2011 - 遠東國際商業銀行 · 1 2011年報目錄 2011Annual Report Contents 壹、營運績效...

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2011年報目錄 2011Annual Report Contents

壹、營運績效 Financial Highlights 3

貳、董事長嘉言 Chairperson's Message 4

參、本行簡介 Corporate Profile 12一、基本資料 General Corporate Data 12 二、本行沿革 Milestones 12 三、本行組織系統簡圖 FEIB Organization Chart 18

肆、公司治理 Corporate Governance 20 一、公司治理守則 Corporate Governance Principles 20 二、董監事成員 Board of Directors and Supervisors 22 三、經營團隊 Management Team 25 四、政策委員會 Policy Committees 28

伍、經營概況 Business Overview 32 一、關鍵績效成果 Key Performance Results 32 二、核心事業 Core Businesses 32

陸、財務狀況 Financial Information 36 一、簡明資產負債表 Simplified Balance Sheet 36 二、簡明損益表 Simplified Income Statement 38 三、資本適足性 Capital Adequacy 39 四、轉投資公司概況及未來計畫 Reinvestment Policies and Plans 42

柒、風險管理 Risk Management 46一、風險管理組織架構及政策 Risk Management Structure and Policy 46 二、各項風險管理策略 Risk Management Strategy 48

捌、股東資訊 Shareholder Information 50一、股利及股份 Shares and Dividends 50 二、信用評等 Credit Ratings 52

玖、企業社會責任 Corporate Social Responsibility 54

壹拾、集團綜效 Group Synergy 58

壹拾壹、其他資訊 Other Information 64

壹拾貳、財務報表 Financial Report 69

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壹、營運績效 Financial Highlights

年度Year分析項目Analysis Items 2007 2008 2009 2010 2011

經營能力Operating Ability

資產總額（百萬元）Total Assets （NT$ million) 359,902 358,487 375,726 417,570 437,288

存款餘額（含同業存款）（百萬元）Deposits （Including Due to Banks）（NT$ million） 290,272 300,785 322,242 348,703 370,913

放款及貼現 – 淨額（百萬元）Loans and Discounts – Net （NT$ million） 223,086 210,680 213,606 236,351 269,460

股東權益（百萬元）Shareholders' Equity （NT$ million） 18,819 19,412 20,763 22,807 24,654

每股淨值（元)Net Worth Per Share （NT$） 10.01 8.29 10.74 11.36 11.64

存放比率（%）Ratio of Loans to Deposits （%） 80.25 72.01 67.33 68.93 74.04

逾放比率（%）NPL Ratio （%） 2.450 2.457 1.075 0.501 0.223

總資產週轉率（次）Total Asset Turnover （Times） 0.02 0.02 0.02 0.02 0.02

員工平均收益額（仟元）Average Operating Revenue per Employee （NT$ thousand ）

3,731 2,693 3,054 3,908 3,637

員工平均獲利額（仟元）Average Net Income per Employee （NT$ thousand） ( 368) (1,290) 628 966 1,005

獲利能力Profitability

淨利（淨損）（百萬元）Net Income （Loss）（NT$ million） (780) (2,683) 1,241 2,196 2,373

第一類資本報酬率（%）Return on Tier 1 Capital （%） (6.29) (15.70) 3.51 14.88 11.18

資產報酬率（%）ROA （%） (0.22) (0.75) 0.34 0.55 0.56

股東權益報酬率（%）ROE （%） (4.04) (14.04) 6.18 10.08 10.00

純益率（%）Net Income Ratio （%） (9.88) (47.93) 20.58 25.49 27.64

每股盈餘（元）EPS (NT$)

分配前 Before Distribution (0.42) (1.43) 0.64 1.10 1.12

分配後 After Distribution (0.49) (1.67) 0.62 1.04 1.07

財務結構FinancialStructure

資本適足率（%）Capital Adequacy Ratio （%) 8.72 10.61 11.71 13.18 12.63

負債佔總資產比率（%）Ratio of Debt to Assets（%） 94.77 94.57 94.47 94.53 94.35

固定資產佔股東權益比率（%）Ratio of Fixed Asset to Shareholders' Equity （%） 13.25 12.25 10.78 12.60 11.89

成長率Growth

資產成長率（%）Asset Growth Rate （%） 4.63 (0.39) 4.81 11.14 4.72

獲利成長率（%）Earnings Growth Rate（%） 46.98 (155.31) 122.96 337.75 (17.97)

營運績效Financial Highlights

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貳、董事長嘉言

回顧民國100年，因歐洲主權債務危機蔓延、美國經濟復甦力道薄弱、中國強力緊縮政策及出口減緩，以及中東

局勢動盪導致油價上升等利空因素影響，導致金融市場波

動加劇，全球景氣步調趨緩。展望未來，雖全球經濟持續

動盪未歇，惟美國復甦動能漸趨改善，中國經濟成長可望

軟著陸，國內就業情況持續好轉、民間消費逐步提升，將

為整體經營環境注入新的動能，減少經濟下滑風險。

本行面臨劇烈動盪之競爭環境，積極迎向挑戰，以四

大核心事業群專業分工，持續發展利基業務，建置交叉銷

售機制，強化資產負債管理，降低營運風險，大幅提升獲

利能力及維持優良資產品質。各項重點業務表現優異領先

同業，臺灣存託憑證存託業務市佔率第一、財富管理獲今

週刊卓越成長獎；分期付款、小額信貸市佔率領先，並充

分運用「Happy Go Inside」集點優勢，結合百貨通路優渥禮遇推出「」，持續提供優質消金商品；積極開發法人信託及國際聯貸業務，完成瀚宇博德聯貸案、

中租迪和回台上市融資案，創造優質獲利之競爭優勢；獲

准開辦OBU人民幣業務，積極掌握兩岸金融新商機；專注可轉債資產交換、外匯保證金交易利基產品，位居市場領

先地位。

董事長　侯金英Chairperson Ms. Ching-Ing Hou

在大眾的心目中，遠東商銀的信用卡即遠東集團的信用卡，也是真正的HAPPY GO信用卡。歡慶遠東百貨台中Top City、板橋Mega City、太平洋SOGO百貨新竹Big City開幕，於2011年底所推出的「C'est Moi我的卡」，由於集遠東零售體系優渥禮遇於一卡，而出現近年信用卡市場難得的申辦潮。

The general public perceives FEIB's credit cards as the ones designated by Far Eastern Group which is also the real HAPPY GO credit cards. To celebrate the grand openings of Far Eastern Department Stores' Taichung Top City and Banqiao Mega City, plus Pacific SOGO Department Store's Hsinchu Big City shopping centers, FEIB launched “C'est Moi My Card”at end 2011, combining the strength of points accumulated within the Far Eastern Retail Group, and attracted an unusually large number of new cardholders in the market place.

新上市Launch of C'est Moi My Card

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Reflecting on 2011, the contagion of European sovereign debt crisis, the weak US economic recovery, the slowdown of China's exports and its strong contraction policies, the rising fuel prices stemmed from the Middle East crisis, are all factors contributing to the worsening of the volatile financial markets and the slow global economic recovery. Looking forward, although the global economy remains unstable, the US recovery can improve gradually. The Chinese economy is expected to have soft landing from the improving domestic employment outlook and the rise in household consumption that injects new momentum into the overall economic environment in order to reduce the risk of economic decline.

Far Eastern International Bank (FEIB) proactively encounters all challenges in this extremely volatile and competitive market. The Bank's businesses are divided into four major business groups to sustain its niche businesses and establish cross-selling mechanism in order to strengthen the asset and liability management, to reduce operational risk, to improve profitability significantly, and to maintain excellent asset quality. The core businesses of FEIB have outperformed its competitors, including TDR (ranked number one in market share) and Wealth Management (awarded with“Outstanding Award”from Business Today). The loan installments and micro finance businesses are also in lead of the market share. Furthermore, the Bank continues to provide outstanding consumer banking products. “C'est Moi My Card”was launched by combining the strength of points accumulated from“Happy Go Inside”and department stores channels. Aside from consumer banking, the Bank is aggressively seeking businesses in Corporate Trust and International Syndicated Loan to create its competitive edge of maximizing profitability by completing syndicated loan from HannStar Board Corporation and financing of Taiwan stock listing of Chailease Finance. FEIB is also aggressively looking into new businesses from cross Straits. It has been permitted to launch OBU Renminbi businesses. The Bank is also focused on niche products, such as convertible bond assets swap and foreign exchange margin trading, both are market leaders.

Chairperson's Message

董事長嘉言Chairperson's Message

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本行除追求穩健之內部成長外，並積極尋求外部成長機會，於100年投資購買ING集團在台所成立的安智證券（更名為遠智證券）100%股權，提供高資產客群優質財富管理服務，接軌國際級金融集團業務；本行連續三年完成三件併購案，充分展現經營團隊積極的企圖心，經由外部併購與內部成長相輔

相成，經營規模已從中小型銀行積極成長為中大型銀行之列。

100年度本行在全體同仁齊心兢業努力之下，充分展現優異之經營績效，全年稅後淨利23.73億元，較99年度積極成長8%，每股盈餘（EPS）為1.12元，總資產報酬率（ROA）為0.56%，股東權益報酬率（ROE）為10%；逾期放款比率降低至0.22%，備抵呆帳覆蓋率更大幅提升至779%，卓越表現優於同業水準，符合高優質銀行之標準。

本行長期致力於推動各項公益活動，善盡企業社會責任。為響應「環保台灣，綠色地球」，全力

打造節能減碳文化，積極推動各項創新E化及節能專案，減少二氧化碳的排放量，為環境保護盡一份心力；積極贊助遠銀MLB全明星台灣大賽，持續為台灣棒球運動發展加油；與集團共同贊助太陽劇團「魔幻森林」，推廣國際級表演藝術；長期贊助伊甸社會福利基金會累計刷卡回饋近3仟萬元；同時培育人才成效卓著，連續8年得到勞委會職訓局補助肯定。展望新的一年，為延續優質成長動能，本行將積極推動「穩增長、固利基、優資產、開新局」四

項重點策略，維持穩健成長，邁向中大型銀行規模經濟；穩固利基產品，維護市場優勢地位；提升資產

組合，聚焦高資產客戶的經營與開發；積極開拓新產品、新市場，發展E化及M化新商業模式，開創藍海商機。同時為掌握外部成長契機，持續配合MOU及ECFA金融開放時程，發展兩岸特色金融業務，尋求與大陸優質銀行策略聯盟或參股機會，結合集團橫跨兩岸之龐大客戶基礎與綜效，積極朝向「成為大

中華區專業精緻金融服務公司」之發展願景。面對未來挑戰及機會，本行全體同仁將秉持誠、勤、樸、

慎、創新之經營理念，為本行所有客戶、股東、員工創造最大價值！

遠東商銀於2011年完成建置CTI（Computer Telephony Integration）客服系統，整合全行各業務部門的電話行銷與客服機制，藉由所累積的客戶往來互動記錄與E化流程，落實客戶關係管理，除提升客服的效率、品質，亦利於即時提供各項加值服務，並增進交叉行銷的精準度與行銷專案的成功率。

FEIB completed in 2011 the establishment of CTI (Computer Telephony Integration) customer service system to converge both telephone sales and customer service systems. With accumulated data collected from interactions with clients and e-banking processes, customer relation management was further strengthened to improve the efficiency and quality of customer service, facilitating to provide a variety of real-time value-added services, and enhance the accuracy of cross sales and success rate of marketing products.

建置全新電話客服系統Newly Established Telephone Customer Service System

分行業務資訊服務系統

財富管理資訊服務系統

貸款資訊服務系統

信用卡資訊服務系統

CTI客服系統

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FEIB not only seeks steady growth internally, but also proactively pursues opportunities externally. The Bank had acquired 100% stock ownership of ING Securities (renamed as Far Eastern International Securities), ING Group's Taiwan subsidiary, in 2011. This will provide an excellent Wealth Management service to high net worth clientele and integrate FEIB in internationally banking group businesses. Furthermore, the Bank has completed three M&A cases in consecutive three years that demonstrates the Management team's aggressive ambition. The operation scale has expanded substantially from being a small-medium size bank to be a part of medium-large size banks, complemented through external M&A and internal development.

After the coordinated efforts of FEIB colleagues, the Bank achieved an outstanding performance in 2011. FEIB reported net income of NT$2.373 billion, 8% higher than 2010, and earnings per share were NT$1.12. Return on assets (ROA) stood at 0.56% whilst return on shareholders' equity (ROE) was 10%. Regarding asset quality, the Bank's NPL ratio dropped to 0.22% whilst the allowance for bad debt coverage ratio climbed to 779%. The outstanding performance of FEIB has surpassed its competitors and fulfills the quality of an excellent bank.

The Bank has long been committed to promoting various philanthropic activities and fulfills the corporate social responsibilities (CSR). In responding to“Clean Environment of Taiwan, Green Earth”slogan, FEIB has adopted the culture of environmental awareness by promoting various innovative environmental protection measures, such as“electronic”and energy saving programs in order to reduce carbon emissions. Aside from the energy saving promotions, the Bank also actively sponsored the MLB All Star games in Taiwan and continued its support for Taiwan's baseball. Moreover, FEIB also co-sponsored world-class performance of Cirque du Soleil's“VAREKAI”with the Far Eastern Group to promote international performing arts. The Bank has a long history of cooperating with Eden Welfare Foundation by donating through credit card spending volume feedback amounting to NT$30 million. In addition to philanthropic activities, FEIB has always been dedicated to the recruitment and cultivation of human resources. It has been receiving grants from Training Center Bureau of Employment and Vocational Training Council of Labor Affairs for the past eight years.

Looking forward in the upcoming year, FEIB will sustain its outstanding growing momentum. The Bank will maintain its steady growth by proactively promoting its four core strategies:“steady growth, maintaining niche products, seeking high quality assets, and cultivating new markets”, thus progressing toward the economies of scale in medium to large size banks. Through FEIB's steady niche products, it is able to maintain its leadership position in the market place. Additionally, the Bank also upgrades its asset allocation and focuses on the management and cultivation of high net worth customers. FEIB also expands aggressively in cultivating new products and new markets by offering new business models, such as electronic and mobile platforms, nonetheless opening up new business opportunities. With the impending deregulation timeline of MOU and ECFA in financial sectors, the Bank is prepared to offer niche financial services for cross-straits banking in order to seize growing businesses externally by seeking strategic alliances or joint venture with high quality banks from China. FEIB also works toward the committed vision of“becoming the excellent financial services company in the Greater China region”by integrating synergies from the Group's vast cross-straits clientele. Faced with upcoming challenges and opportunities, the Bank's workforce will create maximum value for our customers, shareholders, and employees through our management motto of“sincerity, diligence, thrift, prudence, and innovation.”


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未來經營方針對於2012年業務推展，重點計畫如下：

一、個人金融業務方面：

本行財富管理業務成功與其他同業差異化，除併購慶豐銀行擴增財富管理分行通路外，更積極發展 FE Direct、mobile banking、空中理財等虛擬通路，引進多元化財富管理投資商品，持續培育精英財管團隊；中小企業服務部業務躍升，增加放款產品，連結中小企業多元融資與財富管理需求，深耕中小企

業主；提升分行服務品質，改善分行作業流程；持續維持臺灣存託憑證(TDR)存託業務市佔率第一，將加強推展新信託商品，積極擴展手續費收入。

二、消金及信用卡業務方面：

（一）消費金融方面

調整組織擴大銷售團隊，極大化分行通路效益，穩健提升資產規模，開發系統化風險管理機制兼顧質量同步成長；持續推動分期付款、汽機車貸款等利基商品，提升作業效率、強化與

通路的策略聯盟合作計劃，深化夥伴關係；開發多元產品與通路，強化競爭力；更精細的客

戶分群，採差異化定價，引導目標客群提高product holding；擴大網路通路經營、強化品牌形象，有效資源深耕優質既有客戶，鞏固顧客忠誠度。

（二）信用卡方面

多元面向整合集團綜效，穩定成長，鞏固利基。以「Happy Go Inside」跨業集點優勢結合集團企業相關通路；深耕遠銀HAPPY GO大紅利的價值，多元應用Happy Go點數，強化信用卡使用忠誠度。積極推廣以經營女性客群及連結Happy Go點數加倍的「C'est Moi我的卡」；完成「遠東台塑聯名卡」續約後，持續穩固客源及擴展消費規模；以「南山人壽認同卡」與南

山人壽共同經營400萬保戶資料庫，提供南山保戶獨特的保費優惠與刷促活動。持續經營既有客戶，加強與風管的協同作用，刺激循環動用與多元化lending 產品推廣，提升高獲利產品之貢獻度。

遠東商銀於2011年榮獲＜今周刊＞財富管理銀行卓越成長獎的肯定，根據評鑑單位世新大學財務金融研究所調查發現，絕大多數客戶樂與遠東商銀維持長期、穩定的夥伴關係，顯示其理財服務，深得客戶、學者專家與財經媒體一致肯定。

FEIB received the“Outstanding Growth Award”of the wealth management bank from Business Today Magazine in 2011. According to the evaluation conducted by the Graduate School of Finance of Shih Hsin University, the majority of customers would prefer to maintain long-term and steady partnerships with the Far Eastern International Bank, manifesting the unanimous recognition of the Bank's wealth management services by the clients, scholars, and financial media.

財富管理業務卓越成長Outstanding Growth of Wealth Management Business

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Operating GoalsOperating Outlook for 2012 is summarized as follows：

(1) Individual Banking Business

The Wealth Management business has successfully differentiated FEIB from other competitors. Other than expanding wealth management channels by acquiring branches from Chinfon Bank, FEIB has been aggressively cultivating virtual channels, such as FE Direct, mobile banking, and sky banking. Furthermore, the Bank will offer varieties of wealth management products and continue to cultivate excellent wealth management team. The Bank will also expand loan products in order to enhance small- and medium-sized enterprise banking businesses. This further assists the needs of small- and medium-sized enterprise owners by integrating varieties of products in financing and wealth management. Additionally, FEIB will enhance the service quality and improve operations of its branches. The Bank will sustain its number one position in Taiwan's TDR market. It will also proactively promote new trust products and advance revenues from service fees.

(2) Consumer Banking and Credit Card Business

A. Consumer Banking BusinessFEIB has restructured and expanded sales teams in order to optimize profitability from branch channels and steadily elevated the asset scale. By developing systemized risk management mechanism, the organic growth encompasses both quality and quantity. In addition, the Bank continues to promote niche products, such as installment loans and motor loans. The operation efficiency could be further strengthened by forging strategic alliances with channels that reinforces partnerships. The competitiveness can be uplifted by developing varieties of products and channels. The different pricing applied to different clientele can direct targeted customers to increase product holding. In order to secure customers' loyalty, FEIB needs to enlarge channel networks management, strengthen brand image, and cultivate existing high-quality customers effectively.

B. Credit Card BusinessThe credit card unit will seek steady growth from various aspects of integrating the Group's synergies in order to solidify the business. Taking advantage of the bonus point collection system through“Happy Go Inside”across various business sectors, FEIB is able to fortify loyalty in credit cards. The Bank is actively promoting“C'est Moi My Card”that appeals especially to female customers and provides extra bonus points from Happy Go. The extended contract of“Far Eastern & Formosa Co-Branded Card”is able to maintain steady client streams and expand consumers' consumption scale. Moreover, the Bank also joins forces with Nan Shan Life Insurance to manage its 4 million customers' database by providing exclusive premium discounts through“Nan Shan Life Insurance Co-branded Card.”FEIB will continue to manage its existing customers. The Bank will achieve higher revenues generated from high-margin products by working closely with risk management and promoting various lending products.


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三、法人金融業務方面：

嚴控資產品質，落實目標市場紀律，持續客戶開發及深耕，追求授信資產溫和穩定成長；採多產

品行銷，強化客戶往來關係，厚植客戶基礎，以建立穩定的資金來源及優質化存款結構；持續推動電子

金融金流平台、Corporate Finance等利基性產品，提高非風險性收益，維持合理利差及獲利成長；發展OBU及兩岸三地業務模式，以多元化佈局，開發中港台大中華區商機。

四、金融市場業務方面：

提供客戶高度專業化之金融商品與服務，並專注於利基產品，鞏固可轉債資產交換、外匯保證金交

易核心商品之品牌與領導地位；強化TMU金融商品服務，提供企業客戶深度服務；建構穩健財務結構，強化資產負債管理；嚴控風險，優化資產品質，獲利與風險管理兼顧，充分發揮高度競爭優勢之金融交

易商品。積極研發創新服務，開發外匯保證金網路交易，提供客戶虛擬通路專業服務平台。

董事長

謹啟

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(3) Corporate Banking Business

FEIB is closely monitoring the quality of its assets that fulfills its targeted market regulation. It will continue to develop and cultivate customers and seek high-quality credit assets with stable growth. The Bank adopts multi-products marketing strategies in order to solidify its strong relations with clients and cultivate customer base. Nonetheless, this helps to build up steady incoming capital streams and high-quality deposit structure. The Bank continues to promote niche products, such as electronic banking transaction platform and corporate finance products, in order to enlarge a non-systematic risk profit that maintains reasonable growth. Furthermore, the Bank seeks business opportunities in the Greater China region (China, Hong Kong, and Taiwan) through offering OBU and a variety of business models that reaches cross-straits.

(4) Financial Markets Business

FEIB provides highly professional financial products and services to customers and focuses on its core products, such as convertible bonds assets swaps and foreign exchange margin trading, thus secures its brand name and leadership position. Additionally, the Bank strengthens TMU financial product services in order to provide excellent services to its corporate enterprise customers. FEIB also constructs a solid financial structure that strengthens asset and liability management. FEIB also enhances its asset quality by managing both profitability and risk management, thus, developing highly competitive financial transaction products. The Bank is also actively creating innovative services, such as deploying internet transaction of foreign exchange margin trading, thus providing customers its virtual channel of professional service platform.

Chairperson


12

參、本行簡介一、基本資料

公司基本資料

銀行設立日期 1992年01月11日

股票上市日期 1998年11月27日

實收股本（仟元）（每股面額10元） 21,185,604

員工人數 2,532

營業據點 54

簽證會計師勤業眾信聯合會計師事務所

惠譽國際信評公司國際長期評等國內長期評等

BBB-A (twn)

二、本行沿革 Milestones1989 ◆ 政府修正銀行法，開放民間設立銀行；本行創辦人徐有庠先生響應政府金融事業現代化、自由

化、國際化之政策，成立銀行籌備小組。

1990 ◆ 召開發起人會議，正式成立籌備處，議定資本額為新台幣100億元，並向財政部提出設立許可申請。

1991 ◆ 財政部核准本行設立。1992 ◆ 經濟部核准本行設立登記，財政部核發營業執照。 ◆ 總行營業部、儲蓄部及台北逸仙分行正式對外營業。 ◆ 開辦國內暨國際信用卡業務。1994 ◆ 國外部正式營業，提供外匯服務。1995 ◆ 本行股票上櫃，於櫃檯買賣中心正式掛牌。 ◆ 財政部核發本行國際金融業務分行執照；國際金融業務分行開業。1996 ◆ 總經理張學林榮退，由洪信德先生接任。1997 ◆ 與伊甸社會福利基金會合作發行「伊甸愛心卡」，幫助遲緩兒接受早期療育，開啟與伊甸的長

期夥伴關係。

1998 ◆ 11月27日本行股票正式掛牌上市。 ◆ 獲<商業周刊>銀行服務品質調查第一名。 ◆ 國內第一家協助企業發行台灣存託憑證的保管銀行。1999 ◆ 力行3R （Refocusing、Reengineering、Revitalizing）策略，設立消費金融、企業金融及行政管

理等三大事業群，推動組織轉型；成立授信區域管理中心與作業中心，簡化分行功能。

◆ 率先新銀行開辦海外存託憑證保管銀行業務。

April 30, 2012

副董事長　徐旭東Vice Chairman Mr. Douglas Tong Hsu

13

Corporate Profile

General Corporate Data

Date of Establishment January 11, 1992

Date of Listing on Taiwan Stock Exchange November 27, 1998

Paid-in Capital (Thousands)(Par Value NT$10) 21,185,604

Number of Employees 2,532

Operating Units 54

Auditor Deloitte & Touche

Fitch Ratings LimitedForeign Currency Long-term Rating IDRNational Long-term Rating

BBB-A (twn)

(1) Milestones1989 ◆ To comply with the Taiwan Government's amendment of the Bank Law to establish private banks and policy to

liberalize, modernize and globalize Taiwan's financial sector, Far Eastern Group Founder Y. Z. Hsu established a bank organizing committee with a view to establish a private bank.

1990 ◆ Held Convokers' Meeting, formally setting up a bank organizing committee, and applied to the Ministry of Finance for approval to establish bank with capital of NT$10 billion.

1991 ◆ The Ministry of Finance approved the establishment of FEIB.1992 ◆ The Ministry of Economic Affairs approved FEIB's registration; the Ministry of Finance issued an operating license. ◆ Business Department, Savings Department and Taipei Yishen Branch of FEIB began operations. ◆ Launched domestic and international credit card business.1994 ◆ International Banking Department started operations to offer foreign exchange services.1995 ◆ Went public by listing on the Over The Counter (OTC) market of the Republic of China. ◆ The Ministry of Finance issued license for international financial businesses; international financial business branch

launched operations.1996 ◆ President Howard L. Chang retired. Mr. Eli Hong assumed presidency.1997 ◆ Issued“Eden Caring Card”with Eden Social Welfare Foundation to help children with developmental challenges to

receive early treatment and education. Initiated long-term partnership with Eden.1998 ◆ Listed on the Taiwan Stock Exchange on November 27. ◆ Ranked first by Business Weekly for best banking service quality. ◆ Became Taiwan's first bank to assist corporations to issue Global Depositary Receipts (GDRs) and serve as a trust bank.1999 ◆ Implemented 3R (Refocusing, Reengineering & Revitalizing) strategy; set up Consumer Banking, Corporate Banking

and Administration Business Groups to promote restructuring; established loan regional management center and operations center to streamline branch functions.

◆ Became Taiwan's first private bank to launch GDR trust banking business.

(1)General Corporate DataApril 30, 2012

本行簡介 Corporate Profile

14

1999 ◆ 開辦指定用途外幣信託資金投資國外共同基金業務。 ◆ 獲財政部許可設立香港代表人辦事處。 ◆ 轉投資之遠銀人身保險代理人股份有限公司及遠銀租賃股份有限公司設立。2000 ◆ 12月23日董事長徐有庠先生辭世，由徐旭東先生繼任董事長。 ◆ 遠銀New Century信用卡上市，結合遠百、遠傳、愛買與遠東飯店等資源提供卡友權益，為市

場上率先整合運用集團資源與優惠的信用卡商品。

◆ 開辦台外幣選擇權、換匯、換利、遠匯等附加價值的衍生性金融產品。 ◆ 與亞東證券策略聯盟，開辦買賣國外有價證券業務。 ◆ 獲中華民國全國商業總會評鑑為「2000年企業職業訓練績優單位」。2001 ◆ 開辦網路銀行。 ◆ 國內非金控商業銀行中，第一家獲財政部核准發行金融債券。 ◆ 於全台四大區陸續成立消費金融「授信客服中心」，持續提升服務品質。 ◆ 與1999年全美排名第一之上市資產管理公司美國大聯合作，成立子公司遠東大聯資產管理公

司。

2002 ◆ 「遠東商銀e流網金計劃」建立企業入口網站，並獲經濟部核准補助18,000,000元。 ◆ 開辦台外幣可轉換公司債資產交換業務。 ◆ 開辦汽車貸款業務。 ◆ 信用卡發卡量破百萬張，循環餘額破百億元。2003 ◆ 發行美金1億元之海外無擔保轉換金融債券（ECB），為國內非金控之商業銀行中第1家。 ◆ 開辦台外幣利率、股價、商品連結等附加價值的衍生性金融產品。 ◆ 開辦分期付款業務。 ◆ 推出遠銀New Century世界卡/無限卡。 ◆ 開辦ACH媒體交換自動轉帳代付現金股利業務。2004 ◆ 成立財富管理事業群，分行轉型為專業服務財富管理客戶的銷售平台。 ◆ 開辦FX Margin Trading業務，配合匯率市場開放24小時交易。 ◆ 年底消金貸款餘額突破1,000億元規模。 ◆ 轉投資之遠銀資產管理公司成立，於企業重整業務建立獨特的競爭優勢。2005 ◆ 發行ETC(高速公路電子收費)聯名卡 ◆ 獲金管會核准辦理財富管理業務2006 ◆ 提昇組織運作效益，整合業務單位組織為法人金融、金融市場、個人金融、消金及信用卡等四

大事業群，並加入行政支援群、風險管理處、資訊管理處三大總行管理單位。

◆ 推出遠銀HGI信用卡（HAPPY GO INSIDE）與遠東台塑聯名卡。 ◆ 資訊處與信用卡部通過ISO27001安控認證，為全國第一家獲此項認證的銀行。

15

1999 ◆ Launched limited-purpose foreign currency trust fund to invest in overseas mutual funds. ◆ The Ministry of Finance grants right to set up representative office in Hong Kong. ◆ Established Far Eastern Life Insurance Agency Co., Ltd. and Far Eastern International Leasing Corp.2000 ◆ Chairman Y. Z. Hsu passed away on December 23, succeeded by Mr. Douglas Tong Hsu. ◆ Launched FEIB New Century Credit Card to combine and synergize resources from Far Eastern Department Stores,

Far EasTone Telecommunications, Far Eastern Ai Mai and Shangri-la's Far Eastern Plaza Hotel Taipei to offer enhanced rights to cardholders. It was Taiwan's first credit card to integrate group synergy and benefits.

◆ Launched value-added derivative financial products such as New Taiwan dollars (TWD) and foreign currency options, swaps, interest rate swaps, forward foreign exchange contracts, etc.

◆ Formed strategic alliance with Oriental Securities Corp. to engage in overseas negotiable securities business. ◆ Awarded the title of“Outstanding Vocational Training Enterprise”by The General Chamber of Commerce of the

Republic of China in 2000.”2001 ◆ Began Internet banking. ◆ Taiwan's first non-holding commercial bank to be granted the right to issue debentures by the Ministry of Finance. ◆ Established“Customer Service Center”in Taiwan's four major districts to elevate further our service quality. ◆ Opened Far Eastern Alliance Asset Management Co., Ltd. with Alliance Capital Management, ranked in 1999 the largest

listed asset management company in the U.S.2002 ◆ “FEIB e-banking Project”established a portal website; was granted a subsidy of NT$18 million from the Ministry of

Economic Affairs. ◆ Began transactions in TWD and foreign currency convertible bonds. ◆ Launched car loan business. ◆ Credit card issuance exceeded 1 million cards; total credit card revolving balance surpassed NT$10 billion.2003 ◆ Taiwan's first non-holding commercial bank to issue US$100 million worth of Euro Convertible Bonds (ECBs) overseas. ◆ Offered value-added derivatives transactions including TWD and foreign currency interest rate, stock price and

structured investment vehicles. ◆ Initiated installment payment business. ◆ Launched Far Eastern New Century World Card and Infinity Card. ◆ Began Automated Clearing House (ACH) payment service and cash-dividend transfer business.2004 ◆ Established Wealth Management Strategic Business Unit (SBU) with branches transformed into sales platforms for

wealth management clients. ◆ Began Foreign Exchange (FX) Margin Trading business and offered 24-hour transactions directly in line with the FX

market. ◆ Outstanding consumer banking loans exceeded NT$100 billion at year end. ◆ Set up Far Eastern Asset Management Co., Ltd. while restricting the breadth of its businesses to establish a unique

competitive edge.2005 ◆ Launched ETC (Electronic Toll Collection) Card. ◆ Financial Supervisory Commission, Executive Yuan granted FEIB permission to engage in wealth management

business.2006 ◆ To improve operating efficiency, FEIB integrated its business units into four Banking Groups - Corporate Banking,

Financial Markets, Individual Banking, and Consumer Banking & Credit Card, and three management units - Administration & Support Group, Risk Management, and IT Management.


16

2007 ◆ 香港分行正式開業，並取得香港金融局核發的「全功能業務」分行執照。 ◆ 獲行政院勞委會職訓局評等為「金級」企業單位（參加企業計1,431家，金級評等以上僅21

家）。

◆ 率先銀行同業推出透過網路ATM安太歲、點文昌燈與E禮金等網路ATM多元運用服務。2008 ◆ 徐旭東先生請辭董事長並任副董事長，董事長由侯金英女士接任。 ◆ 推出具HAPPY GO集點與儲值功能的「快樂購物卡」，切入小額支付市場。 ◆ 與德意志銀行集團結盟，成立德銀遠東證券投資信託股份有限公司。 ◆ 成立「作業及資訊服務中心」(Operations & Technology, O&T)，為前台金融服務提供高效的作

業支援體系。

2009 ◆ 6月購買友邦國際(AIG)信用卡(股)公司之信用卡業務及應收帳款資產。 ◆ 10月27日經由公開標售程序，取得慶豐銀行19家國內營業據點。 ◆ 通過ISO27001資訊安全認證重審驗證，為全國第一家獲此項重審驗證的銀行。 ◆ 與南山人壽合作推出「遠東商銀南山認同卡」。2010 ◆ 2月推出「FE Direct」純網銀帳戶服務。 ◆ 4月3日正式概括承受慶豐銀行19家國內營業據點。 ◆ 5月份個人金融事業群成立「中小企業服務部」，深耕中小企業客群之財富管理與融資業務。 ◆ 8月份獲經濟部與行政院勞工委員會頒發「創造就業貢獻獎」。2011 ◆ 香港分行開辦人民幣存款、匯款、兌換、貿易融資、授信業務及與前述業務有關之人民幣往

來。

◆ 榮獲今週刊第五屆財富管理銀行評鑑「卓越成長獎」。 ◆ 投資購買ING集團旗下在台所成立的安智證券股份有限公司100%股權，並假台北總行完成簽

約儀式。

◆ 獲行政院金融監督管理委員會核准開辦人民幣業務。 ◆ 贊助美國MLB身價總計超過15億新臺幣之球員於台灣進行明星賽，回饋信用卡客戶刷卡購票享

95折優惠。直播賽事收視率平均2.05%，最高收視突破5%，觀看人次達570.6萬人。 ◆ 推出「C'est Moi我的卡」御璽卡。 ◆ 獲銀行公會頒100年度全國性繳費業務交易總筆數第5名。 ◆ 行動銀行Android版上線（Android + iPhone 全面開通）。

遠東商銀近五年來，年年獲多項E化業務獎項肯定。推出兩年的FE Direct，為股票投資人的首選帳戶，可讓連結股票交割帳戶的投資資金，輕鬆享有更高利息。而於去年全面開通的行動銀行，則以全台首創跨幣別即時換算、直通專屬理專等功能，結合行動中的理財需求。

During the past five years, FEIB has often been awarded in recognition of its achievements in e-banking services. While FE Direct, launched two years ago, has become investors' primary choice of bank account for investment funds transactions which enjoys higher interest; the mobile banking services, fully operated last year, with Taiwan's first real-time cross-currency exchange and direct link to exclusive wealth management advisory services, serve to provide customers' financial needs when they are on the move.

