)( - Ending balance 72,218,006 $ 63,994,626 $ For the Six Months Ended June 30 33. DETAILS OF COMPREHENSIVE INCOME STATEMENT ITEMS 33.1 Interest income, net 2026 2025 2026 2025 Interest income Discounts and loans 10,184,123$ 10,937,463$ 20,328,877$ 22,687,879$ Securities investments 5,180,154 4,660,053 10,141,430 9,309,860 Due from banks 2,506,719 3,330,533 5,447,335 7,370,788 Credit card interests 34,433 32,303 69,041 64,672 Others 179,127 103,617 358,606 177,872 18,084,556 19,063,969 36,345,289 39,611,071 Interest expense Deposits 7,978,729 9,119,149 16,102,024 19,074,441 Bank debentures 495,943 505,510 893,951 899,531 Due to banks 118,570 351,001 417,795 740,134 Structured instruments 108,814 128,150 214,074 210,721 Securities sold under repurchase agreements 97,260 15,213 176,326 27,077 Leased liability 15,437 17,774 39,759 35,573 Others 26,881 17,336 148,490 137,476 8,841,634 10,154,133 17,992,419 21,124,953 Interest income, net 9,242,922$ 8,909,836$ 18,352,870$ 18,486,118$ For the Three Months Ended June 30 For the Six Months Ended June 30 33.2 Service fee income, net 2026 2025 2026 2025 Service fee income Insurance commission fees 753,916$ 687,922$ 1,666,304$ 1,330,725$ Trust and custody services 699,161 541,208 1,405,129 1,187,194 Loan service fees 301,966 238,800 588,314 605,966 Nominee and brokerage service charge 203,023 174,548 416,640 318,103 Credit card related fees 148,764 156,099 301,926 312,018 Guarantees related fees 140,853 153,940 292,300 310,256 Exchange related fees 90,034 92,204 178,620 183,405 Inward/outward business 48,448 49,475 94,367 102,294 Others (Note) 192,019 202,863 393,340 434,680 2,578,184 2,297,059 5,336,940 4,784,641 For the Three Months Ended June 30 For the Six Months Ended June 30
Page 43
43 2026 2025 2026 2025 Service charge Credit card service charge 99,993$ 90,986$ 194,399$ 179,663$ Nominee and brokerage service charge 31,095 28,297 62,094 57,430 Finance service charge 16,678 10,221 35,261 26,538 Custody service charge 7,095 8,078 14,861 16,925 Inter-bank service charge 3,591 3,940 7,299 7,930 Others 132,653 134,237 244,213 270,524 291,105 275,759 558,127 559,010 Service fee income, net 2,287,079$ 2,021,300$ 4,778,813$ 4,225,631$ For the Three Months Ended June 30 For the Six Months Ended June 30 Note: Individual items did not exceed 5% of the total amount. 33.3 Gain (loss) on financial assets and liabilities at FVTPL Realized Gain (Loss) Unrealized Gain (Loss) Total Financial assets mandatorily classified as at FVTPL 509,385$ 640,058$ 1,149,443$ Held-for-trading financial liabilities 400,032)( 703,430)( 1,103,462)( Financial liabilities designated at FVTPL - 15,127)( 15,127)( 109,353$ 78,499)($ 30,854$ For the Three Months Ended June 30, 2026 Realized Gain (Loss) Unrealized Gain (Loss) Total Financial assets mandatorily classified as at FVTPL 2,691,198$ 493,836)($ 2,197,362$ Held-for-trading financial liabilities 2,356,897)( 484,594 1,872,303)( Financial liabilities designated at FVTPL - 3,674 3,674 334,301$ 5,568)($ 328,733$ For the Three Months Ended June 30, 2025 Realized Gain (Loss) Unrealized Gain (Loss) Total Financial assets mandatorily classified as at FVTPL 938,335$ 961,147$ 1,899,482$ Held-for-trading financial liabilities 612,233)( 1,085,756)( 1,697,989)( Financial liabilities designated at FVTPL - 20,544 20,544 326,102$ 104,065)($ 222,037$ For the Six Months Ended June 30, 2026 Realized Gain (Loss) Unrealized Gain (Loss) Total Financial assets mandatorily classified as at FVTPL 5,118,319$ 1,184,338)($ 3,933,981$ Held-for-trading financial liabilities 4,895,544)( 1,748,182 3,147,362)( Financial liabilities designated at FVTPL - 56,400)( 56,400)( 222,775$ 507,444$ 730,219$ For the Six Months Ended June 30, 2025 33.4 Realized gain or loss on financial assets at FVTOCI 2026 2025 2026 2025 Dividend income 1,224,038$ 1,465,860$ 1,536,828$ 1,809,076$ Disposal of debt instruments 16,913 79,798 249,561 116,383 1,240,951$ 1,545,658$ 1,786,389$ 1,925,459$ For the Three Months Ended June 30 For the Six Months Ended June 30
Page 44
44 33.5 Other non-interest income, net 2026 2025 2026 2025 Rent revenue 57,760$ 81,258$ 116,232$ 158,849$ (Loss) gain on disposal and write-off of property and equipment 710)( 21 2,317)( 1,133)( Others 81,043 67,041 92,937 97,337 138,093$ 148,320$ 206,852$ 255,053$ For the Three Months Ended June 30 For the Six Months Ended June 30 33.6 Employment benefits expense 2026 2025 2026 2025 Short-term employment benefits 2,885,494$ 2,783,585$ 5,694,090$ 5,663,436$ Retirement benefits 16,606 219,553 229,838 430,449 Other benefit plan 146,978 62,283 302,507 211,587 3,049,078$ 3,065,421$ 6,226,435$ 6,305,472$ For the Three Months Ended June 30 For the Six Months Ended June 30 33.7 Employees’ compensation and remuneration of directors The employees’ compensation and remuneration of directors were at the rates of no less than 0.1% and no higher than 0.6%, respectively, of net profit before income tax, employees’ compensation and directors’ remuneration. Furthermore, on June 13, 2025, the shareholders' meeting passed an amendment to the Articles of Association stipulating that the aforementioned employees’ compensation should be allocated at a rate of not less than 10% to junior staff. The employees’ compensation and the remuneration of directors for the six months ended June 30, 2026 and 2025 were as follows: 2026 2025 Employees’ compensation 38,004$ 37,990$ Remuneration of directors 28,498$ 23,418$ For the Six Months Ended June 30 The employees’ compensation and the remuneration of directors for 2025 and 2024 as approved in the board meetings on March 19, 2026 and March 21, 2025, respectively, were as follows: Cash Shares Cash Shares Employees’ compensation 80,000$ -$ 76,000$ -$ Remuneration of directors 45,500$ -$ 40,420$ -$ 2025 2024 For the Year Ended December 31 If the amount of the annual consolidated financial report changes after the release date, it will be treated according to the changes in accounting estimation and will be adjusted in the next year. Information on the employees’ compensation and remuneration of directors resolved by the Bank’s board of directors in 2025 and 202 4 is available on the Market Observation Post System website of the Taiwan Stock Exchange.
Page 45
45 33.8 Depreciation and amortization 2026 2025 2026 2025 Depreciation expense Right-of-use assets 206,502$ 206,632$ 422,150$ 406,600$ Properties 187,606 205,437 375,224 420,225 Investment properties 10,264 9,348 20,559 18,748 404,372 421,417 817,933 845,573 Amortization expense Intangible assets 111,465 89,547 217,216 179,075 Other assets 63 1,160 173 3,931 111,528 90,707 217,389 183,006 515,900$ 512,124$ 1,035,322$ 1,028,579$ For the Three Months Ended June 30 For the Six Months Ended June 30 33.9 Other general and administrative 2026 2025 2026 2025 Taxes 459,209$ 486,781$ 905,298$ 936,065$ Maintenance and repair expense 186,046 183,043 372,342 340,062 Postal and telecommunications data expense 136,360 139,747 281,669 265,223 Professional service fee 97,478 166,583 157,801 291,953 Insurance 78,892 60,650 153,087 154,075 Others (Note) 462,405 517,519 1,039,236 1,097,180 1,420,390$ 1,554,323$ 2,909,433$ 3,084,558$ For the Three Months Ended June 30 For the Six Months Ended June 30 Note: Individual items did not exceed five percent of the total amount for the same item 34. INCOME TAX 34.1 Income tax expense recognized in profit or loss The major components of tax expenses were as follows: 2026 2025 2026 2025 Current tax In respect of the current year 720,286$ 1,832,162$ 1,642,650$ 2,839,269$ In respect of prior periods 214,097 89,735 211,639 87,393 Undistributed retained earnings 21,366 52,953 21,366 52,953 955,749 1,974,850 1,875,655 2,979,615 Deferred tax In respect of the current year 134,973 2,051,335)( 491,809 1,932,006)( Income tax (income) expense recognized in profit or loss 1,090,722$ 76,485)($ 2,367,464$ 1,047,609$ For the Three Months Ended June 30 For the Six Months Ended June 30 34.2 Income tax expense recognized in other comprehensive income 2026 2025 2026 2025 Deferred income tax Recognized in other comprehensive income Translation adjustments for foreign operations 98,516$ 1,843,657$ 10,349)($ 1,655,909$ Unrealized gain or loss on financial assets measured at FVTOCI 181,456)( 529,355 384,667 219,916 Income tax (income) expense recognized in other comprehensive income 82,940)($ 2,373,012$ 374,318$ 1,875,825$ For the Three Months Ended June 30 For the Six Months Ended June 30 34.3 Income tax assessments The Bank’s income tax returns through 2020 had been assessed by the tax authorities. Income tax returns of the Bank’s domestic subsidiaries through 20 24 had been assessed by the tax authorities.
Page 46
46 35. EARNINGS PER SHARE The numerators and denominators used in calculating basic earnings per share were as follows: Unit: NT$ Per Share 2026 2025 2026 2025 Basic earnings per share 1.04$ 0.64$ 2.08$ 1.59$ Diluted earnings per share 1.03$ 0.64$ 2.07$ 1.59$ For the Three Months Ended June 30 For the Six Months Ended June 30 The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows: Net Profit for the Period 2026 2025 2026 2025 Earnings used in the computation of basic and diluted earnings per share 5,056,359$ 3,138,846$ 10,165,383$ 7,803,812$ For the Three Months Ended June 30 For the Six Months Ended June 30 Weighted average number of ordinary shares outstanding (in thousands of shares): 2026 2025 2026 2025 Weighted average number of ordinary shares in computation of basic earnings per share 4,898,708 4,898,708 4,898,708 4,898,708 Effect of potentially dilutive ordinary shares: Employees’ compensation 890 819 1,502 1,361 Weighted average number of ordinary shares used in the computation of diluted earnings per share 4,899,598 4,899,527 4,900,210 4,900,069 For the Three Months Ended June 30 For the Six Months Ended June 30 The above weighted average number of outstanding shares has been retrospectively adjusted based on the capital increase ratio from capital surplus with a record date of August 3, 2026. The basic and diluted earnings per share before adjustment for the periods from April 1 to June 30, 2025 and January 1 to June 30, 2025 were both $0.65 and both $1.61, respectively. In the computation of diluted earnings per share, it assumed the entire amount of the compensation w ould be settled in potential shares . If the Bank offered to settle compensation paid to employees in cash or shares , the potential shares are included in the computation of diluted e arnings per share until the number of shares to be distributed to employees is resolved in the following year. 36. RELATED-PARTY TRANSACTIONS The relationship, significant transactions and account balances of the Group and its related parties (except those disclosed in other notes) are summarized as follows: 36.1 The Bank’s related parties Related Party Relationship with the Bank The SCSB Cultural & Educational Foundation Substantive related party The SCSB Charity Foundation Substantive related party Silks Place Taroko Substantive related party Hung Ta Investment Corporation Substantive related party Taiwan Finance Corporation Substantive related party Financial Information Service Co., Ltd. Substantive related party IBF Securities Co., Ltd. Substantive related party Other related parties The relatives of the Bank’s directors, related management and Substantive related party
Page 47
47 36.2 Significant transactions between related parties Balances and transactions between the Bank and its su bsidiaries, which are related parties of the Bank, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Bank and other related parties are disclosed below. 36.2.1 Deposits For the Six Months Ended June 30, 2026 Maximum Balance Ending Balance Interest Rate (%) Interest Expense IBF Securities Co., Ltd. 12,771,245$ 11,135,261$ 0.64~ 1.65 32,190$ Directors and related management 6,882,551 6,344,446 0.01~4.30 88,977 Financial Information Service Co., Ltd. 1,465,755 867,127 0.00~1.72 6,511 The SCSB Cultural & Educational Foundation 335,092 310,103 0.01~ 1.72 2,052 Employees 249,427 132,911 0.00~10.98 1,691 Others 429,028 366,855 0.00~4.00 511 22,133,098$ 19,156,703$ 131,932$ June 30, 2026 For the Year Ended December 31, 2025 Maximum Balance Ending Balance Interest Rate (%) Interest Expense IBF Securities Co., Ltd. 7,485,909$ 6,495,058$ 0.64~1.60 42,198$ Directors and related management 7,643,824 6,703,524 0.01~4.30 148,518 Financial Information Service Co., Ltd. 2,289,415 860,590 0.00~1.70 17,876 The SCSB Cultural & Educational Foundation 350,554 335,079 0.00~1.72 4,953 Employees 282,186 102,284 0.00~10.98 3,569 Others 601,452 410,370 0.00~4.00 1,860 18,653,340$ 14,906,905$ 218,974$ December 31, 2025 For the Six Months Ended June 30, 2025 Maximum Balance Ending Balance Interest Rate (%) Interest Expense Directors and related management 6,100,091$ 6,065,819$ 0.00~4.30 78,610$ IBF Securities Co., Ltd. 5,585,919 5,585,919 0.64~1.60 18,760 Financial Information Service Co., Ltd. 982,186 784,352 0.00~1.70 10,721 The SCSB Cultural & Educational Foundation 310,229 303,823 0.00~1.72 2,052 Employees 163,201 107,502 0.00~10.98 1,671 Others 308,961 306,419 0.00~4.00 500 13,450,587$ 13,153,834$ 112,314$ June 30, 2025 36.2.2 Interest receivable (accounted for as receivables) June 30, 2026 December 31, 2025 June 30, 2025 Directors and related management 106$ 118$ 94$
Page 48
48 36.2.3 Interest payable (accounted for as payables) June 30, 2026 December 31, 2025 June 30, 2025 IBF Securities Co., Ltd. 2,962$ 1,948$ 1,636$ Financial Information Service Co., Ltd. 663 965 849 Directors and related management 725 552 547 The SCSB Cultural & Educational Foundation 89 99 89 The SCSB Charity Foundation 8 3 3 4,447$ 3,567$ 3,124$ 36.2.4 Guarantee deposits received (accounted for as other liabilities) June 30, 2026 December 31, 2025 June 30, 2025 The SCSB Cultural & Educational Foundation 421$ 421$ 318$ 36.2.5 Rental income (accounted for as other non-interest revenue, net) 2026 2025 2026 2025 The SCSB Cultural & Educational Foundation 400$ 320$ 801$ 641$ For the Three Months Ended June 30 For the Six Months Ended June 30 For the rental contracts with related parties, the rental is determined in proportion similar to rentals in the area, based on a reference to the rentals in the neighborhood, and is received on a monthly basis. 36.2.6 Loans Category Name Maximum Balance Ending Balance Normal Loans Non- performingLoans Collateral Interest Rate (%) Interest Income Loans for personal house mortgage Directors and related management (4) 33,089$ 31,476$ 31,476$ -$ Real estate 2.18~2.48 None 366$ Others Directors and related management (12) 233,410 202,527 202,527 - Real estate 2.19~2.51 None 10,833 Directors and related management (6) 2,691 408 408 - None 2.24~2.54 None 5 269,190$ 234,411$ 234,411$ -$ 11,204$ For the Six Months Ended June 30, 2026 Difference of Terms of the Transactions with Unrelated Parties June 30, 2026 Performance Category Name Maximum Balance Ending Balance Normal Loans Non- performingLoans Collateral Interest Rate (%) Interest Income Loans for personal house mortgage Directors and related management (4) 34,065$ 33,089$ 33,089$ -$ Real estate 2.18~2.48 None 530$ Others Directors and related management (11) 213,974 203,394 203,394 - Real estate 2.18~2.52 None 29,202 Directors and related management (5) 1,028 533 533 - None 2.23~2.54 None 19 249,067$ 237,016$ 237,016$ -$ 29,751$ December 31, 2025 For the Year Ended December 31, 2024Performance Difference of Terms of the Transactions with Unrelated Parties Category Name Maximum Balance Ending Balance Normal Loans Non- performingLoans Collateral Interest Rate (%) Interest Income Loans for personal house mortgage Directors and related management (3) 21,673$ 20,984$ 20,984$ -$ Real estate 2.18~2.48 None 244$ Others Directors and related management (10) 204,228 202,303 202,303 - Real estate 2.18~2.51 None 15,511 Directors and related management (3) 1,012 868 868 - None 2.23~2.54 None 11 226,913$ 224,155$ 224,155$ -$ 15,766$ For the Six Months Ended June 30, 2025 Difference of Terms of the Transactions with Unrelated Parties June 30, 2025 Performance
Page 49