架構E化／M化服務平台Constitute e-Banking/Mobile Banking Service Platform

17

◆ Launched HAPPY GO INSIDE (HGI) credit card and the Far Eastern & Formosa co-branded credit card. ◆ IT Management Department and Credit Card Group both passed ISO 27001 safety control certification making FEIB

Taiwan's first bank to receive such recognition.2007 ◆ Officially inaugurated Hong Kong Branch, being granted a“full-service operating”license by the Hong Kong Monetary

Authority. ◆ Rated as a“Golden Grade”enterprise by the Bureau of Employment and Vocational Training of the Republic of China

(only 21 of a total 1,431 participating companies were awarded the“Golden Grade”). ◆ Taiwan's first bank to launch Web ATM services for on-line An Tai Sui, lighting of Wen Chang lamps for bright futures,

and e-payment of wedding traditional red envelopes used for cash-giving, etc.2008 ◆ Mr. Douglas Tong Hsu resigned from Chairmanship, succeeded by Ms. Ching-Ing Hou. ◆ Launched Happy Go Shopping Card to combine HAPPY GO bonus point collection and stored value card to enter the

small amount payment market. ◆ Formed alliance with Deutsche Bank AG to establish Deutsche Far Eastern Asset Management Company Limited in

Taiwan focused on retail and institutional asset management. ◆ Established“Operations & Technology (O&T) Service Center”as high-efficiency support to the Bank's front desk

financial services.2009 ◆ Acquired AIG's credit card and accounts receivable businesses in June. ◆ Acquired Chin-Fon Commercial Bank's 19 domestic operating units through an open bidding process completed on

October 27. ◆ FEIB passed ISO 27001 information safety re-examination certification making it Taiwan's first bank to receive such

important recognition. ◆ Launched“Far Eastern Nan Shan Co-branded card”with Nan Shan Life Insurance Company, Ltd.2010 ◆ Launched“FE Direct”Net-banking service in February. ◆ Completed the acquisition of Chin-Fon bank with 19 domestic operating units on Apr 3, 2010. ◆ Established in May“Small and Medium-sized Enterprise Banking Unit”to cultivate this target market segment. ◆ Received the“Hiring Additional Employees Contribution Award”from the Ministry of Economic Affairs and Council of

Labor Affairs, Executive Yuan in August 2010.2011 ◆ Hong Kong Branch initiated deposit, wire transfer, exchange, financing and relevant business of RMB transactions. ◆ Received“Outstanding Growth Award”of the 5th Wealth Management Bank Review made by Business Today

Magazine. ◆ Acquired 100% stake in ING Securities Company Limited from ING Insurance International B.V. and held signing

ceremony at FEIB Taipei Head Office. ◆ Approved by the Financial Supervisory Commission, Executive Yuan to initiate RMB businesses. ◆ Sponsored U. S. MLB players worth beyond NT$1.5 billion to play the all-star game in Taiwan, offered 5% discount to

cardholders when purchasing tickets with credit cards, audience rating of live broadcasting for this event averaged at 2.05% and topped at 5%, total number of audiences reached 5.706 million.

◆ Launched“C'est Moi My Card”Majesty Cards. ◆ Ranked No. 5 in term of total number of e-bill payments in 2011 by the Bankers Association of the Republic of China. ◆ Launched fully integrated Android mobile banking App (Android+iPhone fully functional).


18

三、本行組織系統簡圖

營業部︵各國內分行︶

信託部

信用卡部

個人金融事業群

消金及信用卡事業群

金融市場事業群

法人金融事業群

行政支援群

作業及資訊服務中心

風險管理處

稽核處

投資部

海外分行

法務處

國外部

企劃處

法人金融部

秘書處

作業服務處

會計處

資訊服務處

財富管理部

消費金融部

金融市場部

國際金融業務分行

人力資源處

資產負債管理委員會

授信審議委員會

人事評議委員會

投資審議委員會

信託財產評審委員會

資訊業務指導委員會

風險管理委員會

股東大會監察人

董事長

董事會

常務董事會

總經理

執行副總經理

副總經理總稽核

薪資報酬委員會

19

(3)FEIB Organization Chart

Operations &

TechnologyG

roup

Individual Banking Group

Co

nsu

mer B

an

king

&

Credit Card Group

Financial Markets G

roup

Corporate Banking Group

Administration &

SupportG

roup

Risk Managem

ent Dept.

Auditing Dept.

Head O

ffice Branch (Dom

estic Branch)

Trust Dept.

Credit Card Dept.

Investment D

ept.

Overseas Branch

Legal Dept.

International Banking Dept.

Planning Dept.

Corporate Banking Dept.

Secretarial Dept.

Financial Control Dept.

Operations Service D

ept.

IT Dept.

Wealth M

anagement D

ept.

Consumer Banking D

ept.

Financial Markets D

ept.

Offshore Banking Branch

Hum

an Resources Dept.

Shareholders' MeetingSupervisors

Chairman

Board of Directors

Board of Managing Directors

President

Chief Executive Vice President

Executive Vice Presidents

Chief Auditor

Assets and Liabilities Management Committee

Credit Committee

Personnel Committee

Investment Committee

Trust Assets Committee

IT Steering Committee

Risk Management Committee

The Salary Committee


20

肆、公司治理

一、公司治理守則

本行依銀行業公司治理實務守則，落實公司治理制度，透過

健全的管理制度與監控機制，達成營運目標，進而提升競爭力，

確保股東、員工及其他利益相關者的權益，為其創造最大價值並

善盡社會責任。茲將本行遵循的公司治理原則條述如下：

1.建置有效的公司治理架構2.遵循法令並健全內部管理3.保障股東權益4.強化董事會職能5.發揮監察人功能6.尊重利益相關者權益7.提升資訊透明度

總經理洪信德 President Mr. Eli Hong

本行遵循遵守法令主管制度，建立完備的內部控制制度，並按部就班執行；董事會下設稽核處，以

獨立超然的精神執行內部稽核任務，定期向董事、監察人報告；本行依法召開股東會，透過公開資訊觀

測站公告重要訊息，與利害關係人及關係企業的業務往來均依規定辦理，以確保股東權益。

董事會成員均具備執行職務能力且符合法定資格條件，定期召開董事會，負責銀行經營策略與重大

決策，監督管理階層以對股東負責，此外設置各類功能性政策委員會，協助推行各項重大政策，並選定

專業獨立的勤業眾信會計師事務所，定期查核財務狀況及內部控制實施。

此外，依法定選任程序，選任符合法定資格條件的監察人，獨立行使監察權，有效監督業務執行，

降低經營風險；同時具備完善妥適的處理機制與溝通管道，尊重與維護員工、消費者及其它利益相關者

的合法權益；設有發言人與代理發言人、建置專屬網站、召開法人說明會及揭露公司治理相關資訊，以

提高對外資訊的透明度。

董監事成員 Board of Directors and Supervisors前排由左至右（Seated From Left to Right）、董事洪信德 Director Mr. Eli Hong、副董事長徐旭東 Vice Chairman Mr. Douglas Tong Hsu、董事長侯金英 Chairperson Ms. Ching-Ing Hou、常務董事王孝一 Managing Director Mr. Shaw Y. Wang、監察人戴立寧 Supervisor Mr. Linin Day後排由左至右（Standing From Left to Right）、董事周添財 Director Mr. Thomas Chou、獨立董事兼常務董事張忠本 Independent Director, Managing Director Mr. Ben C. B. Chang、董事余明德 Director Dr. Min-The Yu、執行董事鍾聰明 Executive Director Mr. Tsung-Ming Chung、獨立董事沈平 Independent Director Mr. Bing Shen、常駐監察人鄭澄宇 Resident Supervisor Mr. Humphrey Cheng、監察人許士軍 Supervisor Dr. Shi-Chun Hsu

21

Corporate Governance

(1) Corporate Governance PrinciplesTo pursue corporate governance excellence, FEIB is dedicated to achieving its operating goals

through a sound management system and an effective auditing mechanism to strengthen the bank's competitive advantage in the market and ensure all the benefits available to shareholders, employees and other related parties. Our mission is to create maximum shareholder value and be a good corporate citizen. The Bank's corporate governance principles are:

1. Establish an effective corporate governance structure2. Comply with relevant laws and regulations and enhance internal management3. Protect shareholders' rights and interests4. Strengthen the power of the Board of Directors5. Ensure the viability of the Supervisors' function6. Respect the rights of related parties7. Enhance information transparency

Far Eastern International Bank, strictly abided by supervising laws, has established and effectively implemented a thorough internal control system, and set up an Audit Department under the Board of Directors to execute independently the internal auditing mission and report regularly to the Bank's Board Members and Supervisors. Furthermore, FEIB holds regular shareholders' meetings, publicly posts important bank messages on Taiwan's public information watch station, and handles businesses among interested parties and group affiliated companies totally conforming to regulations to ensure shareholders' equity.

FEIB board members are all equipped with professional knowhow and conform with legal qualifications. They convoke regular board meetings to decide on the operating strategies and important policies, supervise the Bank's management and protect shareholders' interests. Also various functional committees are set up to assist in the promotion of each major policy. The Bank has selected Deloitte & Touche to conduct regular independent audits and check and report on the Bank's financial situation and internal controls.

Supervisors are also appointed in accordance with rules and regulations to effectively and independently supervise the execution of bank operations and to lower its risk. FEIB respects and safeguards the legal rights of employees, consumers, and other interested parties. The Bank has appointed a spokesperson and acting spokesperson, set up an exclusive website, organized investors' forums and disclosed corporate governance related information to enhance the transparency of bank information.

公司治理Corporate Governance

22

二、董監事成員 Board of Directors and SupervisorsApril 30, 2012

職稱Title

姓名Name

主要經（學）歷Major Educational (Professional) Background

目前兼任本行及其他公司之職務Other Current Positions

董事長

Chairperson

侯金英

Ms. Ching-Ing Hou

◆ 美國范德堡大學經濟學碩士◆ 臺灣大學經濟系及研究所畢業◆ 政治大學銀行學系主任及教授、財稅系教授◆ 臺灣金融研訓院董事長

◆ Master's degree in Economics, Vanderbilt University, U.S.A.

◆ Master's, Dept. of Economics National Taiwan University◆ Professor, Dept. of Money and Banking, National Chengchi

University◆ Chairperson, Taiwan Academy of Banking and Finance

◆ 遠東新世紀股份有限公司監察人

◆ Supervisor, Far Eastern New Century Corporation

副董事長

Vice Chairman

徐旭東

Mr. Douglas Tong Hsu

◆ 美國哥倫比亞大學經濟碩士◆ 遠東新世紀股份有限公司董事長

◆ Master's degree in Economics, Columbia University, U.S.A.◆ Chairman, Far Eastern New Century Corporation

◆ 遠東新世紀股份有限公司董事長◆ 亞洲水泥股份有限公司董事長◆ 裕民航運股份有限公司董事長◆ 遠東百貨股份有限公司董事長◆ 東聯化學股份有限公司董事長◆ 遠傳電信股份有限公司董事長◆ 宏遠興業股份有限公司董事

◆ Chairman, Far Eastern New Century Corporation◆ Chairman, Asia Cement Corp.◆ Chairman, U-Ming Marine Transport Corp.◆ Chairman, Far Eastern Department Stores Ltd.◆ Chairman, Orient Union Chemical Corp.◆ Chairman, Far EasTone Telecommunications Co.,

Ltd.◆ Director, Everest Textile Ltd.

常務董事

Managing Director

王孝一

Mr. Shaw Y. Wang

◆ 中興大學工商管理系畢業◆ 遠東新世紀股份有限公司董事、首席資深副總經理

◆ Dept. of Business Administration, National Chung Hsing University

◆ Director & First Senior Executive Vice President, Far Eastern New Century Corporation

◆ 遠東新世紀股份有限公司首席資深副總經理◆ 遠東新世紀股份有限公司董事◆ 元智大學董事◆ 亞洲水泥股份有限公司監察人

◆ First Senior Executive Vice President, Far Eastern New Century Corporation

◆ Director, Far Eastern New Century Corporation◆ Director, Yuan Ze University◆ Resident Supervisor, Asia Cement Corp.

執行董事

Executive Director

鍾聰明

Mr. Tsung-Ming Chung

◆ 政治大學企業管理碩士◆ 勤業會計師事務所會計師

◆ MBA, National Chengchi University◆ CPA, Deloitte & Touche

◆ 順達科技股份有限公司董事長◆ 台灣大哥大股份有限公司獨立董事◆ 致茂電子股份有限公司獨立董事◆ 東貝光電科技股份有限公司董事

◆ Chairman, DynaPack Corp.◆ Independent Director, Taiwan Mobile Co., Ltd.◆ Independent Director, Chroma Ate Inc.◆ Director, Unity Opto Technology Co., Ltd.

董事

Director

洪信德

Mr. Eli Hong

◆ 中興大學經濟系畢業◆ 美商花旗銀行副總裁◆ 台北區中小企銀副總經理

◆ Dept. of Economics, National Chung Hsing University◆ Former Vice President, Citibank, N.A., Taipei Branch◆ Former Executive Vice President, International Bank of

Taipei

◆ 遠東國際商業銀行總經理◆ 遠銀資產管理股份有限公司董事◆ 德銀遠東證券投資信託股份有限公司董事◆ 遠傳電信股份有限公司監察人

◆ President, Far Eastern International Bank◆ Director, Far Eastern Asset Management Corp.◆ Director, Deutsche Far Eastern Asset

Management Company Limited◆ Supervisor, Far EasTone Telecommunications

Co., Ltd.

23

April 30, 2012

（承上頁）

職稱Title

姓名Name



董事

Director

周添財

Mr. Thomas Chou

◆ 政治大學銀行學系畢業◆ 美國大陸銀行副總裁◆ 荷蘭銀行東北亞區信貸經理、臺灣區副總裁兼高雄分行經理

◆ Dept. of Banking, National Chengchi University◆ Former Vice President, American Continental Bank◆ Former Regional Credit Control Officer for North East Asia,

Former Vice President & Kaohsiung Branch Manager, ABN AMRO Bank, Taiwan

◆ 遠東國際商業銀行執行副總經理◆ 遠銀人身及財產保險代理人股份有限公司董事長

◆ 遠銀資產管理股份有限公司董事◆ 遠智證券股份有限公司董事◆ 大中票券金融股份有限公司董事◆ 遠龍不鏽鋼股份有限公司董事◆ 鼎鼎聯合行銷股份有限公司董事◆ 元太外匯經紀股份有限公司董事

◆ Chief Executive Vice President, Far Eastern International Bank

◆ Chairman, Far Eastern Life and Property Insurance Agency Co.

◆ Director, Far Eastern Asset Management Corp.◆ Director, Far Eastern International Securities

Company Ltd.◆ Director, Da Chung Bills Finance Corps.◆ Director, Yuan Lung Stainless Steel Co., Ltd.◆ Director, Ding Ding Integrated Marketing Service

Co.◆ Director, Cosmos Foreign Exchange International

Co., Ltd.

董事

Director

俞明德

Dr. Min-Teh Yu

◆ 美國俄亥俄州立大學經濟博士◆ 中央大學財務管理系主任暨所長◆ 亞洲開發銀行顧問◆ 靜宜大學校長

◆ Ph.D., Ohio State University, U.S.A.◆ Former Dept. Chairman, Financial Management Dept.,

National Central University◆ Former Advisor, Asian Development Bank◆ Former President, Providence University

◆ 台灣大學財務金融學系教授◆ 智微科技(股)公司獨立董事

◆ Professor, Dept. of Finance, National Taiwan University

◆ Independent Director, JMicron Technology Corporation

獨立董事兼常務董事

Independent Director, Managing Director

張忠本

Mr. Ben C. B. Chang

◆ 政治大學統計研究所畢業◆ 政治大學兼任講師◆ 輔仁大學兼任講師◆ 和通投資控股有限公司執行董事◆ 和通國際股份有限公司總經理◆ 中華開發工業銀行副總經理

◆ Master's degree in Statistics, National Chengchi University◆ Lecturer, National Chengchi University◆ Lecturer, Fu Jen Catholic University◆ Executive Director, Hotung Investment Holdings Limited◆ General Manager, Hotung International Co., Ltd.◆ Executive Vice President, China Development Industrial

Bank

◆ 和碩聯合科技股份有限公司獨立董事◆ 瑞鼎科技股份有限公司獨立董事◆ 聚鼎科技股份有限公司董事長◆ 金像電子股份有限公司董事◆ 拓墣科技股份有限公司董事◆ 順達科技股份有限公司監察人

◆ Independent Director, Pegatron Corp.◆ Independent Director, Kinsus Interconnect

Technology Corp.◆ Chairman, Polytronics Technology Corp.◆ Director, Gold Circuit Electronics◆ Director, Topology Research Inc.◆ Supervisor, Dynapack Corp.


24

April 30, 2012

（承上頁）

職稱Title

姓名Name



獨立董事

Independent Director

沈平

Mr. Bing Shen

◆ 美國哈佛大學商學院企管碩士◆ 美商摩根士丹利公司副總經理◆ 摩根士丹利公司執行董事◆ 中華開發工業銀行副總經理◆ 開發國際投資股份有限公司總經理

◆ MBA, Harvard Business School, U.S.A.◆ Former Vice President and Executive Director, Morgan

Stanley◆ Former Executive Vice President, China Development

Industrial Bank◆ Former President of CDIB & Partners Investment Holding

◆ 中鼎工程股份有限公司監察人兼董事會稽核委員會召集人

◆ 英屬蓋曼群島商達創科技股份有限公司獨立董事兼董事會審核委員會主席

◆ The Taiwan Fund, Inc. 獨立董事

◆ Supervisor and Chairman of the Audit Committee of CTCI Corporation

◆ Independent Non-executive Director and Chairman of the Audit Committee, Delta Networks (Cayman) Inc.

◆ Independent Director, The Taiwan Fund, Inc.

常駐監察人

Resident Supervisor

鄭澄宇

Mr. Humphrey Cheng

◆ 中興大學法律系畢業◆ 遠東新世紀股份有限公司副總經理

◆ Dept. of Law, National Chung Hsing University◆ Executive Vice President, Far Eastern New Century

Corporation

◆ 遠東新世紀股份有限公司總經理◆ 德銀遠東證券投資信託股份有限公司董事長

◆ 東聯化學股份有限公司董事◆ 遠銀資產管理股份有限公司監察人

◆ President, Far Eastern New Century Corporation◆ Chairman, Deutsche Far Eastern Asset

Management Company Limited◆ Director, Oriental Union Chemical Corporation◆ Supervisor, Far Eastern Asset Management

Corp.

監察人

Supervisor

許士軍

Dr. Shi-Chun Hsu

◆ 美國密西根大學企業管理博士◆ 臺灣大學首任管理學院院長◆ 高雄銀行董事長

◆ Ph.D., University of Michigan, U.S.A.◆ Founding Dean, College of Management, National Taiwan

University◆ Former Chairman, Bank of Kaohsiung

◆ 聯華電子股份有限公司獨立董事◆ 昱晶能源股份有限公司獨立董事◆ 智原科技股份有限公司獨立董事◆ 元智大學教授

◆ Independent Director, United Microelectronics Corp.

◆ Independent Director, Faraday Technology Corp.◆ Independent Director, Chi Cheng Enterprise Co.,

Ltd.◆ Far Eastern Group Chair Professor of

Management, Yuan Ze University

監察人

Supervisor

戴立寧

Mr. Linin Day

◆ 美國哈佛大學法學碩士◆ 財政部常務次長◆ 華僑銀行董事長

◆ Master's degree in Law, Harvard University, U.S.A.◆ Former Vice Minister, Ministry of Finance, R.O.C.◆ Former Chairman, Bank of Overseas Chinese

◆ 元智大學董事◆ 環能海運股份有限公司監察人◆ 伍豐科技股份有限公司董事

◆ Director, Yuan Ze University◆ Supervisor, Global Energy Maritime Co., Ltd.◆ Director, Firich Enterprises Co., Ltd.

25

April 30, 2012

三、經營團隊 Management Team

職稱Title

姓名Name

主要經（學）歷Major Educational （Professional） Background

目前兼任其他公司之職務Other Current Positions

總經理

President

洪信德

Mr. Eli Hong

◆ 中興大學經濟系畢業◆ 美商花旗銀行副總裁◆ 台北區中小企業銀行副總經理

◆ Dept. of Economics, National Chung Hsing University◆ Former Vice President, Citibank, N.A., Taipei Branch◆ Former Executive Vice President, International Bank of

Taipei

◆ 遠銀資產管理股份有限公司董事◆ 德銀遠東證券投資信託股份有限公司董事◆ 遠傳電信股份有限公司監察人

◆ Director, Far Eastern Asset Management Corp.◆ Director, Deutsche Far Eastern Asset

Management Company Limited◆ Supervisor, Far EasTone Telecommunications

Ltd.

執行副總經理

Chief Executive Vice President

周添財

Mr. Thomas Chou

◆ 政治大學銀行系畢業◆ 美國大陸銀行副總裁◆ 荷蘭銀行東北亞區信貸經理、台灣區副總裁兼高雄分行經理

◆ Dept. of Banking, National Chengchi University◆ Former Vice President, American Continental Bank◆ Former Regional Credit Control Officer For North East

Asia, Former Vice President & Kaohsiung Branch Manager, ABN AMRO Bank, Taiwan

◆ 遠銀人身及財產保險代理人股份有限公司董事長

◆ 遠銀資產管理股份有限公司董事◆ 遠智證券股份有限公司董事◆ 大中票券金融股份有限公司董事◆ 遠龍不鏽鋼股份有限公司董事◆ 鼎鼎聯合行銷股份有限公司董事◆ 元太外匯經紀股份有限公司董事

◆ Chairman, Far Eastern Life and Property Insurance Agency Co.

◆ Director, Far Eastern Asset Management Corp.◆ Director, Far Eastern International Securities

Company Ltd.◆ Director, Dah Chung Bills Finance Corps.◆ Director, Yuan Lung Stainless Steel Co., Ltd.◆ Director, Ding Ding Integrated Marketing Service

Co.◆ Director, Yuan Tai Foreign Exchange Agency

副總經理

Executive Vice President

王恒彥

Mr. John H. Wang

◆ 政治大學企業管理碩士◆ 美商花旗銀行副理◆ 美商西雅圖銀行副總裁◆ 中國農民銀行顧問◆ 台新銀行資深協理◆ 大安銀行副總經理◆ 中華商銀副總經理

◆ MBA, National Chengchi University◆ Former Assistant Manager, Citibank N.A., Taipei Branch◆ Former Vice President, Seafirst Bank, H. O.◆ Former Consultant, the Farmers Bank of China◆ Former Senior Vice President, Taishin International Bank◆ Former Executive Vice President, Ta-An Commercial Bank◆ Former Executive Vice President, The Chinese Bank

◆ 遠銀資產管理股份有限公司董事長◆ 遠龍不銹鋼股份有限公司董事

◆ Chairman, Far Eastern Asset Management Corp.◆ Director, Yuan Lung Stainless Steel Co., Ltd.

副總經理兼法人金融事業群主管

Executive Vice President, Head o f C o r p o r a t e Banking Group

林建忠

Mr. Jiann-Jong Lin

◆ 美國路易斯安那州立大學財務管理碩士◆ 美商花旗銀行副理◆ 美商第一聯美銀行助理副總裁◆ 台北區中小企業銀行經理

◆ M.S., Louisiana State University, U.S.A.◆ Former Assistant Manager of Citibank, N.A., Taipei Branch◆ Former AVP of First Interstate Bank of California, Taipei

Branch◆ Former Senior VP, International Bank of Taipei

◆ 旭瑋實業股份有限公司董事◆ 遠銀財產保險代理人股份有限公司董事

◆ Director, Hsu Wei Industry Co., Ltd.◆ Director, Far Eastern Property Insurance Agency

Co.


26

April 30, 2012

（承上頁）

職稱Title

姓名Name



副總經理兼金融市場事業群主管

Executive Vice President, Head of Financial Markets Group

廖呂斌

Mr. Ben Liao-Ru

◆ 美國國際管理學院國際管理碩士◆ 中國輸出入銀行副科長◆ 道明銀行台北分行副總經理◆ 比利時聯合銀行台北分行副總經理

◆ MIM, Thunderbird, American Graduate School of International Management, U.S.A.

◆ Former Assistant Division Chief, Export-Import Bank of the Republic of China

◆ Former VP, Toronto Dominion Bank, Taipei Branch◆ Former EVP, Kredietbank N.V., Taipei Branch

◆ 遠銀人身及財產保險代理人股份有限公司董事

◆ 德銀遠東證券投資信託股份有限公司監察人

◆ Director, Far Eastern Life and Property Insurance Agency Co.

◆ Supervisor, Deutsche Far Eastern Asset Management Company Limited

副總經理兼消金及信用卡事業群主管

Executive Vice President, Head of Consumer Banking and Credit Card Group

李銘博

Mr. Alan Lee

◆ 政治大學企業管理碩士◆ 美商花旗銀行助理副總裁◆ 香港上海匯豐銀行副總裁◆ 南山人壽副總經理

◆ MBA, National Chengchi. University◆ Former AVP, Citibank, N.A., Taipei Branch◆ Former VP, The Hongkong and Shanghai Banking

Corporation◆ Former EVP, Nan Shan Life Insurance Company, Ltd.



副總經理兼個人金融事業群主管

Executive Vice President, Head of Individual Banking Group

楊瑞芬

Ms. Joanna Yang

◆ 美國西北大學整合行銷傳播碩士◆ 美商花旗銀行經理◆ 中國信託商業銀行協理◆ 香港上海匯豐銀行資深副總裁

◆ Master's degree, Integrated Marketing Communications, Northwestern University, U.S. A.

◆ Former Manager, Citibank, N.A., Taipei Branch◆ Former Deputy Executive Vice President, Chinatrust

Commercial Bank◆ Former Senior Vice President, The Hongkong and

Shanghai Banking Corporation


◆ 遠智證券股份有限公司董事◆ 遠智保險經紀人股份有限公司董事◆ 日立通股份有限公司監察人


◆ Director, Far Eastern International Securities Company Ltd.

◆ Director, Far Eastern Insurance Brokers Company Ltd.

◆ Supervisor, Sunnywave Communications Inc.

總稽核

Chief Auditor

吳堃平

Mr. Kung-Ping Wu

◆ 中興大學經濟系畢業◆ 台北市銀行副理◆ 漢華證券經理◆ 中興銀行專門委員◆ 台北市第七信用合作社總經理

◆ Dept. of Economics, National Chung Hsing University◆ Former Deputy Manager, Taipei Bank◆ Former Manager, Han-Hua Securities◆ Former Special Committee Member, Standard Bank◆ Former President, the Seven Credit Cooperative of Taipei

◆ 無

◆ None

27

April 30, 2012

（承上頁）

職稱Title

姓名Name



特別助理兼風險管理處消金組單位主管

Special Assistant and Head of Consumer Banking and Small- and Medium-sized Enterprise Banking Unit of Risk Management Dept.

廖國棟

Mr. James Liao

◆ 台灣大學財務金融碩士◆ 第一信託執行副總◆ 泰盛投資公司總經理◆ 台新銀行執行副總經理

◆ Master of Finance, National Taiwan University◆ Former EVP, Taiwan First Investment & Trust Co.◆ Former General Manager, Hongpai Investment Co.◆ Former EVP, Taishin International Bank

◆ 無

◆ None

特別助理兼作業及資訊服務中心主管、作業服務處單位主管

Special Assistant, Head of O&T Group and Head of Operation Service Dept.

劉龍光

Mr. Lonnie Liu

◆ 美國紐約大學資訊管理碩士◆ 美國信孚銀行專案經理◆ 美國紐約銀行經理◆ KPMG顧問公司亞太區經理◆ 南山人壽副總經理

◆ Master's degree in Information Systems, New York University, U.S.A.

◆ Former Project Manager, Bankers Trust◆ Former Manager, New York Bank◆ Former Manager, KPMG Consulting, Asia Pacific◆ Former Executive Vice President, Nan Shan Life Insurance

Company, Ltd.

◆ 無

◆ None

前排由左至右(Seated From Left to Right)副總經理楊瑞芬 Executive Vice President Ms. Joanna Yang總經理洪信德 President Mr. Eli Hong執行副總經理周添財 Chief Executive Vice President Mr. Thomas Chou總稽核吳堃平 Chief Auditor Mr. Kung-Ping Wu後排由左至右(Standing From Left to Right)副總經理李銘博 Executive Vice President Mr. Alan Lee副總經理王恒彥 Executive Vice President Mr. John H. Wang副總經理廖呂斌 Executive Vice President Mr. Ben Liao-Ru副總經理林建忠 Executive Vice President Mr. Jiann-Jong Lin特助劉龍光 Special Assistant Mr. Lonnie Liu特助廖國棟 Special Assistant Mr. James Liao

經營團隊 Management Team


28

四、政策委員會

（一）資產負債管理委員會

本行為強化資產負債管理，健全資產負債結構，特設置資產負債管理委員會，負責擬定本行

資產負債政策及流動性風險管理方針，並研討利率政策，作成結論呈董事會核定後辦理。

（二）授信審議委員會

本行為拓展業務，提升授信品質及增進工作效能，特設置授信審議委員會，負責審議全行超

過授權經理核定範圍之授信案件，作成結論呈總經理、常務董事會或董事會核定後辦理。

（三）人事評議委員會

本行為建立職員管理之升遷獎懲制度，拔擢優秀人才，增進工作效率，特設置人事評議委員

會，負責審議全行人力資源規劃、人事規章、升遷、獎懲情事，作成結論呈總經理、常務董

事會或董事會核定後辦理。

2012年春天，遠東商銀同仁及家屬近三千人，齊聚新北市淡水漁人碼頭，與同為出道20週年的本土搖滾歌手伍佰，共同歡慶銀行20週年生日。同時，同仁們更以捐款伊甸基金會開發遲緩兒照護App，發揚遠東商銀以作公益慶生的優美傳統。

In spring of 2012, nearly 3,000 FEIB employees and families gathered at Danshuei Fishermen's Wharf of New Taipei City to jointly celebrate the Bank's 20th founding anniversary with the presence of famous Taiwanese rock and pop singer Wu Bai who was also commemorating 20 years of his singing career. Meanwhile, as a good corporate citizen, the Bank's staffs continued to make donations to help the development of Eden Social Welfare Foundation's App, aiming for the caring of children with developmental challenges.

20週年員工家庭日Family Day of the Bank's 20th Anniversary

29

(4) Policy CommitteesA. Asset and Liabilities Management Committee

To strengthen its assets and liabilities management and structure, FEIB established the Assets and Liabilities Management Committee to draft the Bank's assets and liabilities policy and floating risk management guidelines, and study interest rate policy to present proposals to the Board of Directors for approval and execution.

B. Credit CommitteeTo expand business, improve credit quality and working efficiency, FEIB has established the Credit Committee to handle and review credit cases with amounts exceeding a manager's authorization. Conclusions reached by this Committee are presented to the Bank's President, Board of Managing Directors or Board of Directors for approval and execution.

C. Personnel CommitteeTo set up a proper staff feedback and incentive system, identify and promote outstanding talent, enhance working efficiency and improve communication and leadership skills, FEIB established the Personnel Committee. The Committee is responsible for the review of the Bank's human resource planning, personnel regulations, promotions, rewards and reprimands, and making proposals to the Bank's President, Board of Managing Directors or Board of Directors for approval and execution.


30

（四）投資審議委員會

本行為訂定投資決策，掌握投資效益，特設置投資審議委員會，定期開會，審議短期有價證

券投資策略交由金融市場部執行；並負責審理各項中長期專案投資計劃，作成結論提董事會

核定後辦理。

（五）信託財產評審委員會

本行為拓展信託業務，特設置信託財產評審委員會，於每季營業終了後一個月內召開會議，

審查每一信託戶之信託財產並作成記錄，由全體出席委員簽署並送總經理及董事長核可後呈

報董事會核備。

（六）資訊業務指導委員會

本行為建構全方位金融服務需求，特設置資訊業務指導委員會，負責研判資訊系統發展趨

勢，審議全行資訊系統架構建置，並配合業務發展，提議、監督資訊業務系統開發，作成結

論呈董事會核定後辦理。

（七）風險管理委員會

本行為建立獨立有效之風險管理機制，提升風險管理品質，特設置風險管理委員會，負責風

險管理政策之擬定，風險管理執行成效、暴險狀況、風險決策之審議與監督，做成結論呈報

董事會核備。

（八）薪資報酬委員會

本行為強化公司治理與健全公司董事、監察人及經理人薪資報酬制度，特依「股票上市或於

證券商營業處所買賣公司薪資報酬委員會設置及行使權辦法」設立薪資報酬委員會，協助訂

定並定期檢討董事監察人及經理人有關薪資報酬之政策、制度、標準與結構，並向董事會提

出建議。

31

D. Investment CommitteeFEIB formed the Investment Committee to formulate investment policy and target superior risk-adjusted returns with regular meetings. The Committee also reviews the investment policy of short-term bills to be executed by the Financial Markets Department and reviews diverse mid- and long-term investment projects for proposal to the Board of Directors for review, potential approval and execution.