49 Employee deposits and loans have interest rates that are better than ordinary rates but within regulated limits, while other related party transactions have similar terms as non-related party transactions. Under the provisions of Articles 32 and 33 of the Banking Act, the Group shall not make unsecured loans to related party, except for consumer loans under certain limits, and government loans. Secured loans to a related party should be fully guaranteed, and the relevant terms should not be superior to other similar credit clients. 36.2.7 Donation 2026 2025 2026 2025 The SCSB Cultural & Educational Foundation -$ 13,000$ -$ 13,000$ For the Three Months Ended June 30 For the Six Months Ended June 30 36.2.8 Disposal of investment properties (Gains or losses on investment property) Name of related-party 2026 2025 2026 2025 Others -$ 48,638$ -$ 12,306$ Transaction Amount Gain on Disposal For the Six Months Ended June 30 For the Six Months Ended June 30 36.3 Compensation of directors and management personnel The compensation of key management personnel for the three months and six months ended June 30, 2026 and 2025 was as follows: 2026 2025 2026 2025 Salaries and other short-term employee benefits 151,235$ 94,600$ 244,174$ 206,387$ Remuneration of directors 36,088 36,385 69,914 70,393 Post-employment benefits 14,192 12,692 28,863 26,785 Bonuses and employees’ compensation 7,949 839 10,628 10,587 Others 7,687 223 7,857 68,843 217,151$ 144,739$ 361,436$ 382,995$ For the Three Months Ended June 30 For the Six Months Ended June 30 37. PLEDGED ASSETS Under the Central Bank’s clearing system of Real -Time Gross Settlement (RTGS), the assets listed below had been provided as collateral for day-term overdrafts with the pledged amount adjustable at any time. June 30, 2026 December 31, 2025 June 30, 2025 Guaranty Purpose The Bank Investments in debt instruments measured at amortized cost 12,000,000$ 12,000,000$ 12,000,000$ Day-term overdraft with the pledge On June 30, 2026, December 31, 2025 and June 30, 2025, the Bank provided financial assets at FVTOCI listed below which had been provided as operating guarantees. June 30, 2026 December 31, 2025 June 30, 2025 Guaranty Purpose The Bank Financial assets at FVTOCI 473,116$ 477,798$ 476,195$ Operating guarantee On June 30, 2026, December 31, 2025 and June 30, 2025, the Group’s subsidiaries provided financial assets as guarantees listed below: June 30, 2026 December 31, 2025 June 30, 2025 Guaranty Purpose Investments in debt instruments measured at amortized cost 17,032,270$ 14,228,720$ 4,564,034$ Operating guarantee Financial assets at FVTOCI - 806,958 9,360,410 Operating guarantee Due from the Central Bank and call loans to banks 1,375,617 1,521,172 1,577,519 Operating guarantee Other assets 432,463 559,878 512,401 Guaranteed derivative 18,840,350$ 17,116,728$ 16,014,364$
Page 50
50 38. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS 38.1 In addition to those disclosed in other notes, significant commitments and contingencies of the Bank as of June 30, 2026, December 31, 2025 and June 30, 2025, were as follows: June 30, 2026 December 31, 2025 June 30, 2025 Commitments of forward contracts with customers 677,941,655$ 610,845,472$ 616,803,534$ Securities in custody 241,945,773 242,946,581 218,074,476 Assets under trust 234,814,445 232,437,854 227,793,993 Guarantee notes payable 133,773,823 115,866,600 105,153,890 Government bonds in brokerage accounts 34,885,000 35,064,400 36,239,600 Receivables under custody 21,323,440 20,578,829 22,728,357 Short-term bills in brokerage accounts 1,454,810 2,237,810 1,775,130 38.2 Material litigation In November 2024, certain debtors filed a damages lawsuit with the Supreme Court of the State of New York, alleging that the Bank failed to fulfill contract and fid uciary duty, resulting in total claimed damages of no less than US$356,000,000. The Bank currently assesses that it will not have a significant impact on its finances and business. Relevant information about the above litigation is available on the Market Observation Post System website of the Taiwan Stock Exchange. 39. SIGNIFICANT SUBSEQUENT EVENTS The Bank's earnings distribution and capital capitalization from capital surplus for the fiscal year 2025 were approved at the annual general shareholders' m eeting held on June 12, 2026. The distribution date is set for August 20, 2026 , with a cash distribution of $1.8 per share, totaling $8,750,886 thousand. Ordinary shares totaling $48,616 thousand shares with a par value of $10 per share will be issued using $486,160 thousand of capital surplus. This capital increase has been declared and declared effective by the Financial Supervisory Commission (FSC), with the record date for the capital increase set as August 3, 2026. 40. FINANCIAL INSTRUMENTS 40.1 Fair value information - financial instruments not measured at fair value 40.1.1 Financial assets and liabilities with significant differences between carrying amounts and fair values. Except as detailed in the following table, the Group’s management considers that the carrying amounts of financial instruments not measured at fair values are approximate of their fair values or the fair values could not otherwise be reliably measured: Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Financial assets Investments in debt instruments measured at amortized cost 173,990,206$ 173,867,953$ 172,989,283$ 173,019,243$ 212,375,654$ 212,342,627$ Financial liabilities Bank debentures 65,434,615 65,724,085 65,275,649 65,690,485 57,483,838 57,809,678 June 30, 2026 December 31, 2025 June 30, 2025
Page 51
51 40.1.2 Fair value level Level 1 Level 2 Level 3 Financial assets Financial assets measured at amortized cost 173,867,953$ 24,057,869$ 149,810,084$ -$ Financial liabilities Bank debentures 65,724,085 - 65,724,085 - June 30, 2026 Total Level 1 Level 2 Level 3 Financial assets Financial assets measured at amortized cost 173,019,243$ 29,224,598$ 143,794,645$ -$ Financial liabilities Bank debentures 65,690,485 - 65,690,485 - December 31, 2025 Total Level 1 Level 2 Level 3 Financial assets Financial assets measured at amortized cost 212,342,627$ 17,797,795$ 194,544,832$ -$ Financial liabilities Bank debentures 57,809,678 - 57,809,678 - June 30, 2025 Total 40.1.3 The evaluation method and assumptions used in measuring fair value. The fair value of financial assets and liabilities are determined as follows: (1) The fair value of financial assets with standard clauses and terms is quoted market price. (2) The fair value of financial instruments other than the above is determined by the discounted cash flow analysis or other generally accepted pricing models. 40.2 Fair value information – financial instrument measured at fair value under repetitive basis 40.2.1 Fair value level Information of the financial instruments measured at fair value categorized by level is as follows:
Page 52
52 Financial Instruments Measured at Fair Value Total Level 1 Level 2 Level 3 Non-derivative financial instruments Assets Financial assets measured at FVTPL Financial assets mandatorily classified as at FVTPL Shares 313,927$ 242,762$ -$ 71,165$ Bonds 3,548,694 2,051,988 1,496,706 - Financial assets at FVTOCI Equity instruments 65,442,889 60,646,371 -- 4,796,518 Debt instruments 531,079,416 331,955,004 199,112,741 11,671 600,384,926$ 394,896,125$ 200,609,447$ 4,879,354$ Liabilities Financial liabilities measured at FVTPL 1,832,165$ -$ 1,832,165$ -$ Derivative financial instruments Assets Financial assets measured at FVTPL 5,199,476$ 613,726$ 3,964,142$ 621,608$ Liabilities Financial liabilities measured at FVTPL 4,128,706$ 1,596$ 3,505,502$ 621,608$ June 30, 2026 Financial Instruments Measured at Fair Value Total Level 1 Level 2 Level 3 Non-derivative financial instruments Assets Financial assets measured at FVTPL Financial assets mandatorily classified as at FVTPL Shares 208,947$ 138,216$ -$ 70,731$ Bonds 417,728 - 417,728 - Financial assets at FVTOCI Equity instruments 46,941,521 42,222,625 - 4,718,896 Debt instruments 474,854,517 296,020,763 178,822,155 11,599 522,422,713$ 338,381,604$ 179,239,883$ 4,801,226$ Non-derivative financial instruments Liabilities Financial liabilities measured at FVTPL 1,823,796$ -$ 1,823,796$ -$ Derivative financial instruments Assets Financial assets measured at FVTPL 3,805,632$ 516,904$ 3,043,189$ 245,539$ Liabilities Financial liabilities measured at FVTPL 4,308,352$ 8,480$ 4,054,333$ 245,539$ December 31, 2025
Page 53
53 Financial Instruments Measured at Fair Value Total Level 1 Level 2 Level 3 Non-derivative financial instruments Assets Financial assets measured at FVTPL Financial assets mandatorily classified as at FVTPL Shares 577,787$ 519,880$ -$ 57,907$ Bonds 2,559,856 2,403,953 155,903 - Financial assets at FVTOCI Equity instruments 52,342,795 48,251,180 -- 4,091,615 Debt instruments 416,469,366 258,123,723 158,334,918 10,725 471,949,804$ 309,298,736$ 158,490,821$ 4,160,247$ Liabilities Financial liabilities measured at FVTPL 2,183,625$ -$ 2,183,625$ -$ Derivative financial instruments Assets Financial assets measured at FVTPL 5,236,651$ 681,830$ 4,513,983$ 40,838$ Liabilities Financial liabilities measured at FVTPL 4,740,954$ 9,348$ 4,683,906$ 47,700$ June 30, 2025 There were no transfers of financial instruments between Level 1 and Level 2 fair value measurement for the six months ended June 30, 2026 and 2025. 40.2.2 Reconciliation of Level 3 fair value measurement For the Six Months Ended June 30, 2026 Assets Financial assets measured at FVTPL 316,270$ 376,069$ -$ -$ -$ -$ -$ 434$ 692,773$ Financial assets measured at FVTOCI 4,730,495 - 117,249 - - - - 39,555)( 4,808,189 Liabilities Financial liabilities measured at FVTPL held for trading 245,539 376,069 - - - - - - 621,608 Reduction Exchange Ending BalanceBuy or Issue Item Beginning Balance Amount of Valuation Gain or Loss Addition Included in Profit or Loss Included in Other Comprehensive Income Transferred In Sell Out, Disposal or Settlement Transferred Out from Third Level For the Six Months Ended June 30, 2025 Assets Financial assets measured at FVTPL 65,545$ 40,838$ -$ -$ -$ -$ -$ 7,638)($ 98,745$ Financial assets measured at FVTOCI 4,763,812 - 404,816)( - - - - 256,656)( 4,102,340 Liabilities Financial liabilities measured at FVTPL held for trading - 47,700 - - - - - - 47,700 Reduction Exchange Ending BalanceBuy or Issue Item Beginning Balance Amount of Valuation Gain or Loss Addition Included in Profit or Loss Included in Other Comprehensive Income Transferred In Sell Out, Disposal or Settlement Transferred Out from Third Level
Page 54
54 40.2.3 Valuation techniques and inputs applied for Level 2 fair value measurement Financial Instruments Valuation T echniques and Inputs Bonds V aluation was based on observable market prices or assessed by using cash flow method through observable elements. Derivatives V aluation was based on widely-adapted pricing techniques. The inputs were assessed by observable elements in the market. Others V aluation was based on observable market prices or assessed by using cash flow method through observable elements. 40.2.4 Valuation techniques and inputs applied for Level 3 fair value measurement The fair value of financial assets classified as Level 3 included but was not limited to bond investments measured at FVTPL , and investments in bonds and equity securities measured at FVTOCI. Most financial instruments with fair value measurements classified as Level 3 only possess single, unobservable inputs. Non -active market debt instruments possess unobservable inputs. The non-active market equity instruments are independent and thus, are irrelevant to each other. The quantified information of significant unobservable inputs is as follows: Measuring at fair value on a repeatability basis Fair Value June 30, 2026 Valuation Techniques Significant Unobservable Inputs Interval (Weighted-Average) Notes Financial assets measured at FVTPL Shares $ 71,165 Market approach P/B ratio 100% Positively correlated to fair value Financial assets measured at FVTOCI Shares 4,796,518 1. Market approach 1. Market liquidity reduction 1. 10%-19% 1. Negatively correlated to fair value 2. Net asset value method 2. P/B ratio 2. 81%~100% 2. Positively correlated to fair value 3. Discounted dividend method 3. Market liquidity reduction 3. 10%~19% 3. Negatively correlated to fair value 4. Capital cost 4. 11.92% 4. Negatively correlated to fair value 5. Sustainable growth rate 5. 10.72% 5. Positively correlated to fair value Bonds 11,671 Discounted cash flow method Discount rate 0%~10% Negatively correlated to fair value Financial assets measured at FVTPL derivatives 621,608 Counterparties quotes Not applicable Not applicable Not applicable Financial liabilities measured at FVTPL derivatives 621,608 Counterparties quotes Not applicable Not applicable Not applicable
Page 55
55 Measuring at fair value on a repeatability basis Fair Value December 31, 2025 Valuation Techniques Significant Unobservable Inputs Interval (Weighted-Average) Notes Financial assets measured at FVTPL Shares $ 70,731 Market approach P/B ratio 100% Positively correlated to fair value Financial assets measured at FVTOCI Shares 4,718,896 1. Market approach 1. Market liquidity reduction 1. 10%~19% 1. Negatively correlated to fair value 2. Net asset value method 2. P/B ratio 2. 81%~ 100% 2. Positively correlated to fair value 3. Discounted dividend method 3. Market liquidity reduction 3. 10%~19% 3. Negatively correlated to fair value 4. Capital cost 5. Sustainable growth rate 4. 9.95% 5. 8.12% 4. Negatively correlated to fair value 5. Positively correlated to fair value Bonds 11,599 Discounted cash flow method Discount rate 0%~10% Negatively correlated to fair value Financial assets measured at FVTPL derivatives Financial liabilities measured at FVTPL derivatives 245,539 245,539 Counterparties Quotes Counterparties quotes Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Measuring at fair value on a repeatability basis Fair Value June 30, 2025 Valuation Techniques Significant Unobservable Inputs Interval (Weighted-Average) Notes Financial assets measured at FVTPL Shares $ 57,907 Market approach P/B ratio 100% Positively correlated to fair value Financial assets measured at FVTOCI Shares 4,091,615 1. Market approach 1. Market liquidity reduction 1. 10%-19% 1. Negatively correlated to fair value 2. Net asset value method 2. P/B ratio 2. 81%~100% 2. Positively correlated to fair value 3. Discounted dividend method 3. Market liquidity reduction 3. 10%-19% 3. Negatively correlated to fair value 4. Capital cost 5. Sustainable growth rate 4. 8.4% 5. 6.8% 4. Negatively correlated to fair value 5. Positively correlated to fair value Bonds Financial assets measured at FVTPL derivatives Financial liabilities measured at FVTPL derivatives 10,725 40,838 47,700 Discounted cash flow method Counterparties quotes Counterparties quotes Discount rate Not applicable Not applicable 0%~10% Not applicable Not applicable Negatively correlated to fair value Not applicable Not applicable
Page 56
56 40.2.5 Sensitivity analysis of alternative assumptions of Level 3 fair value measurements The Group reasonably measured the fair values of its financial instruments; however, using different valuation models, evaluation methods and underlying assumptions may lead to different results. For financial instruments classified as having Level 3 fair value measurements, if the parameters were to go up 1%, the influence on net income or other comprehensive income would be as follows: June 30, 2026 Favorable Unfavorable Favorable Unfavorable Assets Financial assets measured at FVTPL 6,927$ 6,927)($ -$ -$ Financial assets measured at FVTOCI - - 46,721 46,721)( Item Changes in Fair Value Reflected in Profit or Loss Changes in Fair Value Reflected in Other Comprehensive Income December 31, 2025 Favorable Unfavorable Favorable Unfavorable Assets Financial assets measured at FVTPL 706$ 706)($ -$ -$ Financial assets measured at FVTOCI - - 35,514 35,514)( Item Changes in Fair Value Reflected in Profit or Loss Changes in Fair Value Reflected in Other Comprehensive Income June 30, 2025 Favorable Unfavorable Favorable Unfavorable Assets Financial assets measured at FVTPL 578$ 578)($ -$ -$ Financial assets measured at FVTOCI - - 32,095 32,095)( Item Changes in Fair Value Reflected in Profit or Loss Changes in Fair Value Reflected in Other Comprehensive Income 40. 3 Financial risk management 40.3.1 Risk management The Group’s objective in risk man agement is to establish a risk control mechanism weighing the entire risk of the Group, restrictions from laws and regulations, to diversify, transfer, and avoid risk, and to pursue the maximum benefits of the Group’s customers, shareholders, and employees. The Group’s major risks include credit risk, market risk (interest rate, exchange rate and equity securities), operational risk, liquidity risk and so on. The Group established written risk management policies and procedures that are considered and approved by the board of directors to identify, measure, monitor, and control the credit risk, market risk, operation risk and liquidity risk. The Group’s risk management department performs the Group’s risk management activities pursuant to the policies approved by the board of directors. Risk management department works with other business departments in order to identify, evaluate, and avoid any financial risks. The board of directors formulates the written policies for risk management; the policy included specific exposures such as currency risk, interest rate risk, credit risk, derivative and non -derivative financial instruments. In addition, the department of internal audit is responsible for independent review of risk management and control environment.
Page 57
57 40.3.2 Credit risks Credit risk is the risk of counterparties’ failure to fulfill their contractual obligations causing the Group’s financial losses. Both in -balance-sheet and off-balance-sheet items are exposed to credit risks. For the Group’s credit exposures, in-balance-sheet items mainly consisted of discounts and loans, credit card business, due from and call loans to banks, debt investments, and derivative instruments. Off-balance sheet items mainly consisted of financial guarantee, acceptances, letters of credit, loan commitments, and other services which also generate credit exposure. To ensure that the credit risk is controlled within a tolerable range, the Group established an internal standard for credit risk. In that standard, all transactions are analyzed whether in the banking book or in the trading book, and either in -balance-sheet or off-balance-sheet, to identify the inherent and potential risks. The Group examines and confirms credit risk in accordance with the rules before launching new products and business. Furthermore, the Group also establishes a risk management system for complicated credit business such as factoring, credit derivative financial instruments and so on. The Group’s foreign operation units adopt policies and standards same as above to assess their asset quality and provision for contingent loss, and also include policies that comply with the regulations of the local financial supervisory commission. (1) Procedures of credit risk management The major procedures and methods for credit risk management are as follows: A Credit business (including loan commitments and guarantees) The Bank a. The credit risk has increased significantly since initial recognition The Bank assesses the change in the risk of default over the expected duration of each type of credit asset on each reporting date in order to determine whether the credit risk has increased significantly since initial recognition. For this assessment, the Bank’s considerations (including forward -looking information) show that the credit risk has increased significantly since initial recognition and can be corroborated. The main considerations include: i. Changes in internal and external credit ratings from the significant increase in credit risk. ii. Information of overdue status (e.g. if the payment is overdue for more than 30 days). iii. Unfavorable changes in current or projected operating, financial or economic conditions that are expected to result in significant changes in the ability of the debtor to perform its debt obligations. iv. Significant changes in actual or expected results of the debtor’s operations. v. The credit risk of other financial instruments of the same debtor has increased significantly. b. The definition of default and credit impairment on financial assets The Bank’s definition of default on financial assets is the same as the judgment of credit impairment on financial assets. If one or more of the following conditions are met, the Bank determines that the financial assets have defaulted and become credit impaired: i. Changes in internal and external credit ratings from the significant increase in credit risk.
Page 58
58 ii. Information of overdue status (e.g. if the payment is overdue for more than 90 days). iii. The debtor has become bankrupt or may file for ba nkruptcy or financial restructuring. iv. The debtor has died or been dissolved. v. Contracts of other debt instruments of the debtor have defaulted. vi. The active market of the financial assets disappeared due to financial difficulties. vii. The debtor ’s creditor gives the borrower a concession that would not have been considered due to economic or contractual reasons related to the debtor ’s financial difficulties. viii. There is a purchase or initiation of financial assets at a significant discount reflecting that credit losses have occurred. The aforementioned default and credit impairment definitions apply to all financial assets held by the Bank and are consistent with the definitions used for the internal credit risk management purposes of the financial assets and are applied to the relevant impairment assessment model. c. Measurement of expected credit loss For the objective of assessing expected credit loss, credit assets are classified according to the credit risk characteristics (such as the purpose of the bor rowing, the nature of the industry, the type of collateral and the state of the borrowing) into t hree categories: corporate finance , personal finance and credit risk . Further to this, the credit risk characteristics are divided according to each category. The 12 -month expected credit loss amounts of the Bank’s financial instruments whose credit risk has not significantly increased since initial recognition are used to measure the allowance for loss of the financial instruments; for financial instruments wh ose credit risk has increased significantly or which have had credit impairment since initial recognition, such financial instruments are measured at the amount of full lifetime expected credit losses. The estimation method and significant assumptions used to assess expected credit losses have not changed significantly since June 30, 2026. d. Forward-looking information considerations When measuring the expected credit losses, the Bank uses forward -looking economic factors that affect credit risk and take s such forward -looking information regarding expected credit losses into consideration. Based on professional economic judgment, the Bank uses statistical analysis results of GDP growth rate to provide forecast information of economic factors on a quarterly basis and re-evaluates such data on each financial reporting date. SCB (HK) a. The credit risk has increased significantly since initial recognition SCB assesses the change in the risk of default in the next 12 months of each type of credit asset on eac h reporting date in order to determine whether the credit risk has increased significantly since initial recognition. For this assessment, SCB considerations (including forward-looking information) show that the credit risk has increased significantly since initial recognition and can be corroborated. The main considerations include:
Page 59
59 i. Changes in internal and external credit ratings from the significant increase in credit risk. ii. Information of overdue status (e.g. if the payment is overdue for more than 30 days). iii. Unfavorable changes in current or projected operating, financial or economic conditions that are expected to result in significant changes in the ability of the debtor to perform its debt obligations. iv. Significant changes in actual or expected results of the debtor’s operations. v. The credit risk of other financial instruments of the same debtor has increased significantly. vi. There is doubt about the collateral rights under the debt, or the collateral price is affected by the surrounding economic e nvironment, and the mortgage value will decline due to economic recession. vii. There are unfavorable changes in the business of the debtor industry which are affected by the surrounding economy or policy. viii. Key person in debt companies have financial difficulties, debt or dispute litigation, or serious illness or death, all of which have a negative impact on the ability of debt companies to meet their debt obligations. b. The definition of default and credit impairment on financial assets SCB’s definition of default on financial assets is the same as the judgment of credit impairment on financial assets. If one or more of the following conditions are met, SCB determines that the financial assets have defaulted and have credit impairment: i. Information of overdue status (e.g. if the payment is overdue for more than 90 days). ii. The debtor has become bankrupt or may file for bankruptcy or financial restructuring. iii. The debtor has died or been dissolved. iv. Contracts of other debt instruments of the debtor have defaulted. v. The active market of the financial assets disappeared due to financial difficulties. vi. The debtor ’s creditor gives the borrower a concession that would not have been considered due to economic or contractual reasons related to the debtor ’s financial difficulties. vii. The debtor’s overall debt rises and is not proportional to its business growth. viii. If the debtor invests in a project or delays the construction of a project, the cost exceeds the budget, and the creditor needs to arrange for debt restructuring. ix. There is a purchase or initiation of financial assets at a significant discount reflecting that credit losses have occurred. x. Estimated debt contract payments failed to be fully recovered. The aforementioned default and credit impairment definitions apply to all financial assets held by SCB and are consistent with the definitions used for the internal credit risk
Page 60
60 management purposes of the financial assets and are applied to the relevant impairment assessment model. If the financial assets no l onger meet the definition of default and credit impairment for six consecutive months, their statuses are judged to have returned to performance level and are no longer regarded as financial assets that have defaulted and have been credited. c. Measurement of expected credit loss For the objective of assessing expected credit loss, credit assets are classified according to the credit risk characteristics (such as the purpose of the borrowing, the nature of the industry, the type of collateral and the stat e of the borrowing) into two categories: Corporate finance and personal finance. Further to this, the credit risk characteristics are divided according to each category. For financial instruments whose credit risk has not significantly increased since initial recognition, SCB measures the allowance for loss of the financial instruments based on the 12-month expected credit loss amounts; for financial instruments and operating lease receivables whose financial risk has significantly increased or which have had credit impairment since initial recognition, such instruments and operating lease receivables are measured at the amount of expected credit losses during the duration of the period. The estimation method and significant assumptions used to assess expected credit losses have not changed significantly since June 30, 2026. d. Forward-looking information considerations When measuring the expected credit losses, SCB uses forward -looking economic factors that affect credit risk and takes such forward -looking information regarding expected credit losses into consideration. Based on professional economic judgment, SCB uses the statistical analysis results of GDP growth rate to provide forecast information of economic factors on a quarterly basis and re-evaluates such data on each financial reporting date. B. Due from and call loans to bank The Group assesses the credit position of counterparties and consults a credit rating agency for credit rating information and sets limits to the credit facilities. C. Debt investments and derivative financial instruments For the credit risk management of debt investments, the Group identifies credit risk by using information from external institutions about credit ratings, quality of debts, region, and the risk of counterparties. Most of the Group’s counterparties in derivative transactions are assessed at higher than investment grade, and the Group controls the investments according to counterparties’ facilities (including call loans); counterparties that do not have c redit ratings or are not assessed at investment grade are reviewed case by case. Counterparties which are non -financial or non-banking clients are assessed according to the general procedures for the approval of credit facilities and control of credit exposure situations of the counterparties. (2) Policies of credit risk hedging or mitigation A. Collateral The Group applies series of policies to decrease credit risks in its lending business. Among those policies is to request collateral from creditors. To secure the creditor’s rights, the Group has established procedures for pledges, valuations, management, and disposals of collateral. The contracts between the Group and the borrowers clearly state the protocols, including but not limited to the security of credit, procedures for collateral and for offsets. To further decrease credit risks, the contracts also proclaim that the Group may decrease the credit facilities at its
Page 61
61 discretion, accelerate the maturity of the borrowings, demand immediate payback, o r offset borrowers’ assets in the Group against the borrowings. B. Credit risk limitation and credit concentration management The credit policies of the Group regulate the credit limitations, as applied to a single counterparty or group, to avoid excessive credit concentration. The Group further implements concentration policies, which monitor and manage the credit limitation and concentration in one single counterparty, different enterprises, related parties, industries, and countries. The policies are based on individual criteria in different categories including but not limited to industries, enterprises, and share-pledge related loans. C. Other mechanisms for credit risk management The contracts between the Group and the borrowers clearly state the protocols, including but not limited to the security of the credit, procedures for collateral and set off. To further decrease credit risks, the contracts also proclaim that the Group may decrease the balances, shorten the maturity period, demand immediate payback, or use borrowers’ assets in the Group to offset their liabilities. In most circumstances, the Group applies gross settlement with counterparties. However, to further decrease credit risks, the Group applies net settlement or even terminates transactions with certain counterparties when default may occur. The table below analyzes the collateral held as security and other credit enhancements, and their financial effects in respect of the financial assets recognized in the Group’s consolidated balance sheets: June 30, 2026 Book Value Collateral Total Financial instruments subject to IFRS 9 impairment requirements and credit impairment Receivables 1,099,217$ 430,920$ -$ -$ 430,920$ Discounts and loans 21,104,607 17,844,608 - 591,177 18,435,785 Maximum Exposure to Credit Risk Mitigated by Master Netting Arrangement Other Credit Enhancement December 31, 2025 Book Value Collateral Total Financial instruments subject to IFRS 9 impairment requirements and credit impairment Receivables 1,547,639$ 676,843$ -$ -$ 676,843$ Discounts and loans 22,377,708 16,632,495 - 665,088 17,297,583 Maximum Exposure to Credit Risk Mitigated by Master Netting Arrangement Other Credit Enhancement