E. Trust Assets CommitteeTo expand the trust assets business, FEIB established the Trust Assets Committee. With one Vice President serving as its Committee Chief, this Committee holds meetings in the last month of each quarter to review trust assets of each client and to prepare status reports signed by all attending committee members to be presented to the Bank President and Chairman for approval and final reporting to the Board of Directors.

F. IT Steering CommitteeTo meet the Bank's need for diversified and multi-faceted financial services, FEIB formed an IT Steering Committee to study IT system development trends and review and improve the Bank's IT operating system. To meet FEIB's business development needs, the Committee makes IT proposals, supervises IT system development, and presents conclusions and recommendations to the Board of Directors for approval and execution.

G. Risk Management CommitteeTo establish an independent and efficient risk management mechanism and improve risk management, FEIB formed the Risk Management Committee to take the responsibility of drafting risk management policies, monitoring/reviewing risk management, risk exposures, risk policy, and reporting conclusions to the Board of Directors.

H. The Salary CommitteeAccording to 「Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter」,we established the Salary Committee to assist the Board of Directors to achieve further transparency for revising the remuneration policies, and advise the Board of Directors.


32

伍、經營概況

一、關鍵績效成果

（一）經營效能

2011年營業淨收益85.87億元，較2010年減少0.4%；淨利息收入38.93億元，較2010年減少3%；淨手續費收入19.33億元，較2010年減少2%；其他淨收益27.61億元，較2010增加4%；2011年提列呆帳費用8.34億元，較2010年增加1.59億元。因2010年4月起併購慶豐銀行19家分行，2011年度用人及營業費用合計52.89億元，較2010年增加7%；2011年所得稅費用0.91億元，較2010年減少7.17億元；2011年度稅後淨利23.73億元，較2010年度增加8%，每股盈餘1.12元。

（二）資產品質

2011年底自有資本與風險性資產比率為12.63%，較去年底之13.18%下降0.55%，其中第一類資本比率Tier I為8.32%，較去年底之9.01%下降0.69%。逾放比率自2010年底之0.50%下降至2011年底之0.22%。備抵呆帳覆蓋率自2010年底之299.92%提高至2011年底之779.32%。

二、核心事業

（一）個人金融業務

1.財富管理業務截至2011年信託資產餘額(含國際金融業務分行)較2010年度成長26.97%。

2.保險業務2011年新契約保險收入較2010年成長46.88%。

3.中小企業服務部2011年放款餘額較2010年度成長255.2%。

（二）消金及信用卡業務

1.消費金融業務2011年下半年雖有奢侈稅、歐債與美國二次衰退問題，但因上半年延續2010年景氣復甦，2011年消費金融授信餘額較2010年成長15%。其中房貸餘額較2010年成長11%；信貸餘額較2010年成長13%；車貸業務量較2010年大幅成長92%，主要係因景氣恢復、新信用評分系統提供更專業、快速的效率服務所發揮之綜效。

遠東商銀在庶民經濟業務擁有卓越表現，其中與補教業合作的分期付款業務，創造學習者、補教業者與銀行三贏的局面；而結合策略聯盟廠商的汽車貸款業務，提供車主簡便的資金需求管道，在有計劃的經營下，2011年業務量突破百億元，於策盟車貸市場領先同業，市占第一。

FEIB ach ieved outs tand ing performance in civilian economy. For example, the install payment business in collaboration with the remedial education industry has proved to be a triple win-win situation for students, remedial education institutions and the bank. By offering easy access to financing with carefully planned operations, the Bank's auto loan business volume exceeded NT$10 billion at end 2011 and ranked top one in market share of strategic alliance auto loan.

微型金融服務嘉惠庶民經濟Micro Financial Services to Benefit Civilian Economy

33

(1)Key Performance ResultsA.Operating Efficiency

FEIB's net operating income in 2011 decreased 0.4% year on year to NT$8.587 billion; net interest income dropped 3% from 2010 to NT$3.893 billion; net fee income stood at NT$1.933 billion, down 2% than that of 2010; other net profit was NT$2.761 billion, grew 4% than 2010; and provisions for bad debts in 2011 was NT$8.34 billion, up NT$1,590 million than 2010.Personnel and operating expenses increased 7% to NT$5.289 billion with the acquisition of 19 operating units of Chin-Fon Commercial Bank since April 2010; income tax expense for 2011 was NT$901 million, a considerable decrease of NT$7,170 million year on year; net income after tax was NT$2.373 billion, up 8% than that of 2010; and earnings per share was NT$1.12.

B.Asset QualityFEIB's total BIS ratio in 2011 dropped 0.55% to 12.63%, as compared to 13.18% of 2010; its Tier I capital ratio reached 8.32%, down 0.69% year on year from 9.01% of 2010. The Bank's NPL ratio dropped from 0.50% at end 2010 to 0.22% at end 2011, while the coverage ratio of bad debts jumped from 299.92% at end 2010 to 779.32% at end 2011.

(2)Core BusinessesA.Individual Banking

1.Wealth ManagementFEIB's assets under trust (including the offshore banking unit) were up by 26.97% comparing to that of 2010.

2.Insurance AgencyIn 2011, FEIB's new contract insurance income grew 46.88% year on year.

3.Small- and Medium-sized Enterprise Banking UnitOutstanding loans for 2011 grew 255.2% year on year.

B. Consumer Banking and Credit Card1.Consumer Banking

During second half of 2011, though under the impact of luxury tax, European Debts and second recession in the U. S., FEIB's outstanding consumer banking loans in 2011 grew 15% from that of 2010, among which mortgage loans was up 11%; personal loans increased 13% year on year; car loans in particular surged 92% than that of 2010, mainly because of economic recovery, synergy achieved by more professional rating system of car loan clients to offer more speedy and efficient services.

Business Overview

經營概況Business Overview

34

2.信用卡業務信用卡2011年流通卡數達128.6萬卡，較2010年增加7.89%；簽帳金額為551億元，較2010年成長7.48%；年底循環餘額(不含未到期分期償還)為77億元，因政策引導信用卡循環餘額轉信貸，使整體市場衰退21.8%，本行較前一年度僅衰退14%。

（三）法人金融業務

本行法人金融業務係以客戶需求為導向，提供整合性解決方案，以滿足不同產業客戶之融

資、資金管理、避險等需求。主要業務包括存款、放款、外匯業務(匯兌、進、出口)、應收帳款、電子金融、供應鏈線上融資、財務避險及結構性產品等金融服務。

1. 授信業務：2011年法人金融持續採擴張性營運策略，授信餘額較2010年成長13%。2.存款業務：2011年存款餘額較2010年成長5%。3. 交易型業務：2011年應收帳款較2010年成長15%，進口業務較2010年成長5%，出口業務較2010年成長18%。

（四）金融市場業務

金融市場事業群業務核心在於銀行資產負債管理、金融商品之交易與服務提供、有價證券投

資、信用衍生品承作、金融同業授信暨前項業務之管理，其中可轉換公司債資產交換/選擇權及外匯保證金(FX Margin Trading)業務持續創造佳績執同業之牛耳，秉持創造利潤、嚴控風險、恪遵法規，優化資產品質之基礎上，繼續業務之拓展，相關工作重點如下：

1.產品創新，提供客戶多元化商品與服務。 2. 鞏固核心商品品牌與領導地位，精緻深耕現有客源。3.建構穩健財務結構，強化資產負債管理。4. 推動業務E化、強化經營資訊分析管理，提升經營效率。5. 培育優秀金融人才，擴大經營規模與業務穩健成長。6.掌握兩岸大中華商機，提供最佳金融服務平台。

遠東商銀成立企業理財部（Corporate Finance Dept.）兩年多來，強化企業理財商品的深度與廣度。近年來主辦之由德國合資母公司主導的輔德高分子公司聯貸案、Charlease Holding 新加坡下市台灣再上市案，以及籌組中的EQUVO跨國租賃聯貸案等，皆配合企業的全球化競爭腳步，提高服務的速度、彈性、精準性與規格，從案件架構到文件規格皆具國際作業標準。

After setting up the Corporate Finance Department for more than two years, FEIB has further strengthened the scope of its corporate finance products. The Bank served as the lead bank in the syndicated loan for EVONIK Industries, a German joint venture company, Charlease Holding, and handled delisting of Charlease Holding from the Singapore Exchange and its re-listing in the Taiwan Stock Exchange, also backed the cross-border lease transaction with EQUVO Pte. Ltd., all demonstrating the Bank's commitment to working closely with global enterprises through expediting services, flexibility, precision and scale, conforming to the international operation standard of relevant case structure and documentation.

因應企業全球化競爭的金融服務Financial Services in Coping with Global Competition

35

2.Credit CardAt the end of 2011, the number of cards in force issued by FEIB reached 1.286 million, up 7.89% than that of 2010. Spending volume totaled NT$5.51 billion, an increase of 7.48% year on year; as government policy encouraged to transfer credit card revolving balance to credit loan, while the overall market dropped 21.8%, the Bank's total revolving balance (excluding install payments before due) at the end 2011 stood at NT$7.7 billion, only down by 14% year on year.

C. Corporate BankingFEIB offers customer-oriented integrated financial solutions to satisfy different customers' needs for financing, fund management and hedge fund. Major businesses include deposit, loan, foreign exchange (remittance, import, & export), factoring, e-banking, supply chain financing, hedge fund, structured financial instruments, etc.1. Loan Business: With expansive operating strategy, at the end of 2011, FEIB's outstanding

corporate lending grew 13% from that of 2010.2. Deposit Business: FEIB deposits for 2011 were up 5% year on year.3. Factoring Business: At the end of 2011, the Bank's major factoring business increased by 15%,

import value grew 5%, and export volume was up 18% year on year.

D. Financial MarketsThe core values of financial markets include managing financial assets and liabilities, as well as financial instruments, investments in bonds and securities, derivative transactions, trading, equity investment, credit and management services. Among which the Bank's convertible asset swaps and FX margin trading continuing to lead in the industry, the Bank creates profit and enjoys further growth conforming to laws and regulations via strengthening risk control and improving asset quality. The focuses are:1.Product innovation, provide clients with diversified products and services.2. Consolidate brand value and leading position of the Bank's core financial products and cultivate

in-depth the existing customer base.3. Fortify healthy financial structure and strengthen the management of assets and liabilities.4. Promote e-banking, enhance data analysis and management to improve operating efficiency.5. Cultivate outstanding talents to expand operating scale and pursue steady growth.6. Provide best financial service platform to seize the business opportunities in the Greater China

market.

經營概況Business Overview

36

一、簡明資產負債表 Simplified Balance Sheet

陸、財務狀況Financial Information

單位：新台幣仟元(NT$ thousands)

年度 Year項目 Items 2007 2008 2009 2010 2011

現金及約當現金、存放央行及拆借銀行同業Cash, Cash Equivalents, Due from Central Bank and Due from Banks

76,017,473 92,543,739 91,085,125 107,186,195 92,546,064

公平價值變動列入損益之金融資產Financial Assets Measured at Fair Value through Profit or Loss

10,780,933 8,871,325 9,306,027 16,724,890 13,806,866

附賣回票券及債券投資Bonds Sold under Resale Agreements - - 1,310,002 - 850,505

備供出售金融資產Available-for-Sale Financial Assets 6,961,599 8,237,504 21,102,321 16,855,460 15,674,659

貼現及放款-淨額Net Loans, Bills Discounted 223,085,628 210,679,832 213,606,351 236,351,285 269,460,381

應收款項-淨額Net Receivables 21,373,741 16,594,447 20,069,250 18,657,547 20,095,497

持有至到期日之金融資產Hold-to-Maturity Financial Assets - - 1,577,569 2,788,161 3,926,306

採權益法之股權投資Net Investment in Equity 3,239,789 2,736,902 2,553,988 2,598,677 2,795,235

固定資產-淨額Net Fixed Assets 2,494,150 2,377,299 2,238,516 2,873,876 2,931,980

無形資產Intangible Assets - - - 1,942,335 1,905,193

其他金融資產Net Other Financial Assets 14,075,610 14,261,412 10,664,922 10,342,119 12,033,501

其他資產Other Assets 1,873,544 2,185,036 2,211,926 1,249,306 1,262,149

資產總額Total Assets 359,902,467 358,487,496 375,725,997 417,569,851 437,288,336

央行及銀行同業存款Due to Central Bank and Other Banks 17,775,322 6,995,447 8,063,618 18,093,079 11,785,731

存款及匯款Deposits Accepted and Remittances Payable 281,370,449 296,838,709 320,745,380 348,171,265 370,373,644

公平價值變動列入損益之金融負債Financial Liabilities Measured at Fair Value through Profit or Loss

2,666,625 2,479,110 3,120,210 6,445,235 4,081,035

附買回票券及債券負債Bonds Sold under Repurchase Agreements 1,726,186 50,042 973,223 - 213,870

應付金融債券Bonds Debentures 31,436,230 27,538,328 17,554,366 16,789,596 20,230,280

特別股負債 Preferred Liability - - - - -

應計退休金負債 Accrued Pension Cost 406,852 401,347 391,234 407,511 408,397

37


（承上頁）

年度 Year項目 Items 2007 2008 2009 2010 2011

其他金融負債 Other Financial Liabilities 185,169 12,168 119,546 16,067 472,176

其他負債 Other Liabilities 5,516,158 4,760,699 3,995,516 4,839,987 5,068,825

負債總額Total Liabilities

分配前 Before Distribution 341,082,991 339,075,850 354,963,093 394,762,740 412,633,958

分配後After Distribution 341,082,991 339,075,850 355,156,473 395,264,527 413,163,598

股本 Capital 18,797,803 23,413,183 19,337,974 20,071,489 21,185,604

資本公積 Capital Surplus 1,024,291 9,978 9,302 9,302 29,008

保留盈餘Retained Earnings

分配前Before Distribution (801,200) (4,075,209) 1,240,920 2,567,030 3,409,346

分配後 After Distribution (801,200) (4,075,209) 372,645 1,031,561 1,748,395

金融商品之未實現損益Unrealized Gain or Loss on Financial Instrument

(213,365) 24,046 160,586 148,026 17,658

累積換算調整數Cumulative Translation Adjustment 11,947 39,648 14,122 11,264 12,762

股東權益其他項目Other Shareholders' Equity Items - - - - -

股東權益總額Total Shareholders' Equity

分配前 Before Distribution 18,819,476 19,411,646 20,762,904 22,807,111 24,654,378

分配後 After Distribution 18,819,476 19,411,646 20,569,524 22,305,324 24,124,738

會計師查核意見Independent Auditors' Report

無保留意見Unqualified

Opinion


Opinion


Opinion


Opinion


Opinion

會計師姓名Names of Auditors

王小蕙郭慈容

王小蕙張日炎

黃秀椿張日炎

陳俊宏張日炎

陳俊宏張日炎

財務狀況Financial Information

38

二、簡明損益表 Simplified Statements of Income


年度Year項目 Items 2007 2008 2009 2010 2011

利息淨收益Net Interest Income 4,313,255 3,847,568 3,117,024 3,995,520 3,893,003

利息以外淨收益Net Other Revenues 4,272,040 2,572,703 3,882,642 4,622,655 4,694,311

呆帳費用Bad Debt Expense 5,432,577 5,104,185 2,252,219 675,225 834,461

營業費用Operating Expense 4,323,675 4,305,681 4,061,180 4,938,823 5,288,558

繼續營業部門稅前損益Pre-Tax Gain (Loss) from Continued Operations

( 1,170,957 ) ( 2,989,595 ) 686,267 3,004,127 2,464,295

繼續營業部門稅後損益After-Tax Gain (Loss) from Continued Operations

( 780,091 ) ( 2,682,917 ) 439,883 2,196,378 2,373,231

停業部門損益（稅後淨額）After-Tax Gain (Loss) from Discontinued Operations

- - - - -

非常損益（稅後淨額）Extraordinary Gain or Loss - - 801,037 - -

會計原則變動之累積影響數（稅後淨額）Cumulative Effect of Changes in Accounting

- - - - -

本期損益Net Income ( 780,091 ) ( 2,682,917 ) 1,240,920 2,196,378 2,373,231

每股盈餘（元）EPS (NT$) ( 0.42 ) ( 1.43 ) 0.64 1.10 1.12

追溯調整每股盈餘（元）Diluted EPS (NT$) ( 0.46 ) ( 1.59 ) 0.59 1.04 1.07

39

年度 Year分析項目 Analysis Items 2007 2008 2009 2010 2011

普通股Common Shares 18,797,803 23,413,183 19,337,975 20,071,490 21,185,605

永續非累積特別股Non-Cumulative Perpetual Preferred Stocks

- - - - -

無到期日非累積次順位債券Non-Cumulative Subordinated Debts without Maturity Dates

- - - - -

預收股本Advanced Receipts for Capital Stocks - - - -

資本公積(固定資產增值公積除外)Capital Surplus (apart from Fixed Asset Appreciation Surplus)

1,024,291 9,978 9,301 9,301 29,008

法定盈餘公積Legal Reserves 1,596,516 - - 372,276 1,030,702

特別盈餘公積Special Reserves - - - - 4,554

累積盈虧Retained Earnings -1,198,858 -2,037,604 1,240,920 2,194,754 2,374,090

少數股權Minority Interests - - - - -

股東權益其他項目Other Shareholders'Equity items -202,138 -97,410 -52,853 -114,544 -217,702

減：商譽Minus: Goodwill - - - - -

減：出售不良債權未攤銷損失Minus: Unamortized Loss on Disposal of Non-Performing Loan (NPL)

- - - - -

減：資本扣除項目Minus: Capital Allowance 1,815,257 1,408,353 1,329,684 1,352,028 1,485,271

第一類資本合計Total Tier I Capital 18,202,357 19,879,794 19,205,659 21,181,249 22,920,986

永續累積特別股Perpetual Cumulative Preferred Stocks - - - - -

無到期日累積次順位債券Cumulative Subordinated Debt without Maturity Date

- - - - -

固定資產增值公積Fixed Asset Appreciation Surplus - - - - -

累積虧損Accumulated Deficits -1,198,858 -2,037,604 - -

備供出售金融資產未實現利益之45%45% of Unrealized Valuation Gain on Available-for-Sale Financial Assets

324 72,496 102,402 123,225 111,655

可轉換債券Convertible Bonds - - - - -

三、資本適足性 Capital Adequacy


Tier I Capital

第一類資本

Net Capital

自有資本

Tier II Capital

第二類資本


40


營業準備及備抵呆帳Operating Reserve and Loan Loss Provisions

- 34,632 1,231,274 1,691,414 2,285,658

長期次順位債券Long-term Subordinated Debts 7,000,000 8,600,000 7,200,000 9,337,480 10,940,000

非永續特別股Non-Perpetual Preferred Stocks - - - - -

永續非累積特別股及無到期日非累積次順位債券合計超出第一類資本總額15%者Aggregate Non-Cumulative Perpetual Preferred Stocks and Non-Cumulative Subordinated Debts without Maturity Date Exceeding 15% of Total Tier I Capital

- - - - -

減：資本扣除項目Minus: Capital Allowance 1,645,315 1,408,352 1,329,684 1,352,028 1,485,270

第二類資本合計Total Tier II Capital 4,156,151 5,261,172 7,203,992 9,800,091 11,852,043

短期次順位債券Short-term Subordinated Debts - - - - -

非永續特別股Non-Perpetual Preferred Stocks - - - - -

第三類資本合計Total Tier III Capital - - - - -

自有資本Net Capital 22,358,508 25,140,966 26,409,651 30,981,340 34,773,029

信用風險Credit Risk

標準法Standardized Approach 229,431,001 212,523,534 203,675,818 214,289,186 246,909,957

內部評等法Internal Rating Based Approach - - - - -

資產證券化Securitization - - - - -

作業風險Operating Risk

基本指標法Basic Indicator Approach 16,323,900 16,120,713 13,595,938 12,306,063 11,744,788

標準法／選擇性標準法Standardized Approach/Alternative Standardized Approach

- - - - -

進階衡量法Advanced Measurement Approach

- - - - -

Tier III Capital

第三類資本

Tier II Capital

第二類資本

Net Capital

自有資本

（承上頁）

Total Risk-Weighted Assets

加權風險性資產額


41

（承上頁）


市場風險Market Risk

標準法Standardized Approach 10,600,125 8,411,013 8,218,088 8,526,963 16,750,238

內部模型法Internal Model Approach - - - - -

加權風險性資產總額Total Risk-Weighted Assets

256,355,026 237,055,260 225,489,844 235,122,212 275,404,983

資本適足率Capital Adequacy Ratio 8.72% 10.61% 11.71% 13.18% 12.63%

第一類資本佔風險性資產之比率Ratio of Tier I Capital to Risk Assets 7.10% 8.39% 8.52% 9.01% 8.32%

第二類資本佔風險性資產之比率Ratio of Tier II Capital to Risk Assets 1.62% 2.22% 3.19% 4.17% 4.31%

第三類資本佔風險性資產之比率Ratio of Tier III Capital to Risk Assets - - - - -

普通股股本佔總資產比率Ratio of Common Shareholders' Equity to Total Assets 5.22% 6.53% 5.15% 4.81% 4.84%

Total Risk-Weighted Assets

加權風險性資產額



42

註：本行各關係企業間並未相互持股

遠銀人身保險代理人

股份有限公司

本行持股

100.00％

遠銀財產保險代理人

股份有限公司

本行持股

100.00％

遠銀資產管理

股份有限公司

本行持股

100.00％

遠東國際商業銀行

四、轉投資公司營運概況及未來計畫 Reinvestment Policies and Plans（一）關係企業相關資料

（二）關係企業相關資料

企業名稱實收資本額

資產總值負債總額淨值營業收入營業利益

本期損益（稅前）

每股盈餘（元）（稅前）

遠銀人身保險代理人股份有限公司

14,152 335,881 51,157 284,724 391,786 263,951 267,116 188.75

遠銀財產保險代理人股份有限公司

3,500 15,271 1,579 13,692 14,812 8,443 8,616 24.62

遠銀資產管理股份有限公司

1,200,000 2,166,369 1,436,776 729,593 114,138 97,504 (62,523) (0.52)

遠智證券股份有限公司 200,000 328,923 57,083 271,840 186,655 (43,115) (43,115) (2.16)

遠智保險經紀人股份有限公司

9,000 4,691 1,698 2,993 3,308 (2,516) (2,516) (2.80)

Dec 31, 2011單位：仟元

遠智保險經紀人

股份有限公司

遠智證券持股

100.00％

遠智證券

股份有限公司

本行持股

100.00％

43

Far Eastern Life

Insurance Agency Co.,

Ltd.

FEIB Ownership 100%

Far Eastern Property

Insurance Agency Co.,

Ltd.

FEIB Ownership 100%

Far Eastern Asset

Management Corp.

FEIB Ownership 100%

Far Eastern International

Securities Company Ltd.

FEIB Ownership100％


Insurance Brokers Co.,

Ltd.


Securities Company Ltd.

Ownership 100.00％

Far Eastern International Bank

Note: There is no cross holding among FEIB affiliated companies.

(4) Reinvestment Policies and PlansA. Affiliated Companies

B. Affiliated Companies

Dec 31, 2011Unit: NT$ thousands

Company Name Paid-in Capital Total Assets Total

Liabilities Net Worth Operating Income

Operating Profit

Gain or Loss (Before Tax)

EPS (NT$)(Before Tax)

Far Eastern Life Insurance Agency Co., Ltd. 14,152 335,881 51,157 284,724 391,786 263,951 267,116 188.75

Far Eastern Property Insurance Agency Co., Ltd. 3,500 15,271 1,579 13,692 14,812 8,443 8,616 24.62

Far Eastern Asset Management Corp. 1,200,000 2,166,369 1,436,776 729,593 114,138 97,504 (62,523) (0.52)

Far Eastern International Securities Company Ltd. 200,000 328,923 57,083 271,840 186,655 (43,115) (43,115) (2.16)

Far Eastern International Insurance Brokers Co., Ltd. 9,000 4,691 1,698 2,993 3,308 (2,516) (2,516) (2.80)


44

（三）未來計劃：

1.遠銀人身、財產保險代理人股份有限公司保險銷售通路的重心已以「銀行保險」為主，除了持續執行以客戶需求為引進保險商品

的策略外，提升銀行同仁對銀行保險商品的熟悉度，並以專業保險顧問協助銷售，加強

售後服務品質與深耕客戶關係；積極擴展與其他可行通路間異業策略聯盟，增加多元行

銷契機以達強本培源的目標。藉由集團員工優惠專案、集團關企團體保險，持續開發集

團內部客戶，進一步發揮集團綜效，成為遠東集團內的專業保險服務團隊；並提供符合

遠東集團內外、個人、法人之全方位風險控管之保險方案。

2.遠智證券股份有限公司遠智證券是專以提供財富管理服務為出發點所設立的證券公司，原本就擁有基金、債

券、股票和保險的全方位商品平台，可以有效為高資產客戶進行資產配置，提供客製化

的私人銀行級服務。如今在遠東商銀的支持下，產品線也將更完善，再加上與遠東集團

內部的綜效，遠智證券的表現可望於2012年更上一層樓。另外，遠智證券也採取積極成長的策略，持續招募具有專業知識的財務顧問，希望能將公司團隊規模由目前的七十人

擴大至百人。此外，2012年營運計畫還包括加強持續性收入，促進與遠銀之跨售機會，以及強化風險控管與法令遵循。

3.遠銀資產管理股份有限公司 2012年將持續購入金融機構之不良債權，並加速處分轉投資事業，以擴大收入來源，增

加收益。

遠東商銀近三年來積極擴展營運版圖，陸續完成2008年與德意志銀行集團結盟成立德銀遠東投信、2010受讓AIG集團友邦信用卡與併購慶豐銀19家分行、2012投資購買ING集團旗下安智證券（已更名為遠智證券）等多項行動，藉以推升信用卡業務與通路規模，並架構國際性財富管理平台。

FEIB has been proactively pursuing expansions during the last few years: in 2008, it formed alliance with Deutsche Bank AG to establish Deutsche Far Eastern Asset Management Company Limited; in 2010, it completed the acquisition of Chin-Fon Bank with 19 domestic branches; in 2012, the Bank acquired 100% stock ownership of ING Securities from ING Insurance International B.V. (renamed as Far Eastern International Securities) to promote the Bank's credit card business as well as channel scale expansion and construct an international wealth management platform.

接軌國際級金融集團業務Geared to World-class International Financial Groups

45

(3) Future PlansA. Far Eastern Life and Property Insurance Agency Co., Ltd.

The insurance sales channel aims to promote“Bank Insurance”. Aside from continuing to introduce insurance products in compliance with customer needs and educating the Bank staffs to be more familiar with the bank insurance products, the company will also employ professional consultants to assist in insurance sales, strengthen after-sales service quality and fortify customer relations. It will focus on forming cross-industry strategic alliances with other marketing channels to increase multiple sales opportunities and expand businesses. Through providing special discounts to Group employees and group insurance packages among affiliated companies, the company will further develop inner clients within the Far Eastern Group to achieve Group synergy and become the Group's expert insurance service team to offer comprehensive insurance policies catering to the needs and risk control of the Far Eastern Group as well as individual and enterprise

clients.

B. Far Eastern International Securities Company Ltd. Far Eastern International Securities is a securities company to mainly provide wealth management

services. Already equipped with a comprehensive platform consisting of funds, bonds, securities and insurance products, the company can effectively design asset allocation and portfolio for its high-end clients and offers customerized personal banking services. Now with the support of FEIB, the company shall display a more complete product line and added with group synergy, it is expected to perform better in 2012, hopefully to continue to recruit financial consultants with professional knowhow to expand its manpower from the current 70 to 100 staffs. Furthermore, the 2012 operational plan also includes the increase of continuous income, the promotion of cross-

sales with FEIB, and strengthening risk control and law abiding business model.

C. Far Eastern Asset Management Corp. In 2012, this Company will continue to purchase non-performing loans from other banking institutions, expedite on the disposal of reinvestment businesses so as to expand income source and increase revenues.


46

柒、風險管理

一、風險管理組織架構及政策

（一）政策

1. 塑造本行注重風險管理之專業組織文化，並運用內外部風險管理規範之質化（如各項作業

辦法等）、量化指標（如資產品質比率等），作為本行營運策略參考。

2.設置獨立之風險控管專責單位，有效監控及落實風險管理制度。3. 有效辨識、衡量、監督與控制各項既有及潛在風險於本行可承受範圍內，並兼顧風險與合理利潤，達到盈餘目標。

（二）組織架構 1.董事會：董事會為本行風險管理之最高決策單位，負責核定全行風險管理政策，建立全行風險管

理文化，對整體風險管理擔負最終責任。

2.風險管理委員會：由總經理為風險管理委員會召集人，並指定相關主管擔任委員，定期開會，掌理及審議

全行風險管理執行狀況、評估資本適足性與風險承擔情形。 3.風險管理處：下設法金組、消金組及中小企業組，分別對法人金融與金融市場、消金及信用卡等事業

群及中小企業金融之風險管理採直接管理。各事業群有關授信準則、程序、辦法、新產

品開發、人員授權等，均先經由風險管理處審查，再行呈核，使本銀行風險管理具集中

控制效果。

A 風險管理處法金組分為審查組、應收帳款徵審組、金融市場中台組、授管組、覆審追蹤組等五個單位，分別負責授信案件事前審核、貸放後管理、交易部位之每日市價評

估與限額控管、授信規範之擬訂與控管及督導法金授信覆審追蹤作業。

B 風險管理處消金組分為消金授管、信用卡授管、債權管理、資訊/服務等四個單位，分別負責制定消金與信用卡產品授信政策、資產品質管理、徵審與貸後管理、交易管

理、中途授信管理、逾期放款回收、債權管理、消債案件處理及資料倉儲運用與風險

分析。

C 風險管理處中小企業組分為中小企業授管、債權管理、資訊/服務等三單位，分別負責制定中小企業產品授信政策、資產品質管理、徵審、逾期放款回收、債權管理、消債

案件處理及資料倉儲運用與風險分析。

4.稽核處定期查核全行風險管理有關業務，包括風險管理架構、風險管理運作程序等相關作業之

實際執行狀況，並適時提供改進建議。

47

(1) Risk Management Structure and Policy A. Policy

1. To foster a risk management-oriented culture, the Bank has employed a qualitative index of internal and external risk management regulations (such as diverse operating procedures) and quantitative index (such as ratio of asset quality) as a reference for operating strategy.

2. FEIB has set up an independent risk control unit to effectively supervise and implement the Bank's risk management system.

3. To effectively recognize, evaluate, monitor and control all existing and potential risks within acceptable limits to achieve target revenues.

B. Organization Structure1. Board of Directors

The Board of Directors steers FEIB's risk management, and is responsible for reviewing the whole Bank's risk management policies, reinforcing a risk management culture and taking ultimate responsibility for overall risk management.

2. Risk Management CommitteeThe Bank President presides over the Risk Management Committee, appoints relevant bank heads as Committee Members and calls regular meetings to execute and review the Bank's capital adequacy, risk bearing capacity and entire risk management system.

3. Risk Management DepartmentUnder the Management Risk Department, the Corporate Banking, Consumer Banking and Small- and Medium-sized Enterprise Teams directly manage risk with regard to Corporate Banking, Financial Markets, Consumer Banking, Credit Card as well as Small- and Medium-sized Enterprise Business Groups. The Risk Management Department reviews and gives quantitative and qualitative feedback on each business group's lending guidelines, processes, product development, and authorization criteria, etc. before consideration for approval in an effort to centralize control and improve quality.(a) The Corporate Banking Team under Risk Management Department is further divided into 5 Sections including: Risk

Review, AR Factoring, Financial Market Middle Office, Credit Control, and Second Review & Trace which handle respectively the pre-evaluation of lending cases, after loan management, daily assessment of each position's market value and limit control, the drawing of lending guidelines and risk control, and monitor Corporate Banking's second review and trace operations.

(b) The Consumer Banking Team under Risk Management Department is further divided into 4 Sections including: Consumer Banking Credit Control, Credit Card Control, Debt Management, and Information/Service which handle respectively drawing of the lending policies of consumer banking and credit card products, management of asset quality, evaluation and after-loan management, transaction management, mid-way lending management, overdue loan recovery, debt write-off, data storage & processing, and risk analysis.

(c) The Small- and Medium-sized Enterprise Team under Risk Management Team is further divided into 3 Sections including: Small- & Medium-sized Enterprise Lending Control, Debt Management, and Information/Service which handle respectively the drawing of lending policies to small- and medium-sized enterprises, asset quality management, evaluation, overdue loan recovery, debt management, debt write-off cases, data storage & processing, and risk analysis.

4. Auditing DepartmentRegularly check the Bank's risk management related businesses including the execution of risk management structure and risk management operating processes, and then provide constructive suggestions for improvement.