Page 62
62 June 30, 2025 Book Value Collateral Total Financial instruments subject to IFRS 9 impairment requirements and credit impairment Receivables 1,336,623$ 455,830$ -$ -$ 455,830$ Discounts and loans 25,304,186 21,119,300 - 669,191 21,788,491 Maximum Exposure to Credit Risk Mitigated by Master Netting Arrangement Other Credit Enhancement (3) Credit risk exposures The maximum exposure of the Group’s assets in the consolidated balance sheets is equivalent to the book value, while the pledged assets and other credit instruments are not considered. The off-balance sheet items related to the maximum credit exposure (without considering collateral or other credit enhancements and irrevocable maximum exposure) are as follows: June 30, 2026 December 31, 2025 June 30, 2025 Other guarantees 71,644,394$ 70,562,604$ 75,210,386$ Issued and non-cancelable loan commitments 31,200,897 37,730,999 36,218,616 Issued but unused letters of credit 30,213,292 28,520,211 30,012,789 Non-cancelable credit card commitments 546,831 551,833 567,372 The Group assessed that it could continually c ontrol and minimize credit risk exposure of off-balance sheet items because it adopts stricter procedures and regularly audits credit accounts. Total carrying amounts of the financial assets with the largest credit risk exposure in the Group are as follows: Lifetime ECLs Lifetime ECLs - Unimpaired - Impaired Discounts and loans Consumer banking -Mortgage 369,481,444$ 1,495,141$ 654,303$ 371,630,888$ -Microcredit 23,395,225 870,456 1,821,217 26,086,898 -Others 51,147,093 455,182 479,095 52,081,370 Corporate banking -Secured 410,422,355 14,994,828 14,809,277 440,226,460 -Unsecured 330,680,723 15,293,428 3,340,715 349,314,866 Total 1,185,126,840$ 33,109,035$ 21,104,607$ 1,239,340,482$ Accounts receivable (including non- performing credit card receivables) Credit cards 4,192,918$ 223,660$ 70,966$ 4,487,544$ Others 23,942,940 777,025 1,028,251 25,748,216 Total 28,135,858$ 1,000,685$ 1,099,217$ 30,235,760$ Debt instruments measured at FVTOCI 534,707,075$ 878,375$ 55,686$ 535,641,136$ Investments in debt instruments measured at amortized cost 173,993,312$ -$ -$ 173,993,312$ 12-Month ECLs June 30, 2026 Total
Page 63
63 Lifetime ECLs Lifetime ECLs - Unimpaired - Impaired Discounts and loans Consumer banking -Mortgage 357,447,496$ 2,750,460$ 806,782$ 361,004,738$ -Microcredit 22,463,347 860,436 1,426,634 24,750,417 -Others 47,604,412 194,273 526,054 48,324,739 Corporate banking -Secured 415,250,325 11,765,434 17,017,667 444,033,426 -Unsecured 311,406,667 12,484,267 2,600,571 326,491,505 Total 1,154,172,247$ 28,054,870$ 22,377,708$ 1,204,604,825$ Accounts receivable (including non- performing credit card receivables) Credit cards 3,835,486$ 248,399$ 72,923$ 4,156,808$ Others 18,350,123 210,243 1,474,716 20,035,082 Total 22,185,609$ 458,642$ 1,547,639$ 24,191,890$ Debt instruments measured at FVTOCI 476,066,598$ 206,552$ 54,911$ 476,328,061$ Investments in debt instruments measured at amortized cost 172,992,620$ -$ -$ 172,992,620$ 12-Month ECLs December 31, 2025 Total Lifetime ECLs Lifetime ECLs - Unimpaired - Impaired Discounts and loans Consumer banking -Mortgage 340,798,077$ 1,478,408$ 2,332,366$ 344,608,851$ -Microcredit 21,739,055 151,311 1,427,341 23,317,707 -Others 45,968,200 86,355 530,424 46,584,979 Corporate banking -Secured 413,165,982 12,635,356 17,664,295 443,465,633 -Unsecured 288,527,038 19,090,815 3,349,760 310,967,613 Total 1,110,198,352$ 33,442,245$ 25,304,186$ 1,168,944,783$ Accounts receivable (including non- performing credit card receivables) Credit cards 3,206,145$ 218,528$ 74,257$ 3,498,930$ Others 26,872,973 87,545 1,262,366 28,222,884 Total 30,079,118$ 306,073$ 1,336,623$ 31,721,814$ Debt instruments measured at FVTOCI 419,993,783$ 305,191$ -$ 420,298,974$ Investments in debt instruments measured at amortized cost 212,379,115$ -$ -$ 212,379,115$ 12-Month ECLs June 30, 2025 Total (4) Information on concentration of credit risk Concentration of credit risk exists if transaction counterparties are significantly concentrated on same individuals or groups engaged in activities with similar economic characteristics, which may lead their ability to fulfill contractual obligations being affected by similar changes in economic or other conditions. Concentration of credit risk can be on assets, liabilities or off -balance sheet items and can arise in the course of the enforcement and implementation of transactions (regardless of products or service) or in the combination of exposures across categories, including credit, due from and call loans to
Page 64
64 banks, marketable securities, receivables and derivatives, etc. The Group maintain s a diversified loan portfolio to mitigate the credit risk concentration to same customers; total discounts and loans transactions with same customers and non -performing loans are not material. The Group’s most significant concentrations of credit risk of discounts and loans and non -performing loans by industry, region, and collateral were summarized as follows: A. Industry Sector Amount ％ Amount ％ Amount ％ Private sector 678,497,692$ 54 668,353,048$ 55 659,177,944$ 56 Consumer 492,845,654 40 475,279,213 40 454,149,364 40 Financial institution 61,290,488 5 56,454,723 5 50,945,717 4 Others 6,706,648 1 4,517,841 - 4,671,758 - 1,239,340,482$ 100 1,204,604,825$ 100 1,168,944,783$ 100 June 30, 2026 December 31, 2025 June 30, 2025 B. Region Region Amount ％ Amount ％ Amount ％ Taiwan 832,074,074$ 68 820,090,092$ 68 796,744,060$ 68 Asia Pacific except Taiwan 302,342,521 24 284,214,254 24 269,305,625 23 Others 104,923,887 8 100,300,479 8 102,895,098 9 1,239,340,482$ 100 1,204,604,825$ 100 1,168,944,783$ 100 June 30, 2026 December 31, 2025 June 30, 2025 C. Collateral Collaterals Assumed Amount ％ Amount ％ Amount ％ Unsecured 345,718,501$ 27 320,847,466$ 27 306,313,041$ 26 Secured Properties 790,724,887 64 782,127,686 65 765,737,163 66 Guarantee 48,345,010 4 50,641,682 4 53,642,619 5 Financial collateral 33,249,018 3 30,488,374 3 24,241,287 2 Personal properties 1,874,353 - 2,069,309 - 2,492,296 - Other collateral 19,428,713 2 18,430,308 1 16,518,377 1 1,239,340,482$ 100 1,204,604,825$ 100 1,168,944,783$ 100 June 30, 2026 December 31, 2025 June 30, 2025 (5) Information on credit risk quality Part of the financial assets held by the Group, cash and c ash equivalents, financial assets at fair value through profit or loss, investments in bills and bonds with resale agreements, guarantee deposits paid, security businesses, clearing and settlement funds, etc. are assessed to have very low credit risk because the counterparties have good credit ratings. 40.3.3 Market risk (1) The sources and definition of market risk Market risk is the risk resulting from changes in fair value and future cash flows of on - and off-balance-sheet financial instruments cause d by changes in market prices, interest rates, foreign exchange rate, including equity securities price and commodity price. Changes in above risk elements can cause risks to shift the net profit of the Group or its investment structures. The Group’s financial instruments are exposed to price, interest rate and foreign exchange rate risks. Major market price risk positions of equity securities include domestic listed shares and funds. Major interest risks include bonds and interest rate derivative instruments such as fixed and floating interest rate swap and bond options whereas the major foreign exchange risks include foreign currency positions held by the Group.
Page 65
65 (2) Market risk management policies The Group monitors its market risk and tolerable loss according to the risk management objectives and limits approved by the board of directors. The Group also builds a market risk information system, which enables the Group to effectively monitor the management of the investment limits, assessment of gains and losses, and analysis of sensitivity factors. The results of the monitoring, assessment and analysis are reported to the board of directors in risk control meetings and serve as references for the decision making of the management. The Group splits market risk exposures into trading and held -for-fixed-income portfolios which are controlled by both the Group’s operation and risk management section. Routine control reports are reviewed by the board of directors and relevant committees. (3) Market risk management process A. Recognition and measurement The Group’s operation and risk management sections both identify market risk factors of exposure positions, which are used to measure market risks. Market risk factors include interest rates, foreign exchange rates and market price of equity securities, and exposures, gai ns and losses and sensitivity ( DV01, Delta, Beta) etc. Measurement of investment portfolio is affected by interest rate risk, foreign exchange risk and price of equity securities. B. Monitoring and reporting The Group’s risk management department regularly reviews market risk management objective, positions and control of gains and losses, sensitivity analysis and pressure test and reports to the board of directors. Therefore, the board of directors could well understand market risk control. The Group has established explicit notification process, the limit and stop -loss regulation for various transactions. Stop -loss order must be taken when the limit is reached, otherwise the trading depar tment’s reasons and plans must be approved by the management, and the department should report to relevant committee regularly. (4) Interest rate risk management A. Definition of interest rate risk Interest rate risk represents risks of changes in fair value of investment portfolio and loss in earnings resulting from changes in interest rates. Major products include interest rate -related financial securities and derivative instruments. B. Purpose of interest risk management Interest rate risk manageme nt enhances the Group’s ability to deal with a contingency, to measure, manage and avoid negative influence on earnings and economic values of balance sheet items affected by the changes in interest rates. In addition, it enhances the efficiency of capital and the business management. C. Procedures of interest risk management The Group carefully chooses investment target through conducting research about issuers’ credit, financial status, country risks and interest rate trend. The Group also establishes t rading amount limit and stop -loss limit including limit for trading department, trader and trading commodity, etc. which are approved by top management and the board of directors. When the Group undertakes business activities related to interest rate commodities, it will
Page 66
66 identify interest rate repri sing risks and yield curve risks, and measure the possible impact of interest rate changes on the Group’s earnings and economic value. The Group reports the analysis and monitoring of limit on interest rate risk position and various interest rate management objectives to the strategy management committee and the board of directors on a monthly. When risk management objective has exceeded its limit , it will be reported to the strategy management committee for resolution of response actions. D. Measurement methods The Group measures risks of price reset periods gap from difference in maturity date and price reset date of assets, liabilities, and off -balance sheet items. The Group also established interest rate sensitivity monitoring index for major periods in order to maintain long -term profitability and business growth. Such interest rate indexes and results of pressure test are reviewed by management personnel regularly. In addition, the Group regularly uses DV01 and IRRBB to measure portfolio affected by interest rate. (5) Foreign exchange rate risk management A. Definition of foreign exchange rate risk Foreign exchange risk means losses resulting from currencies exchange at different times. The Group’s foreign exchange rate risk results mainly from spot and forward foreign exchange. The Group’s foreign exchange rate risk is relatively insignificant due to the fact that transactions are basically settled immediately on transaction date. B. Policies, procedures and measurement method for foreign exchange rate risk management In order to control foreign exchange rate risk within tolerable range, the Group has established trading limit, stop-loss limit and maximum loss for trading department and trader and the risk is controlled within the tolerable range. The Group undertakes pressure test on a seasonal basis and uses 3%-10% fluctuation in major foreign exchange rate (USD) as the sensitivity threshold and reports test results to the board of directors. (6) Equity securities price risk management A. Definition of equity securities price risk The market risk of equity securities held by the Group includes individual and general risk from price fluctuations of both individual equity security and the entire equity security market. B. Purpose of equity security price risk management The main purpose of equity security price risk management is to prevent financial status from deteriorating and to avoid decrease in earnings due to violent fluctuation in equity security prices, and to enhance capital efficiency and strengthen operation. C. Procedures of equity security price risk management The Group stop-loss point is set according to the policy approved by the assets and liabilities management committee and board of directors . Stop -loss action must be taken when limit is reached, otherwise the investment department must submit request to top management personnel for approval.
Page 67
67 D. Measurement method The Group’s control of security price risk is based on limit of positions held, as well as strict profit and loss monitoring. (7) Market valuation technique The Group assesses its exposures to market risk and the anticipated loss under market pressures by using assumptions on changes in several market conditions. Limits of various financial instruments are set by the board of directors and monitored by its risk management department. The Group also establishes sensitivity analysis based on major risk factors of various financial products in order to monitor the changes in various market risk factors of financial products. A. Sensitivity analysis a. Interest rate risk The Group has assessed the possible impact on income if global yield curve moves between -1 to +1 bas is points simultaneously on June 30, 2026, Dec ember 31, 2025 and June 30, 2025 while other factors remain unchanged. b. Foreign exchange rate risk The Group assesses the possible impact on income when exchange rates of the NTD against various currencies fluctuate between -1% and +1% on June 30, 2026, December 31, 2025 and June 30, 2025 while other factors remain unchanged. The functional currency of SCB (HK) is the HKD, and the major foreign currency is the USD; as the two currencies were under the Linked Exchange Rate System, there was insignificant foreign exchange rate risk. c. Equity securities price risk The Group has assessed the possible impact on income when equity security prices on June 30, 2026, December 31, 2025 and June 30, 2025 rise or fall by 1% while other factors remain unchanged. The analysis assumed that the trends of equity instruments are consistent with historical data. B. Sensitivity analysis is summarized as follows: Equity Profit or Loss Foreign currency appreciated 1% against the NTD 1,022,514$ 10,483$ Foreign currency depreciated 1% against NTD 1,022,514)( 10,483)( Interest rate curve edged up 1bp 98,954)( 7,320 Interest rate curve edged down 1bp 98,954 7,320)( Equity price increased 1% 525,164 2,149 Equity price decreased 1% 525,164)( 2,149)( Foreign exchange risk Interest rate risk June 30, 2026 Major Risk Fluctuation Range Amount Equity price risk
Page 68
68 Equity Profit or Loss Foreign currency appreciated 1% against the NTD 962,960$ 3,564)($ Foreign currency depreciated 1% against NTD 962,960)( 3,564 Interest rate curve edged up 1bp 95,363)( 8,888 Interest rate curve edged down 1bp 95,363 8,888)( Equity price increased 1% 384,859 1,522 Equity price decreased 1% 384,859)( 1,522)( December 31, 2025 Fluctuation Range Amount Foreign exchange risk Interest rate risk Equity price risk Major Risk Equity Profit or Loss Foreign currency appreciated 1% against the NTD 871,844$ 2,427$ Foreign currency depreciated 1% against NTD 871,844)( 2,427)( Interest rate curve edged up 1bp 86,997)( 3,943 Interest rate curve edged down 1bp 86,997 3,943)( Equity price increased 1% 423,415 1,335)( Equity price decreased 1% 423,415)( 1,335 June 30, 2025 Major Risk Fluctuation Range Amount Foreign exchange risk Interest rate risk Equity price risk 40.3.4 Liquidity risk (1) The sources and definition of liquidity risk Liquidity risk is the po ssibility that the Group is unable to liquidate assets or obtain financing to fulfill matured financial liabilities which may result in financial loss. Liquidity risk may be present when, for example, deposits are withdrawn in advance of the original date of settlement, the market becomes worse and borrowing from other banks becomes difficult, the clients’ credit deteriorates leading to the occurrence of defaults, liquidation of financial instruments becomes difficult, early redemption of interest -sensitive instruments happens, etc. The aforementioned factors may reduce cash balance to be used in the areas of loans, trading, and investment. In some extreme circumstances, the lack of liquidity may lead to the decrease in the overall assets and liabilities, and the need to liquidate the Group’s assets and the possibility of being unable to fulfill loan commitments. Liquidity risks include inherent risks that may be affected by some specific industry events or overall market condition. These events include but a re not limited to credit, merger and acquisitions, systemic breakdown and natural disasters. (2) The management policies are as follows: The management procedures are monitored by the independent department of risk management; the procedures are as follows: A. Regular financing and monitoring of cash flows to ensure the fulfillment of the requirements in the future. B. Maintaining appropriate position of high liquidity assets which are easily realizable. C. Monitoring of liquidity ratios of the balance sheet accounts according to the internal management purposes and external monitoring rules. D. Managing the maturity date of debt instruments. The procedures for monitoring and reporting liquidity risk are applied and measured based on the estimated cash flows (the time gap is based on how the Group manages the liquidity risk) of 1 day, 10 days, and 1 month. Estimates of future cash flows are based on the maturity analysis of financial assets and liabilities. The risk management department also monitors the use of loan com mitment, discount facilities, guarantee letters, and other types of contingent liabilities, and furthermore reports the related information to the risk management committee and the board of directors
Page 69
69 regularly. The Group holds certain position of highly liquid interest bearing assets to fulfill its obligation and for future needs. To manage the liquidity risk, the Group holds the following assets: Cash and cash equivalents, due from the Central Bank and banks, and financial assets at fai r value through profit or loss, etc. (3) Maturity analysis The Group analyzed cash outflows of non -derivative financial liabilities according to the remaining terms from date of the balance shee ts to maturity date of the contract. The disclosure of cash outflows of non -derivative financial liabilities is based on the cash flows of contracts so that the items could not correspond with all items in the consolidated balance sheets. June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Due to the central bank and banks 49,540,900$ 6,658,276$ 2,208,771$ 4,643,004$ 1,416,199$ 64,467,150$ Financial liabilities measured at FVTPL - - - - 1,913,309 1,913,309 Securities sold under repurchase agreements 10,312,837 25,574 362,710 66,000 - 10,767,121 Payables 50,036,897 1,610,059 1,251,365 497,894 1,033,326 54,429,541 Deposits and remittances 1,066,266,978 469,884,940 209,850,097 226,540,087 16,766,031 1,989,308,133 Bank debentures - 355,327 - 7,155,327 57,923,961 65,434,615 Other financial liabilities 16,839,774 48,417 111,961 298,363 1,447,319 18,745,834 Lease liabilities 35,043 68,002 115,111 226,821 1,904,023 2,349,000 December 31, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Due to the central bank and banks 20,267,060$ 6,526,441$ 1,833,111$ 2,069,837$ 3,643,151$ 34,339,600$ Financial liabilities measured at FVTPL - - - - 1,823,305 1,823,305 Securities sold under repurchase agreements 1,193,914 5,588,297 105,094 305,000 - 7,192,305 Payables 32,772,074 1,490,132 714,218 711,116 942,910 36,630,450 Deposits and remittances 1,080,096,137 443,064,657 159,748,614 283,549,930 16,084,229 1,982,543,567 Bank debentures - 350,420 - 2,350,420 62,574,809 65,275,649 Other financial liabilities 12,080,907 52,270 156,924 203,366 1,373,319 13,866,786 Lease liabilities 38,319 71,785 103,382 173,768 1,121,594 1,508,848 June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Due to the central bank and banks 31,391,385$ 3,671,905$ 3,118,887$ 2,270,116$ 3,599,387$ 44,051,680$ Financial liabilities measured at FVTPL - - - - 2,249,185 2,249,185 Securities sold under repurchase agreements 3,367,888 333,155 254,457 - - 3,955,500 Payables 41,212,881 1,396,574 982,953 497,509 816,183 44,906,100 Deposits and remittances 1,033,064,994 444,173,164 237,121,047 197,205,259 13,953,905 1,925,518,369 Bank debentures - 1,326,767 - 326,767 55,830,304 57,483,838 Other financial liabilities 9,689,470 102,173 84,408 176,765 1,374,380 11,427,196 Lease liabilities 35,607 70,946 164,474 197,101 1,208,140 1,676,268 The Group evaluated the contractual maturity date to comprehend all derivative financial instruments on the consolidated balance sheets. Because the maturity analysis of derivative financial liabilities is based on the contractual cash flows, the amounts would not correspond with related items on the consolidated balance sheets. Maturity analysis of derivative financial liabilities is as follows: A. Derivative financial liabilities in net settlement June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives 399,017$ 43,083$ 5,097$ 55,958$ -$ 503,155$ Interest rate derivatives 6,823 1,157 324 6,117 1,030,412 1,044,833 December 31, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives 548,915$ 118,013$ 7,313$ 7,013$ -$ 681,254$ Interest rate derivatives - 717 2,035 4,523 674,286 681,561
Page 70
70 June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives 67,330$ 43,601$ 43,173$ 52,582$ -$ 206,686$ Interest rate derivatives 2,421 40 107 10,368 331,619 344,555 Equity securities derivatives 9,458 - - - - 9,458 B. Derivative financial liabilities in total settlement June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives Cash inflow 289,606,514$ 160,209,704$ 66,979,996$ 64,508,104$ 1,013,257$ 582,317,575$ Cash outflow 289,592,212 160,269,579 67,099,731 64,545,991 1,006,751 582,514,264 Interest rate derivatives Cash inflow 48,201$ 122,766$ 176,722$ 132,382$ 2,661,300$ 3,141,371$ Cash outflow 48,201 122,766 176,722 132,382 2,661,300 3,141,371 December 31, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives Cash inflow 346,684,595$ 108,355,216$ 76,836,796$ 30,941,355$ 174,295$ 562,992,257$ Cash outflow 346,895,367 108,732,245 77,112,699 31,130,781 183,689 564,054,781 Interest rate derivatives Cash inflow 52,375$ 110,336$ 166,912$ 329,626$ 2,702,822$ 3,362,071$ Cash outflow 52,375 110,336 166,912 329,626 2,702,822 3,362,071 June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Derivative financial liabilities measured at FVTPL Foreign exchange derivatives Cash inflow 290,874,711$ 154,939,459$ 85,503,385$ 67,581,712$ 22,560$ 598,921,827$ Cash outflow 290,570,871 155,096,567 85,546,773 67,672,251 22,560 598,909,022 Interest rate derivatives Cash inflow 26,303$ 72,231$ -$ 355,726$ 301,577$ 755,837$ Cash outflow 26,303 72,231 - 355,726 301,577 755,837 The analysis of cash outflows of in -balance-sheet items is illustrated according to the remaining days from the balance sheet date to maturity date of the contract. For financial guarantee contracts, the largest amount is categorized under the earliest possible date to take responsibility. The disclosure of cash outflows of off -balance sheet items is based on the cash flows of contracts so that part items could not correspond with all items in the balance sheet. June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Other guarantees 17,595,705 $ 10,674,230 $ 11,253,012 $ 13,702,858 $ 18,418,589 $ 71,644,394 $ Non-cancelable loan commitments 5,901,438 55,922 307,356 1,887,652 23,048,529 31,200,897 Issued but unused letters of credit 24,143,975 5,062,024 660,254 109,946 237,093 30,213,292 Non-cancelable credit card commitments 81,970 163,940 245,910 55,011 - 546,831 December 31, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Other guarantees 18,909,616 $ 10,572,808 $ 6,963,549 $ 16,345,457 $ 17,771,174 $ 70,562,604 $ Non-cancelable loan commitments 8,956,046 311,428 3,751,521 804,452 23,907,552 37,730,999 Issued but unused letters of credit 25,470,816 2,523,956 453,234 46,081 26,124 28,520,211 Non-cancelable credit card commitments 82,720 165,440 248,159 55,514 - 551,833 June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Total Other guarantees 15,296,781 $ 14,652,259 $ 11,462,693 $ 16,202,958 $ 17,595,695 $ 75,210,386 $ Non-cancelable loan commitments 11,895,206 65,153 2,066,240 1,952,214 20,239,803 36,218,616 Issued but unused letters of credit 25,806,626 3,434,574 718,680 52,909 - 30,012,789 Non-cancelable credit card commitments 85,049 170,098 255,147 57,078 - 567,372
Page 71
71 40.4 Transfer of financial assets In the daily transactions of the Group, most of the transferred financial assets not eligible for full derecognition are repurchase notes and bonds. The cash flows of the transactions have been transferred to outsiders and the liabilities for repurchasing the transferred financial assets in a fixed amount have been recognized; the Group may repurchase the transferred financial assets in the future. The Group is not eligible to conduct, sell, or pledge the transferred financial assets during the effective period prior to derecognition. However, the Group is still exposed to the interest risks and credit risks. As a result, the transferred financial assets are not derecognized. The following tables show the transferred financial assets that are not qualified for derecognition and related financial liabilities. Financial assets measured at FVTOCI Securities sold under repurchase agreements Financial assets measured at amortized cost Securities sold under repurchase agreements 2,039,069$ 2,030,395$ 2,039,069$ 2,030,395$ 8,674$ 9,292,947$ 8,736,726$ 9,292,947$ 8,736,726$ 556,221$ The Book Value of Related Financial Liabilities The Fair Value of Financial Assets Transferred The Fair Value of Related Financial Liabilities Net Amount June 30, 2026 Type of Financial Assets The Book Value of Financial Assets Transferred Financial assets measured at FVTOCI Securities sold under repurchase agreements 7,416,095$ 7,192,305$ 7,416,095$ 7,192,305$ 223,790$ The Book Value of Related Financial Liabilities The Fair Value of Financial Assets Transferred The Fair Value of Related Financial Liabilities Net Amount December 31, 2025 Type of Financial Assets The Book Value of Financial Assets Transferred Financial assets measured at FVTOCI Securities sold under repurchase agreements June 30, 2025 Type of Financial Assets The Book Value of Financial Assets Transferred The Book Value of Related Financial Liabilities The Fair Value of Financial Assets Transferred The Fair Value of Related Financial Liabilities Net Amount 18,850$ 3,974,350$ 3,955,500$ 3,974,350$ 3,955,500$ 41. CAPITAL MANAGEMENT All the Group’s risks were included in the scope of assessment of capital adequacy according to “Regulations Governing the Capital Adequacy”. The business objectives and project budget are approved by the board of directors, and furthermore the Bank considered the development strategy, capital adequacy, debt ratio, and dividend policy in its assessments. The contents are included in stress test, estimate of capital adequacy ratio to ensure achieving the objective of capital adequacy and strengthening of the capital structure. The Banking Act and related measures stipulate that in order to improve the financial foundation of a bank, the ratio of the Group’s own capital to the risky assets shall not be less than 10.50%, where the actual ratio is lower than the prescribed standard, the authorities may impose limit on its capital surplus distribution. The Group conformed to the regulation on capital management as of June 30, 2026, December 31, 2025 and June 30, 2025. The following table lists the equity capital, risk-weighted assets, and risk exposure:
Page 72
72 June 30, 2026 December 31, 2025 June 30, 2025 Analysis items Eligible capital Common equity $ 214,305,035 $ 223,059,144 $ 201,771,172 Other Tier I capital 11,697,420 11,512,245 11,391,700 Tier II capital 42,140,539 34,971,388 36,280,040 Eligible capital $ 268,142,994 $ 269,542,777 $ 249,442,912 Risk-weighted assets Credit risk Standardized approach $ 1,423,758,237 $ 1,343,640,458 $ 1,295,263,271 Internal rating based approach N/A N/A N/A Synthetic securitization - - 728,155 Operational risk Standardized approach 78,722,088 78,722,088 65,393,890 Market risk Standardized approach 50,810,056 29,129,571 97,506,245 Simplified Standardized approach 555,448 5,325,900 - Internal models approach (IMA) N/A N/A N/A Total risk-weighted assets 1,553,845,829 $ 1,456,818,017 $ 1,458,891,561 $ June 30, 2026 December 31, 2025 June 30, 2025 Ratio of common equity to risk-weighted assets 13.79% 15.31% 13.83% Ratio of Tier I capital to risk-weighted assets 14.54% 16.10% 14.61% Capital adequacy ratio 17.26% 18.50% 17.10% Leverage ratio 8.65% 9.22% 8.65% Note 1: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the Capital Adequacy Ratio of Banks” and “Explanation of Methods for C alculating the Eligible Capital and Risk-weighted Assets of Banks”. Note 2: Formulas used were as follows: (1) Eligible capital = Ordinary equity + Other Tier I capital + Tier II capital. (2) Total risk-weighted assets = Risk-weighted assets for credit risk + Capital requirements for operational risk and market risk × 12.5. (3) Capital adequacy ratio = Eligible capital ÷ Total risk-weighted assets. (4) Ratio of ordinary equity to risk-weighted assets = Ordinary equity ÷ Total risk-weighted assets. (5) Ratio of Tier I capital to risk -weighted assets = (Ordinary equity + Other Tier I capital) ÷ Total risk-weighted assets. (6) Leverage ratio = Net value of tier I capital ÷ Net value of exposure measurement
Page 73
73 42. ASSET QUALITY, CONCENTRATION OF CREDIT EXTENSIONS, INTEREST RATE SENSITIVITY, PROFITABILITY AND MATURITY ANALYSIS OF ASSETS AND LIABILITIES 42.1 Assets quality: As stated in Table 1 42.2 Concentration of credit risks Top 10 credit extensions information of the Bank and SCB(HK) were as below: Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value (Note 4) 1 A Group (retail sale of electric and communications equipment) 11,530,513 5.39% P Group (hotel and property development) 12,823,863 7.55% 2 B Group (computer and peripheral manufacturing) 9,194,854 4.29% Q Group (property development) 10,316,739 6.07% 3 C Group (general management agency) 7,676,776 3.59% R Group (hotel and property development) 10,291,798 6.06% 4 D Group (computer manufacturing) 6,511,831 3.04% S Group (car dealer) 7,716,010 4.54% 5 E Group(Computer and peripheral equipment and software wholesale industry) 5,665,083 2.65% T Group (property development) 6,917,557 4.07% 6 F Group (general management agency) 5,530,569 2.58% U Group (conglomerate company) 5,850,393 3.44% 7 G Group (computer manufacturing) 4,747,650 2.22% V Group (broadcasting and Entertainment) 5,691,288 3.35% 8 H Group (computer and peripheral manufacturing) 4,667,003 2.18% W Group (hotel and property development) 5,538,350 3.26% 9 I Group (electric power supply) 4,561,382 2.13% X Group (property development, apparel and commodity trading) 5,035,125 2.96% 10 J Group (real estate development) 4,400,000 2.06% Y Group (apparel and accessories import and export industry) 4,251,628 2.50% Ranking (Note 1) June 30, 2026 The Bank SCB (HK) Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value (Note 4) 1 A Group (retail sale of electric and communications equipment) 11,042,820 5.39% P Group (hotel and property development) 12,758,316 7.70% 2 C Group (general management agency) 7,152,599 3.49% Q Group (property development) 11,194,399 6.76% 3 D Group (computer manufacturing) 6,848,379 3.34% Z Group (hotel and property development) 10,352,187 6.25% 4 F Group (general management agency) 6,479,883 3.16% T Group (property development) 8,083,382 4.88% 5 E Group (Computer and peripheral equipment and software wholesale industry) 6,173,566 3.01% S Group (car dealer) 6,979,457 4.21% 6 K Group (financial leasing) 4,507,070 2.20% U Group (conglomerate company) 5,866,952 3.54% 7 J Group (real estate development) 4,225,000 2.06% V Group (broadcasting and Entertainment) 5,672,252 3.42% 8 I Group (electric power supply) 4,141,077 2.02% W Group (hotel and property development) 5,589,245 3.37% 9 L Group (real estate development) 3,949,101 1.93% X Group (property development, apparel and commodity trading) 5,367,145 3.24% 10 G Group (computer manufacturing) 3,928,250 1.92% Y Group (apparel and accessories import and export industry) 4,078,897 2.46% Ranking (Note 1) December 31, 2025 The Bank SCB (HK)
Page 74
74 Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value Group Name (Note 2) Credit Extension Balance (Note 3) % of Net Asset Value (Note 4) 1 A Group (retail sale of electric and communications equipment) 10,538,038 5.63% P Group (hotel and property development) 11,959,234 7.94% 2 C Group (general management agency) 7,285,543 3.90% Z Group (hotel and property development) 9,874,403 6.56% 3 M Group (real estate development) 6,436,358 3.44% T Group (property development) 6,354,972 4.22% 4 D Group (computer manufacturing) 6,354,622 3.40% V Group (broadcasting and entertainment industry) 5,960,078 3.96% 5 F Group (general management agency) 5,860,943 3.13% U Group (conglomerate company) 5,491,173 3.65% 6 I Group (electric power supply) 5,608,229 3.00% a Group (investment holding) 5,113,290 3.40% 7 B Group (computer and peripheral manufacturing) 4,589,985 2.45% Q Group (property development) 5,067,656 3.36% 8 K Group (financial leasing) 4,133,278 2.21% W Group (hotel and property development) 4,892,395 3.25% 9 N Group (residential and building development, leasing and 3,975,404 2.13% X Group (property development, apparel and commodity trading) 4,887,336 3.25% 10 O Group (financial industry) 3,840,088 2.05% Y Group (apparel and accessories import and export industry) 3,744,635 2.49% Ranking (Note 1) June 30, 2025 The Bank SCB (HK) Note 1: The top 10 credit extensions ranking is made by total credit balance, which excluded government-owned or state-run enterprises. If the borrower is an affiliate of the Group enterprise, the credit balance of the borrower is then aggregated to the Group enterprise’s credit balance. The borrower is marked by specific codes as well as its major industr y. The major industry of a borrower is determined by its maximum exposures by industries. The classification of industry should be in line with th e Standard Industrial Classification System of Taiwan published by the Directorate General of Budget, Accounting and Statistics under the Executive Yuan. Note 2: “Group Enterprise” conforms to the definition of Article 6 in “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.” Note 3: Credit balance includes each item of loan (including import bill negotiated, export bill negotiated, discounts, overdrafts, short -term loans, short -term secured loans, m arginal receivables, medium-term loans, medium -term secured loans, long -term loans, long -term secured loans and non-performing loans), exchange bills negotiated, accounts receivable - without recourse factoring, acceptances receivable and guarantees issued. Note 4: It is net equity of SCB (HK).