Risk Management

風險管理 Risk Management

48

二、各項風險管理策略

（一）信用風險

1.法人金融業務訂定穩健及明確之法人金融徵授信及貸後管理程序，掌控資產品質；控管授信行業別之

適當比重、集團企業授信風險之集中管理，並定期或視必要性依據經濟走勢、產業趨勢

及本行經營政策調整上述行業或集團比重。

2.消金及信用卡業務訂定明確之授信規範及貸放程序，達成消金授信資產品質穩定及穩健獲利之營運目標。

管理資產結構確保各資產組合適當配置，追蹤放款品質，檢討經濟景氣、經營環境變

化，動態調整授信政策。

3.中小企業金融業務訂定明確中小企業徵授信規範、作業程序及貸後管理機制，達成授信資產品質優化及規

模成長目標。規範授信產品類別、進行資產結構管理，確保債權擔保性及資產組合適當

性。定期檢視經濟景氣變化，動態調整授信政策及策略目標。

（二）作業風險

以有效且具獨立運作之內部稽核，檢視作業風險管理狀況，除就應改善事項設立追蹤機制

外，並適時呈報查核結果予董事會。為加強內部控制藉以防止弊端之發生，建立各單位

「自行查核」制度，並由稽核處定期至各單位辦理「一般查核」與「專案查核」；同時本

行設有「遵守法令主管」制度，督導全行確實遵循法令。

依日常營業活動及管理流程可能發生之各項風險，綜合評估其發生頻率及影響嚴重性，採

取將部份或全部之作業風險利用保險、委外等措施，移轉或沖抵事件發生之損失與衝擊。

落實KYC（認識客戶，Know Your Customer）及防制洗錢、內部控制制度、法規遵循、員工道德規範與教育訓練等措施，以降低風險發生之機率。本行建置符合國際標準規範

(ISO27001)的資訊安全控管規範，包含制定本行資訊安全政策、相關資訊安全之實施程序、

監督風險與資訊安全稽核能力、宣導資安教育訓練。

（三）市場風險

依本行「金融市場自營交易業務授權準則」針對不同業務設有交易員、交易室部位限額及

停損限額，每日由專人於日中及日終進行檢視，損失達限額即應立即結清部位，避免市場

風險，並每日按市價評估交易性部位損益。新產品、業務及系統推展或運作前，適當評估

市場風險並考量其對本行之影響。

依金融產品訂定交易室部位總額及個別交易員部位限額以控制市場風險於合理範圍。交易

性部位採即時或依每日市價評估為原則，並應每日評估一次，若為銀行本身業務需要辦理

之避險交易，至少每月評估二次，且由風險管理處獨立評估，執行部位控管及停損限制。

49

(2) Risk Management StrategyA. Credit Risk

1. Corporate BankingTo engage in stipulating stable and precise corporate banking lending and after-loan management processes, control asset quality; maintain an adequate ratio of lending industries, centralize management of corporate lending risk, and regularly adjust when necessary the above-said industry or corporate ratios in accordance with economic performance, industry trend, and the Bank's operating policy to diversify and reduce risk.

2. Consumer Banking and Credit Card BusinessTo Define precise lending guidelines and processes so as to achieve the steady and organic growth target; manage asset structure to ensure the proper allocation of portfolios, trace lending quality, review economic recovery, monitor changes of operating environment, and proactively adjust lending policies.

3. Small- and Medium-sized Enterprise Banking BusinessTo stipulate clearly the lending guidelines, operation process and after-loan management mechanism to small- and medium-sized enterprise clients to improve lending asset quality and achieve growth in scale; regulate lending product categories, implement asset structure management, ensure debt guarantee and proper portfolios; regularly monitor the changes in economic scenario, and proactively adjust lending polices and strategic objective.

B. Operating RiskWith effective and independent internal auditing, the Bank examines execution of its operations risk management. Aside from setting up follow-up mechanism for areas that require improvement, it also presents verification checking results in a timely manner to the Board of Directors. To strengthen the Bank's internal controls and prevent defaults, each bank business unit has established its own“self-auditing”system and the Auditing Dept. shall implement “general auditing”and“special auditing.”The Bank also employs a“Compliance Officer”system to ensure that the Bank strictly abides by all regulations.FEIB evaluates the frequency and seriousness of operational risks with regard to its daily operations and management process, and strives to transfer or write-off the loss and impact by way of insurance, outsourcing, and etc. With measures such as the implement of KYC (Know Your Customer), anti-laundry, internal control system, regulations, employee morale buildup and educational trainings, the Bank aims to lower the possibility of risk occurrence. The Bank has also set up information safety control guidelines conforming to the requirements of“ISO27001 Information Security Management System”including IT safety policies, process, supervision, audit and educational training to mitigate information risk.

C. Market RiskThe Bank controls trading risk held by every trading unit around various financial instruments and even whole trading room risk by setting up certain positions from specific clerk, stop-loss limits for all positions to different financial instruments and products to control market risk within a reasonable range. Special staff and teams check twice daily at noontime and end of day to review results, immediately squaring positions when reaching limits, and evaluating each day's gains or losses of un-squared positions. Before launching, promoting or operating new product, business or system, adequate evaluation of market risk should be performed to check its affect on the Bank.In accordance with trading positions volumes of financial products and individual clerk's trading limit to control market risk within reasonable range. Trading positions will go through real time evaluations with reference to their daily market values, and should be evaluated once daily. As to hedge businesses deemed necessary by the Bank itself, should be evaluated at least twice per month and monitored independently by the Risk Management Department to execute position control and stop-loss limit.

風險管理 Risk Management

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（三）股權分散情形 Shares Diversification

捌、股東資訊Shareholder Information

一、股份及股利 Shares and Dividends（一）股本來源 Sources of Capital

April 30, 2012

（二）股東結構 Shareholder Structure

April 30, 2012單位：股 Unit: per share

April 30, 2012每股面額十元 Par Value NT$10

股份種類

Types of Shares

核定股本Authorized Capital 備註

Note流通在外股份Outstanding Shares

未發行股份Non-issued Shares

合計Total

普通股Common Shares

2,118,560,453股shares

2,381,439,547股shares

4,500,000,000股shares

上市股票Listed on the Taiwan Stock Exchange (TSE)

股東結構Shareholder

Structure

數量 Quantity

政府機構Government Institutions

金融機構Financial

Institutions

其他法人Other Legal

Persons

個人Individuals

外國機構及外人

Foreign Institutions and Foreigns

合計Total

人數Number of People 5 19 153 65,956 140 66,273

持有股數（股）Number of Shares 11,592,714 42,998,042 1,267,128,655 671,763,368 125,077,674 2,118,560,453

持股比例Percentage 0.55% 2.03% 59.81% 31.71% 5.90% 100.00%

持股分級Number of Share Range

股東人數（人）Number of Shareholders

持有股數（股）Number of Shares

持股比例（%）Percentage

1∼ 999股 shares 29,063 8,868,379 0.42 1,000∼ 5,000股 shares 19,698 47,022,937 2.24 5,001∼ 10,000股 shares 6,561 49,889,836 2.35

10,001∼ 15,000股 shares 4,502 55,269,139 2.61 15,001∼ 20,000股 shares 1,536 27,958,076 1.32 20,001∼ 30,000股 shares 1,588 39,158,117 1.85 30,001∼ 50,000股 shares 1,226 48,235,099 2.27 50,001∼ 100,000股 shares 1,054 74,946,022 3.54

100,001∼ 200,000股 shares 530 73,362,535 3.46 200,001∼ 400,000股 shares 236 66,381,124 3.13 400,001∼ 600,000股 shares 99 47,945,857 2.26 600,001∼ 800,000股 shares 35 24,033,096 1.13 800,001∼ 1,000,000股 shares 23 20,588,458 0.97

1,000,001股以上 shares plus 122 1,534,901,778 72.45合計 total 66,273 2,118,560,453 100.00

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（四）主要股東名單 Major Shareholders

April 30, 2012單位：股 Unit: per share

註：係列明股權比例佔前十名之股東。Note: Listed above are the Bank's top ten major shareholders.

股份Shares

主要股東名稱 Major Shareholders

持有股數（股）Number of Shares

持股比例（%）Percentage

裕元投資股份有限公司Yu Yuan Investment Co., Ltd. 124,131,579 5.86

裕利投資股份有限公司Yue-Li Investment Company 109,936,402 5.19

亞洲投資股份有限公司Asia Investment Corp. 100,944,128 4.76

德勤投資股份有限公司Der Ching Investment Corp. 100,931,984 4.76

裕通投資股份有限公司Yue-Tung Investment Corp. 97,527,424 4.60

遠鼎投資股份有限公司Yuan Ding Investment Corp. 89,183,204 4.21

開元國際投資股份有限公司Kai Yuan International Investment Corp. 80,454,577 3.80

鼎元國際投資股份有限公司Ding Yuan International Investment Corp. 66,269,998 3.13

遠東新世紀股份有限公司Far Eastern New Century Corporation 65,553,900 3.09

亞洲水泥股份有限公司Asia Cement Corporation 58,915,143 2.78

股東資訊Shareholder Information

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二、信用評等在信用評等方面，經惠譽國際信評公司（Fitch Ratings）評等，本行評等為國內評等分別為長期評

等A（twn）、短期評等F1（twn），國際外幣評等之長期評等BBB-、短期評等F3，長期評等展望為穩定（Stable），屬投資等級穩健之金融機構。

Credit Ratings

The Bank's investment grade ratings were assessed by Fitch Ratings Limited to read as follows: National Rating Long-term A (twn), National Rating Short-term F1 (twn), Foreign Currency Rating Long-term BBB-, Foreign Currency Rating Short-term F3, and Foreign Currency Rating Outlook Stable. FEIB is considered a stable financial institution of investment grade.

評等項目(Ratings) 2007/3/5 2008/3/13 2009/3/13 2010/9/27 2011/10/14

國際評等Foreign Currency Rating

短期Short-term F3 F3 F3 F3 F3

長期Long-term BBB BBB- BBB- BBB- BBB-

展望Outlook Stable Stable Negative Stable Stable

國內評等National Rating

短期Short-term F1 (twn) F1 (twn) F1 (twn) F1 (twn) F1 (twn)

長期Long-term A+ (twn) A (twn) A (twn) A (twn) A (twn)

個別評等Individual Rating C C C/D C/D C/D

支援評等Support Rating 4 4 4 4 4

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股東資訊Shareholder Information

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遠東商銀兩度贊助MLB球星來台交流，繼2010年道奇隊來台加場賽之後，2011年遠銀MLB全明星台灣賽更推出夢幻陣容，由旅美名投王建民領銜的中華隊，對戰MLB全壘打王Robinson Cano等強棒共組的超級打線，全台五場賽事除為台灣棒球運動興起一股旋風，更配合舉辦少棒營，為國內小選手加油！

FEIB sponsored U.S. MLB (Major League Baseball) players to visit Taiwan twice. After the extra game of Los Angeles Dodgers in Taiwan held in 2010, the 2011 FEIB All-Star Games were particularly impressive with dream teams such as famous pitcher Wang Jianmin leading the Taiwanese team against the super hitting team comprising MLB home-run king Robinson Cano. The five games held throughout Taiwan were warm welcomed by local audiences and little league baseball camp was organized to encourage Taiwan's little league baseball players.

遠銀2011 MLB全明星賽開打Initiated 2011 FEIB MLB All-Star Games

玖、企業社會責任

本行自成立以來，除致力於提供客戶完善的金融相關服務，更不忘實踐企業公民之社會責任，長年

投身各項公益活動，近幾年更大力推廣人文美學，期盼台灣社會不僅享有財富的豐饒，亦能領會藝術所

帶來的心靈之美。以下為2011年本行主辦或參與的公益與人文美學活動。

（一）關懷社會公益

1. 本行為財團法人伊甸社會福利基金會之長期公益夥伴，雙方自1997年聯名發行伊甸愛心卡，開啟合作，多年來除了活動專案贊助，本行更有計劃透過伊甸愛心卡刷卡金回饋，持續穩定

捐贈伊甸，至2011年底累計捐款金額突破2,800萬元。2. 本行兩度贊助美國職棒大聯盟球星來台交流，繼2010年贊助MLB道奇隊台灣賽加場賽，2011年再度贊助遠銀MLB大聯盟全明星賽台灣大賽，全台共計5場賽事，分別於新北市新莊棒球場、台中市洲際棒球場與高雄市澄清湖棒球場舉行。由旅美名投王建民領軍的中華隊對戰全

壘打王Cano Robinson等強棒所組成的大聯盟全明星隊。本行除回饋客戶享購票優惠，亦配合舉辦青少棒訓練營，藉以協助國內小選手在棒球運動上持續精進；另邀請高雄地區受伊甸基

金會照護的50位小朋友到場，體驗觀賞大聯盟球賽的樂趣。

FEIB has been a good corporate citizen since its establishment in 1992. Besides offering comprehensive financial services, the Bank is committed to exceeding its corporate social responsibilities. The Bank has long dedicated itself to sponsoring various social events and promoting arts in particular during recent years with the hope not only to enrich Taiwan's society, but also to understand the spiritual beauty through artistic appreciation. The Bank's sponsorships for social welfare and aesthetic art events in 2011 are as follows:

(I) Caring for Social Welfare1. The Bank has long partnered with the Eden Social Welfare Foundation to jointly issue since 1997 the

Eden Honor Card to sponsor various events with charitable cause. Furthermore, through cash back program of cardholders' spending volume, donations have been made steadily to the Eden Social Welfare Foundation. Accumulated funds collected amounted to more than NT$28 million at end 2011.

2. FEIB sponsored for the second time the visit of U. S. major league baseball players to Taiwan. After sponsoring extra games (Los Angeles Dodgers vs. Taiwan's Chinese Professional Baseball League) in 2010, the Bank backed again in 2011 five games throughout Taiwan held at Hsinchuang Baseball Stadium of New Taipei City, Taichung Intercontinental Baseball Stadium, and Kaohsiung Chengcing Lake Baseball Field. Taiwan's All-Star team led by famous pitcher Wang Jianmin vs. LA Dodgers teammates such as homerun king Cano Robinson. FEIB not only offered discount on ticket purchase to its clients, but also held youth and little baseball camps to promote this sport and invited 50 children aided by the Eden Social Welfare Foundation to attend these events and experience the fun of major league games.

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企業社會責任Corporate Social Responsibility

Corporate Social Responsibility

（二）致力環境保護

本行與遠東集團關係企業共同打造台北花卉博覽會唯一企業贊助展館「遠東流行館」，該館建材由

回收保特瓶再製而成，擁有最環保建築、首座碳中和建築等七項世界第一，所有建材皆可拆除再重組利

用，符合再回收與循環利用的環保精神。該館以在綠建築上的創新表現獲國家地理雜誌頻道專題報導，

以34種語言在全球168個國家播放。

（三）推廣藝文美學

1. 本行與遠東集團關係企業推廣人文美學不餘遺力，繼2009年共同贊助享譽國際的加拿大太陽劇團來台首演，於2011年再度贊助太陽劇團來台演出＜魔幻森林＞，持續為國人引進國際級的表演藝術。

2. 於2005年製作發行的「921重建校園之美」月曆，開啟本行月曆的人文美學風格，多年來本行持續透過月曆，為客戶的家常生活增添美與知識的趣味。2011年底與甫開幕的國立台灣歷史博物館合作，取得其所典藏16至19世紀西方人繪製台灣相關古地圖之圖像授權，推出20週年紀念月曆「悠遊台灣古地圖，探索夢想地平線」，邀請客戶一起認識19世紀前台灣與世界交會的精彩歷史。

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遠東商銀發行20週年紀念月曆，以12張國立台灣歷史博物館所典藏16至19世紀台灣相關古地圖，串起台灣與世界交會的精彩故事；而大航海時代地圖所蘊含的探索、開拓、前進的精神，也輝映遠東商銀20週年的里程碑意義。

With courtesy and collections from National Museum of History, FEIB published its 20th anniversary calendar with 12 ancient maps of Taiwan dating from the 16th to 19th century that illustrated the wonderful stories of Taiwan's linkage to the world. The spirits of exploration, expansion, pioneering and advancement adopted from the Great Voyage correspond greatly with Far Eastern International Bank's 20th anniversary milestone.

發行台灣古地圖月曆Published Taiwan Ancient Map Calendar

(II) Creating Sustainable EnvironmentThe Pavilion of New Fashion“FE EcoARK”commissioned by the Far Eastern Group is the only

pavilion sponsored by private enterprise for the 2010 Taipei International Flora Expo. Constructed from recycled PET bottles, the project holds 7 world records in green construction as the most environment-friendly, first wide-span exhibition hall with a zero-carbon footprint, and etc. The whole building can be taken apart and reassembled at another site after the Expo, in keeping with the EcoARK's commitment to “Reuse, Recycle, and Reduce”. A documentary on“EcoARK”pavilion as part of National Geographic Channel's Megastructures series was aired throughout 168 countries in 34 languages.

(III) Promote Aesthetic Arts1. FEIB and the Group's affiliates have been dedicated to prompting fine arts. After jointly

sponsoring the premiere of Canada's Cirque du Soleil in Taiwan in 2009, the Bank sponsored again in 2011 the world-class Cirque du solieil to perform the show“Varekai”in Taipei.

2. “The Beauty of Reconstructed Campus after September 21st Earthquake”calendar published by FEIB initiated the aesthetic style of the Bank's calendar design. Over the years, through distributing these exquisite calendars FEIB have continued to add fun, style and flavor to the daily lives of its clients. At end 2011, the Bank collaborated with the newly opened National Museum of History and acquired authorization of its collection of ancient maps during 16th till 19th century drawn by western painters and introduced“Crusing Taiwan's Old Maps, Exploring Dream Horizon”calendar to mark the Bank's 20th founding anniversary and invite its clients to learn about the remarkable history of the Island's engagements with other parts of the world before the 19th century.

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企業社會責任Corporate Social Responsibility

遠東銀行由實業家徐有庠先生創辦，為遠東集團金融服務事業版圖之知名企業，遠東企業集團由紡

織業崛起，經歷62年持續投資拓展，遂行產業垂直與水平整合，目前集團經營領域涵蓋紡纖、運輸、百貨零售、石化、金融服務、通訊網路、旅館觀光、水泥、營建、社會公益等10大領域，事業體系橫跨製造業、服務業與高科技產業，2011年資產總額超過624億美元，並與全球知名廠商策略聯盟，營運觸角遍及全世界，近年來持續深耕台灣，佈局大陸，2011年營業額突破215億美元，目前共有9家股票上市公司，為台灣國際化及創新企業的標竿。

不斷為顧客、為股東創造新的價值，是遠東集團始終堅持的目標，致力經營旗下每一個事業體，

都成為該產業第一流的公司，秉持一貫的經營宗旨，遠東集團分佈在台灣、大陸、加拿大、香港、新加

坡、馬來西亞、泰國等十餘個國家及地區，為數5萬6千餘名訓練嚴謹、熱忱敬業的高素質員工，結合先進的科技知識、技術、設備與管理，產銷高品質的能源、化纖原料、紡織衣飾、水泥建材等商品，並

提供百貨零售、金融、運輸、通訊、醫療、教育等全方位、多元化的服務。

在追求卓越的同時，遠東集團致力於提升員工福利與環境保護，以促進人與環境的和諧與平衡。遠

東集團所有經營活動皆以保護環境品質及有效運用地球資源為中心，不但提供員工完整的訓練，良好的

工作環境，並鼓勵終身學習以吸收新知，提升技能；配合研發創新，以不傷害環境的生產模式，製造最

佳的產品，提供貼心的服務。

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壹拾、集團綜效

遠東商銀發行伊甸愛心卡，15年來累積回饋與專案贊助伊甸基金會金額突破三千萬元。為紀念開行20週年，同仁更集資贊助伊甸製作「孩子第一哩路」公益App。該App於完成後，將提供新生兒父母下載，隨時隨地運用智慧型手機記錄寶寶的成長，並同步進行0至6歲發展檢測，讓每個孩子都穩健踏出人生的第一步。

FEIB has been issuing“Eden Caring Card” with Eden Social Welfare Foundation for 15 years since 1997, accumulated feedbacks from the sponsorship programs have exceeded NT$30 million. To commemorate its 20th founding anniversary, the Bank's staffs also funded the production of“Children's First Mile”App, allowing new parents to download and record the growths of their babies on their smart phones, undergo zero to six-year-old development test simultaneously to ensure that all children may take a successful first step of their lives.

創新行動科技與公益結合Combining Innovative Mobile Technology with Social Responsibility

Established by the visionary entrepreneur Mr. Y. Z. Hsu, Far Eastern International Bank (FEIB) is the flagship company of Far Eastern Group's financial services. Starting from textiles and after 62 years of continuous innovation together with vertical and horizontal integration and expansion, FEG has developed into a leading diversified business conglomerate in Greater China. With total assets exceeding US$62.4 billion in 2011, the Group's global operations span the manufacturing, service and high-tech sectors. Our businesses cover ten major industries namely polyester fibers, petrochemicals, cement, retail, transportation, telecommunications, financial services, the Internet, hotels, construction and social responsibility. The Group has also formed strategic alliances and joint ventures with many world-renowned corporations and organizations (www.feg.com.tw). Based in Taiwan and extending well into mainland China, the Group with 9 listed companies has generated revenues surpassing US$21.5 billion in 2011 and ranked as the standard for internationalization and innovation in our respective industries.

Far Eastern Group has always been committed to creating new value for its customers and shareholders. The Group's affiliated companies lead in their respective sectors. With operations located in Taiwan, China, Canada, Hong Kong, Singapore, Malaysia, Thailand as well as other nations and regions, the Group's 56,000-plus well-trained and dedicated staff, coupled with advanced technology, know-how, modern facilities and management, manufacture and sell high-quality products ranging from chemical fibers to textiles/apparel and cement, and offer comprehensive, value-added services in the fields of retail, financial, transportation, telecom, medical health, and higher education, etc.

FEG also focuses on employee benefits and environmental protection to enhance the harmony and balance between humankind and earth. All the Group's operations aim to make effective use of global resources. Staff benefit from extensive training and a good working environment. Lifelong learning is encouraged to absorb new knowledge and enhance skills. With continuous R&D and innovation, we manufacture superior products and deliver value added services in an environment-friendly way.

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集團綜效Group Synergy

Group Synergy

從企業經營的角度來看，外部環境的變化我們或許無法改變，但我們可以調整自己，對環境作出

「應變」。回顧62年前，遠東集團橫跨海峽來到台灣建立事業，爾後數十年的發展，歷經二次石油危機、亞洲金融風暴、網路泡沫、911恐怖攻擊及SARS危機，遠東關係企業無不回歸基本面，秉持「誠勤樸慎」及「創新」的立業精神，結合員工、顧客及供應商突破難關，轉「危」為「機」。擁有豐富的集

團關係企業資源，一直是本行在激烈競爭的金融環境中較同業享有之優勢，本行除持續朝關係企業資源

整合的既定目標努力，亦積極開發其他新種產品，如推出遠東New Century信用卡、Happy Go Inside信用卡，整合集團的服務和資源，滿足顧客最大的需求，為國內集團資源整合的績優典範。

遠東集團結合食、衣、住、行、育、樂等生活所需，是國內唯一橫跨各項消費領域的企業集團，其

中金融服務事業包含遠東商銀、亞東證券、遠銀租賃、亞東投顧、德銀遠東投信、遠銀資產管理、遠銀

保代等公司。本行擁有如此多元及豐富的集團資源，未來更將發揮遠東集團橫跨兩岸之廣大客戶基礎優

勢，掌握趨勢、創造契機，開拓兩岸三地金融業務契機，成為大中華區首屈一指的專業銀行。

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Operations-wise, we obviously are not able to control external environments but we can thrive in the environment and adjust ourselves. 62 years ago, FEG moved from China to Taiwan and established its businesses. During the following decades of economic development, we had encountered two oil crises, the Asian financial crisis, Internet bubble, September 11th terrorist attacks and SARS. The Group has always stuck to its founding motto of“Sincerity, Diligence, Thrift, Prudence and Innovation” to join forces with its staff, customers and suppliers to overcome adversity and turn challenges into opportunities. FEIB's competitive edge has long been its abundant Group resources compared to other financial institutions facing intense competition. The Bank has been actively developing services and products such as Far Eastern New Century Card and Happy Go Inside Card to fully integrate the Group's services and resources and satisfy our clients' demand; thus, our Group is the benchmark for resource integration among the nation's conglomerates.

Meeting basic human needs for food, clothing, transportation, communication, finance, education and recreation, FEG is Taiwan's only business conglomerate that spans all consumption areas. The Group's financial business includes Far Eastern International Bank, Oriental Securities, Far Eastern International Leasing, Oriental Securities Investment Advisory, Deutsche Far Eastern Asset Management, Far Eastern Insurance Agency and FE Direct. Taking advantage of the Group's diverse resource and with an ample customer base both in Taiwan and awaiting across the Straits, FEIB aims to anticipate business trends, create business opportunities, and explore financial businesses in Taiwan, Hong Kong and China to become an outstanding professional bank in the Greater China region.

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註：遠東集團目前轄下經營領域涵蓋十大產業。Note: The Far Eastern Group now operates in 10 different industries.

石化能源事業Petrochem. Bus.

東聯化學(OUCC)亞東石化(OPTC)亞東石化上海(OPSC)亞東工業氣體(ALFE)

Alberta & Orient Glycol Ltd.(A&O)嘉惠電力(CPC)

百貨零售事業Retail and

Department Store Bus.

遠東百貨(FEDS)亞東百貨(YTDSL)

太平洋崇光百貨(PSDSC)遠百企業(FEG)

太平洋中國控股(PCH)遠東都會(FECS)

營造建築事業Construction Bus.

遠揚建設(FECC)遠揚營造(FEGCI)遠鼎公司(YDC)

遠東資源開發(FERD)

水泥建材事業Cement & Bldg. Materials

亞洲水泥(ACC)亞洲中國(AC(C)H)亞泥新加坡(AC(S))九龍英泥(KCC)

亞東預拌(台灣)(YRC)遠龍不銹鋼(YLSS)江西亞東水泥(JYDC)亞東石化(OPTC)四川亞東(SYDC)湖北亞東(HYDC)揚州亞東(YYDC)

海陸運輸事業S/L Transportation Bus.

裕民航運(U-Ming)富民運輸(FMTC)富達運輸(FDTC)

裕民新加坡U-Ming(SINGAPORE)裕民香港U-Ming(Hong Kong)

聚酯化纖事業Polyester & Synth.

Fiber Bus.

遠東新世紀(FENC)宏遠興業(EVT)

遠紡工業(上海)(FEIS)遠東先進纖維(FEFC)遠東服裝(蘇州)(FEAS)遠紡工業(無錫)(FEIW)遠紡織染(蘇州)(FEDZ)中比啤酒(蘇州)(SBBZ)亞東工業(蘇州)(OTIZ)

遠東集團事業關聯圖 Business Structure of Far Eastern Group

63

社會公益事業Social Responsibilities

徐元智先生紀念基金會(FEMF)徐元智先生醫藥基金會(FEMDF)徐有庠先生紀念基金會(YZHMF)

亞東紀念醫院(FEMH)遠東聯合診所(FEUCC)元智大學(YZU)亞東技術學院(OIT)豫章工商(YCVS)

觀光旅館事業

Hotel Bus.

遠東國際大飯店(FEPH)(台北、台南)(Taipei、Tainan)

金融服務事業Financial Services Bus.

遠東國際商業銀行（FEIB）遠智證券(FEIS)亞東證券(OSC)

亞東證券投顧(OSIA)德銀遠東投信(DWS)遠銀租賃(FEILC)

遠銀資產管理(FEAMC)遠銀保險代理人(FEINS)

通訊網路事業Communication &

Internet Bus.

遠傳電信(FET)新世紀資通(NCIC)和宇寬頻網路(KGEX)全虹企業(ARCOA)遠通電收(FETC)


64

壹拾壹、其他資訊

本行2011年度大事紀要

1月

8月

7月

10月

11月

12月

2月

5月

★ 贊助太陽劇團「魔幻森林」台北演出，提供存戶與卡友購票9折優惠，以及製作獨家魔幻絲巾、筆記本等獨家太陽劇團贈品回饋財富管理客戶與卡友。

★ 香港分行開辦人民幣存款、匯款、兌換、貿易融資、授信業務及與前述業務有關之人民幣同業往來。

★榮獲今週刊第五屆財富管理銀行評鑑「卓越成長獎」。

★分行營業時間由16:30延至17:00；簡易外匯業務營業時間由15:30延至17:00。

★投資購買ING 集團旗下在台所成立的安智證券股份有限公司100%股權，並假台北總行完成簽約儀式。

★獲行政院金融監督管理委員會核准開辦人民幣業務。

★ 贊助美國MLB身價總計超過15億新臺幣之球員於台灣進行明星賽，回饋信用卡客戶刷卡購票享95折優惠。直播賽事收視率平均2.05%，最高收視突破5%，觀看人次達570.6萬人。

★推出「C'est Moi我的卡」御璽卡。

★獲財金資訊公司頒發銀聯卡收單業務之推動優良獎。

★ 全行新語音系統上線：配合CTI專案，整合語音、電話及電腦各項系統，使客服人員能提供客戶跨消費金融事業群與個人金融事業群之諮詢服務。

★ 推出20周年紀念月曆「悠遊台灣古地圖，探索夢想地平線」，以大航海時代的台灣古地圖集為素材；12/20假國立台灣歷史博物館舉辦月曆發表會。

★行動銀行Android版上線（Android + iPhone 全面開通）。

★投資購買安智證券案完成交割，之後更名為「遠智證券」，成為本行百分之百持股的子公司。

★獲准辦理中小企業信用保證基金批次保證業務。

★獲銀行公會頒100年度全國性繳費業務全國性繳費業務交易總筆數第5名。

★汽車貸款策盟業務量突破新臺幣100億元。

★ 推出行動銀行iPhone版。

★ 個人金融事業群信託部與柏騰科技簽定本行首次設質型有價證券（法人信託）信託案。

★香港分行SUMMIT系統上線，整合金融商品交易作業。

★假台北國軍英雄館召開一百年股東常會。

★個人金融事業群將現行分行組織11區重新規劃調整為7區，以提高區域效能並促進業務交流。

★台北大稻埕分行開幕於台北市延平北路二段86號，營業分行增至54家。

★舉辦「第八屆遠東菁英盃高球邀請賽」，邀請消金及信用卡事業群與個人金融事業群之VIP與賽。

6月

65

其他資訊Other Information

Other Information

Significant FEIB Events in 2011

Jan

Feb

May

Jun

July

Aug

Oct

Nov

Dec

★ Sponsored Cirque du Soleil's“Varekai”in Taipei, offered depositors and cardholders with 10% ticket discount, produced and presented exclusive Cirque du Soleil souvenirs including Varekai scarves and pads to the Bank's wealth management clients and cardholders.

★ Hong Kong Branch initiated deposit, wire transfer, exchange, financing and relevant business of RMB transactions.

★ Launched mobile banking for iPhone.

★ Branch office hour to end extended from 16:30 till 17:00; simple foreign exchange business office hour to end extended from 15:30 to 17:00.

★ Acquired 100% stake in ING Securities Company Limited from ING Insurance International B.V. and held signing ceremony at FEIB Taipei Head Office.

★ Hong Kong Branch's SUMMIT system online to consolidate transactions of financial products.

★ The Bank's 2011 Shareholders' Meeting was held.

★ Individual Banking Group replanned and readjusted its current branch structure from 11 to 7 sections to enhance regional efficiency and promote business exchange.

★ Taipei Dadaochen Branch was inaugurated at No. 86, Yenping North Road, Sec. 2, adding up to a total of 54 branches.

★ Sponsored“The 8th Far Eastern Elite Cup Charity Golf Tournament”, inviting VIP clients of Consumer Banking and Credit Card Business Groups to participate.

★ Approved by the Financial Supervisory Commission, Executive Yuan to initiate RMB business.

★ Sponsored U. S. MLB players worth beyond NT$1.5 billion to play the all-star game in Taiwan, offered 5% discount to cardholders when purchasing tickets with credit cards, audience rating of live broadcasting for this event averaged at 2.05% and topped at 5%, total number of audiences reached 5.706 million.

★ Trust Dept. of Individual Banking Group and Paragon Technologies Co., Ltd. entered into the Bank's first Securities Pledge Agreement (legal trustee).

★ Received“Outstanding Growth Award”of the 5t Wealth Management Bank Review made by Business Today Magazine.

★ Launched “C'est Moi My Card” Majesty Cards.

★ Awarded by Financial Information Service Co., Ltd. for the Bank's good promotion of “China UnionPay” online payment business.

★ Initiated Brand new phone online voice service system, with the application of Computer Telephone Integration (CTI) to converge voice, telephone and computer systems, enabling customer service staffs to provide clients with consulting services on Consumer Banking Group and Individual Banking Group businesses.

★ Published the Bank's 20th Anniversary Calendar titled “Cruising Taiwan's Old Maps, Exploring Dream Horizon” illustrating ancient maps of Taiwan during Grand Voyage, and held press release on December 20, 2011 at National Museum of History.

★ Launched fully integrated Android mobile banking App (Android+iPhone fully functional).

★ Completed the share purchase of ING Securities Company Limited and renamed it as“Far Eastern International Securities Company Ltd.”as the Bank's fully owned affiliated company.

★ Authorized to engage in small and medium enterprise batch-type credit guarantee business.

★ Ranked No. 5 in term of total number of e-bill payments in 2011 by the Bankers Association of the Republic of China.

★ Business volume of Car Loan Strategic Alliance Unit exceed NT$10 billion.

66

本行各營業單位地址及電話表

單位名稱地址電話

總行 106台北市大安區敦化南路二段207號27樓 (02) 2378-6868營業部 106台北市大安區敦化南路二段207號1樓 (02) 2378-6868國外部 103台北市大同區重慶北路一段30號2樓 (02) 2550-8811信託部 100台北市中正區襄陽路1號5樓 (02) 2312-3636信用卡部 220新北市板橋區文化路二段182巷3弄33號 (02) 8073-1166台北襄陽分行 100台北市中正區襄陽路1號 (02) 2381-4567台北南門分行 100台北市中正區羅斯福路一段40號 (02) 2392-6955台北忠孝分行 100台北市中正區忠孝東路一段112號 (02) 2327-8898台北東門分行 100台北市中正區信義路二段135號 (02) 2356-7711台北重慶分行 103台北市大同區重慶北路一段30號 (02) 2550-6600台北松江分行 104台北市中山區松江路59號 (02) 2505-5533台北松山分行 105台北市松山區南京東路五段171號 (02) 8787-6668台北逸仙分行 110台北市信義區基隆路一段200之3號 (02) 2722-9558台北永吉分行 110台北市信義區中坡北路7號 (02) 8785-5788台北中山分行 104台北市中山區民生東路一段70號 (02) 2523-8899台北古亭分行 100台北市中正區羅斯福路三段50號 (02) 2369-5600台北信義分行 110台北市信義區光復南路505號 (02) 2720-7755台北南京東路分行 104台北市南京東路三段101號 (02) 7702-9766板橋南雅分行 220新北市板橋區南雅南路二段172號 (02) 8966-3339板橋文化分行 220新北市板橋區文化路二段1號 (02) 2255-6499板橋埔墘分行 220新北市板橋區中山路二段25號 (02) 2963-2787蘆洲分行 247新北市蘆洲區三民路38號1樓 (02) 7730-6978新店分行 231新北市新店區北新路三段98號 (02) 2910-6060永和分行 234新北市永和區福和路222號 (02) 2232-6500中和分行 235新北市中和區中正路748號 (02) 8226-9000雙和分行 234新北市永和區中和路535號1、2樓 (02) 7717-6668三重分行 241新北市三重區福德北路46號 (02) 8973-1133台北新莊分行 242新北市新莊區復興路一段209號 (02) 8991-3366新莊富國分行 242新北市新莊區富國路6號 (02) 2901-6868林口分行 333桃園縣龜山鄉復興一路227號 (03) 397-3888桃園分行 330桃園縣桃園市南華街78號 (03) 339-6339桃園大興分行 330桃園縣桃園市大興西路二段6號 (03) 301-8966中壢分行 320桃園縣中壢市延平路372號 (03) 427-9696新竹林森分行 300新竹市中華路三段42、46號 (03) 524-6668新竹科園分行 300新竹市科學園區園區二路11號3樓 (03) 579-8833新竹經國分行 300新竹市經國路二段100號 (03) 533-3131竹北分行 302新竹縣竹北市光明六路39-41號 (03) 553-6699台中自由分行 400台中市中區自由路二段131號 (04) 2225-2008台中公益分行 403台中市西區公益路367號 (04) 2328-8666台中文心分行 406台中市北屯區文心路四段698號 (04) 2230-6689台中大雅分行 404台中市北區文心路四段180號 (04) 2297-3266大里分行 412台中市大里區益民路二段121號 (04) 2482-3899彰化分行 500彰化縣彰化市民生路233號 (04) 728-9188南投分行 540南投縣南投市三和二路11號 (049) 222-3311嘉義分行 600嘉義市文化路272號 (05) 278-5911台南分行 701台南市東區東門路二段2號 (06) 208-9898永康分行 710台南市永康區中正北路37號 (06) 253-0400崇德分行 701台南市東區崇道路87號 (06) 290-7290 高雄中正分行 800高雄市新興區中正四路49號 (07) 251-8199高雄文化中心分行 802高雄市苓雅區四維二路96號 (07) 715-5678高雄五福分行 803高雄市鹽埕區大勇路106號 (07) 533-3820高雄苓雅分行 802高雄市苓雅區青年一路191號 (07) 336-9066鳳山分行 830高雄市鳳山區青年路二段201號 (07) 777-8600台北農安簡易型分行 104台北市中山區農安街12之1號 (02) 2592-2255台北金湖簡易型分行 114台北市內湖區民權東路六段495號 (02) 2630-5788三重重陽簡易型分行 241新北市三重區重陽路四段39號1、2樓 (02) 7738-6868桃園大有簡易型分行 330桃園縣桃園市大有路480、482號 (03) 346-9688台北大稻埕分行 103台北市大同區延平北路二段86號 (02) 2558-6186香港分行香港中環皇后大道中8號20樓 (852) 2167-8183

67

其他資訊Other Information

Operating Locations

Operating Unit Address Telephone NumberHead Office 27F, No. 207, Dunhua S. Rd., Sec. 2, Da-an Dist., Taipei City 106,Taiwan (02) 2378-6868Business Department 1F, No. 207, Dunhua S. Rd., Sec. 2, Da-an Dist., Taipei City 106, Taiwan (02) 2378-6868International Banking Department 2F, No. 30, Chongqing N. Rd., Sec. 1, Datong Dist., Taipei City 103, Taiwan (02) 2550-8811

Trust Department 5F, No. 1, Shiangyang Rd., Zhongjheng Dist., Taipei City 100, Taiwan (02) 2312-3636Credit Card Department No. 33, Ally. 3, Lane 182, Wenhua Rd., Sec. 2, Banqiao City, New Taipei City 220, Taiwan (02) 8073-1166Taipei Shiangyang Branch No. 1, Shiangyang Rd., Zhongjheng Dist., Taipei City 100, Taiwan (02) 2381-4567Taipei Nanmen Branch No. 40, Roosevelt Rd., Sec. 1, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2392-6955Taipei Junghsiau Branch No. 112, Junghsiau E. Rd., Sec. 1, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2327-8898Taipei Tungmen Branch No. 135, Sinyi Rd., Sec. 2, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2356-7711Taipei Chungching Branch No. 30, Chungching N. Rd., Sec. 1, Datong Dist., Taipei City 103, Taiwan (02) 2550-6600Taipei Sungjiang Branch No. 59, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan (02) 2505-5533Taipei Sungshan Branch No. 171, Nanjing E. Rd., Sec. 5, Sungshan Dist., Taipei City 105, Taiwan (02) 8787-6668Taipei Yishen Branch No. 200-3, Keelung Rd., Sec. 1, Sinyi Dist., Taipei City 110, Taiwan (02) 2722-9558Taipei Yungi Branch No. 7, Jhongpo N. Rd., Sinyi Dist., Taipei City 110, Taiwan (02) 8785-5788Taipei Zhongshan Branch No. 70, Minsheng E. Rd., Sec. 1, Zhongshan Dist., Taipei City 104, Taiwan (02) 2523-8899Taipei Guting Branch No. 50, Roosevelt Rd., Sec. 3, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2369-5600Taipei ShingYi Branch No. 505, Guangfu S. Rd., Sinyi Dist., Taipei City 106, Taiwan (02) 2720-7755Taipei Nanjing East Road Branch No. 101, Nanjing E. Rd., Sec. 3, Zhongshan Dist., Taipei City 104, Taiwan (02) 7702-9766

Banqiao Nanya Branch No. 172, Nanya S. Rd., Sec. 2, Banqiao Dist., New Taipei City 220, Taiwan (02) 8966-3339Banqiao Wenhua Branch No. 1, Wenhua Rd., Sec. 2, Banqiao Dist., New Taipei City 220, Taiwan (02) 2255-6499Banqiao Puqian Branch No. 25, Jhongshan Rd., Sec. 2, Banqiao Dist., New Taipei City 220, Taiwan (02) 2963-2787Luzhou Branch No. 1, Sanming Rd., Luzhou Dist. New Taipei City 247, Taiwan (02) 7730-6978Sindian Branch No. 98, Beixin Rd., Sec. 3, Sindian Dist., New Taipei City 231, Taiwan (02) 2910-6060Yunghe Branch No. 222, Fuhe Rd., Yonghe Dist., New Taipei City 234, Taiwan (02) 2232-6500Zhunghe Branch No. 748, Zhongjheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (02) 8226-9000Shuanghe Branch 1F & 2F, No. 535, Zhonghe Rd., Yonghe Dist., New Taipei City 234, Taiwan (02) 7717-6668Sanchung Branch No. 46, Fude N. Rd., Sanchung Dist., New Taipei City 241, Taiwan (02) 8973-1133Taipei Shinjuang Branch No. 209, Fusing Rd., Sec. 1, Shinjuang Dist., New Taipei City 242, Taiwan (02) 8991-3366Shingjuang Fuguo Branch No. 6, Fuguo Rd.,Shingjuang Dist., New Taipei City 242, Taiwan (02) 2901-6868Lin Ko Branch No. 227, Fushing 1st Rd., Gueishan Township, Taoyuan County 333, Taiwan (03) 397-3888Taoyuan Branch No. 78, Nanhua St., Taoyuan City, Taoyuan County 330, Taiwan (03) 339-6339Taoyuan Tashin Branch No. 6, Tashin W. Rd., Sec. 2, Taoyuan City, Taoyuan County 330, Taiwan (03) 301-8966Jhongli branch No. 372, Yanping Rd., Jhongli City, Taoyuan County 320, Taiwan (03) 427-9696Hsinchu Linsen Branch No. 42-46, Jhonghua Rd., Sec. 3, Hsinchu City 300, Taiwan (03) 524-6668Hsinchu Science Based Industrial Park Branch 3F, No. 11, Yuanchiu 2nd Rd., Hsinchu City 300, Taiwan (03) 579-8833

Hsinchu Jinguo Branch No. 100, Jinguo Rd., Sec. 2, Hsinchu City 300, Taiwan (03) 533-3131Jubei Branch No. 39-41, Guangming 6th Rd., Jubei City, Hsinchu County 302, Taiwan (03) 553-6699Taichung Tzyou Branch No. 131, Tzyou Rd.,Sec. 2, Central Dist., Taichung City 400, Taiwan (04) 2225-2008Taichung Gungyi Branch No. 367, Gongyi Rd., West Dist., Taichung City 403, Taiwan (04) 2328-8666Taichung Wenshin Branch No. 698, Wenshin Rd., Sec. 4, Beitun Dist., Taichung City 406, Taiwan (04) 2230-6689Taichung Taya Branch No. 180, Wunsin Rd., Sec. 4, North Dist., Taichung City 404, Taiwan (04) 2297-3266Tali Branch No. 121, Yimin Rd., Sec. 2, Dali Dist., Taichung City 412, Taiwan (04) 2482-3899Changhua Branch No. 233, Minsheng Rd., Changhua City, Changhua County 500, Taiwan (04) 728-9188Nantou Branch No. 11, Sanhe 2nd Rd., Nantou City, Nantou County 540, Taiwan (049) 222-3311Chiayi Branch No. 272, Wunhua Rd., Chiayi City 600, Taiwan (05) 278-5911Tainan Branch No. 2, Dongmen Rd., Sec. 2, East Dist., Tainan City 701, Taiwan (06) 208-9898Yung Kang Branch No. 37, Jhongshan N. Rd., Yungkang Dist., Tainan City 710, Taiwan (06) 253-0400Chungde Branch No. 87, Chongdao Rd., East Dist., Tainan City 701, Taiwan (06) 290-7290 Kaohsiung Jungjeng Branch No. 49, Zhongzheng 4th Rd., Xinxing Dist., Kaohsiung City 800, Taiwan (07) 251-8199Kaohsiung Cultural Center Branch No. 96, Sihwei 2nd Rd., Lingya Dist., Kaohsiung City 802, Taiwan (07) 715-5678

Kaohsiung Wufu Branch No. 106, Dayong Rd., Yancheng Dist., Kaohsiung City 803, Taiwan (07) 533-3820Kaohsiung Lingya Branch No. 191, Cingnian 1st Rd., Lingya Dist., Kaohsiung City 802, Taiwan (07) 336-9066Fengshan Branch No. 201, Cingnian Rd., Sec. 2, Fengshan Dist., Kaohsiung City 830, Taiwan (07) 777-8600Taipei Nun-an Branch No. 12-1, Nun-an St., Jhongshan Dist., Taipei City 104, Taiwan (02) 2592-2255Taipei Jinhu Branch No. 495, Minchuan E. Rd., Sec. 6, Neihu Dist., Taipei City 114, Taiwan (02) 2630-5788Sanchung Chungyang Branch 1F. & 2F, No. 39, Chungyang Rd., Sec. 4, Sanchung Dist. New Taipei City 241, Taiwan (02) 7738-6868Taoyuan Tayu Branch No. 480-482, Tayu Rd., Taoyuan City, Taoyuan County 330, Taiwan (03) 346-9688Taipei Dadaocheng Branch No. 86, Yenping North Road, Sec. 2, Tatung Dist. , Taipei City 103, Taiwan (02) 2558-6186Hong Kong Branch 20F, No. 8, Queen's Road, Central, Hong Kong ( 852) 2167-8183

69

壹拾貳　財務報表 Financial Report

71- 1 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders

Far Eastern International Bank Ltd.

We have audited the accompanying balance sheets of Far Eastern International Bank Ltd. (the “Bank”) as of

December 31, 2011 and 2010, and the related statements of income, changes in shareholders’ equity and cash

flows for the years then ended. These financial statements are the responsibility of the Bank’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements of Financial

Institutions by Certified Public Accountants and auditing standards generally accepted in the Republic of China.

Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as evaluating

the overall financial statement presentation. We believe that our audits provide a reasonable basis for our

opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of the Bank as of December 31, 2011 and 2010, and the results of its operations and its cash flows for

the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by

Public Banks, requirements of the Business Accounting Law and Guidelines Governing Business Accounting

relevant to financial accounting standards and accounting principles generally accepted in the Republic of

China.

We have also audited the consolidated financial statements of the Bank as of and for the years ended

December 31, 2011 and 2010, on which we have issued an unqualified opinion in our report dated March 27,

2012.

March 27, 2012

Notice to Readers

The accompanying financial statements are intended only to present the financial position, results of operations

and cash flows in accordance with accounting principles and practices generally accepted in the Republic of

China and not those of any other jurisdictions. The standards, procedures and practices to audit such

financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying financial statements have been

translated into English from the original Chinese version prepared and used in the Republic of China. If there

is any conflict between the English version and the original Chinese version or any difference in the

interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

72

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FAR EASTERN INTERNATIONAL BANK LTD. BALANCE SHEETS DECEMBER 31, 2011 AND 2010

(In Thousands of New Taiwan Dollars, Except Par Value)

Percentage Percentage

Increase Increase

2011 2010 (Decrease) 2011 2010 (Decrease)

ASSETS Notes Amount Amount % LIABILITIES AND SHAREHOLDERS’ EQUITY Notes Amount Amount %

CASH AND CASH EQUIVALENTS 4 $ 5,806,874 $ 4,247,843 37 LIABILITIES Due to the Central Bank and other banks 18 $ 11,785,731 $ 18,093,079 (35) DUE FROM THE CENTRAL BANK AND OTHER BANKS 5, 28, 29 86,739,190 102,938,352 (16) Financial liabilities measured at fair value through profit or loss 2, 6, 28, 31 4,081,035 6,445,235 (37) FINANCIAL ASSETS MEASURED AT FAIR VALUE Securities sold under repurchase agreements 2 213,870 - - THROUGH PROFIT OR LOSS 2, 6, 28, 31 13,806,866 16,724,890 (17) Payables 19, 25 4,581,829 4,441,701 3 Deposits and remittances 20, 28, 31 370,373,644 348,171,265 6

SECURITIES PURCHASED UNDER RESELL AGREEMENTS 2, 7, 28 850,505 - - Bank debentures 2, 21, 31 20,230,280 16,789,596 20 Other financial liabilities 22, 31 472,176 16,067 2,839 RECEIVABLES, NET 2, 3, 8, 9, 28 20,095,497 18,657,547 8 Other liabilities 2, 9, 23, 28 895,393 805,797 11 DISCOUNTS AND LOANS, NET 2, 3, 9, 28, 31 269,460,381 236,351,285 14 Total liabilities 412,633,958 394,762,740 5 AVAILABLE-FOR-SALE FINANCIAL ASSETS 2, 10, 28, 29, 31 15,674,659 16,855,460 (7) SHAREHOLDERS’ EQUITY 2, 10, 12, 25 Capital stock, NT$10.00 par value,

HELD-TO-MATURITY FINANCIAL ASSETS 2, 11, 31 3,926,306 2,788,161 41 Authorized - 4,500,000 thousand shares Issued and outstanding - 2,118,560 thousand shares in 2011 INVESTMENTS ACCOUNTED FOR BY THE EQUITY and 2,007,149 thousand shares in 2010 21,185,604 20,071,489 6 METHOD 2, 12 2,795,235 2,598,677 8 Capital surplus Additional paid-in capital in excess of par 19,706 - - DEBT INSTRUMENT INVESTMENTS WITH NO ACTIVE From equity-method investments 9,302 9,302 - MARKETS 2, 13, 31 9,293,780 7,125,474 30 Total capital surplus 29,008 9,302 212 Retained earnings

OTHER FINANCIAL ASSETS 2, 9, 14, 30,31 2,739,721 3,216,645 (15) Legal reserve 1,030,702 372,276 177 Special reserve 4,554 - - PROPERTIES Unappropriated earnings 2,374,090 2,194,754 8

Cost Total retained earnings 3,409,346 2,567,030 33 Land 2, 15 1,581,625 1,581,625 - Other shareholders' equity Buildings and improvements 1,232,272 1,226,082 1 Cumulative translation adjustments 12,762 11,264 13 Computer equipment 1,288,640 1,165,157 11 Unrealized valuation gain on available-for-sale financial Transportation equipment 7,975 10,228 (22) assets 17,658 148,026 (88)

Miscellaneous equipment 1,288,897 1,235,487 4 Total other shareholders' equity 30,420 159,290 (81) Total cost 5,399,409 5,218,579 3

Less: Accumulated depreciation 2,518,648 2,364,728 7 Total shareholders’ equity 24,654,378 22,807,111 8 2,880,761 2,853,851 1 Prepayments for properties 51,219 20,025 156 CONTINGENT LIABILITIES AND COMMITMENTS 2, 28, 30, 31

Net properties 2,931,980 2,873,876 2

INTANGIBLE ASSETS 2, 16 1,905,193 1,942,335 (2)

OTHER ASSETS 2, 17, 24 1,262,149 1,249,306 1 TOTAL $ 437,288,336 $ 417,569,851 5 TOTAL $ 437,288,336 $ 417,569,851 5 The accompanying notes are an integral part of the financial statements.

73

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FAR EASTERN INTERNATIONAL BANK LTD. BALANCE SHEETS DECEMBER 31, 2011 AND 2010

(In Thousands of New Taiwan Dollars, Except Par Value)

Percentage Percentage

Increase Increase

2011 2010 (Decrease) 2011 2010 (Decrease)

ASSETS Notes Amount Amount % LIABILITIES AND SHAREHOLDERS’ EQUITY Notes Amount Amount %

CASH AND CASH EQUIVALENTS 4 $ 5,806,874 $ 4,247,843 37 LIABILITIES Due to the Central Bank and other banks 18 $ 11,785,731 $ 18,093,079 (35) DUE FROM THE CENTRAL BANK AND OTHER BANKS 5, 28, 29 86,739,190 102,938,352 (16) Financial liabilities measured at fair value through profit or loss 2, 6, 28, 31 4,081,035 6,445,235 (37) FINANCIAL ASSETS MEASURED AT FAIR VALUE Securities sold under repurchase agreements 2 213,870 - - THROUGH PROFIT OR LOSS 2, 6, 28, 31 13,806,866 16,724,890 (17) Payables 19, 25 4,581,829 4,441,701 3 Deposits and remittances 20, 28, 31 370,373,644 348,171,265 6

SECURITIES PURCHASED UNDER RESELL AGREEMENTS 2, 7, 28 850,505 - - Bank debentures 2, 21, 31 20,230,280 16,789,596 20 Other financial liabilities 22, 31 472,176 16,067 2,839 RECEIVABLES, NET 2, 3, 8, 9, 28 20,095,497 18,657,547 8 Other liabilities 2, 9, 23, 28 895,393 805,797 11 DISCOUNTS AND LOANS, NET 2, 3, 9, 28, 31 269,460,381 236,351,285 14 Total liabilities 412,633,958 394,762,740 5 AVAILABLE-FOR-SALE FINANCIAL ASSETS 2, 10, 28, 29, 31 15,674,659 16,855,460 (7) SHAREHOLDERS’ EQUITY 2, 10, 12, 25 Capital stock, NT$10.00 par value,

HELD-TO-MATURITY FINANCIAL ASSETS 2, 11, 31 3,926,306 2,788,161 41 Authorized - 4,500,000 thousand shares Issued and outstanding - 2,118,560 thousand shares in 2011 INVESTMENTS ACCOUNTED FOR BY THE EQUITY and 2,007,149 thousand shares in 2010 21,185,604 20,071,489 6 METHOD 2, 12 2,795,235 2,598,677 8 Capital surplus Additional paid-in capital in excess of par 19,706 - - DEBT INSTRUMENT INVESTMENTS WITH NO ACTIVE From equity-method investments 9,302 9,302 - MARKETS 2, 13, 31 9,293,780 7,125,474 30 Total capital surplus 29,008 9,302 212 Retained earnings

OTHER FINANCIAL ASSETS 2, 9, 14, 30,31 2,739,721 3,216,645 (15) Legal reserve 1,030,702 372,276 177 Special reserve 4,554 - - PROPERTIES Unappropriated earnings 2,374,090 2,194,754 8

Cost Total retained earnings 3,409,346 2,567,030 33 Land 2, 15 1,581,625 1,581,625 - Other shareholders' equity Buildings and improvements 1,232,272 1,226,082 1 Cumulative translation adjustments 12,762 11,264 13 Computer equipment 1,288,640 1,165,157 11 Unrealized valuation gain on available-for-sale financial Transportation equipment 7,975 10,228 (22) assets 17,658 148,026 (88)

Miscellaneous equipment 1,288,897 1,235,487 4 Total other shareholders' equity 30,420 159,290 (81) Total cost 5,399,409 5,218,579 3

Less: Accumulated depreciation 2,518,648 2,364,728 7 Total shareholders’ equity 24,654,378 22,807,111 8 2,880,761 2,853,851 1 Prepayments for properties 51,219 20,025 156 CONTINGENT LIABILITIES AND COMMITMENTS 2, 28, 30, 31

Net properties 2,931,980 2,873,876 2

INTANGIBLE ASSETS 2, 16 1,905,193 1,942,335 (2)

OTHER ASSETS 2, 17, 24 1,262,149 1,249,306 1 TOTAL $ 437,288,336 $ 417,569,851 5 TOTAL $ 437,288,336 $ 417,569,851 5 The accompanying notes are an integral part of the financial statements.

74

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FAR EASTERN INTERNATIONAL BANK LTD.

STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2011 AND 2010

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Percentage

Increase

2011 2010 (Decrease)

Notes Amount Amount %

INTEREST INCOME 2, 28, 31 $ 8,157,425 $ 7,062,525 16 INTEREST COST 31 4,264,422 3,067,005 39 NET INTEREST INCOME 3,893,003 3,995,520 (3) OTHER NONINTEREST INCOME AND GAINS, NET

Service fee income 2 2,353,263 2,458,659 (4) Service charges 419,903 480,445 (13) Net service fee income 1,933,360 1,978,214 (2) Net gain on financial assets and liabilities measured at fair

value through profit or loss 2, 6, 28, 31 684,242 576,152 19 Net gain on available-for-sale financial assets 2, 25 262,309 139,700 88 Investment income recognized by the equity method 2, 12 229,413 273,770 (16) Foreign exchange gain (loss) 2 (13,332) 139,616 (110)

Gain on nonperforming receivables recovered 2, 8 250,299 116,253 115 Recovery of written-off credits 2 1,219,968 1,247,641 (2) Others 28 128,052 151,309 (15)

Total other noninterest income and gains, net 4,694,311 4,622,655 2

NET PROFIT 8,587,314 8,618,175 -

ALLOWANCE FOR POSSIBLE LOSSES 2, 9 834,461 675,225 24 OPERATING EXPENSES 2, 23, 25, 26, 28

Personnel expense 2,932,135 2,781,193 5 Depreciation and amortization 255,376 242,125 5 Others 2,101,047 1,915,505 10

Total operating expenses 5,288,558 4,938,823 7

INCOME BEFORE INCOME TAX 2,464,295 3,004,127 (18) INCOME TAX EXPENSE 2, 24 91,064 807,749 (89) NET INCOME $ 2,373,231 $ 2,196,378 8 2011 2010

Income Income

Before Before

Income Net Income Net

Notes Tax Income Tax Income

EARNINGS PER SHARE (NEW TAIWAN DOLLARS)

Basic 27 $ 1.17 $ 1.12 $ 1.43 $ 1.04 Diluted 27 $ 1.16 $ 1.12 $ 1.42 $ 1.04

The accompanying notes are an integral part of the financial statements.

75

- 3 -


STATEMENTS OF INCOME


(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Percentage

Increase

2011 2010 (Decrease)

Notes Amount Amount %

INTEREST INCOME 2, 28, 31 $ 8,157,425 $ 7,062,525 16 INTEREST COST 31 4,264,422 3,067,005 39 NET INTEREST INCOME 3,893,003 3,995,520 (3) OTHER NONINTEREST INCOME AND GAINS, NET

Service fee income 2 2,353,263 2,458,659 (4) Service charges 419,903 480,445 (13) Net service fee income 1,933,360 1,978,214 (2) Net gain on financial assets and liabilities measured at fair

value through profit or loss 2, 6, 28, 31 684,242 576,152 19 Net gain on available-for-sale financial assets 2, 25 262,309 139,700 88 Investment income recognized by the equity method 2, 12 229,413 273,770 (16) Foreign exchange gain (loss) 2 (13,332) 139,616 (110)

Gain on nonperforming receivables recovered 2, 8 250,299 116,253 115 Recovery of written-off credits 2 1,219,968 1,247,641 (2) Others 28 128,052 151,309 (15)

Total other noninterest income and gains, net 4,694,311 4,622,655 2

NET PROFIT 8,587,314 8,618,175 -

ALLOWANCE FOR POSSIBLE LOSSES 2, 9 834,461 675,225 24 OPERATING EXPENSES 2, 23, 25, 26, 28

Personnel expense 2,932,135 2,781,193 5 Depreciation and amortization 255,376 242,125 5 Others 2,101,047 1,915,505 10

Total operating expenses 5,288,558 4,938,823 7

INCOME BEFORE INCOME TAX 2,464,295 3,004,127 (18) INCOME TAX EXPENSE 2, 24 91,064 807,749 (89) NET INCOME $ 2,373,231 $ 2,196,378 8 2011 2010

Income Income

Before Before

Income Net Income Net

Notes Tax Income Tax Income

EARNINGS PER SHARE (NEW TAIWAN DOLLARS)

Basic 27 $ 1.17 $ 1.12 $ 1.43 $ 1.04 Diluted 27 $ 1.16 $ 1.12 $ 1.42 $ 1.04


76

- 4 -

FAR EASTERN INTERNATIONAL BANK LTD. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


(In Thousands of New Taiwan Dollars, Except Par Value and Per Share Amounts)

Other Shareholders’ Equity

Unrealized

Valuation Gain

(Loss) on

Available-for-

Capital Surplus

(Notes 2 and 25) Cumulative sale Financial

Capital Stock (NT$10.00 Par Value) (Note 25) Additional From Retained Earnings (Note 25) Translation Assets Total

Authorized Issued and Outstanding Paid-in Capital Equity-method Unappropriated Adjustments (Notes 2, 10, 12 Shareholders'

Shares Shares Amount in Excess of Par Investments Legal Reserve Special Reserve Earnings (Note 2) and 25) Equity

BALANCE, JANUARY 1, 2010 4,500,000,000 1,933,797,463 $ 19,337,974 $ - $ 9,302 $ - $ - $ 1,240,920 $ 14,122 $ 160,586 $ 20,762,904 Appropriation of the 2009 earnings

Legal reserve - - - - - 372,276 - (372,276) - - - Cash dividends - NT$0.100 per share - - - - - - - (193,380) - - (193,380) Stock dividends - NT$0.349 per share - 67,489,532 674,895 - - - - (674,895) - - -

Employees' bonus - stock - 5,861,971 58,620 - - - - (1,993) - - 56,627 Translation adjustments - offshore banking unit and overseas branch - - - - - - - - (2,858) - (2,858) Change in unrealized valuation gain on available-for-sale financial

assets - - - - - - - - - 6,133 6,133 Change in unrealized valuation loss on available-for-sale financial

assets from equity-method investees - - - - - - - - - (18,693) (18,693)

Net income in 2010 - - - - - - - 2,196,378 - - 2,196,378 BALANCE, DECEMBER 31, 2010 4,500,000,000 2,007,148,966 20,071,489 - 9,302 372,276 - 2,194,754 11,264 148,026 22,807,111 Appropriation of the 2010 earnings

Legal reserve - - - - - 658,426 - (658,426) - - -

Cash dividends - NT$0.250 per share - - - - - - - (501,787) - - (501,787) Stock dividends - NT$0.515 per share - 103,368,172 1,033,682 - - - - (1,033,682) - - -

Employees' bonus - stock - 8,043,315 80,433 19,706 - - - - - - 100,139 Translation adjustments - offshore banking unit and overseas branch - - - - - - - - 1,498 - 1,498 Change in unrealized valuation loss on available-for-sale financial

assets - - - - - - - - - (116,630) (116,630)

Change in unrealized valuation loss on available-for-sale financial

assets from equity-method investees - - - - - - 4,554 - - (13,738) (9,184) Net income in 2011 - - - - - - - 2,373,231 - - 2,373,231 BALANCE, DECEMBER 31, 2011 4,500,000,000 2,118,560,453 $ 21,185,604 $ 19,706 $ 9,302 $ 1,030,702 $ 4,554 $ 2,374,090 $ 12,762 $ 17,658 $ 24,654,378


- 4 -





Unrealized

Valuation Gain

(Loss) on

Available-for-

Capital Surplus











Legal reserve - - - - - 658,426 - (658,426) - - -



assets - - - - - - - - - (116,630) (116,630)




77

- 4 -





Unrealized

Valuation Gain

(Loss) on

Available-for-

Capital Surplus











Legal reserve - - - - - 658,426 - (658,426) - - -



assets - - - - - - - - - (116,630) (116,630)




- 4 -





Unrealized

Valuation Gain

(Loss) on

Available-for-

Capital Surplus











Legal reserve - - - - - 658,426 - (658,426) - - -



assets - - - - - - - - - (116,630) (116,630)




78- 5 -


STATEMENTS OF CASH FLOWS


(In Thousands of New Taiwan Dollars)

2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,373,231 $ 2,196,378

Adjustment to reconcile net income to net cash provided by operating

activities Allowance for possible losses 834,461 675,225

Recovery of written-off credits 86,692 383,742

Depreciation 215,394 214,680 Amortization 39,982 27,445

Amortization of premium on financial assets 144,848 96,253

Net valuation gain on financial assets and liabilities measured at fair

value through profit or loss (361,498) (312,526) Realized gain on available-for-sale financial assets (262,309) (139,700)

Investment income recognized under the equity method (229,413) (273,770)

Cash dividends received from investments accounted for by the equity method 258,791 210,388

Net loss on disposal of properties 494 1,570

Net loss on disposal of collaterals assumed - 1,646 Gain on reversal of asset impairment losses - (5,035)

Decrease (increase) in financial assets measured at fair value

through profit or loss 1,522,341 (6,241,470)

Decrease (increase) in receivables (932,514) 1,715,565 Decrease (increase) in deferred income tax assets (112,819) 573,525

Increase (decrease) in financial liabilities measured at fair value

through profit or loss (607,019) 2,460,158 Increase in accrued pension cost 886 16,277

Increase in payables 551,590 225,896

Net cash provided by operating activities 3,523,138 1,826,247

CASH FLOWS FROM INVESTING ACTIVITIES

Decrease (increase) in due from the Central Bank and other banks 16,199,162 (15,989,535) Increase in loans and discounts (34,467,060) (19,828,036)

Decrease (increase) in securities purchased under resell agreements (850,505) 1,310,002

Decrease in available-for-sale financial assets 1,295,903 4,347,197 Increase in held-to-maturity financial assets (1,197,877) (1,304,927)

Acquisition of subsidiaries (225,301) -

Decrease (increase) in debt instrument investments with no active

market (2,162,729) 923,875 Decrease (increase) in other financial assets 90,772 (482,145)

Acquisition of properties (274,527) (169,295)

Proceeds of the disposal of properties 1,129 853 Proceeds of the disposal of collaterals assumed - 338,864

Decrease in other assets 97,136 120,580

Cash received on the acquisition of some branches of Chinfon Bank - 20,272,270

Net cash used in investing activities (21,493,897) (10,460,297)

(Continued)

79- 6 -





2011 2010

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in due to the Central Bank and other banks $ (6,307,348) $ 2,374,475

Increase (decrease) in securities sold under repurchased agreements 213,870 (973,223)

Increase in deposits and remittances 22,247,523 8,321,405 Issuance of bank debentures 3,500,000 4,000,000

Redemption of bank debentures (85,780) (5,085,900)

Increase (decrease) in other financial liabilities 413,322 (1,725) Increase (decrease) in other liabilities 46,246 (70,569)

Cash dividends (501,787) (193,380)

Net cash provided by financing activities 19,526,046 8,371,083

EFFECTS OF EXCHANGE RATE CHANGES 3,744 9,359

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS 1,559,031 (253,608)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 4,247,843 4,501,451

CASH AND CASH EQUIVALENTS, END OF YEAR $ 5,806,874 $ 4,247,843

SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid $ 4,202,325 $ 2,833,441

Income tax paid $ 267,082 $ 184,665

NONCASH INVESTING AND FINANCING ACTIVITIES

Stock dividends $ 1,033,682 $ 674,895

Employees' bonus - stock $ 100,139 $ 56,627 (Continued)

80

- 7 -





Fair values of the assets and liabilities acquired from a new subsidiary-ING Securities Company Limited on

December 14, 2011 were as follows (Note 12):

Assets

Deposits in banks $ 181,075

Receivables, net 11,978 Investments accounted for by the equity method 2,771

Properties, net 10,542

Other assets 82,945 Total assets 289,311

Liabilities

Payables 45,389

Other liabilities 8,802 Total liabilities 54,191

Acquired cost (235,120)

Payables 9,819 Cash paid $ (225,301)

Fair values of the assets and liabilities acquired from Chinfon Bank on April 3, 2010 were as follows (Note 36):

Assets

Cash $ 387,307

Due from other banks 365,143 Receivables, net 17,298

Discounts and loans, net 3,872,667

Properties, net 684,152 Other assets 190,252

Intangible assets 1,967,097

Total assets 7,483,916

Liabilities Payables 279,451

Deposits and remittances 26,769,884

Bank debentures 262,820 Other liabilities 60,626

Total liabilities 27,372,781

Compensation from Resolution Trust Corporation 19,888,865 Cash received 387,307

Direct cost (3,902)

Cash received, net $ 20,272,270

The accompanying notes are an integral part of the financial statements. (Concluded)

81- 8 -


NOTES TO FINANCIAL STATEMENTS


(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. ORGANIZATION AND OPERATIONS

Far Eastern International Bank Ltd. (the “Bank”) obtained its license on January 11, 1992 and started business on April 11, 1992. The Bank (a) accepts deposits and extends loans and guarantees; (b) issues

letters of credit, handles domestic and foreign remittances and accepts commercial drafts; (c) invests in

securities and acts as an agent for trading government bonds, corporate bonds and bank debentures; and (d) conducts relevant businesses that are authorized by the central authorities.