Page 75
75 42.3 Interest rate sensitivity information 42.3.1 The Bank Interest Rate Sensitivity (NTD) June 30, 2026 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 963,147,077 $ 49,520,978 $ 25,278,310 $ 48,456,590 $ 1,086,402,955 $ Interest rate sensitive liabilities 229,737,785 517,554,797 202,594,178 57,326,786 1,007,213,546 Interest rate sensitivity gap 733,409,292 468,033,819)( 177,315,868)( 8,870,196)( 79,189,409 214,110,620 107.86% 36.99% Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity June 30, 2025 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 962,087,151 $ 39,394,203 $ 10,053,771 $ 63,283,654 $ 1,074,818,779 $ Interest rate sensitive liabilities 277,113,012 507,573,560 169,092,318 57,816,705 1,011,595,595 Interest rate sensitivity gap 684,974,139 468,179,357)( 159,038,547)( 5,466,949 63,223,184 187,033,954 106.25% 33.80% Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity Note 1: The tables above refer only to the financial assets/liabilities denominated in NT dollars held by the whole bank, excluded contingent assets and liabilities. Note 2: Interest rate-sensitive assets/liabilities refer to financial assets/liabilities which returns are driven by interest rate fluctuations. Note 3: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities. Note 4: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities. (The interest rate-sensitive assets and liabilities are denominated in NT dollars). Interest Rate Sensitivity (USD) June 30, 2026 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 8,268,070 $ 184,271 $ - $ - $ 8,452,341 $ Interest rate sensitive liabilities 4,226,336 3,646,384 359,119 350,764 8,582,603 Interest rate sensitivity gap 4,041,734 3,462,113)( 359,119)( 350,764)( 130,262)( 6,722,468 98.48% 1.94%)( Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity June 30, 2025 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 8,310,276 $ 147,619 $ - $ - $ 8,457,895 $ Interest rate sensitive liabilities 4,026,668 3,710,588 440,119 131,340 8,308,715 Interest rate sensitivity gap 4,283,608 3,562,969)( 440,119)( 131,340)( 149,180 6,385,591 101.80% 2.34% Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity
Page 76
76 Note 1: The tables above refer only to the financial assets/liabilities denominated in US dollars held by the whole bank, contingent assets and liabilities excluded. Note 2: Interest rate-sensitive assets/liabilities refer to financial assets/liabilities which returns are driven by interest rate fluctuations. Note 3: Interest rate sensitivity gap = Interest rate-sensitive assets – Interest rate-sensitive liabilities. Note 4: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities. (The interest rate-sensitive assets and liabilities are denominated in US dollars). 43.3.2 SCB (HK) Interest Rate Sensitivity (USD) June 30, 2026 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 6,787,301 $ 561,911 $ 367,012 $ 2,153,987 $ 9,870,211 $ Interest rate sensitive liabilities 7,684,128 820,678 377,633 577,097 9,459,536 Interest rate sensitivity gap 896,827)( 258,767)( 10,621)( 1,576,890 410,675 5,335,646 104.34% 7.70% Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity June 30, 2025 Item 1~90 days 91~180 days 181 days~1 year Over 1 year Total Interest rate sensitive assets 6,630,310 $ 277,175 $ 1,003,900 $ 1,965,992 $ 9,877,377 $ Interest rate sensitive liabilities 7,267,877 873,010 392,154 502,541 9,035,582 Interest rate sensitivity gap 637,567)( 595,835)( 611,746 1,463,451 841,795 5,141,898 109.32% 16.37% Net equity Ratio of interest rate sensitive assets to liabilities Ratio of interest rate sensitivity gap to net equity Note 1: The tables above refer only to the financial assets/liabilities denominated in US dollars held by SCB (HK), contingent assets and liabilities excluded. Note 2: Interest rate-sensitive assets/liabilities refer to financial assets/liabilities which returns are driven by interest rate fluctuations. Note 3: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities. Note 4: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities. (The interest rate-sensitive assets and liabilities are denominated in US dollars). 43.4 Profitability The Group June 30, 2026 June 30, 2025 Before income tax 1.22 0.83 After income tax 1.03 0.75 Before income tax 10.74 7.81 After income tax 9.11 7.00 46.33 32.48 Unit: % Items Return on total assets Return on equity Profit margin
Page 77
77 Note 1: Return on total assets = Income before (after) income tax ÷ Average total assets. Note 2: Return on equity = Income before (after) income tax ÷ Average equity. Note 3: Profit margin = Income after income tax ÷ Total net revenue. Note 4: Income before (after) income tax represents income YTD. Note 5: The quarterly profitability of each quarter is converted to the annual benchmark figures expressed in the annual rates. 43.5 Maturity analysis of assets and liabilities 43.5.1 The Bank (1) Maturity analysis of New Taiwan Dollars assets and liabilities June 30, 2026 0~10 days 11~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 1,171,767,903 $ 139,404,063 $ 100,636,776 $ 75,568,431 $ 82,081,569 $ 158,497,310 $ 615,579,754 $ Major cash outflow on maturity 1,490,882,863 36,672,075 73,986,018 202,651,876 203,471,552 334,683,211 639,418,131 Gap 319,114,960 )( 102,731,988 26,650,758 127,083,445 )( 121,389,983 )( 176,185,901 )( 23,838,377 )( Total For remaining period to maturity date June 30, 2025 0~10 days 11~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 1,164,061,142 $ 182,002,609 $ 103,448,410 $ 61,446,506 $ 67,326,569 $ 122,641,511 $ 627,195,537 $ Major cash outflow on maturity 1,480,512,118 52,916,931 83,883,074 220,650,700 214,540,474 292,420,604 616,100,335 Gap 316,450,976 )( 129,085,678 19,565,336 159,204,194 )( 147,213,905 )( 169,779,093 )( 11,095,202 Total For remaining period to maturity date Note: This table includes only financial assets/liabilities denominated in the NTD dollars held by the head office and domestic branches. (2) Maturity analysis of US Dollars assets and liabilities June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 13,401,268 $ 2,506,790 $ 1,565,201 $ 752,346 $ 761,828 $ 7,815,103 $ Major cash outflow on maturity 12,797,019 3,064,172 3,193,627 2,161,840 2,871,580 1,505,800 Gap 604,249 557,382)( 1,628,426)( 1,409,494)( 2,109,752)( 6,309,303 Total For remaining period to maturity date June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 13,057,941 $ 1,892,148 $ 1,239,442 $ 724,396 $ 706,343 $ 8,495,612 $ Major cash outflow on maturity 12,450,297 2,882,241 2,952,664 2,319,073 2,737,835 1,558,484 Gap 607,644 990,093)( 1,713,222)( 1,594,677)( 2,031,492)( 6,937,128 Total For remaining period to maturity date Note: This table includes only financial assets/liabilities denominated in the US dollars held by the head office, branches and OBU.
Page 78
78 43.5.2 SCB (HK) Maturity analysis of US Dollars assets and liabilities June 30, 2026 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 9,958,734 $ 922,305 $ 1,694,576 $ 897,313 $ 811,912 $ 5,632,628 $ Major cash outflow on maturity 9,591,154 4,829,412 3,590,501 653,670 166,627 350,944 Gap 367,580 3,907,107)( 1,895,925)( 243,643 645,285 5,281,684 Total For remaining period to maturity date June 30, 2025 0~30 days 31~90 days 91~180 days 181 days~1 year Over 1 year Major cash inflow on maturity 9,886,472 $ 2,888,788 $ 1,322,974 $ 555,817 $ 1,169,152 $ 3,949,741 $ Major cash outflow on maturity 9,114,030 4,682,232 3,261,540 637,545 185,706 347,007 Gap 772,442 1,793,444)( 1,938,566)( 81,728)( 983,446 3,602,734 Total For remaining period to maturity date Note: This table includes only financial assets/liabilities held by SCB. 43. THE CONTENTS AND AMOUNTS OF TRUST ACTIVITIES BY PROCESSING TRUST ENTERPRISE ACT The trust account balance sheets, income statements and the details of trust assets are as follows: Balance Sheet of Trust Account June 30, 2026 June 30, 2025 Trust Assets Bank deposit 12,193,957 $ 8,238,845 $ Short-term investments 118,823,937 110,940,417 Net asset value of collective investment trust fund 813,302 3,438,782 Accounts receivable 13,756 23,488 Land 32,359,236 34,128,842 Buildings and improvement, net 89,332 89,802 Construction in progress 16,826,500 15,851,025 Securities in custody 49,855,908 53,769,040 Other assets 64,020 62,247 Total trust assets 231,039,948 $ 226,542,488 $ June 30, 2026 June 30, 2025 Trust Liabilities Accounts payable 176 $ 174 $ Depository of security payable 49,855,908 53,769,040 Trust capital 180,885,058 172,634,197 Accumulated gain and equity 298,806 139,077 Total trust liabilities 231,039,948 $ 226,542,488 $
Page 79
79 Trust Asset Lists Item June 30, 2026 June 30, 2025 Cash in banks 12,193,957 $ 8,238,845 $ Short-term investment Funds 65,989,999 63,998,232 Bonds 39,322,981 37,315,325 Common stock 4,820,359 4,360,947 Structured instruments 8,515,440 5,093,123 Preferred stock 175,158 172,790 Net asset value of collective trust accounts 813,302 3,438,782 Receivables 13,756 23,488 Land 32,359,236 34,128,842 Buildings and improvement, net 89,332 89,802 Construction in progress 16,826,500 15,851,025 Depository of securities 49,855,908 53,769,040 Other assets - principal deferred expense 64,020 62,247 Total 231,039,948 $ 226,542,488 $ Income Statements of Trust Account 2026 2025 Trust income Dividend income 1,071 $ 2,491 $ Interest income 51,953 43,707 Donation income 823 949 Realized investment gains 14,933 11,725 Unrealized investment gains 162,072 144,660 Other revenue 26,298 38,389 257,150 $ 241,921 $ Trust expenses Tax expenditures 340$ 3,169$ Management expenses 4,146 4,360 Service expenses 1,075 524 Realized investment losses 1 161 Unrealized investment losses 43,524 86,800 Donation expenses 953 759 Other expenses 1,314 1,443 51,353 97,216 Income (loss) before income tax 205,797 144,705 Income tax expense - 16)( Net income (loss) 205,797 $ 144,689 $ For the Six Months Ended June 30
Page 80
80 44. EXCHANGE RATE INFORMATION OF FOREIGN FINANCIAL ASSETS AND LIABILITIES The information regarding sign ificant financial assets/liabilities denominated in foreign currencies held by the Group was as follows: 44.1 The Bank Foreign Currencies Exchange Rate New Taiwan Dollars Foreign Currencies Exchange Rate New Taiwan Dollars Foreign Currencies Exchange Rate New Taiwan Dollars Financial assets Cash and cash equivalents USD 191,279 $ 31.8500 6,092,236 $ 59,707 $ 31.4100 1,875,397 $ 152,518 $ 29.2900 4,467,252 $ EUR 56,171 36.3300 2,040,692 26,074 36.8500 960,827 21,393 34.3600 735,063 JPY 10,363,767 0.1964 2,035,444 11,681,472 0.2005 2,342,135 12,956,015 0.2035 2,636,549 Due from the Central Bank and call loans to banks USD 1,454,554 31.8500 46,327,545 1,403,554 31.4100 44,085,631 847,204 29.2900 24,814,605 HKD 525,000 4.0610 2,132,025 485,000 4.0355 1,957,218 63,000 3.7310 235,053 VND 1,260,000,000 0.0012 1,525,104 1,310,000,000 0.0012 1,564,664 980,000,000 0.0011 1,100,344 Receivables USD 139,472 31.8500 4,442,183 92,756 31.4100 2,913,466 110,116 29.2900 3,225,298 CNY 232,644 4.6910 1,091,333 42,791 4.4930 192,260 11,450 4.0900 46,831 AUD 28,270 21.9100 619,396 13,540 20.9950 284,272 5,575 19.1450 106,733 Discounts and loans USD 3,565,281 31.8500 113,554,200 3,309,189 31.4100 103,941,626 3,550,829 29.2900 104,003,781 CNY 3,215,254 4.6910 15,082,757 3,875,703 4.4930 17,413,534 2,731,291 4.0900 11,170,980 CHF 143,627 39.3900 5,657,468 50,351 39.6150 1,994,655 33,477 36.7100 1,228,941 Financial assets at FVTOCI USD 3,102,566 31.8500 98,816,727 3,471,976 31.4100 109,054,766 3,679,637 29.2900 107,776,568 AUD 1,506,691 21.9100 33,011,600 1,262,616 20.9950 26,508,623 711,943 19.1450 13,630,149 JPY 48,057,776 0.1964 9,438,547 31,240,451 0.2005 6,263,710 20,568,777 0.2035 4,185,746 Financial assets measured at amortized cost SGD 100,621 24.6100 2,476,283 71,571 24.4250 1,748,122 46,646 22.9950 1,072,625 AUD 100,000 21.9100 2,191,000 100,000 20.9950 2,099,500 100,000 19.1450 1,914,500 USD 66,223 31.8500 2,109,203 196,034 31.4100 6,157,428 113,712 29.2900 3,330,624 Financial assets at FVTPL USD 125,240 31.8500 3,988,894 32,780 31.4100 1,029,620 77,574 29.2900 2,272,142 AUD 44,254 21.9100 969,605 148 20.9950 3,107 11,344 19.1450 217,181 EUR 10,124 36.3300 367,805 989 36.8500 36,445 20,022 34.3600 687,956 Equity investments under the equity method USD 3,222,812 31.8500 102,646,562 3,186,038 31.4100 100,073,454 3,136,140 29.2900 91,857,541 HKD 123,313 4.0610 500,774 120,908 4.0355 487,924 116,117 3.7310 433,233 Financial liabilities Payables USD 157,033 31.8500 5,001,501 98,906 31.4100 3,106,637 126,797 29.2900 3,713,884 GBP 27,784 42.1800 1,171,929 4 42.2600 169 13 40.1600 522 CNY 236,748 4.6910 1,110,585 26,485 4.4930 118,997 7,104 4.0900 29,055 Deposits from the central bank and other banks CNY 3,641,471 4.6910 17,082,140 125,123 4.4930 562,178 210,659 4.0900 861,595 USD 272,820 31.8500 8,689,317 57,460 31.4100 1,804,819 627,784 29.2900 18,387,793 EUR 93,083 36.3300 3,381,705 - 36.8500 - 73,200 34.3600 2,515,152 Deposits and remittances USD 7,975,474 31.8500 254,018,847 8,101,357 31.4100 254,463,623 7,734,250 29.2900 226,536,183 CNY 3,556,309 4.6910 16,682,646 3,812,626 4.4930 17,130,129 3,935,522 4.0900 16,096,285 JPY 83,604,785 0.1964 16,419,980 91,650,508 0.2005 18,375,927 93,062,046 0.2035 18,938,126 Financial liabilities at FVTPL USD 110,771 31.8500 3,528,056 103,495 31.4100 3,250,778 104,470 29.2900 3,059,926 AUD 12,295 21.9100 269,383 26,699 20.9950 560,546 3,125 19.1450 59,828 HKD 19,188 4.0610 77,922 208 4.0355 839 20 3.7310 75 June 30, 2026 December 31, 2025 June 30, 2025
Page 81
81 44.2 SCB (HK) Foreign Currencies Exchange Rate New Taiwan Dollars Foreign Currencies Exchange Rate New Taiwan Dollars Foreign Currencies Exchange Rate New Taiwan Dollars Financial assets Cash and cash equivalents CNY 640,683 $ 4.6910 3,005,444 $ 662,175 $ 4.4930 2,977,578 $ 722,679 $ 4.0900 2,955,757 $ USD 52,663 31.8500 1,677,317 38,809 31.4100 1,218,991 40,611 29.2900 1,189,496 JPY 2,301,085 0.1964 451,933 1,633,983 0.2005 327,614 1,374,517 0.2035 279,714 Due from the Central Bank and call loans to banks USD 2,381,123 31.8500 75,838,768 3,365,221 31.4100 105,701,592 3,337,738 29.2900 97,762,346 CNY 3,202,493 4.6910 15,022,895 4,272,115 4.4930 19,194,613 5,122,602 4.0900 20,951,442 Receivables USD 55,202 31.8500 1,758,184 31,274 31.4100 982,316 280,158 29.2900 8,205,828 CNY 7,706 4.6910 36,149 4,655 4.4930 20,915 10,173 4.0900 41,608 Discounts and loans USD 2,463,102 31.8500 78,449,799 2,394,345 31.4100 75,206,376 2,662,395 29.2900 77,981,550 CNY 4,308,180 4.6910 20,209,672 3,519,376 4.4930 15,812,556 3,730,064 4.0900 15,255,962 GBP 285,577 42.1800 12,045,638 302,818 42.2600 12,797,089 318,596 40.1600 12,794,815 Financial liabilities Payables USD 93,318 31.8500 2,972,178 20,585 31.4100 646,575 38,073 29.2900 1,115,158 CNY 225,479 4.6910 1,057,722 7,801 4.4930 35,050 5,510 4.0900 22,536 Deposits from the central bank and other banks USD 219,046 31.8500 6,976,615 158,150 31.4100 4,967,492 196,985 29.2900 5,769,691 CNY 1,351,664 4.6910 6,340,656 1,352,266 4.4930 6,075,731 1,271,210 4.0900 5,199,249 AUD 185,000 21.9100 4,053,350 220,000 20.9950 4,618,900 172,000 19.1450 3,292,940 Deposits and remittances USD 8,877,945 31.8500 282,762,548 9,137,034 31.4100 286,994,238 8,479,586 29.2900 248,367,074 CNY 6,921,799 4.6910 32,470,159 7,364,923 4.4930 33,090,599 9,178,645 4.0900 37,540,658 June 30, 2026 December 31, 2025 June 30, 2025 45. ADDITIONAL DISCLOSURES 45.1 Information of significant transaction items and 45.2 Other business investment is as follows: 45.1.1 Financing provided: None. 45.1.2 Endorsement/guarantee provided: The Bank - not applicable; investees - not applicable or none. 45.1.3 Marketable securities held: Table 2. 45.1.4 Allowance for service fees to related-parties amounting to more than $5 million: None. 45.1.5 Receivables from related parties amounting to at least $300 million or 10% of the issued capital: None. 45.1.6 Sale of non-performing loans: Table 3. 45.1.7 Application for approval of securitization product types and information according to Financial Asset Securitization Clause of the Real State Securitization Act: None. 45.1.8 Other significant transactions which may have effects on decision making of financial statement users: None. 45.1.9 Names, locations, and other information of investees on which the Bank exercises significant influence: Table 4. 45.1.10 Derivative financial transactions: Note 9 on which the Bank exercises significant influence has no such transaction. 45.3 Investments in Mainland China: 45.3.1 Name of the investees in mainland China, main businesses and products, paid -in capital, method of investment, information on inflow or outflow of capital, percentage of ownership, investment income or loss, ending balance of investment, dividends remitted by the investee, and the limit of investment in mainland China: Table 5.
Page 82
82 45.3.2 Significant direct or indirect transactions with the investees, prices and terms of payment, unrealized gain or loss: None. 45.4 Significant transactions and the amount among the parent and its subsidiaries: Table 6. 46. SEGMENT INFORMATION Information reported to the chief operating decision maker focuses on the major geo graphical areas and profit or loss of the segments. The Group’s segments mainly operate in Taiwan and Hong Kong. The Group provides income before tax of each operating segment to the chief operating decision maker as the basis of resource allocation and assessment of segment performance. The Group did not periodically provide information on all assets of each operating segment to the chief operating decision maker, thus the amount of assets was zero. The significant accounting policies of each operating s egment are in line with the Group’s significant accounting policies stated in Note 4. The operating segments information is as follows: Taiwan Hong Kong Others Other Adjustments Total Net interest income 9,276,275$ 8,086,187$ 990,396$ 12$ 18,352,870$ Non-interest income 4,735,046 4,173,312 209,251 41,855)( 9,075,754 Net revenue 14,011,321 12,259,499 1,199,647 41,843)( 27,428,624 Provisions for bad-debt expense, commitment and guarantee liability 1,050,548)( 802,795)( 328,194)( - 2,181,537)( Operating expenses 4,876,201)( 4,499,824)( 827,650)( 32,485 10,171,190)( Profit before income tax 8,084,572$ 6,956,880$ 43,803$ 9,358)($ 15,075,897$ For the Six Months Ended June 30, 2026 Taiwan Hong Kong Others Other Adjustments Total Net interest income 8,375,081$ 9,102,041$ 1,008,996$ -$ 18,486,118$ Non-interest income 4,516,295 4,678,136 190,697 2,128)( 9,383,000 Net revenue 12,891,376 13,780,177 1,199,693 2,128)( 27,869,118 Provisions for bad-debt expense, commitment and guarantee liability 904,315)( 6,129,636)( 316,087)( - 7,350,038)( Operating expenses 4,905,695)( 4,643,552)( 862,056)( 7,306)( 10,418,609)( Profit before income tax 7,081,366$ 3,006,989$ 21,550$ 9,434)($ 10,100,471$ For the Six Months Ended June 30, 2025 Main operating clients The Group’s revenue from any single external client did not exceed 10% of the total revenue, thus main operating clients were not disclosed.
Page 83
83 TABLE 1 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. OVERDUE LOANS AND RECEIV ABLES JUNE 30, 2026, DECEMBER 31, 2025 AND JUNE 30, 2025 (In Thousands of New Taiwan Dollars) 2,954,735 $ 293,384,690 $ 1.01 4,007,916 $ 135.64 3,914,921 $ 298,123,194 $ 1.31 3,987,771 $ 101.86 2,040,391 $ 297,900,316 $ 0.68 4,036,249 $ 197.82 855,821 259,702,184 0.33 2,763,057 322.85 145,052 241,908,429 0.06 2,434,666 1,678.48 202,986 235,363,565 0.09 2,458,815 1,211.32 430,886 335,857,745 0.13 4,815,366 1,117.55 528,937 329,338,744 0.16 4,994,255 944.21 830,010 317,333,552 0.26 5,185,930 624.80 - - - - - - - - - - - - - - - 5,558 4,157,603 0.13 42,195 759.18 8,310 3,253,756 0.26 33,430 402.29 27,987 3,156,831 0.89 46,070 164.61 Secured 21,353 37,189,307 0.06 374,272 1,752.78 92,611 36,675,849 0.25 376,707 406.76 123,230 35,885,282 0.34 422,706 343.02 Unsecured - - - - - - - - - - - - - - - 4,268,353 930,291,529 0.46 12,002,806 281.20 4,689,831 909,299,972 0.52 11,826,829 252.18 3,224,604 889,639,546 0.36 12,149,770 376.78 6,933 4,041,948 0.17 50,888 734.00 8,471 3,325,641 0.25 53,220 628.26 7,412 2,828,063 0.26 50,561 682.15 - 204,455 - 2,045 - - 266,318 - 3,249 - - 264,786 - 2,648 - Accounts receivable factored without recourse (Note 7) Loans NPL Ratio (%) (Note 2) Loan Loss Reserve(LLR) Coverage Ratio (Note 3) Secured Date June 30, 2026 December 31, 2025 June 30, 2025 Business Overdue Loans (Note 1) Loans NPL Ratio (%) (Note 2) Loan Loss Reserve(LLR) Coverage Ratio (Note 3) Overdue Loans (Note 1) Loans NPL Ratio (%) (Note 2) Loan Loss Reserve(LLR) Coverage Ratio (Note 3) Overdue Loans (Note 1) Total Overdue Loans (Note 1) Accounts Receivable Delinquency Ratio (%) (Note 2) Unsecured Consumer banking Mortgage (Note 4) Cash cards Microcredit (Note 5) Corporate banking Others (Note 6) Allowance for Credit Losses Coverage Ratio (Note 3) Credit cards Allowance for Credit Losses Coverage Ratio (Note 3) Overdue Loans (Note 1) Accounts Receivable Delinquency Ratio (%) (Note 2) Allowance for Credit Losses Coverage Ratio (Note 3) Overdue Loans (Note 1) Accounts Receivable Delinquency Ratio (%) (Note 2) Note 1: Non-performing loans represent the amounts of non -performing loans reported to the authorities and disclosed to the public, as required by the “Regulations Governing the Proce dures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrued Loans.” Non-performing credit card receivables represent the amounts of non-performing receivables reported to the authorities and disclosed to the public, as required by the Banking Bureau’s letter dated July 6, 2005 (Ref. No. 0944000378). Note 2: Ratio of non-performing loans: Non-performing loans ÷ Outstanding loan balance. Ratio of non-performing credit card receivables: Non-performing credit card receivables ÷ Outstanding credit card receivables balance. Note 3: Coverage ratio of loans: Allowance for possible losses on loans ÷ Non-performing loans. Coverage ratio of credit card receivables: Allowance for possible losses on credit card receivables ÷ Non-performing credit card receivables. Note 4: Housing mortgage is fully secured by property, which is purchased (owned) by the borrower, the spouse or the minor children of the borrower and the rights on mortgage are pledged to the financial institution, for the purpose of purchasing or decorating property. Note 5: Small scale credit loans, as categorized in accordance with the Banking Bureau’s letter dated December 19, 2005 (Ref. No. 09440010950), are unsecured loans with small amounts exclusive of credit cards and cash cards. Note 6: Other loans of consumer banking refer to secured or unsecured loans exclusive of housing mortgage, cash card, small scale credit loans and credit card. Note 7: As required by the Banking Bureau’s letter dated July 19, 2005 (Ref. No. 0945000494), factoring without recourse is disclosed as non-performing receivables in three months after the factors or insurance companies reject indemnification.