The operations of the Bank’s Trust Department include pecuniary, securities, real estate, creditor’s right of money or guarantee, movable property and ground right trusts and related operations. These operations

are regulated by the Banking Act and Trust Enterprise Act.

As of December 31, 2011, the Bank’s operating units included the Business Department, International Banking Department, Trust Department, Credit Card Department, Offshore Banking Unit (OBU), and 53

domestic branches, as well as an overseas branch in Hong Kong.

The Bank’s stock is listed on the Taiwan Stock Exchange.

As of December 31, 2011 and 2010, the Bank had 2,532 and 2,378 employees, respectively.

2. SIGNIFICANT ACCOUNTING POLICIES

The Bank’s financial statements have been prepared in conformity with the Regulations Governing the

Preparation of Financial Reports by Public Banks, Business Accounting Law, Guidelines Governing

Business Accounting, and accounting principles generally accepted in the Republic of China. The Bank’s significant accounting policies are summarized as follows:

Foreign-currency Transactions

Nonderivative foreign-currency assets and liabilities are recorded in the respecting denominated currency.

Foreign-currency items in income statements of domestic operating units are translated into New Taiwan

Dollars at prevailing exchange rates on the trading dates. For overseas branches (including Offshore Banking Unit), income or losses from transactions settled in non-local currency are translated into local

currency at prevailing exchange rates in the local exchange market on the trading date.

At the balance sheet date, foreign-currency monetary assets and liabilities are revalued at prevailing

exchange rates, and the exchange differences are recognized as gain or loss.

At the balance sheet date, foreign-currency nonmonetary assets and liabilities (such as equity instruments and derivatives) that are measured at fair value are revalued at prevailing exchange rates, with the exchange

differences treated as follows:

a. Recognized in shareholders’ equity if the changes in fair value are recognized in shareholders’ equity;

b. Recognized as gain or loss if the changes in fair value are recognized as gain or loss.

82- 9 -

Foreign-currency nonmonetary assets and liabilities that are carried at cost continue to be stated at the

exchange rates of the trade dates.

When foreign-currency items are settled, exchange differences arising from the application of different exchange rates are recognized as gain or loss for the current year.

If the functional currency of an equity-method investee is other than the New Taiwan dollars, translation adjustments will result from the translation of the investee’s financial statements into the reporting currency

of the Bank. These adjustments are accumulated and reported as a cumulative translation adjustment

under shareholders’ equity.

Translation of Foreign Branches’ Financial Statements

The financial statements of foreign branches (including the OBU) are translated into New Taiwan dollars at the following exchange rates:

a. Assets and liabilities - at exchange rates prevailing on the balance sheet date;

b. Prior years’ earnings haven’t yet remitted to the head office, which should be the same as the ending

balance of the prior year - at historical exchange rates; and

c. Income and expenses - at average exchange rates for the year.

Exchange differences arising from the translation of the financial statements of foreign branches are recognized as a cumulative translation adjustment under shareholders’ equity.

Accounting Estimates

In accordance with the above regulations, laws and principles, certain estimates and assumptions have been

used to determine fair value of certain financial instruments, allowance for possible losses, reserve for

guarantees, depreciation, impairment, pension, income taxes, contingent losses and employees’ bonus, remuneration to directors and supervisors, etc. Actual results may differ from these estimates.

Current and Noncurrent Assets and Liabilities

Accounts included in the balance sheets were not classified as current or noncurrent, since the operating

cycle could not be reasonably identified. Nevertheless, accounts were properly categorized according to the nature of each account and sequenced by their liquidity. Please refer to Note 31 for the maturity

analysis of assets and liabilities.

Financial Instruments Measured at Fair Value through Profit or Loss

Financial instruments at fair value through profit or loss (FVTPL) are financial assets and liabilities that are

held for trading or those that are designated on initial recognition as measured at fair value through profit or loss. FVTPL instruments are initially measured at fair value. Transaction costs directly attributable to

the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately as expense.

At each balance sheet date subsequent to initial recognition, financial assets and liabilities at FVTPL are remeasured at fair value, with changes in fair value recognized as gain or loss in the year. On the

derecognition of financial assets and liabilities at FVTPL, differences between the carrying amount and the

sum of the consideration received and receivable or consideration paid and payable are recognized as gain

or loss. Acquisition and disposal of financial assets are recognized and derecognized on a trade date basis, except government bonds, for which the settlement date basis is used.

A derivative instrument that does not meet the criteria for hedge accounting is classified as a financial asset or a financial liability held for trading. If the fair value of the derivative is positive, the derivative is

recognized as a financial asset; otherwise, the derivative is recognized as a financial liability.

83- 10 -

Fair values of financial assets and financial liabilities at the balance sheet date are determined as follows:

Publicly traded stocks - at closing prices; open-end mutual funds - at net asset values; and bonds - at prices

quoted by the Taiwan GreTai Securities Market.

Available-for-sale Financial Assets

Available-for-sale financial assets are initially measured at fair value plus transaction costs that are directly

attributable to the acquisition. The difference between the initial cost of a debt instrument and its maturity

amount is amortized using the effective interest method. At each balance sheet date subsequent to initial recognition, available-for-sale financial assets are remeasured at fair value, with changes in fair value

recognized in equity until the financial assets are derecognized or impaired, at which time, the cumulative

gain or loss previously recognized in equity is included in profit or loss for the year. Acquisition and

disposal of financial assets are recognized and derecognized on a trade date basis, except government bonds, for which the settlement date basis is used.

Any subsequent decrease in impairment loss on an equity instrument classified as available for sale is recognized directly in equity. If the fair value of a debt instrument classified as available for sale increases

as a result of an event that occurred after the impairment loss was recognized, the decrease in impairment

loss is reversed as gain of the year.

Held-to-maturity Financial Assets

Held-to-maturity financial assets are initially measured at fair value plus transaction costs that are directly attributable to the acquisition. At each balance sheet date subsequent to initial recognition,

held-to-maturity financial assets are measured at amortized cost using the effective interest method.

Acquisition and disposal of financial assets are recognized and derecognized on a settlement date basis.

An impairment loss is recognized when there is objective evidence that the investment is impaired. The

impairment loss is reversed if an increase in the investment’s recoverable amount is due to an event that

occurred after the impairment loss was recognized; however, the adjusted carrying amount of the investment may not exceed the carrying amount that would have been determined had no impairment loss

been recognized for the investment in prior years.

Hedge Accounting

The Bank engages non-trading derivatives primarily as a tool for hedging against risks to financial assets and liabilities due to adverse market changes in interest rates, exchange rates and credit. The hedge

accounting that the Bank uses is qualified as a fair value hedge. The fair value hedge is mainly used to

avoid the risk of changes in fair value of interest-earning assets and interest-bearing liabilities due to

fluctuations of interest rates or exchange rates. At the start of the hedge, there must be a formal designation and documentation of the hedging relationship between the hedging instrument and the hedged

item, the risk management objective, hedging strategies and how the Bank will assess the hedging

instrument effectiveness.

Once the hedge is determined as a fair value hedge, the effect of changes in fair value of hedged items will

be offset by the gain or loss recognized from remeasuring the derivative hedging instrument at fair value, and the carrying amount of the hedged item is adjusted through the corresponding gain or loss on the

hedging instrument.

Financial Assets Carried at Cost

Investments in equity instruments with no quoted market prices in an active market and with fair value that

cannot be reliably measured, such as non-publicly traded stocks, are carried at their original cost. An impairment loss is recognized when there is objective evidence that the asset is impaired. No reversal of

this impairment loss is allowed.

84

- 11 -

Debt Instrument Investments with No Active Markets

Debt instrument investments which with no active markets are carried at amortized cost. The accounting treatment for these debt instrument investments is the same as that for held-to-maturity financial assets,

except for the absence of restriction on the timing of their disposal. An impairment loss is recognized

when there is objective evidence that the investment is impaired.

Non-accrual Loans

Under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal

with Nonperforming/Non-accrual Loans” issued by the Banking Bureau in the Financial Supervisory

Commission of the Executive Yuan, overdue loans and other credits extended by the Bank, including their

respective accrued interests, are classified as nonaccrual loans within six months after the expiration of the repayment period.

Nonaccrual loans arising from loans are classified as loans and discounts; others arising from guarantees, acceptances, accounts receivable - factoring and credit card receivables are classified as other financial

assets.

Allowance for Possible Losses and Reserve for Guarantees

In determining the allowance for possible losses and reserve for guarantees, the Bank evaluates the risks on

specific loans and overall credit portfolio and considers the general collectability of loans, discounts, receivables, other financial assets and guarantees as of the balance sheet date.

The Bank evaluates possible losses on specific loans on the basis of the borrowers’ financial situation, the ability to make payment of principal and interest and the values of collaterals in accordance with

“Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with

Nonperforming/Nonaccrual Loans” (the “Regulations”). The Regulations require that loans be classified

by level of collectability and that minimum provisions be made for outstanding credits at specific percentages. However, as required by the Banking Bureau’s letter (Ref. No. 10010006830), loan coverage

ratio should be targeted above 1 percent.

Uncollectible loans or receivables may be written off, after approving by the Bank’s Board of Directors or

Managing Directors. The subsequent collections of written-off loans are recorded as an increase in

allowance for possible losses or as an increase in other income.

As discussed in Note 3, effective January 1, 2011, the Bank prospectively adopted the third-time revised

Statement of Financial Accounting Standards (SFAS) No. 34 - “Financial Instruments: Recognition and

Measurement.” One of the main revisions is that the impairment of loans and receivables should be covered by SFAS No. 34. Loans and accounts receivable are assessed for impairment at each balance

sheet date and are considered to be impaired when there is objective evidence of impairment as a result of

one or more events that occurred after the initial recognition of the loans and accounts receivable, and those loss events have impact on the estimated future cash flows of the loans and accounts receivable. Objective

evidence of impairment includes:

! Significant financial difficulty of the debtor;

! The accounts receivable becoming overdue; or

! The high probability that the debtor will enter into bankruptcy or undergo financial reorganization

Loans and accounts receivable that are assessed as not impaired individually are further assessed by

portfolio for impairment. Factors to evaluate the impairment of loans and accounts receivable portfolios

include the past experience in collecting payments and the increased trend of delayed payments as well as changes in national or local economic conditions that correlate with defaults on loans and receivables.

85- 12 -

The amount of the impairment loss recognized is the difference between the carrying amount of the loan

and account receivable and the present value of estimated future cash flows discounted at the original

effective interest rate after taking into account the related collaterals and guarantees. The carrying amount

of the loans and accounts receivable should be reduced through an allowance account.

Securities Purchased/Sold Under Resell/Repurchase Agreements

Securities purchased under resell agreements and securities sold under repurchase agreements are generally

treated as collateralized financing transactions.

Impairment of Assets

If the recoverable amount of an asset (mainly properties, intangible assets, and investments accounted for

by the equity method) is estimated to be lower than its carrying amount, an impairment loss is recognized in profit or loss. If an impairment loss reverses, the carrying amount of the asset is increased accordingly.

However, the adjusted carrying amount may not exceed the carrying amount that would have been

determined had no impairment loss been recognized for the asset in prior years.

Investments Accounted for by the Equity Method

Equity investments of 20 percent or more of the investees’ voting shares are accounted for by the equity

method. The investments are stated at cost plus (or minus) a proportionate share in net income (losses) of

the investees.

The acquisition cost is allocated to the assets acquired and liabilities assumed on the basis of their fair

values at the date of acquisition, and the acquisition cost in excess of the fair value of the identifiable net

assets acquired is recognized as goodwill. Goodwill has to be tested for impairment annually instead of amortization. The fair value of the net identifiable assets acquired in excess of the acquisition cost is used

to reduce the fair value of each of the noncurrent assets acquired in proportion to the respective fair values

of the noncurrent assets, with any excess recognized as an extraordinary gain.

When the investors can not subscribes for its investee’s newly issued shares at the original percentage of

ownership in the investee, the change in its equity in the investee’s net assets should be recorded as an

adjustment to investments, with a corresponding amount debited or credited to capital surplus. When the adjustment should be debited to capital surplus, but the capital surplus arising from long-term investments

is insufficient, the shortage is debited to retained earnings.

Cash dividends received are treated as a reduction of carrying amounts. Stock dividends received are

recorded as an increase in the number of shares. The cost per share will be recalculated on the basis of the

new number of shares held. Cost of shares sold is calculated at moving-average cost.

Properties

Properties are stated at cost less accumulated depreciation and accumulated impairment losses. Major additions and improvements to properties are capitalized, while cost of repairs and maintenance are

expensed as incurred.

Depreciation is provided on a straight-line basis over estimated useful lives as follows: buildings and

improvements, 5 to 55 years; computer equipment, 3 to 7 years; transportation equipment, 3 to 7 years; and

miscellaneous equipment, 3 to 20 years. Properties still in use beyond their original estimated useful lives

are further depreciated over their newly estimated useful lives.

Upon disposal of properties, the related cost, accumulated depreciation and accumulated impairment losses

of the properties are derecognized. Any gain or loss is included in net profit of the year of disposal.

86 - 13 -

The reversal of an impairment loss is recognized in earnings. However, the adjusted carrying amount may

not exceed the carrying amount that would have been determined had no impairment loss been recognized

for the properties in prior years.

Intangible Assets

Intangible assets arising on merge or acquisition are initially recorded at fair value. Assets that are determined to have definite useful lives are amortized on a straight-line basis over 4 to 15 years, and those

assets that are determined to have indefinite useful lives are tested for impairment annually. Events and

circumstances are evaluated annually to determine whether the useful lives of intangible assets remain indefinite.

Bank Debentures

Issuance costs of bank debentures are recorded as deferred charges and amortized over the issuance period.

Pension Cost

Pension cost under the defined benefit plan is determined by actuarial valuations. Unrecognized net

transition obligations and unrecognized prior service cost are amortized over 26 and 23 years, respectively.

Under the defined contribution plan, the Bank makes monthly contributions to employees’ individual

pension accounts at a specific percentage of salaries and wages are made. These payments are recognized

as pension costs.

Income Tax

The inter-year allocation method is applied to income taxes, whereby deferred income tax assets and

liabilities are recognized for the tax effects of temporary differences, unused loss carryforwards and unused

tax credits. Valuation allowances are provided to the extent, if any, that it is more likely than not that

deferred income tax assets will not be realized.

Income tax credits for research, development expenditures and personnel training expenditures are

recognized when the expenses are incurred.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

An additional tax at 10% of unappropriated earnings is provided for as income tax in the year the

shareholders approve the retention of earnings.

Income Recognition

Interest income from discounts and loans is recorded on the accrual basis. For non-accrual loans, interest

income is recognized only when collections on these obligations are made. Under the regulations of the Banking Bureau under the Financial Supervisory Commission governed by the Executive Yuan, the interest

income on credits covered by agreements that extend their maturity is recorded as deferred income and

recognized upon collection.

Service fee income is recognized as cash receipts when the related services have been substantially

completed.

For acquired nonperforming receivables, the Bank recognizes income from cash receipts or disposal of

these loans by the cost - recovery method.

87- 14 -

Contingencies

A loss should be recognized when it is probable that an asset has been impaired or a liability has been

incurred and the amount of loss can be reasonably estimated. If a loss or liability due to a certain event is possible but the amount of loss cannot be reasonably estimated, a footnote disclosure of the circumstance

that might give rise to the possible loss should be made.

Acquisition of Another Financial Institution’s Business

The accounting for the Bank’s acquisition of another financial institution’s business is based on the Statement of Financial Accounting Standards No. 25 - “Business Combinations.” The identifiable net

assets and liabilities obtained through the acquisition are measured at the fair value at the transaction date.

Goodwill arising from the acquisition cost exceeding the fair value of the identifiable net assets acquired

has to be tested for impairment annually instead of being amortized. If the fair value of the identifiable net assets exceeds the acquisition cost, the excess is used to reduce the fair value of each of the noncurrent

assets acquired in proportion to the respective fair values of the noncurrent assets, with any remaining

excess recognized as an extraordinary gain.

Reclassifications

Certain accounts in the financial statements as of and for the year ended December 31, 2010 have been

reclassified to conform to the presentation of the financial statements as of and for the year ended

December 31, 2011.

3. EFFECTS OF CHANGES IN ACCOUNTING PRINCIPLES

Financial Instruments

On January 1, 2011, the Bank prospectively adopted the newly revised Statement of Financial Accounting Standards (SFAS) No. 34 - “Financial Instruments: Recognition and Measurement.” The main revisions

include (1) finance lease receivables are now covered by SFAS No. 34; (2) the scope of the applicability of

SFAS No. 34 to insurance contracts is amended; (3) loans and receivables originated by the Bank are now covered by SFAS No. 34; (4) additional guidelines on impairment testing of financial assets carried at

amortized cost if the asset issuer or obligor has financial difficulties and the terms of obligations been

modified; and (5) accounting treatment by a debtor for modifications in the terms of obligations.

Operating Segments

On January 1, 2011, the Bank adopted the newly issued SFAS No. 41 - “Operating Segments.” The requirements of the statement are based on the information on the components of the Bank that

management uses to make decisions about operating matters. SFAS No. 41 requires the identification of

operating segments on the basis of internal reports that are regularly reviewed by the Bank’s chief operating decision maker in order to allocate resources to the segments and assess their performance. This statement

supersedes SFAS No. 20 - “Segment Reporting.” For this accounting change, the information for the year

ended December 31, 2010 has been recast to reflect the new segment reporting requirement.

88- 15 -

4. CASH AND CASH EQUIVALENTS

December 31

2011 2010

Cash on hand $ 2,448,864 $ 2,211,862

Deposits due from other banks 2,540,823 1,422,599 Notes and checks for clearing 817,187 613,382

$ 5,806,874 $ 4,247,843

5. DUE FROM THE CENTRAL BANK AND OTHER BANKS

December 31

2011 2010

Due from the Central Bank - certificates of deposit (Note 29) $ 69,400,000 $ 84,000,000 Call loans to banks 3,570,480 5,548,500

New Taiwan dollar deposit reserve - Type A 5,019,759 5,651,740

New Taiwan dollar deposit reserve - Type B 8,705,369 7,710,130 Foreign-currency deposit reserve 43,582 27,982

$ 86,739,190 $ 102,938,352

The deposit reserves are required by law and determined at a prescribed percentage of the average of

deposit balances within a month. The Type B reserve cannot be withdrawn and is adjusted on the basis of

monthly recomputation of the reserve. The Type A and foreign-currency deposit reserves can be withdrawn anytime but bear no interest.

6. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

December 31

2011 2010

Financial assets held for trading

Government bonds $ 1,722,733 $ 2,225,184 Foreign-currency swap contracts 460,509 378,526

Interest rate swap contracts 358,907 56,058

Convertible bond option contracts 317,057 284,440 Mutual funds 57,286 25,000

Forward exchange contracts 51,235 28,161

Currency option contracts 49,016 41,932

Listed and OTC stocks 36,819 141,628 Cross-currency swap contracts 4,801 523,826

Others 91,993 40,842

3,150,356 3,745,597 Financial assets designated as measured at fair value through profit

or loss - convertible bonds

10,656,510 12,979,293

Total financial assets at fair value through profit or loss $ 13,806,866 $ 16,724,890 (Continued)

89

- 16 -

December 31

2011 2010

Financial liabilities held for trading

Convertible bond option contracts $ 1,971,854 $ 4,427,702

Cross-currency swap contracts 719,979 230,427 Settlement coverage bonds payable 649,552 -

Foreign-currency swap contracts 260,861 1,313,356

Interest rate swap contracts 182,081 130,678

Convertible bond asset swap contracts 127,769 142,607 Forward exchange contracts 67,853 135,219

Others 101,086 65,246

Total financial liabilities at fair value through profit or loss $ 4,081,035 $ 6,445,235

(Concluded)

The Bank engages in derivative transactions mainly to accommodate customers’ needs and to manage

exposures due to exchange rate and interest rate fluctuations. The Bank’s strategy is to hedge against most

of the market risk exposures by using the offsetting effects of profit or loss on changes in the fair values of

the hedging instrument and the hedged item.

On the valuation of financial assets and liabilities at fair value through profit or loss, there were net gains of

NT$361,498 thousand in 2011 and NT$312,526 thousand in 2010. Net disposal gains on financial assets and liabilities at fair value through profit or loss were NT$322,744 thousand in 2011 and NT$263,626

thousand in 2010.

Outstanding derivative contract (nominal) amounts as of December 31, 2011 and 2010 were as follows:

December 31

2011 2010

Foreign-currency swap contracts $ 47,007,582 $ 36,692,289

Interest rate swap contracts 44,438,500 19,437,500 Convertible bond option contracts 33,499,262 21,552,450

Convertible bond asset swap contracts 28,113,195 17,937,104

Cross-currency swap contracts 17,706,190 7,879,600

Credit default swap contracts 14,496,297 6,874,732 Non-deliverable forward contracts 8,036,471 147,500

Forward exchange contracts 7,583,875 7,959,689

Currency option contracts 4,665,684 1,811,066

7. SECURITIES PURCHASED UNDER RESELL AGREEMENTS

Securities acquired for NT$850,505 thousand under resell agreements as of December 31, 2011 will be sold

for NT$850,565 thousand by January 2, 2012 (2010: Nil).

90

- 17 -

8. RECEIVABLES, NET

December 31

2011 2010

Credit card $ 15,523,234 $ 15,618,049

Factoring 3,412,000 2,633,984 Interest 603,528 509,042

Due from spot exchange trading 595,616 647,971

Acceptances 332,333 653,475

Others 442,174 468,729 20,908,885 20,531,250

Less: Allowance for possible losses (Note 9) 813,388 1,873,703

$ 20,095,497 $ 18,657,547

In August 2009, the Bank acquired the credit card business of AIG Credit Card Company (Taiwan) Ltd. for NT$2.67 billion, including account receivables at the gross amount of NT$6.83 billion and written-off

nonperforming receivables at the gross amount of NT$12.68 billion. The gains on recovering written-off

nonperforming receivables were NT$250,299 thousand in 2011 and NT$116,253 thousand in 2010.

9. DISCOUNTS AND LOANS, NET

December 31

2011 2010

Negotiations, discount and overdraft $ 176,576 $ 268,387 Short-term loans 67,654,241 63,956,391

Medium-term loans 84,002,593 64,377,763

Long-term loans 122,135,928 110,724,229 Non-accrual loans 264,778 632,058

274,234,116 239,958,828

Less: Allowance for possible losses 4,773,735 3,607,543

$ 269,460,381 $ 236,351,285

As of December 31, 2011 and 2010, the balances of non-accrual loans were NT$264,778 thousand and NT$632,058 thousand, respectively. The unrecognized interest revenues on non-accrual loans were

NT$3,349 thousand in 2011 and NT$21,242 thousand in 2010.

The Bank’s financial assets which are covered by the Statement of Financial Accounting Standards (SFAS)

No. 34 - “Financial Instruments: Recognition and Measurement,” were assessed for impairment loss on

the basis of the credit characteristics of financial assets. The results were as follows:

Discounts and loans

December 31, 2011 Item Discounts and

Loans

Allowance for

Possible Losses

Assessed individually $ 5,188,537 $ 3,373,260 With objective evidence of

individual impairment Assessed by portfolios 2,143,385 450,059

Assessed individually 3,105,077 - Without objective evidence of


91

- 18 -

Others (including receivables, other financial assets and debt instrument investments with no active market)

December 31, 2011 Item

Receivables Allowance for

Possible Losses

Assessed individually $ 621,930 $ 438,556 With objective evidence of


Assessed individually 9,204,321 - Without objective evidence of individual impairment Assessed by portfolios 16,256,145 245,349

Movements of allowances for possible losses on receivables, loans and discounts and other financial assets

were as follows:

Receivables and

Other Financial

Assets

Loans and

Discounts Total

Year ended December 31, 2011

Balance, January 1, 2011 $ 1,944,637 $ 3,607,543 $ 5,552,180 Allowance for (reversal of) possible losses (515,269) 1,305,454 790,185

Amounts written off (231,407) (191,772) (423,179)

Amounts recovered 41,892 44,800 86,692 Effects of exchange rate change 190 7,710 7,900

Balance, December 31, 2011 $ 1,240,043 $ 4,773,735 $ 6,013,778

Receivables

and Other

Financial Loans and Discounts

Assets Specific Risk General Risk Total


Balance, January 1, 2010 $ 2,597,791 $ 757,183 $ 1,590,835 $ 4,945,809

Allowance for (reversal of)

possible losses

42,451 672,636 (39,862) 675,225 Acquired from the acquisition of

Chinfon Bank

3,389 2,627,693 - 2,631,082

Amounts written off (751,015) (2,323,937) - (3,074,952)

Amounts recovered 52,021 331,721 - 383,742 Effects of exchange rate change - - (8,726) (8,726)

Balance, December 31, 2010 $ 1,944,637 $ 2,065,296 $ 1,542,247 $ 5,552,180

In 2011 and 2010, the Bank had no written off credits for which legal proceedings had not been initiated.

The allowance for (reversal of) possible losses were as follows:

Year Ended December 31

2011 2010

Allowance for possible losses - loans and discounts $ 1,305,454 $ 632,774

Allowance for (reversal of) possible losses - receivables and other

financial assets

(515,269) 42,451 Reserve for guarantees 44,276 -

$ 834,461 $ 675,225

92- 19 -

10. AVAILABLE-FOR-SALE FINANCIAL ASSETS

December 31

2011 2010

Government bonds $ 14,773,521 $ 15,696,295

Listed and OTC stocks - domestic 776,673 1,159,165

- overseas 124,465 -

$ 15,674,659 $ 16,855,460

The terms of government bonds investments are summarized as follows:

December 31

2011 2010

Aggregate par value $ 14,369,000 $ 15,376,400

Coupon interest rates 0.88%-6.90% 0.88%-7.10%

Effective interest rates 0.91%-9.45% 0.41%-6.39% Maturity January 2012 -

August 2031

January 2011 -

August 2030

Related pledge information was shown in Note 29.

11. HELD-TO-MATURITY FINANCIAL ASSETS

December 31

2011 2010

Foreign corporate bonds $ 2,374,459 $ 470,428

Foreign bank debentures 1,400,397 2,170,233

Certificates of deposit 151,450 147,500

$ 3,926,306 $ 2,788,161

The terms of foreign corporate bonds are summarized as follows:

December 31

2010 2011

Aggregate par value - USD 59,000 thousand 15,000 thousand

AUD 20,000 thousand - Coupon interest rates 0.51%-7.00% 7.00%

Effective interest rates 0.46%-6.75% 2.25%-7.00%

Maturity January 2012 -

March 2014

February 2012 -

May 2012

93

- 20 -

The terms of foreign bank debentures are summarized as follows:

December 31

2011 2010


AUD 6,000 thousand 26,000 thousand

Coupon interest rates 0.66%-6.50% 0.38%-6.50% Effective interest rates 0.61%-5.91% 1.05%-6.65%

Maturity January 2012 -

March 2015

November 2011

- March 2015

The terms for a single certificate of deposit are summarized as follows:

December 31

2011 2010


Coupon interest rates (floating interest rates) 1.54% 1.39% Maturity August 2012 August 2012

12. INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

December 31

2011 2010

% of % of

Owner- Owner-

Amount ship Amount ship

Dah Chung Bills Finance Corp. $ 1,414,579 22.06 $ 1,413,899 22.06

Far Eastern Asset Management Co., Ltd. 729,593 100.00 801,801 100.00

Far Eastern Life Insurance Agency Co., Ltd. 284,725 100.00 242,219 100.00 ING Securities Co., Ltd. 232,094 100.00 - -

Deutsche Far Eastern Asset Management Co.,

Ltd.

120,552 40.00 125,332 40.00 Far Eastern Property Insurance Agency Co.,

Ltd.

13,692 100.00 15,426 100.00

$ 2,795,235 $ 2,598,677

The Bank acquired 100% common stock of ING Securities Company Limited from ING Insurance

International B.V. for NT$235,120 thousand on August 29, 2011 to expend the Bank’s business, elevate operating efficiency and strengthen competitiveness; this transaction was settled on December 14, 2011.

On January 3, 2012, ING Securities was renamed Far Eastern International Securities.

Fair values of the related assets and liabilities acquired from ING Securities Company Limited on

December 14, 2011 were as follows:

Assets Deposits in banks $ 181,075

Receivables, net 11,978

Investments accounted for by the equity method 2,771 Properties, net 10,542

Other assets 82,945

Total assets 289,311 (Continued)

94

- 21 -

Liabilities

Payables $ 45,389

Other liabilities 8,802 Total liabilities 54,191

Acquired cost (235,120)

Payables 9,819

Cash paid $ (225,301)

(Concluded)

Investment income (loss) recognized by the equity method was as follows:


2011 2010

Far Eastern Life Insurance Agency Co., Ltd. $ 220,432 $ 177,926 Dah Chung Bills Finance Corp. 83,368 103,608

Far Eastern Asset Management Co., Ltd. (73,138) 5,116

Far Eastern Property Insurance Agency Co., Ltd. 6,557 8,291

Deutsche Far Eastern Asset Management Co., Ltd. (4,780) (21,171) ING Securities Co., Ltd. (3,026) -

$ 229,413 $ 273,770

The investment loss related to the operating results of ING Securities Company Limited from December 14,

2011 to December 31, 2011 were included in the Bank’s income statement in 2011. However, for comparison purposes, the pro forma income statements for the years ended December 31, 2011 and 2010

based on an assumption that the transaction took place on January 1, 2010 are shown as follows (the pro

forma income statements were unaudited):


Item 2011 2010

Net interest income $ 3,893,003 $ 3,995,520

Other noninterest income and gains, net 4,654,222 4,566,706

Net profit 8,547,225 8,562,226

Allowance for possible losses (834,461) (675,225) Operating expenses (5,288,558) (4,938,823)

Income before income tax 2,424,206 2,948,178

Income tax expense (91,064) (807,749)

Net income $ 2,333,142 $ 2,140,429

All accounts of the subsidiaries were included in the consolidated financial statements for the years ended December 31, 2011 and 2010.

95- 22 -

13. DEBT INSTRUMENT INVESTMENTS WITH NO ACTIVE MARKET

December 31

2011 2010

Convertible bond asset swap contracts - master agreement $ 4,647,900 $ 4,859,320

Credit-linked notes - master agreement 3,331,234 1,423,132 Floating rate notes, net 1,232,798 762,215

Convertible bonds, net 81,848 80,807

$ 9,293,780 $ 7,125,474

As of December 31, 2011 and 2010, the accumulated impairment losses on floating rate notes and

convertible bonds were NT$225,638 thousand and NT$232,719 thousand, respectively.

14. OTHER FINANCIAL ASSETS

December 31

2011 2010

Non-accrual loans other than discounts and loans $ 507,131 $ 507,409

Less: Allowance for possible losses (Note 9) 426,655 70,934

80,476 436,475 Guarantee deposits for financial instrument agreements 1,669,282 1,566,155

Refundable deposits 426,515 622,430

Derivative instruments held for hedging (Note 31) 252,233 228,126

Financial Information Service Co., Ltd. account 207,369 205,074 Financial assets carried at cost 103,846 158,385

$ 2,739,721 $ 3,216,645

Financial assets carried at cost were as follows:

December 31

2011 2010

% of % of

Owner- Owner-

Amount ship Amount ship

Domestic unquoted common stocks

ERA Communications Co., Ltd. $ 50,006 1.76 $ 50,006 1.76 Financial Information Service Co., Ltd. 45,500 1.14 45,500 1.14

An Feng Enterprise Co., Ltd. 3,000 10.00 3,000 10.00

Taiwanpay Company 2,467 3.35 2,467 3.35 Sunshine Asset Management Co., Ltd. 2,073 3.46 2,073 3.46

Taipei Forex Inc. 800 0.40 800 0.40

103,846 103,846 Overseas unquoted common stock

VISA Inc., Class C - 54,539

$ 103,846 $ 158,385

The above equity investments, which had no quoted prices in an active market and had fair values that

could not be reliably measured, were carried at cost.

96- 23 -

VISA Inc. Class C shares were released from transfer restrictions and had quoted prices in an active

market; thus, it had been reclassified into available for sale financial assets as of the end of 2011.

15. PROPERTIES

Accumulated depreciation was as follows:

December 31

2011 2010

Buildings and improvements $ 479,089 $ 450,703

Computer equipment 920,001 832,916

Transportation equipment 6,939 8,704 Miscellaneous equipment 1,112,619 1,072,405

$ 2,518,648 $ 2,364,728

As of December 31, 2011 and 2010, properties were insured for NT$3,851,285 thousand and NT$1,815,912

thousand, respectively.

16. INTANGIBLE ASSETS

December 31

2011 2010

Operating rights $ 1,538,210 $ 1,538,210 Core deposits value 428,887 428,887

1,967,097 1,967,097

Less: Accumulated amortization 61,904 24,762

$ 1,905,193 $ 1,942,335

In April 2010, the Bank acquired the assets and liabilities, classified as Package B of the Chinfon Bank,

through winning an open bid. The fair value of acquired management and operation rights of Chinfon

Bank’s branches has no definite useful life, and the acquired core deposits value is amortizable over 4 to 15

years.

17. OTHER ASSETS

December 31

2011 2010

Deferred income tax, net (Note 24) $ 1,079,643 $ 966,824

Prepaid expenses 100,999 144,402

Deferred charges, net 18,560 45,121 Other prepayments 34 83,018

Others 62,913 9,941

$ 1,262,149 $ 1,249,306

After disposing of the collaterals assumed, the Bank recognized a gain of NT$5,035 thousand on

impairment reversal in 2010.