Page 84
84 TABLE 1-1 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. OVERDUE LOANS AND RECEIV ABLES JUNE 30, 2026, DECEMBER 31, 2025 AND JUNE 30, 2025 (In Thousands of New Taiwan Dollars) Excluded NPL Excluded Overdue Receivables Excluded NPL Excluded Overdue Receivables Excluded NPL Excluded Overdue Receivables As a result of debt negotiations and loan agreements (Note 1) $ - $ - $ - $ - $ - $ - As a result of consumer debt clearance (Note 2) - 31,401 - 32,987 - 32,768 June 30, 2026 December 31, 2025 June 30, 2025 Note 1: The disclosure of excluded NPLs and excluded overdue receivables resulting from debt consultation and loan agreements is based on the Banking Bureau’s letter dated April 25, 2006 (Ref. No. 09510001270). Note 2: The disclosure of excluded NPLs and excluded overdue receivables resulting from consumer debt clearance is based on the Banki ng Bureau’s letter dated September 15, 2008 (Ref. No. 09700318940) and September 20, 2016 (Ref. No. 10500134790).
Page 85
85 TABLE 2 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES MARKETABLE SECURITIES HELD JUNE 30, 2026 (In Thousands of New Taiwan Dollars) Shancom Reconstruction AG Empresa Inversiones Generales, S.A. Indirect subsidiary Investments in subsidiaries 1 21,232$ 100.00 21,232$ Note Krinein Company Indirect subsidiary Investments in subsidiaries 2 33,919 100.00 33,919 Note Safehaven Investment Corporation Indirect subsidiary Investments in subsidiaries 1 60,127 100.00 60,127 Note Shanghai Commercial & Savings Bank, Ltd. The Bank Financial assets measured at FVTOCI 11,370 485,483 0.23 485,483 Wresqueue Limitada Prosperity Realty Inc. Indirect subsidiary Investments in subsidiaries 4 47,874 100.00 47,874 Note China Travel Service (Taiwan) Silks Place Taroko - Equity investments under the equity method 20,372 179,009 45.00 179,009 CTS Travel International Ltd. Indirect subsidiary Investments in subsidiaries 600 7,027 100.00 7,027 Note Joy Tour Service Co., Ltd. - Financial assets measured at FVTOCI 100 393 11.00 393 Shanghai Commercial & Savings Bank, Ltd. The Bank Financial assets measured at FVTOCI 27 1,188 - 1,188 SCSB Asset Management Ltd. SCSB Leasing (China) Co., Ltd. Indirect subsidiary Investments in subsidiaries N/A 995,920 100.00 995,920 Note Krinein Company Shanghai Commercial Bank (HK) Indirect subsidiary Investments in subsidiaries 1,920 16,261,400 9.60 16,261,400 Note Empresa Inversiones Generales, S.A. Shanghai Commercial Bank (HK) Indirect subsidiary Investments in subsidiaries 9,600 81,307,000 48.00 81,307,000 Note Holding Company Name Name Security Issuer’s Relationship with Holding Company Financial Statement Account Carrying Amount Percentage of Ownership (%) Market Value or Net Asset Value June 30, 2026 NoteShares (In Thousands) Note: A consolidated entity; the related intercompany transaction was eliminated in the con solidated financial statements.
Page 86
86 TABLE3 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES SALE OF NON-PERFORMING LOANS FOR THE SIX MONTHS ENDED JUNE 30, 2026 (Amounts in Thousands of US Dollars) Transaction Date Seller Trading Partners Debt Components Book Value Selling Price (Note) Disposal(loss) (Note) With agree conditions The relationship between the transaction object and the Bank 2026/4/13 The Shanghai Commerical & SavingsBank and The Shanghai Commercial Bank 35TH STREET PARTNERS LLC Loan Claims (Business accounts, guarantors) - - - In accordance with the terms of the debt assignment agreement Non-related party Note: The principal amounts of the debt as of April 13, 2026 was US$57,950 thousand. For related information, please refer to the Taiwan Stock Exchange Market Observation Station website.
Page 87
87 TABLE 4 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES RELATED INFORMATION OF INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 2026 (Amounts in Thousands of New Taiwan Dollars) (Share in Thousands) Financial business SCSB Asset Management Ltd. Taiwan Purchase and management of creditor’s rights of financial institutions 100.00 1,795,215$ 10,429$ 160,000 - 160,000 100.00 Paofoong Insurance Company Ltd. Hong Kong Insurance 40.00 505,951 16,068 500 - 500 100.00 Shanghai Commercial Bank (HK) Hong Kong Banking and financial 57.60 97,568,400 3,445,993 11,520 - 11,520 57.60 SCSB Leasing (China) Co., Ltd. China Leasing operation 100.00 995,920 20,133)( N/A - N/A 100.00 AMK BANK PLC. Cambodia Banking and related financial services 99.99 5,284,286 5,156 11,999 - 11,999 99.99 Non-financial business China Travel Service (Taiwan) Taiwan Travel services 99.99 370,523 241)( 38,943 - 38,943 99.99 SCSB Marketing Ltd. Taiwan Marketing 100.00 8,370 818 500 - 500 100.00 Kuo Hai Real Estate Management Taiwan Building material distribution 30.00 - - 3,000 - 3,000 30.00 Shancom Reconstruction AG Switzerland Securities investment 100.00 96,943,909 3,444,235 15 - 15 100.00 Wresqueue Limitada Liberia Securities investment 100.00 423,267 7,177 176 - 176 100.00 Empresa Inversiones Generales, S.A. Panama Securities investment 100.00 21,232 2,975)( 1 - 1 100.00 Krinein Company Cayman Islands Securities investment 100.00 33,919 132 2 - 2 100.00 Safehaven Investment Corporation Liberia Securities investment 100.00 60,127 954 1 - 1 100.00 Prosperity Realty Inc. USA Real estate services 100.00 47,874 2,878 4 - 4 100.00 Silks Place Taroko Taiwan Hotel industry 45.00 179,009 2,971)( 20,372 - 20,372 45.00 CTS Travel International Ltd. Taiwan Travel services 100.00 7,027 1 600 - 600 100.00 Investee Company Location NoteShares (In Thousands) Percentage of Ownership (%) Shares (In Thousands) Shares (Pro forma) Carrying Amount Investment Income (Loss) Recognized Consolidated Investment (Note 2) Main Businesses and Products Percentage of Ownership (%) Note 1: Investees are categorized into financial business and non-financial business. Note 2: The Bank, board chairman, supervisors, managing directors, and the shares of investee companies invested in by related parties which comply with corporation law are considered.
Page 88
88 TABLE 5 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. INVESTMENT IN MAINLAND CHINA JUNE 30, 2026 (Amounts in Thousands of New Taiwan Dollars and US Dollars) 1. Investee company name, main business and products, total amount of paid -in capital, investment type, investment outflows and inflows, % ownership, investment gain (loss), carrying amount as of June 30, 2026 and inward remittance of earnings: Outflow Inflow 955,500 $ 955,500 $ - $ - $ 955,500 $ 20,133 )($ 995,920 $ - $ 30,000 US$ 30,000 US$ - US$ - US$ 30,000 US$ 637 )(US$ 31,269 US$ 66,654,503 3,590,865 - - 3,590,865 - 17,338,963 - 2,092,763 US$ 112,743 US$ - US$ - US$ 112,743 US$ - US$ 544,394 US$ 3,284,579 2,034,992 - - 2,034,992 57,143 )( 3,058,795 - 103,126 US$ 63,893 US$ - US$ - US$ 63,893 US$ 1,807 )(US$ 96,038 US$ 3,471,602 2,061,236 - - 2,061,236 45,762 3,548,778 - 108,999 US$ 64,717 US$ - US$ - US$ 64,717 US$ 1,447 US$ 111,422 US$ 2,761,618 2,761,618 - - 2,761,618 38,059 3,061,886 - 86,707 US$ 86,707 US$ - US$ - US$ 86,707 US$ 1,204 US$ 96,135 US$ Accumulated Inward Remittance of Earnings as of June 30, 2026 SCSB Leasing (China) Co., Ltd. Leasing operation Note 1 (3) 100% Investment Type (Note 1) Investment Gain (Loss) (Note 2) Carrying Amount as of June 30, 2026 (Note 3) Investee Company Name Main Businesses and Products Total Amount of Paid-in Capital Accumulated Outflow of Investment as of June 30, 2026 Investment Flows Accumulated Outflow of Investment as of December 31, 2025 % Ownership of Direct or Indirect Investment Shanghai Commercial Bank Ltd. - Shenzhen Branch Banking business approved by local government Note 4 100% Bank of Shanghai Banking business approved by local government Note 4 3% The Shanghai Commercial & Savings Bank, Ltd. - Wuxi Branch Banking business approved by local government Note 1 (1) 100% Shanghai Commercial Bank Ltd. - Shanghai Branch Banking business approved by local government Note 4 100% 2. Upper limit on investments in mainland China: Upper Limit on Investment Authorized by Investment Commission MOEA 11,404,211 $ 358,060 US$ 12,171,276 $ 382,144 US$ 171,797,176 $ Accumulated Investment in Mainland China as of June 30, 2026 (Note 3) Investment Amounts Authorized by Investment Commission, MOEA (Note 3) Note 1: Methods of investment in mainland China are listed below: (1) Directly invest. (2) Invest indirectly via a third company. (3) Others. Note 2: Except for SCSB Leasing (China) Co., Ltd., the financial statements of the remaining entities are recognized based on audits conducted and certified by international accounting firms affiliated with domestic CPA firms. Note 3: Calculated using the exchange rate on June 30, 2026. Note 4: To invest via sub-subsidiary of the Bank, Shanghai Commercial Bank (HK).
Page 89
89 TABLE 6 THE SHANGHAI COMMERCIAL & SA VINGS BANK, LTD. AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2026 (In Thousands of New Taiwan Dollars) 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Asset Management Ltd. From parent company to subsidiary Accounts payable 3 $ Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Asset Management Ltd. From parent company to subsidiary Deposits and remittances 19,283 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Asset Management Ltd. From parent company to subsidiary Other liabilities 352 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Asset Management Ltd. From parent company to subsidiary Interest expenses 53 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Asset Management Ltd. From parent company to subsidiary Other non-interest income 488 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Accounts payable 11 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Deposits and remittances 12,495 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Other liabilities 20 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Interest expenses 90 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Other non-interest income 40 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. SCSB Marketing From parent company to subsidiary Other general and administrative expenses 39,678 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Accounts payable 473 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Deposits and remittances 162,157 Note 4 0.01% 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Other liabilities 198 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Interest expenses 1,185 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Other non-interest income 366 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. China Travel Service (Taiwan) From parent company to subsidiary Other general and administrative expenses 854 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. CTS Travel International Ltd. From parent company to subsidiary Accounts payable 48 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. CTS Travel International Ltd. From parent company to subsidiary Deposits and remittances 4,974 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. CTS Travel International Ltd. From parent company to subsidiary Interest expenses 53 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Cash and cash equivalents 69,106 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Due from the Central Bank and call loans to banks 122,306 Note 4 - No Company Name Counterparty Nature of Relationship Intercompany Transaction Financial Statement Item Amount Term Percentage of Consolidated Total Gross Sales or Total Assets (Note 3) (Continued)
Page 90
90 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Accounts payable 226 $ Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Deposits and remittances 75,841 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Interest expenses 1,666 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. Shancom Reconstruction AG From parent company to subsidiary Service fee 13,972 Note 4 - 0 The Shanghai Commercial & Savings Bank, Ltd. AMK BANK PLC. From parent company to subsidiary Discount and loans 1,605,240 Note 4 0.06% 0 The Shanghai Commercial & Savings Bank, Ltd. AMK BANK PLC. From parent company to subsidiary Interest revenue 49,725 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 19,283 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Accounts receviable 3 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other assets 352 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest revenue 53 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Depreciation and amortization expenses 493 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Right-of-use assets 986 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest expenses 8 Note 4 - 1 SCSB Asset Management Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Lease liabilities 1,000 Note 4 - 1 SCSB Asset Management Ltd. Shancom Reconstruction AG From subsidiary to subsidiary Cash and cash equivalents 2 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 12,495 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Accounts receviable 11 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other assets 20 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest revenue 90 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Depreciation and amortization expenses 40 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Right-of-use assets 273 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Lease liabilities 275 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest expenses 3 Note 4 - 2 SCSB Marketing The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other non-interest income 39,678 Note 4 - 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Accounts receviable 473 Note 4 - 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 162,157 Note 4 0.01% 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other assets 198 Note 4 - 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest revenue 1,185 Note 4 - 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other general and administrative expenses 366 Note 4 - 3 China Travel Service (Taiwan) The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Other non-interest income 854 Note 4 - 3 China Travel Service (Taiwan) Shancom Reconstruction AG From subsidiary to subsidiary Cash and cash equivalents 104 Note 4 - No Company Name Counterparty Nature of Relationship Intercompany Transaction Financial Statement Item Amount Term Percentage of Consolidated Total Gross Sales or Total Assets (Note 3) (Continued)
Page 91
91 4 CTS Travel International Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Accounts receviable 48 $ Note 4 - 4 CTS Travel International Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 4,974 Note 4 - 4 CTS Travel International Ltd. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest revenue 53 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Due from the Central Bank and call loans to banks 69,106 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 75,841 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Accounts receviable 226 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Cash and cash equivalents 122,306 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest revenue 1,666 Note 4 - 5 Shancom Reconstruction AG The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Service fee income 13,972 Note 4 - 5 Shancom Reconstruction AG SCSB Asset Management Ltd. From subsidiary to subsidiary Deposits and remittances 2 Note 4 - 5 Shancom Reconstruction AG Wresqueue Limitada From subsidiary to subsidiary Accounts payable 63 Note 4 - 5 Shancom Reconstruction AG China Travel Service (Taiwan) From subsidiary to subsidiary Deposits and remittances 104 Note 4 - 6 AMK BANK PLC. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Due from the Central Bank and call loans to banks 1,605,240 Note 4 0.06% 6 AMK BANK PLC. The Shanghai Commercial & Savings Bank, Ltd. From subsidiary to parent company Interest expenses 49,725 Note 4 - 7 Wresqueue Limitada Shancom Reconstruction AG From subsidiary to subsidiary Prepaid expenses 63 Note 4 - No Company Name Counterparty Nature of Relationship Intercompany Transaction Financial Statement Item Amount Term Percentage of Consolidated Total Gross Sales or Total Assets (Note 3) Note 1: The parent company and subsidiaries are indicated by the following numbers: (1) Parent company: 0. (2) Subsidiaries: 1 onward. Note 2: The directional flow of the various transactions is indicated according to the following types: (1) Transactions from parent company to subsidiary. (2) Transactions from subsidiary to parent company. (3) Transactions from subsidiary to subsidiary. (4) Transactions from parent company to indirect subsidiary. (5) Transactions from indirect subsidiary to parent company. Note 3: The percentages are recalculated by the consolidated total assets or the consolidated net sales. If the account belongs to the balance sheets, it will be based on the percentage of its final amount divided by the consolidated total assets. Otherwise, if the account belongs to the income statements, it will be based on the percentage of its average amount divided by the consolidated net revenue. Note 4: All transactions with related parties were carried out at arm’s length.