97- 24 -

18. DUE TO THE CENTRAL BANK AND OTHER BANKS

December 31

2011 2010

Call loans from banks $ 11,236,270 $ 17,514,617 Due to banks 544,952 567,491

Overdraft 4,509 10,971

$ 11,785,731 $ 18,093,079

19. PAYABLES

December 31

2011 2010

Accrued expenses $ 1,388,880 $ 1,248,191

Accrued interest 863,788 801,691

Checks for clearing 817,187 613,383 Payables on factoring business 457,695 197,294

Acceptances 332,333 653,475

Taxes payable 144,002 206,886 Payables on fund collection 137,291 286,504

Securities transacted 102,244 115,458

Others 338,409 318,819

$ 4,581,829 $ 4,441,701

20. DEPOSITS AND REMITTANCES

December 31

2011 2010

Checking deposits $ 3,695,949 $ 2,529,351

Demand deposits 28,411,093 27,670,187 Demand savings 50,602,247 47,673,495

Time savings 86,199,374 87,564,567

Negotiable certificates of deposits 24,478,500 25,136,500 Time deposits 176,981,336 157,561,798

Remittances 5,145 35,367

$ 370,373,644 $ 348,171,265

98

- 25 -

21. BANK DEBENTURES

December 31

Item Issuance Period Note 2011 2010

Senior bank debentures - 10-year

maturity; fourth issue in 2005 2005.08.26-2015.08.26 Interest payable on August 26 each year;

fixed interest rate at 2.30% $ 3,000,000 $ 3,000,000

Subordinated bank debentures - seven-year maturity; first issue in 2006

2006.12.27-2013.12.27 Interest payable on December 27 each year; floating interest rate; associated press 90 days interest plus 0.45%

2,000,000 2,000,000


2007.02.13-2014.02.13 A coupons: Interest payable on February 13 each year; floating interest rate

B coupons: Interest payable on February 13 each year; fixed interest rate at 2.55%

2,000,000 2,000,000

Subordinated bank debentures - seven-year maturity; second issue in 2007

2007.03.12-2014.03.12 Interest payable on March 12 each year; floating interest rate

1,000,000 1,000,000

Subordinated bank debentures - five and a half years’ maturity; third issue in 2007

2007.09.26-2013.03.26 Interest payable on September 26 each year (will be paid on March 26 in the last year); floating interest rate

2,000,000 2,000,000


2008.06.17-2015.06.17 A coupons: Interest payable on June 17 each year; 3.90% fixed interest rate;

B coupons: Interest payable on June 17

each year; floating interest rate

2,400,000 2,400,000

Subordinated bank debentures - seven-year maturity; first issue in

2010

2010.05.18-2017.05.18 Interest payable on May 18 each year; fixed interest rate at 2.98%

2,000,000 2,000,000

Subordinated bank debentures - seven-year maturity; second issue

in 2010

2010.09.29-2017.09.29 Interest payable on September 29 each year; fixed interest rate at 2.10%

2,000,000 2,000,000

Subordinated bank debentures - seven-year maturity; first issue in

2011

2011.11.10-2018.11.10 Interest payable on November 10 each year; fixed interest rate at 1.95%

3,500,000 -

Subordinated bank debentures - seven-year maturity; 1-1 issue in

2005; acquired from Chinfon Bank

2005.06.28-2012.06.28 Interest payable on sample interest in half a year; floating interest rate;

repayable in five equal annual installment from the third year of issuance

90,900 176,620

Subordinated bank debentures - seven-year maturity; 1-1 issue in 2002; acquired from Chinfon Bank

Had matured on June 28, 2009

240

300

Total bank debentures 19,991,140 16,576,920 Add: Unrealized valuation loss

(Notes 14, 22 and 31) 239,140

212,676

$ 20,230,280 $ 16,789,596

Related hedging information for the above bank debentures is shown in Note 31.

22. OTHER FINANCIAL LIABILITIES

December 31

2011 2010

Principal of structured notes $ 459,005 $ - Derivative instruments held for hedging (Note 31) 13,093 15,450

Lease payable 78 257

Appropriated loan funds - 360

$ 472,176 $ 16,067

Under related laws and regulations, effective January 1, 2011, the principal received on structured financial instruments should not be classified as deposits. Thus, this kind of principal can not be included in any

statutory ratio requirements nor can limits be placed on deposits.

99- 26 -

23. PENSION PLANS

Under defined benefit plan based on the Labor Standards Law (LSL), the Bank recognizes pension liabilities based on the actuarial report. The Bank contributes amounts equal to 2% of total monthly

salaries and wages to a pension fund administered by the pension fund monitoring committee. The

pension fund is deposited in the Bank of Taiwan in the committee’s name.

The pension plan under the Labor Pension Act (LPA) is a defined contribution plan. Based on the LPA,

the Bank makes contributions to employees’ individual pension accounts at 6% of monthly salaries and wages monthly. Related pension costs were NT$92,070 thousand in 2011 and NT$79,749 thousand in

2010.

Information about the defined benefit plan is as follows:

a. Net pension cost

2011 2010

Service cost $ 12,685 $ 18,058 Interest cost 17,798 19,292

Amortization 3,408 7,226

Projected return on plan assets (5,068) (3,521)

Net pension cost $ 28,823 $ 41,055

b. Reconciliation of funded status of the plan and accrued pension cost as of December 31, 2011 and 2010:

December 31

2011 2010

Benefit obligation

Vested benefit obligation $ (90,935) $ (61,057) Non-vested benefit obligation (488,400) (483,897)

Accumulated benefit obligation (579,335) (544,954)

Additional benefit based on futures salaries (246,662) (252,248)

Projected benefit obligation (825,997) (797,202) Fair value of plan assets 260,879 245,390

Funded status (565,118) (551,812)

Unrecognized net transitional obligation 6,570 7,226 Unrecognized prior service cost (24,444) (25,644)

Unrecognized net loss 174,595 162,719

Accrued pension cost $ (408,397) $ (407,511)

Vested benefit $ 103,424 $ 71,718

c. Actuarial assumptions on pension obligation

December 31

2011 2010

Discount rate used in determining present values 2.00% 2.25%

Future salary increase rate 2.50% 2.50% Expected rate of return on plan asset 2.00% 2.00%

100- 27 -

d. Summary of changes in the pension fund

2011 2010

Balance, beginning of year $ 245,390 $ 225,688

Contributions 18,290 18,502 Interest income 2,983 3,681

Payments during the year (5,784) (2,481)

Balance, end of year $ 260,879 $ 245,390

24. INCOME TAX

a. A reconciliation of income tax expense based on income before income tax at the statutory rate of 17%

and income tax expense was as follows:

2011 2010

Income tax expense at the statutory rate $ 418,930 $ 510,702

Tax effects of the net income of the offshore banking unit (36,115) (71,636)

Tax effects of adjusting items:

Permanent differences (359,152) (426,599) Temporary differences (28,120) 228,052

Loss carryforwards (used) 4,457 (240,519)

Additional income tax under the Alternative Minimum Tax Act 197,692 226,257 Current income tax expense 197,692 226,257

Deferred income tax adjustments

Temporary differences 28,120 (228,052)

Loss carryforwards 11,008 285,661 Investment tax credits 4,641 5,634

Effect of tax law changes on deferred income tax - 283,905

Allowance for (reversal of) valuation loss (156,588) 226,377 Adjustments for prior years’ tax (2,277) 2,309

Overseas branch income tax 8,468 5,658

Income tax expense $ 91,064 $ 807,749

b. In 2011 and 2010, the Legislative Yuan passed the following amendments to tax laws:

1) March 2009 - the amendment of Article 24 of the Income Tax Law, which requires (a) the

profit-seeking enterprise that invests in short-term notes for which the issuance dates are on and

after January 1, 2010 to include the related interest income, which was taxed separately before January 1, 2010, in its taxable income; and (b) the profit-seeking enterprise that invests in beneficial

securities or asset-based securities issued under the Financial Asset Securitization Act or Real

Estate Securitization Act to include from January 1, 2010 the related interest income, which was taxed separately before January 1, 2010, in its taxable income;

2) May 2010 - the amendment of Article 5 of the Income Tax Law, which reduced a profit-seeking

enterprise’s income tax rate from 20% to 17%, effective January 1, 2010.

101- 28 -

c. Deferred income tax assets were as follows:

December 31

2011 2010

Unused loss carryforwards $ 1,171,293 $ 1,182,301

Unused investment tax credits 5,114 9,755 Allowance for possible losses in excess of the limit 244,420 147,456

Amortization of premium on bonds investment - 87,188

Allowance for pension cost in excess of the limit 46,957 46,821

Unrealized loss on impairment of assets 2,541 2,541 Unrealized loss (gain) on derivatives (50,091) 73,174

Others 9,747 11,703

1,429,981 1,560,939 Less: Valuation allowance 350,338 594,115

$ 1,079,643 $ 966,824

d. Information on integrated income tax as follows:

As of December 31, 2011 and 2010, the balances of imputation credits allocable to the shareholders were NT$23,184 thousand and NT$36,417 thousand, respectively.

The creditable ratios for the distribution of the 2011 and 2010 earnings were 9.30% (estimate) and 13.77% (actual), respectively.

There were no unappropriated earnings generated before 1998.

e. As of December 31, 2011, the Bank had unused loss carryforwards, with expiry years as follows:

Unused Amount Expiry Year

$ 113,656 (assessed) 2016

676,187 (assessed) 2017 381,450 (assessed) 2018

$ 1,171,293

f. The Bank’s income tax returns through 2009 had been assessed by the tax authorities.

25. SHAREHOLDERS’ EQUITY

Appropriation of Earnings and Dividend Policy

The Bank’s Articles of Incorporation provide that the appropriations from the Bank’s annual earnings less

its losses and all taxes and dues must be as follows:

a. 30% as legal reserve;

b. Special reserve based on the relevant law or regulations; and

c. Portion to be retained on the basis of operational needs;

102- 29 -

d. Any remainder:

%

Shareholders’ bonus 92 Remuneration to directors and supervisors 2

Employees’ bonus 6

100

The dividend policy of the Bank will be evaluated and adjusted after taking into account factors such as the level of future operations and investment requirements and should include the distribution of at least 10%

of the appropriated earnings as cash dividends.

The Banking Law provides that, unless the legal reserve equals the paid-in capital, cash dividends and bonuses may be distributed at amounts not exceeding 15% of paid-in capital.

Under the Company Law, legal reserve should be appropriated until its balance equals the Bank’s paid-in capital. This reserve may be used to offset a deficit. According to an amendment to the Company Law,

effective on January 7, 2012, when the Bank has no deficit and its legal reserve has exceeded 25% of its

paid-in capital, the excess may be distributed in the form of stocks or cash.

The appropriations of 2010 and 2009 earnings, which were approved in the shareholders’ meetings on June

15, 2011 and June 21, 2010, respectively, were as follows:

Appropriation of Earnings

Dividends Per Share

(Dollars)

2010 2009 2010 2009

Legal reserve $ 658,426 $ 372,276 $ - $ - Cash dividends 501,787 193,380 0.250 0.100

Stock dividends 1,033,682 674,895 0.515 0.349

$ 2,193,895 $ 1,240,551

The total amounts of share employees’ bonus (in stocks) and the remuneration to directors and supervisors for 2010 and 2009 that were approved in the foregoing shareholders’ meetings were NT$133,519 thousand

and NT$75,502 thousand, respectively, and had no difference with the related estimates made in 2010 and

2009 financial statements.

The employees’ bonus for 2010 in stocks of 8,043 thousand shares was determined at NT$12.45, the

closing price of the Bank’s common stock (after considering the effect of cash and stock dividends) of the

day preceding the shareholders’ meeting. As the result, the additional paid-in capital of 2011 increased by NT$19,706 thousand. The employees’ bonus for 2009 in stocks of 5,862 thousand shares was determined

at NT$9.66, the closing price of the Bank’s common stock (after considering the effect of cash and stock

dividends) of the day preceding the shareholders’ meeting. As the result, the retained earnings of 2010 decreased by NT$1,993 thousand.

The appropriations of the 2011 earnings that were approved in the board of directors meeting on March 27,

2012 were as follows: Appropriation

of Earnings

Dividends Per

Share (Dollars)

Legal reserve $ 711,969 $ -

Cash dividends 529,640 0.250

Stock dividends 1,131,311 0.534

$ 2,372,920

103- 30 -

The employees’ bonus (in stocks) and the remuneration to directors and supervisors approved in the

foregoing board of directors meetings were NT$108,323 thousand and NT$36,108 thousand, respectively,

which were the same as the related estimates made according to the Bank’s Article of Incorporation in 2011. If the actual amounts approved by the shareholders differ from the proposed amounts, the

differences are recorded in the year of shareholders’ resolution as a change in accounting estimate.

Under the Integrated Income Tax System, which took effect on January 1, 1998, ROC-resident shareholders

will be allocated a tax credit for the income tax paid by the Bank on earnings generated since 1998, which

is maintained in the imputation credits account (ICA). The allocation of income tax credits is based on a creditable tax ratio, which is determined on the dividend ex-right date.

The Bank’s foreign shareholders are not entitled to the foregoing tax credits, except those related to the

10% income tax on unappropriated earnings actually paid by the Bank. If dividends distributed to foreign shareholders are from the earnings subject to an additional 10% income tax, the tax can be used by the

foreign shareholders to reduce the final withholding tax on their dividend income.

Information on the employees’ bonus, remuneration to directors and supervisors is available on the Market

Observations Post System Website of the Taiwan Stock Exchange.

Capital Surplus

Under the Company Law, capital surplus may be used to offset a deficit. The capital surplus from share

issue in excess of par value (including treasury stock transaction) may be capitalized by issuing stock to shareholders at the original percentage of ownership if the Bank has no deficit. This capitalization is

limited to a certain percentage of the Bank’s paid-in capital and may be made once a year. Based on an

amendment of the Company Law, effective on January 7, 2012, the foregoing capital surplus may be distributed in cash. However, capital surplus on equity-method investments may not be used for any

purpose.

Unrealized Gain or Loss on Financial Instruments

The movements of unrealized gain or loss on financial instrument included in shareholders’ equity in 2011

and 2010 were as follows:

Available-

for-sale

Financial Assets

Equity-method

Investments Total


Balance, beginning of year $ 104,091 $ 43,935 $ 148,026

Recognized change in fair value 145,679 - 145,679

Transferred to profit or loss (262,309) - (262,309) Equity-method investments - (13,738) (13,738)

Balance, end of year $ (12,539) $ 30,197 $ 17,658


Balance, beginning of year $ 97,958 $ 62,628 $ 160,586 Recognized change in fair value 145,833 - 145,833

Transferred to profit or loss (139,700) - (139,700)

Equity-method investments - (18,693) (18,693)

Balance, end of year $ 104,091 $ 43,935 $ 148,026

104

- 31 -

26. PERSONNEL, DEPRECIATION AND AMORTIZATION EXPENSES


2011 2010

Personnel expenses

Salary and bonus $ 2,170,726 $ 2,139,665

Temporary employee service 201,507 128,933

Insurance 171,114 145,141 Employees’ bonus, remuneration to directors and supervisors 144,431 133,519

Pension 120,893 120,804

Others 123,464 113,131

$ 2,932,135 $ 2,781,193

Depreciation $ 215,394 $ 214,680

Amortization $ 39,982 $ 27,445

27. EARNINGS PER SHARE

The numerators and denominators used in calculating basic and diluted earnings per share (EPS) were as follows:

EPS (Dollars)

NT$ (Numerator) Shares Before After

Before After (Denominator) Income Income

Income Tax Income Tax (In Thousands) Tax Tax

Year ended December 31, 2011 Basic EPS

Income attributable to common shareholders

$ 2,464,295 $ 2,373,231 2,113,272 $ 1.17 $ 1.12

Effect of dilutive potential common stock

Employees’ bonus - - 13,264

Diluted EPS

Income attributable to common shareholders plus effect of potential dilutive common stock

$ 2,464,295 $ 2,373,231 2,126,536 $ 1.16 $ 1.12 Year ended December 31, 2010 Basic EPS

Income attributable to common shareholders

$ 3,004,127 $ 2,196,378 2,106,464 $ 1.43 $ 1.04

Effect of dilutive potential common stock

Employees’ bonus - - 9,503 Diluted EPS

Income attributable to common

shareholders plus effect of potential dilutive common stock

$ 3,004,127 $ 2,196,378 2,115,967 $ 1.42 $ 1.04

The weighted average number of shares outstanding for EPS calculation has been retroactively adjusted for the issuance of stock dividends. This adjustment caused the basic and diluted EPS to decrease from

NT$1.10 and NT$1.09, respectively, to NT$1.04 for both EPS in 2010.

105

- 32 -

Based on Interpretation 2008-169 issued by the Accounting Research and Development Foundation, stock

employees’ bonus for the current year should be considered in calculating the weighted-average number of

shares outstanding used for diluted EPS. The number of shares is estimated by dividing the entire amount of the bonus by the closing share price at the balance sheet date. The dilutive effect of the potential shares

should be included in the calculation of diluted EPS until the shareholders resolve the way to attribute the

employees’ bonus at their meeting in the following year.

28. RELATED-PARTY TRANSACTIONS

The Bank had business transactions with the following related parties:

Related Party Relationship with the Bank

Far Eastern Asset Management Co., Ltd. Subsidiary

Far Eastern Life Insurance Agency Co., Ltd. Subsidiary Far Eastern Property Insurance Agency Co., Ltd. Subsidiary

ING Securities Co., Ltd. Subsidiary

Yuan Long Stainless Steel Co., Ltd. Equity-method investee of Far Eastern Asset

Management Co., Ltd. Far Eastern New Century Corp. Chairman is the vice-chairman of the Bank

Oriental Union Chemical Corp. Chairman is the vice-chairman of the Bank

Asia Cement Corporation Chairman is the vice-chairman of the Bank Far Eastern Department Store Corp. Chairman is the vice-chairman of the Bank

Yuan Ding Co., Ltd. Chairman is the vice-chairman of the Bank

Far Eastern Geant Company Ltd. Chairman is the vice-chairman of the Bank

Bai Ding Investment Co. Chairman is the vice-chairman of the Bank Ding Ding Hotel Co., Ltd. Chairman is the vice-chairman of the Bank

New Century InfoComm Tech Co., Ltd. Chairman is the vice-chairman of the Bank

U-Ming Marine Transport Corp. Chairman is the vice-chairman of the Bank Dah Chung Bills Finance Corp. Equity-method investee

Oriental Securities Corp. The chairman of Oriental’s major shareholder is

the vice-chairman of the Bank Everest Textile Co., Ltd. Chairman is a second-degree relative of the vice

chairman of the Bank

City Super Company Chairman is a second-degree relative of the vice

chairman of the Bank Other Bank’s supervisors, managers or the relatives of

the Bank’s chairman and vice-chairman

The significant transactions and account balances with the above parties (in addition to those disclosed in

other notes) were summarized as follows:

a. Call loans from banks

Related Party Maximum

Balance

Balance Interest Rate Interest

Dah Chung Bills Finance Corp.

2011 $ 600,000 $ 425,000 0.40%-0.78% $ 1,263

2010 $ 550,000 $ - 0.11%-0.41% $ 879

106 - 33 -

b. Loans

Maximum Ending Non-performing

Difference

with the

Terms of Transactions

with

Unrelated

Category Related Party Balance Balance Normal Loans Loans Collateral Parties 2011 Consumer loans Two individuals $ 1,101 $ 832 $ 832 $ - Unsecured loan Note Loans for personal

house mortgage Eight individuals 78,810 60,224 60,224 - Real estate Note

Others Yuan Long Stainless Steel Co., Ltd. 1,850,000 1,820,000 1,820,000 - Real estate and machinery

Note

U-Ming marine Transport Corp. 1,315,000 1,270,000 1,270,000 - Listed stock Note Far Eastern Department Store Corp. 850,000 550,000 550,000 - Quoted/unquoted stock Note Bai Ding Investment Co. 449,000 322,000 322,000 - Quoted/unquoted stock Note Far Eastern New Century Corp. 219,217 4,048 4,048 - Machinery Note Everest Textile Co., Ltd. 88,457 170 170 - Real estate Note Asia Cement Corp. 995,000 - - - Quoted stock Note Far Eastern Geant Company Ltd. 460,000 - - - Real estate Note Oriental Union Chemical Corp. 40,000 - - - Listed stock Note $ 4,027,274 $ 4,027,274 $ - 2010 Consumer loans One individual 684 $ 528 $ 528 $ - Unsecured loan Note Loans for personal



Note

Asia Cement Corp. 980,000 530,000 530,000 - Listed stock Note Far Eastern New Century Corp. 785,483 106,680 106,680 - Machinery Note Bai Ding Investment Co. 495,000 96,000 96,000 - Quoted/unquoted stock Note Far Eastern Geant Company Ltd. 460,000 - - - Real estate Note Far Eastern Department Store Corp. 450,000 - - - Quoted/unquoted stock Note U-Ming marine Transport Corp. 150,000 - - - Listed stock Note Everest Textile Co., Ltd. 81,853 - - - Real estate Note Oriental Union Chemical Corp. 40,000 - - - Listed stock Note $ 2,550,304 $ 2,550,304 $ -

Note: The terms for the loans were no superior than those for unrelated parties.

The interest incomes on the above instruments were NT$30,118 thousand in 2011 and NT$22,562

thousand in 2010, with interest rates of 0.73% to 2.74% and 0.60% to 2.67%, respectively.

c. Guarantees

Maximum Ending Allowance for

Related Party Balance Balance Guarantees Interest Rate Collateral

2011

Everest Textile Co., Ltd. $ 307,200 $ 307,200 $ 1,536 0.60%-0.75% Real estate Ding Ding Hotel Co., Ltd. 43,000 41,000 205 0.50% Certificate of deposit Yuan Long Stainless Steel Co., Ltd. 60,000 30,000 150 0.60% Real estate and

machinery Yuan Ding Co., Ltd. 16,000 14,000 70 0.50% Unlisted stock City Super Company 3,000 3,000 15 0.60% Certificate of deposit

U-Ming Marine Transport Corp. 300,000 - - 0.40% Listed stock Far Eastern Geant Company Ltd. 300,000 - - 0.40% Real estate Far Eastern New Century Corp. 782 - - 0.60% Machinery

New Century InfoComm Tech Co., Ltd. 302 - - 0.60% Certificate of deposit $ 395,200 $ 1,976

2010 Everest Textile Co., Ltd. $ 305,250 $ 305,250 $ - 0.60%-0.80% Real estate

U-Ming Marine Transport Corp. 300,000 300,000 - 0.40% Listed stock Far Eastern Geant Company Ltd. 300,000 300,000 - 0.40% Real estate Yuan Long Stainless Steel Co., Ltd. 60,000 30,000 - 0.60% Real estate and

machinery Ding Ding Hotel Co., Ltd. 43,000 43,000 - 0.50% Certificate of deposit Yuan Ding Co., Ltd. 14,500 9,000 - 0.50% Unlisted stock

City Super Company 3,000 3,000 - 0.60% Certificate of deposit Far Eastern New Century Corp. 782 782 - 0.60% Machinery New Century InfoComm Tech Co., Ltd. 325 295 - 0.60% Certificate of deposit

$ 991,327 $ -

107- 33 -

b. Loans

Maximum Ending Non-performing

Difference

with the

Terms of Transactions

with

Unrelated

Category Related Party Balance Balance Normal Loans Loans Collateral Parties 2011 Consumer loans Two individuals $ 1,101 $ 832 $ 832 $ - Unsecured loan Note Loans for personal



Note

U-Ming marine Transport Corp. 1,315,000 1,270,000 1,270,000 - Listed stock Note Far Eastern Department Store Corp. 850,000 550,000 550,000 - Quoted/unquoted stock Note Bai Ding Investment Co. 449,000 322,000 322,000 - Quoted/unquoted stock Note Far Eastern New Century Corp. 219,217 4,048 4,048 - Machinery Note Everest Textile Co., Ltd. 88,457 170 170 - Real estate Note Asia Cement Corp. 995,000 - - - Quoted stock Note Far Eastern Geant Company Ltd. 460,000 - - - Real estate Note Oriental Union Chemical Corp. 40,000 - - - Listed stock Note $ 4,027,274 $ 4,027,274 $ - 2010 Consumer loans One individual 684 $ 528 $ 528 $ - Unsecured loan Note Loans for personal



Note

Asia Cement Corp. 980,000 530,000 530,000 - Listed stock Note Far Eastern New Century Corp. 785,483 106,680 106,680 - Machinery Note Bai Ding Investment Co. 495,000 96,000 96,000 - Quoted/unquoted stock Note Far Eastern Geant Company Ltd. 460,000 - - - Real estate Note Far Eastern Department Store Corp. 450,000 - - - Quoted/unquoted stock Note U-Ming marine Transport Corp. 150,000 - - - Listed stock Note Everest Textile Co., Ltd. 81,853 - - - Real estate Note Oriental Union Chemical Corp. 40,000 - - - Listed stock Note $ 2,550,304 $ 2,550,304 $ -

Note: The terms for the loans were no superior than those for unrelated parties.

The interest incomes on the above instruments were NT$30,118 thousand in 2011 and NT$22,562

thousand in 2010, with interest rates of 0.73% to 2.74% and 0.60% to 2.67%, respectively.

c. Guarantees

Maximum Ending Allowance for

Related Party Balance Balance Guarantees Interest Rate Collateral

2011

Everest Textile Co., Ltd. $ 307,200 $ 307,200 $ 1,536 0.60%-0.75% Real estate Ding Ding Hotel Co., Ltd. 43,000 41,000 205 0.50% Certificate of deposit Yuan Long Stainless Steel Co., Ltd. 60,000 30,000 150 0.60% Real estate and

machinery Yuan Ding Co., Ltd. 16,000 14,000 70 0.50% Unlisted stock City Super Company 3,000 3,000 15 0.60% Certificate of deposit

U-Ming Marine Transport Corp. 300,000 - - 0.40% Listed stock Far Eastern Geant Company Ltd. 300,000 - - 0.40% Real estate Far Eastern New Century Corp. 782 - - 0.60% Machinery

New Century InfoComm Tech Co., Ltd. 302 - - 0.60% Certificate of deposit $ 395,200 $ 1,976

2010 Everest Textile Co., Ltd. $ 305,250 $ 305,250 $ - 0.60%-0.80% Real estate

U-Ming Marine Transport Corp. 300,000 300,000 - 0.40% Listed stock Far Eastern Geant Company Ltd. 300,000 300,000 - 0.40% Real estate Yuan Long Stainless Steel Co., Ltd. 60,000 30,000 - 0.60% Real estate and

machinery Ding Ding Hotel Co., Ltd. 43,000 43,000 - 0.50% Certificate of deposit Yuan Ding Co., Ltd. 14,500 9,000 - 0.50% Unlisted stock

City Super Company 3,000 3,000 - 0.60% Certificate of deposit Far Eastern New Century Corp. 782 782 - 0.60% Machinery New Century InfoComm Tech Co., Ltd. 325 295 - 0.60% Certificate of deposit

$ 991,327 $ -

- 34 -

d. Letters of credit issued

December 31

2011 2010

Everest Textile Co., Ltd. $ - $ 32,643 Yuan Long Stainless Steel Co., Ltd. - 11,322

$ - $ 43,965

e. Bills and bonds - buy and sell

Buy Sell Resell

Trading Available- Trading Available- Agreements

Purposes for-sale Purposes for-sale Bonds

Dah Chung Bills Finance Corp.

2011 $ - $ - $ - $ 50,000 $ 200,000 2010 $ 250,000 $ - $ 200,000 $ - $ 500,008

f. Derivative financial instruments - convertible bond asset swap contracts

Contract Nominal Valuation Balance Sheet

Period Amount Gain Account Balance

Dah Chung Bills Finance

Corp.

2011 2010.08.10-

2014.09.15

$ 372,000 $ 686 Financial assets at fair value

through profit or loss

$ 80

Financial liabilities at fair value through profit or loss

1,128

2010 2010.01.06- 2012.08.10

205,000 712 Financial assets at fair value through profit or loss

104


1,838

g. Deposits

December 31

2011 2010

Amount Interest Rate Amount Interest Rate

Others (each account

balance did not exceed

5% of total deposits) $ 33,960,837 0%-6.37% $ 38,718,905 0%-6.15%

h. Others-revenue


2011 2010

Service fee income - Far Eastern Life Insurance Agency Co., Ltd. $ 65,657 $ 39,909

Rental - Oriental Securities Corp. 1,280 1,280

$ 66,937 $ 41,189

108 - 35 -

i. Operating expenses


2011 2010

Amount

% to

Total

Amount

% to

Total

Rental - Yuan Ding Co., Ltd. $ 75,851 2 $ 86,901 2 Rental - Far Eastern Geant Company Ltd. 3,389 - 3,877 -

Postage - New Century InfoComm Tech Co.,

Ltd.

48,889 1 45,315 1 Service fee for stock transactions - Oriental

Securities Corp.

8,280 - 7,188 -

$ 136,409 3 $ 143,281 3

j. Compensation of directors, supervisors and management personnel


2011 2010

Salaries and incentives $ 81,497 $ 75,463

Employees’ bonus, remuneration to directors and supervisors 34,434 17,122

Special compensation 430 520

$ 116,361 $ 93,105

29. PLEDGED ASSETS

December 31

2011 2010

Due from the Central Bank - certificates of deposit $ 2,500,000 $ 2,500,000

Available-for-sale - government bonds 671,100 1,017,300

$ 3,171,100 $ 3,517,300

The certificates of deposits issued by the Central Bank have been pledged as collaterals for the intraday

overdraft in the Central Bank’s real-time gross settlement system. The credit line for intraday overdraft

and guarantee amounts can be changed at any time. Government bonds have been provided for the trust

fund reserve deposited and as guarantee on the provisional seizure of the debtor’s property.

30. SIGNIFICANT COMMITMENTS AND CONTINGENCIES

In addition to those mentioned in Note 31, the Bank’s contingency liabilities and commitments resulting

from operating activities as of December 31, 2011 are summarized as follows:

a. Some sections of the Bank’s office premises are held under operating leases (the refundable deposit

amounts to NT$77,752 thousand). Rentals are payable monthly and the leasing arrangements will

expire between 2012 and 2022.

109

- 36 -

Minimum rentals for the next five years were summarized as follows, excluding imputed interest:

Year Amount

2012 (January 1, 2012 to December 31, 2012) $ 303,289

2013 (January 1, 2013 to December 31, 2013) 257,276

2014 (January 1, 2014 to December 31, 2014) 221,537 2015 (January 1, 2015 to December 31, 2015) 123,224

2016 (January 1, 2016 to December 31, 2016) 76,690

b. Balance sheets and income statements of trust accounts and trust asset lists were as follows:

Balance Sheets of Trust Accounts

Assets 2011 2010 Liabilities 2011 2010

Bank deposits $ 3,042,671 $ 2,585,595 Payables $ 1,119 $ 1,083 Short-term investments 64,155,777 50,210,444 Income tax payable 101 81

Accounts receivable 1,704 7,560 Trust capital 67,082,292 51,171,635 Real estate, net 464,334 502,339 Reserve and earnings 700,029 2,213,018 Deferred charges 119,055 79,879 Total $ 67,783,541 $ 53,385,817 Total $ 67,783,541 $ 53,385,817

Income Statements of Trust Accounts

2011 2010

Trust revenue

Interest $ 22,173 $ 16,678

Cash dividends 1,148,730 971,054 Realized investment gain 828,399 1,409,320

Unrealized investment gain 1,006,811 2,280,480

3,006,113 4,677,532 Trust expenses

Management 26,548 30,306

Supervisor 260 470 Taxes 28,652 806

Service charges 890 667

Realized investment loss 975,897 813,138

Unrealized investment loss 333,449 9,434 1,365,696 854,821

Income before tax 1,640,417 3,822,711

Income tax 15,422 11,961

Net income $ 1,624,995 $ 3,810,750

110 - 37 -

Trust Asset Lists

Investment Portfolio 2011 2010

Bank deposits $ 3,042,671 $ 2,585,595

Short-term investments

Funds 37,635,796 35,965,552 Common stocks 23,189,815 14,244,892

Bonds 3,325,177 -

Futures trading margin 4,989 - Accounts receivable 1,704 7,560

Real estate, net

Land 304,025 353,094

Building 28,648 43,913 Construction in progress 131,661 105,332

Deferred charges 119,055 79,879

Total $ 67,783,541 $ 53,385,817

As of December 31, 2011 and 2010, short-term investments - funds amounting to NT$683,506 thousand and NT$636,532 thousand, respectively, consisted of investments in overseas securities through the

Non-Discretionary Pecuniary Trust of the Offshore Banking Unit (OBU), which were recorded in the

OBU’s books.

31. FINANCIAL INSTRUMENTS

a. Methods and assumptions used to estimate the fair values of financial instruments are as follows:

1) The carrying amounts of the following short-term financial instruments approximate their fair

values because of their short maturities: Cash and cash equivalents, due from the Central Bank and other banks, securities purchased under resell agreements, receivables excluding income tax

receivables, due to the Central Bank and other banks, payables excluding income tax payables, and

securities sold under repurchase agreements.

2) The fair values of financial instruments measured at fair value through profit or loss,

available-for-sale financial assets and held-to-maturity investments are based on their quoted prices in an active market. For those instruments with no quoted market prices, their fair values are

determined using valuation techniques incorporating estimates and assumptions consistent with

those generally used by other market participants to price financial instruments. Fair values of

derivative financial instruments are estimated on the basis of quotations from the pricing system of Reuters.

3) Discounts and loans, deposits, bank debentures and principle of structured notes are interest-earning assets or interest-bearing liabilities. Their carrying amounts approximate their fair values. The

fair value of non-accrual accounts is based on their carrying amount, net of allowance for possible

losses.

4) Financial assets carried at cost are investments in unquoted stocks, which have no quoted prices in

an active market and entail an unreasonably high cost to determine their fair values. Thus, no fair

value of these assets is presented.

5) On financial assets and liabilities other than those listed above, their estimated future cash flows are

equal to their carrying amounts. Thus, the carrying amounts of these assets and liabilities represent their fair value.

111- 38 -

b. Financial assets and liabilities with fair values based on quoted market prices or valuation techniques

were as follows:

Quoted Market Prices Valuation Techniques

December 31 December 31

2011 2010 2011 2010

Financial assets Financial assets measured at fair value


$ 12,473,348 $ 15,371,105 $ 1,333,518 $ 1,353,785

Available-for-sale financial assets 15,674,659 16,855,460 - - Other financial assets - hedging derivative

financial instruments

- - 252,233 228,126 Financial liabilities Financial liabilities measured at fair value


649,552 - 3,431,483 6,445,235

Other financial liabilities - hedging derivative financial instruments

- - 13,093 15,450

Bank debentures (applying hedge accounting)

- - 4,839,140 4,812,676

c. In addition to the fair values of financial assets and liabilities using quoted market prices or valuation

techniques, other fair values of financial instruments were as follows:

December 31

2011 2010

Carrying

Amount

Estimated

Fair Value

Carrying

Amount

Estimated

Fair Value

Financial assets Loans and discounts $ 269,460,381 $ 269,460,381 $ 236,351,285 $ 236,351,285 Held-to-maturity financial assets 3,926,306 3,869,699 2,788,161 2,787,687 Debt instrument investments with no

active market

9,293,780 9,293,780 7,125,474 7,125,474 Other financial assets - financial assets

carried at cost

103,846 103,846 158,385 158,385

Other financial assets - non-accrual loans 80,476 80,476 436,475 436,475 Other financial assets - Financial

Information Service Co., Ltd. account

207,369 207,369 205,074 205,074 Other financial assets - guarantee deposits

for financial instrument agreements

1,669,282 1,669,282 1,566,155 1,566,155 Other financial assets - refundable

deposits

426,515 426,515 622,430 622,430

Financial liabilities Deposits and remittances 370,373,644 370,373,644 348,171,265 348,171,265 Bank debentures 15,391,140 15,391,140 11,976,920 11,976,920 Other financial liabilities - principle of

structured notes

459,005 459,005 - - Other financial liabilities - lease payable 78 78 257 257

Other financial liabilities - appropriated loan funds

- - 360 360

d. The valuation of financial instruments with fair values determined using valuation techniques showed

gains of NT$3,176,384 thousand in 2011 and losses of NT$1,942,203 thousand in 2010.

e. On financial assets other than those measured at fair value through profit or loss, interest incomes were NT$8,102,451 thousand in 2011 and NT$7,021,598 thousand in 2010. On financial liabilities other

than those measured at fair value through profit or loss, interest costs were NT$4,263,453 thousand in

2011 and NT$3,065,182 thousand in 2010.

112

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f. The fair value hierarchy of financial instruments was as follows:

Financial Instruments December 31, 2011

Measured at Fair Value Total Level 1 Level 2 Level 3

Nonderivative financial instruments Assets Financial assets measured at fair value


Held for trading Bonds $ 1,722,733 $ - $ 1,722,733 $ - Stocks 36,819 36,819 - - Mutual funds 57,286 57,286 - -

Financial assets designated as measured at fair value through profit or loss 10,656,510 10,648,263 - 8,247

Available-for-sale Bonds 14,773,521 408,166 14,365,355 - Stocks 901,138 901,138 - -

Debt instrument investments with no active market 9,293,780 - - 9,293,780

Derivative financial instruments

Assets Financial assets measured at fair value

through profit or loss 1,333,518 950,956 334,465 48,097 Held for trading

Other financial assets Derivative financial assets held for

hedging 252,233 252,233 - -

Liabilities Financial liabilities measured at fair

value through profit or loss Held for trading (4,081,035) (1,937,969) (2,033,999) (109,067)

Other financial liabilities Derivative financial liabilities held

for hedging (13,093) (13,093) - -

Total $ 34,933,410 $ 11,303,799 $ 14,388,554 $ 9,241,057

Note a: The above table shows the ways to determine the fair value of certain financial assets and liabilities at fair value through profit or loss, available-for-sale financial assets, debt

instrument investments with no active markets, hedging derivative financial assets and

liabilities, etc. in terms of level of input to the overall fair value of these financial instruments.

Note b: Level 1 inputs are observable inputs that reflect quoted prices for identical financial

instruments in an active market. Based on paragraph 5 of the Statement of Financial Accounting Standards No. 34 - “Financial Instruments: Recognition and Measurement,” a

market is active if it has these characteristics: (1) products traded in the market are

homogeneous; (2) willing buyers and sellers can be found immediately; and (3) the price

information is publicly available.

113

- 40 -

Note c: Level 2 inputs are observable inputs other than quoted prices for identical assets or liabilities

in active markets and consist of direct inputs (such as market prices) or indirect inputs (such

as prices derived from market prices), for example:

1) Quoted prices for similar financial instruments in active markets - The fair values of

financial instruments owned by the Bank are derived from prices of similar financial

instruments that had been most recently traded. The determination of similarity is based on the characteristics and transaction conditions of financial instruments. Fair value

measurement should be adjusted in accordance with the observable prices of similar

financial instruments. The adjustment factors include the time-lag of the last trading prices of similar financial instruments, the differences in transaction conditions,

transactions involving related parties, the relevance between the observable prices of

similar financial instruments and prices of owned financial instruments.

2) Quoted prices of identical or similar financial instruments in non-active markets;

3) Valuation techniques with observable inputs (interest rates, curves of yield rates, volatility, etc.), which are taken from a market and can reflect the expectation of most

market participants.

4) Inputs mostly derived from the observable market data or inputs that can be corroborated

by observable market data.

Note d: Level 3 inputs are unobservable items such as inputs derived through extrapolation or interpolation and thus cannot be corroborated by observable market data. For example, they

can be the option pricing model with historical volatility, which cannot represent the entire

market participants’ expectations for future fluctuation.

Note e: The classification of the financial instruments shown in the fair value hierarchy table should

be the same as the classification of these instruments in the balance sheet.

Note f: When using valuation techniques that include unobservable inputs, the Bank should assess

whether the inputs have a significant effect on the fair value valuation results. If the effect is

significant, the fair values of these financial instruments should be classified under Level 3.

Note g: If the valuation techniques or the classification levels of a financial instrument significantly

change between two reporting periods (for example, the classification level changes from Level 1 to Level 2 or the unobservable inputs change), the significance of the change should

be determined in terms of the degree of impact on the investment amount, current period’s

profit based on valuation results, related assets and liabilities, or shareholders’ equity, and the

change situations and causes should be explained.

Movement of Level 3 financial assets:

Increase in the Current Period Decrease in the Current Period

Item Beginning

Balance Valuation Profit

Purchase or Issue Transfer-in Sale, Disposition

or Settlement

Transfer-out

from Level 3

Ending Balance

Financial assets at fair value through profit or loss

Held for trading $ 39,722 $ 8,375 $ - $ - $ - $ - $ 48,097 Designated as measured at fair value through

profit or loss - (2,192 ) 540,514 - 530,075 - 8,247 Held for trading

Debt instrument investments with no active market 7,125,474 345,771 3,374,422 - 1,551,887 - 9,293,780

Total $ 7,165,196 $ 351,954 $ 3,914,936 $ - $ 2,081,962 $ - $ 9,350,124

114

- 41 -

Movement of Level 3 financial liabilities:

Increase in the Current Period Decrease in the Current Period

Item Beginning

Balance Valuation Profit

Purchase or Issue Transfer-in Sale, Disposition

or Settlement Transfer-out From Level 3

Ending Balance


Held for trading $ 16,446 $ 53,912 $ 38,370 $ - $ 71 $ - $ 109,067 Total $ 16,446 $ 53,912 $ 38,370 $ - $ 71 $ - $ 109,067

g. Financial risks

1) Market risk

a) Interest rate sensitivity analysis

The fair values of bonds, bills, loans and other similar financial instruments will fluctuate as

market interest rates change. The related interest rate sensitivity analysis is shown in Note 35.

b) Net positions on foreign currencies:

December 31

2011 2010

U.S. dollars $ 41,986 $ 35,314 Yen 8,568 11,284

RMB 5,678 3,890

2) Credit risk

a) Maximum credit exposure

The Bank is exposed to credit risk if counter-parties or other parties default on the contracts.

To manage the risk, the Bank makes credit commitments and issues financial guarantees and

standby letters of credit (L/C) only after careful evaluation of customers’ creditworthiness. As

of December 31, 2011 and 2010, about 66.69% and 67.13%, respectively, of total loans granted, and about 47.59% and 48.83%, respectively, of the aggregate guarantees were secured.

Collaterals, mostly in the form of cash, marketable securities and other assets, may be required

depending on the evaluation result. If the customers default, the Bank will execute its right on the collaterals to mitigate its credit risk.

The amounts of the maximum credit exposure of commitments and guarantees held by the Bank were as follows (values of collaterals were not considered):

December 31

Items 2011 2010

Unused portion of credit card lines $ 133,113,662 $ 124,586,343

Financial guarantees and standby L/C 10,031,345 10,701,616 Irrevocable loan commitments 7,507,001 15,243,285

115

- 42 -

b) Significant concentration of credit risk

The concentration of credit risk exists when counter-parties to financial transactions are

individuals or groups engaging in similar activities or activities in the same region. The similarity would cause their ability to meet contractual obligations to be similarly affected by

changes in economic or other conditions. There was no significant concentration risk of the

Bank’s loans in a single customer or counter-party, but there were some risks involving similar industries, and related information as of December 31, 2011 and 2010 is summarized as follows:

December 31

Credit Risk Profile by Industry Sector 2011 2010

Manufacturing $ 44,012,107 $ 38,667,490

Finance and insurance 32,456,609 26,985,968 Transportation and warehousing 14,229,779 10,660,359

$ 90,698,495 $ 76,313,817

3) Liquidity risk

As of December 31, 2011 and 2010, the Bank’s NTD liquidity reserve ratios were 31.32% and 38.37%, respectively. The Bank has sufficient paid-in capital and working capital to meet all

contract obligations. The possibility of the Bank’s derivative financial instruments not being

liquidated quickly with minimal loss in value is low. Also, the Bank can enter into derivative financial contracts at reasonable market terms. Thus, the Bank does not expect significant cash

flow demands to settle these contracts.

To match the contractual maturity profile with the interest rates for assets and liabilities is one of the

Bank’s major management strategies. Because of uncertainties of transactions, however, the

maturities and the interest rate cannot fully match each other, resulting in gaps that may give rise to

gain or loss.

The Bank’s assets and liabilities were appropriately categorized by maturity dates for liquidity

analysis as follows: December 31, 2011

Due Between

Due within After One Year Due After

One Year and Seven Years Seven Years Total

Assets Cash and cash equivalents $ 5,806,874 $ - $ - $ 5,806,874 Due from the Central Bank and other

banks 86,739,190 - - 86,739,190 Financial assets measured at fair

value through profit or loss 4,070,964 9,735,902 - 13,806,866

Securities purchased under resell agreements 850,505 - - 850,505

Receivables 17,713,664 3,195,221 - 20,908,885 Discounts and loans 90,982,875 67,838,543 115,412,698 274,234,116 Available-for-sale financial assets 966,392 13,617,595 1,090,672 15,674,659 Held-to-maturity financial assets 1,950,000 1,976,306 - 3,926,306 Debt instrument investments with no

active markets 1,847,024 7,446,756 - 9,293,780

Other financial assets 903,890 2,158,640 - 3,062,530 211,831,378 105,968,963 116,503,370 434,303,711

(Continued)

116

- 43 -

December 31, 2011

Due Between

Due within After One Year Due After

One Year and Seven Years Seven Years Total

Liabilities Due to the Central Banks and other

banks $ 11,785,731 $ - $ - $ 11,785,731 Financial liabilities measured at fair


Securities sold under repurchase Agreements 213,870 - - 213,870 Payables 4,581,829 - - 4,581,829 Deposits and remittances 304,340,104 66,033,540 - 370,373,644 Bank debentures 91,140 20,139,140 - 20,230,280 Other financial liabilities 459,083 13,093 - 472,176 323,772,254 87,966,311 - 411,738,565

Gap $ (111,940,876) $ 18,002,652 $ 116,503,370 $ 22,565,146

(Concluded) December 31, 2010

Due Between

Due within

After One Year

and Due After

One Year Seven Years Seven Years Total

Assets Cash and cash equivalents $ 4,247,843 $ - $ - $ 4,247,843 Due from the Central Bank and other

banks 102,938,352 - - 102,938,352 Financial assets measured at fair


Receivables 16,756,018 3,775,232 - 20,531,250 Discounts and loans 78,240,583 57,768,597 103,949,648 239,958,828 Available-for-sale financial assets 1,314,460 11,322,924 4,218,076 16,855,460 Held-to-maturity financial assets 58,250 2,729,911 - 2,788,161 Debt instrument investments with no

active markets 3,892,952 3,232,522 - 7,125,474 Other financial assets 2,044,808 1,084,386 - 3,129,194

215,809,757 90,321,971 108,167,724 414,299,452 Liabilities Due to the Central Banks and other

banks 18,093,079 - - 18,093,079 Financial liabilities measured at fair

value through profit or loss 4,795,568 1,649,667 - 6,445,235 Payables 4,441,701 - - 4,441,701

Deposits and remittances 289,804,273 58,366,992 - 348,171,265 Bank debentures 89,520 16,700,076 - 16,789,596 Other financial liabilities 617 15,450 - 16,607 317,224,758 76,732,185 - 393,956,943 Gap $ (101,415,001) $ 13,589,786 $ 108,167,724 $ 20,342,509

4) Cash flow risk on the interest rate fluctuations

Cash flow risk is the risk to future cash flows of interest-earning assets and interest-bearing

liabilities, which are affected by interest rate fluctuations. The Bank uses interest rate swap

contracts to manage the risk.

117- 44 -

The following interest rate sensitivity analysis of carrying amounts of interest-earning assets and

interest-bearing liabilities is categorized by the earlier of contractual maturity or repricing date:

December 31, 2011

Due Between

One Month and

Due Between

After Three

Months

Due Between

After Six

Months and Due After

Three Months and Six Months One Year One Year Total

Assets Cash - deposits in other banks $ 2,462,528 $ - $ - $ - $ 2,462,528

Due from the Central Bank and other banks 81,675,849 - - - 81,675,849

Financial assets measured at fair

value through profit or loss 951,007 793,230 693,303 9,941,703 12,379,243

Securities purchased under resell agreements 850,505 - - - 850,505

Receivables 9,240,564 3,801,022 - - 13,041,586 Discounts and loans (excluding

non-accrual loans) 170,580,296 102,720,396 274,876 393,770 273,969,338

Available-for-sale financial assets 62,081 - 3,173 14,708,267 14,773,521 Held-to-maturity financial assets 3,465,136 461,170 - - 3,926,306 Debt instrument investments with

no active market 9,190,733 - - 103,047 9,293,780

Other financial assets - guarantee deposits for financial instrument

agreements 1,669,282 - - - 1,669,282 280,147,981 107,775,818 971,352 25,146,787 414,041,938 Liabilities

Due to the Central Bank and other banks 11,539,779 245,952 - - 11,785,731

Securities sold under repurchase

agreements 213,870 - - - 213,870

Deposits and remittances 163,407,728 134,153,257 67,205,226 1,906,339 366,672,550 Bank debentures 7,803,740 87,400 - 12,100,000 19,991,140

Other financial liabilities 459,005 - - - 459,005 183,424,122 134,486,609 67,205,226 14,006,339 399,122,296

Gap $ 96,723,859 $ (26,710,791 ) $ (66,233,874 ) $ 11,140,448 $ 14,919,642

December 31, 2010

Due Between

One Month and

Due Between

After Three

Months

Due Between

After Six

Months and Due After

Three Months and Six Months One Year One Year Total

Assets Cash - deposits in other banks $ 1,356,915 $ - $ - $ - $ 1,356,915

Due from the Central Bank and

other banks

97,258,630 - - - 97,258,630 Financial assets measured at fair

value through profit or loss

83,879 1,181,945 1,621,828 12,316,825 15,204,477

Receivables 8,900,047 3,919,651 - - 12,819,698 Discounts and loans (excluding

non-accrual loans)

147,700,340 91,587,987 38,443 - 239,326,770

Available-for-sale financial assets 150,095 - 5,201 15,540,999 15,696,295 Held-to-maturity financial assets 2,788,161 - - - 2,788,161 Debt instrument investments with

no active market

6,496,152 - 523,800 105,522 7,125,474

Other financial assets - guarantee deposits for financial instrument

agreements

1,566,155 - - - 1,566,155 266,300,374 96,689,583 2,189,272 27,963,346 393,142,575 Liabilities

Due to the Central Bank and other

banks

17,677,088 415,991 - - 18,093,079

Deposits and remittances 156,919,952 113,102,159 74,147,320 1,437,116 345,606,547 Bank debentures 7,976,920 - - 8,600,000 16,576,920 Other financial liabilities 118 88 154 - 360

182,574,078 113,518,238 74,147,474 10,037,116 380,276,906 Gap $ 83,726,296 $ (16,828,655 ) $ (71,958,202 ) $ 17,926,230 $ 12,865,669

118- 45 -

h. Fair value hedges

The fair values of bank debentures issued by the Bank were exposed to the risk on interest rate fluctuations. The Bank used interest rate swap contracts to hedge against the risk. The terms of the

interest rate swap contracts were as follows:

December 31

2011 2010

Nominal Nominal

Hedged Items Hedging Instruments Amount Fair Value Amount Fair Value Bank debentures Interest rate swap contracts $ 4,600,000 $ 239,140 $ 4,600,000 $ 212,676

32. MAJOR RISK MANAGEMENT STRATEGIES

The Bank’s risk management policy is to form a risk management orientation culture. The Bank has set

up an independent risk control unit to implement and monitor a risk management system, to ensure every risk is under a tolerable level and to maximize shareholder value.

A risk management committee has been formed to measure and manage the Bank’s risks, to evaluate risk

acceptance and to assess the execution of risk management. Furthermore, the Bank has an independent risk management department, which is responsible for the establishment of risk management strategies and

rules, risk statistic analysis, and management and reporting of various risks. The department consists of

teams that directly manage risks with regard to their respective areas: Corporate banking and financial markets, consumer banking and credit card business groups, and small and medium enterprises. For

integrated risk management, each operating unit of the Bank is required to present, first to the management

department for review and then to the top Bank management for approval, all the related documents,

including the credit authorization principles and procedures, new product development, levels and degree of authorization, etc.

33. CAPITAL ADEQUACY

December 31, 2011 December 31, 2010

The Bank Consolidation The Bank Consolidation

Tier I capital $ 22,920,986 $ 23,551,038 $ 21,181,249 $ 21,710,972

Tier II capital 11,852,043 12,487,420 9,800,091 10,335,467

Tier III capital - - - - Eligible capital

Total eligible capital 34,773,029 36,038,458 30,981,340 32,046,439

Standardized approach 246,909,957 251,995,348 214,289,186 219,361,512

Internal rating-based approach - - - - Credit risk

Synthetic securitization - - - -

Basic indicator approach 11,744,788 11,458,613 12,306,063 12,061,975

Standardized approach/alternative

standardized approach

- - - - Operational risk

Advanced measurement approach

- - - -

Standardized approach 16,750,238 16,750,238 8,526,963 8,526,963 Market risk

Internal models approach - - - -

Risk-weighted assets

Total risk-weighted assets 275,404,983 280,204,199 235,122,212 239,950,450

Capital adequacy ratio 12.63% 12.86% 13.18% 13.36%

Ratio of Tier I capital to risk-weighted assets 8.32% 8.40% 9.01% 9.05%

Ratio of Tier II capital to risk-weighted assets 4.31% 4.46% 4.17% 4.31%

Ratio of Tier III capital to risk-weighted assets - - - -

Ratio of common shareholders’ equity to total assets 4.84% 4.83% 4.81% 4.80%

Leverage ratio 5.38% 5.51% 5.36% 5.47%

119- 46 -

Note a: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the

Capital Adequacy Ratio of Banks” and “Explanation of Methods for Calculating the Eligible

Capital and Risk-weighted Assets of Banks”.

Note b: An annual report should include both the current year’s and prior year’s capital adequacy ratio,

but a semiannual report should include the capital adequacy ratio of the most recent year.

Note c: Formulas used were as follows:

1) Eligible capital = Tier I capital + Tier II capital + Tier III 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 Tier I capital to risk-weighted assets = Tier I capital/Total risk-weighted assets.

5) Ratio of Tier II capital to risk-weighted assets = Tier II capital/Total risk-weighted assets.

6) Ratio of Tier III capital to risk-weighted assets = Tier III capital/Total risk-weighted assets.

7) Ratio of common stock to total assets = Common stock/Total assets.

8) Leverage ratio = Tier I capital ÷ Adjusted average total asset (the average total asset excludes

goodwill, deferred losses on the sale of nonperforming loans and items deducted from Tier I

capital because of ineligibility as defined under the “Explanation of Methods for Calculating the Eligible Capital and Risk-Weighted Assets of Banks”).

Note d: Capital adequacy ratios have to be disclosed in the notes to financial statements, except the notes

to the financial statements for the first and the third quarters.

34. AVERAGE AMOUNT AND AVERAGE INTEREST RATE OF INTEREST-EARNING ASSETS

AND INTEREST-BEARING LIABILITIES


2011 2010

Average Average Average Average

Balance Rate (%) Balance Rate (%)

Interest-earning assets

Cash and cash equivalents - deposits in

other banks $ 2,079,147 0.22 $ 1,310,995 0.07 Due from the Central Bank and banks 83,821,989 0.80 77,320,250 0.59

Financial assets measured at fair value

through profit or loss - government bonds 2,062,837 1.91 1,909,784 1.95

Securities purchased under resell

agreements 168,978 0.69 541,864 0.24 Receivables - credit card revolving

balances 8,113,992 12.27 9,653,014 12.27

Discounts and loans 255,376,853 2.47 222,454,084 2.35

(Continued)

120- 47 -


2011 2010

Average Average Average Average

Balance Rate (%) Balance Rate (%)

Available-for-sale financial assets -

government bonds $ 15,811,816 1.32 $ 14,384,657 1.37 Held-to-maturity financial assets 3,299,654 2.65 2,543,249 2.06

Debt instrument investments with no active

market 3,696,513 1.70 4,181,662 1.70 Guarantee deposits for financial instrument

agreements 2,081,673 0.05 1,400,051 0.08

Interest-bearing liabilities

Due to banks 12,784,226 1.08 8,923,171 0.77

Securities sold under repurchase agreements 36,069 0.10 411,937 0.12

Demand deposit 78,174,864 0.25 66,338,962 0.22

Time deposit 254,973,343 1.06 236,570,654 0.79 Negotiable certificates of deposit 20,255,713 0.88 13,217,044 0.49

Bank debentures 17,030,287 2.02 15,756,841 1.85

(Concluded)

The above average balances were calculated at the daily average of interest-earning assets and

interest-bearing liabilities for the year.

35. ASSET QUALITY OF LOANS, CONCENTRATION OF CREDIT EXTENSIONS, INTEREST

RATE SENSITIVITY, PROFITABILITY AND MATURITY ANALYSIS OF ASSETS AND

LIABILITIES

a. Asset quality of loans

Nonperforming loans and nonperforming receivables

December 31, 2011

Items

Business Nonperforming

Loans (Note a) Loans

Ratio of

Nonperforming

Loans (Note b)

Allowance for

Possible Losses

Coverage

Ratio

(Note c)

Secured $ 133,629 $ 35,675,055 0.37% $ 2,447,853 $ 1,831.83% Corporate banking Unsecured 5,303 89,851,175 0.01% 898,344 16,940.30%

Housing mortgage (Note d) 227,571 105,697,900 0.22% 825,201 362.61%

Cash card - - - - -

Small-scale credit loans (Note e) 192,345 13,805,008 1.39% 361,946 188.18%

Secured 24,666 26,989,102 0.09% 210,089 851.74%

Consumer banking

Other (Note f) Unsecured 29,036 2,215,876 1.31% 30,302 104.36%

Total 612,550 274,234,116 0.22% 4,773,735 779.32%

Nonperforming

Receivables

Accounts

Receivable

Ratio of

Nonperforming

Receivables

Allowance for

Possible Losses

Coverage

Ratio

Credit card 34,168 15,530,088 0.22% 774,335 2,266.26%

Accounts receivable factored without recourse (Note g)

- 3,412,000 - 17,151 -

121

- 48 -

December 31, 2010

Items

Business Nonperforming

Loans (Note a) Loans

Ratio of

Nonperforming

Loans (Note b)

Allowance for

Possible Losses

Coverage

Ratio

(Note c)

Secured $ 445,960 $ 33,929,433 1.31% $ 1,709,565 $ 383.35% Corporate banking Unsecured 12,500 77,840,015 0.02% 282,316 2,258.53%

Housing mortgage (Note d) 413,043 99,560,848 0.41% 766,556 185.59%

Cash card - - - - -

Small-scale credit loans (Note e) 200,741 11,897,392 1.69% 618,435 308.08%

Secured 101,042 15,359,069 0.66% 189,479 187.53%

Consumer

banking

Other (Note f) Unsecured 29,560 1,372,071 2.15% 41,192 139.35%

Total 1,202,846 239,958,828 0.50% 3,607,543 299.92%

Nonperforming

Receivables

Accounts

Receivable

Ratio of

Nonperforming

Receivables

Allowance for

Possible Losses

Coverage

Ratio

Credit card 75,095 15,631,166 0.48% 1,849,193 2,462.47%

Accounts receivable factored without recourse

(Note g) - 2,633,984 - 3,007 -

Note a: Nonperforming loans represent the amounts of nonperforming loans reported to the authorities

and disclosed to the public, as required by the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Nonperforming/Non-accrued Loans.”

Nonperforming credit card receivables represent the amounts of nonperforming 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 b: Ratio of nonperforming loans: Nonperforming loans ÷ Outstanding loan balance.

Ratio of nonperforming credit card receivables: Nonperforming credit card receivables ÷

Outstanding credit cards receivable balance.

Note c: Coverage ratio of allowance for possible losses for loans: Allowance for possible losses for

loans ÷ Nonperforming loans.

Coverage ratio of allowance for possible losses for credit card receivables: Allowance for

possible losses for credit card receivables ÷ Nonperforming credit card receivables.

Note d: Housing mortgage is a loan given to the borrower who provides a house, to be purchased (or

already owned) by the borrower or the spouse or the minor children of the borrower, as a

mortgage to the Bank and will use the loan for house purchase or refurbishment.

Note e: Small-scale credit loans refer to the loans under the Banking Bureau’s regulation, dated

December 19, 2005 (Ref. No. 09440010950), excluding small-scale unsecured loans obtained

through credit cards and cash cards.

Note f: Other loans of consumer banking refer to secured or unsecured loan, excluding of housing

mortgage, cash card, small scale credit loans and credit cards.

Note g: As required by the Banking Bureau’s letter dated July 19, 2005 (Ref. No. 0945000494),

factoring without recourse is disclosed as nonperforming receivables in three months after the factors or insurance companies reject indemnification.

122

- 49 -

Excluded nonperforming loans and nonperforming receivables

December 31, 2011 December 31, 2010 Items

Business

Nonperforming

Loans

Nonperforming

Account

Receivable

Nonperforming

Loans

Nonperforming

Account

Receivable

Loans negotiated under an agreement and exempted

from being reported as nonperforming loans (Note a) $ 643,243 $ 1,575,374 $ 850,251 $ 2,067,269

Account receivable negotiated under an agreement and

exempted from being reported as nonperforming

receivables (Note b) 535,484 1,415,117 551,802 1,382,899

Total 1,178,727 2,990,491 1,402,053 3,450,168

Note a: Amounts of executed contracts on negotiated debts that are excluded as nonperforming loans

or receivables are disclosed to the public in accordance with the Banking Bureau’s letter dated

April 25, 2006 (Ref. No. 09510001270).

Note b: Amounts of executed debt-restructuring projects not reported as nonperforming loans or

receivables are disclosed to the public in accordance with the Banking Bureau’s letter dated

September 15, 2008 (Ref. No. 09700318940).

b. Concentration of credit extensions

December 31, 2011

Ranking

(Note a) Group Enterprise (Note b)

Industry and Code (Note a)

Total Balances of

Credit Extensions

(Note c)

Ratio of Credit

Extensions to Net

Worth (%)

1 A Group - 2413 - steel rolling and extruding $ 5,566,747 23%

2 B Group - 5010 - ocean water transportation 3,493,631 14%

3 C Group - 2611 - integrated circuit

manufacturing

2,823,382 11%

4 D Group - 2641 - liquid crystal panel and

component manufacturing

2,485,091 10%

5 E Group - 1850 - artificial fiber 2,259,714 9%

6 F Group - 2630 - printed circuit manufacturing 2,248,242 9%

7 G Group - 6499 - non-categorized and other

financial intermediaries

2,046,291 8%

8 H Group - 2641 - liquid crystal panel and


2,002,101 8%

9 I Group - 6499 - non-categorized and other


1,863,045 8%

10 J Group - 6499 - non-categorized and other


1,811,764 7%

123

- 50 -

December 31, 2010

Ranking

(Note a) Group Enterprise (Note b)

Industry and Code (Note a)

Total Balances of

Credit Extensions

(Note c)

Ratio of Credit

Extensions to Net

Worth (%)

1 A Group - 2413 - steel rolling and extruding $ 4,256,010 19%

2 B Group - 5010 - ocean water transportation 3,360,950 15%

3 C Group - 2611 - integrated circuit manufacturing

3,243,465 14%

4 D Group - 2641 - liquid crystal panel and


2,753,070 12%

5 F Group - 2630 - printed circuit manufacturing 2,482,995 11%

6 K Group - 4210 - highway and street

construction

2,472,335 11%

7 H Group - 2641 - liquid crystal panel and


2,466,649 11%

8 L Group - 6611 - securities 2,073,383 9%

9 E Group - 1850 - artificial fiber 1,957,931 9%

10 G Group - 6499 - non-categorized and other


1,919,873 8%

Note a: The list shows rankings by total amount of credit, endorsement or other transactions but

excludes government-owned or state-run enterprises. The amount of credit, endorsement or

other transactions for each member firm of the entire group enterprise are summarized. The industry of the group enterprise should be presented as the industry of the member firm with

the highest risk exposure. The lines of industry and code should be described in accordance

with the Standard Industrial Classification System of the Republic of China published by the

Directorate-General of Budget, Accounting and Statistics under the Executive Yuan.

Note b: “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 c: Credit balance includes each item of loans (import and export negotiations; discounted,

overdrafts; unsecured and secured short-term loans; margin loans receivable; unsecured and secured medium-term loans; unsecured and secured long-term loans; and non-accrual loans),

exchange bills negotiated, factored accounts receivable without recourse, acceptances and

guarantees.

c. Interest rate sensitivity

Table 1 Interest Rate Sensitivity Analysis (for NTD Items)

December 31, 2011

(In Thousands of New Taiwan Dollars, %)

Items 1 to 90 Days 91 to 180 Days 181 Days to

One Year

Over

One Year Total

Interest rate-sensitive assets $ 231,853,494 $ 104,937,888 $ 696,476 $ 24,456,197 $ 361,944,055

Interest rate-sensitive liabilities 150,954,515 118,967,341 59,999,402 14,006,339 343,927,597

Interest rate sensitivity gap 80,898,979 (14,029,453 ) (59,302,926 ) 10,449,858 18,016,458

Net worth 24,542,500

Ratio of interest rate-sensitive assets to liabilities 105.24%

Ratio of the interest-rate sensitivity gap to net worth 73.41%

124- 51 -

Interest Rate Sensitivity Analysis (for NTD Items)

December 31, 2010

(In Thousands of New Taiwan Dollars, %)

Items 1 to 90 Days 91 to 180 Days 181 Days to

One Year

Over

One Year Total

Interest rate-sensitive assets $ 225,402,024 $ 94,431,786 $ 2,150,829 $ 27,857,825 $ 349,842,464

Interest rate-sensitive liabilities 155,414,581 98,616,368 60,981,203 10,037,116 325,049,268

Interest rate sensitivity gap 69,987,443 (4,184,582 ) (58,830,374 ) 17,820,709 24,793,196

Net worth 23,446,757


Ratio of the interest-rate sensitivity gap to net worth 105.74%

Table 2

Interest Rate Sensitivity Analysis (for USD Items)

December 31, 2011

(In Thousands of U.S. Dollars, %)

Items 1 to 90 Days 91 to 180 Days 181 Days to One

Year

Over

One Year Total

Interest rate-sensitive assets $ 1,256,664 $ 92,529 $ 9,075 $ 22,799 $ 1,381,067

Interest rate-sensitive liabilities 749,276 471,641 229,467 - 1,450,384

Interest rate sensitivity gap 507,388 (379,112 ) (220,392 ) 22,799 (69,317 )

Net worth 4,837


Ratio of the interest-rate sensitivity gap to net worth (1,433.06% )

Interest Rate Sensitivity Analysis (for USD Items)

December 31, 2010

(In Thousands of U.S. Dollars, %)

Items 1 to 90 Days 91 to 180 Days 181 Days to One

Year

Over

One Year Total

Interest rate-sensitive assets $ 1,146,240 $ 72,931 $ 1,303 $ 3,577 $ 1,224,051

Interest rate-sensitive liabilities 745,971 456,529 437,091 - 1,639,591

Interest rate sensitivity gap 400,269 (383,598 ) (435,788 ) 3,577 (415,540 )

Net worth 4,201


Ratio of the interest-rate sensitivity gap to net worth (9,891.45% )

Note a: Table 1 refers only to the New Taiwan dollar amounts held by the head office, domestic and

overseas branches (i.e., excluding foreign currencies).

Note b: Table 2 refers to the total U.S. dollar amounts held by the head office, domestic branches, OBU and oversea branches, excluding contingent assets and liabilities.

Note c: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities that would be affected by interest rate changes.

Note d: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities

Note e: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets/Interest

rate-sensitive liabilities

d. Profitability

Items 2011 2010

Before tax 0.58% 0.76% Return on total assets

After tax 0.56% 0.55%

Before tax 10.38% 13.79% Return on equity

After tax 10.00% 10.08%

Net income ratio 27.64% 25.49%

125- 52 -

Note a: Return on total assets = Income before (after) income tax/Average total assets

Note b: Return on equity = Income before (after) income tax/Average equity

Note c: Net income ratio = Income after income tax/Total net revenues

e. Maturity analysis of assets and liabilities

1) For New Taiwan dollar items

December 31, 2011


Amount for Remaining Period to Maturity

Total 1 to 30 Days

From 31 Days to

90 Days

From 91 Days to

180 Days

From 181 Days

to 1 Year Over 1 Year

Main capital inflow on maturity $ 416,967,038 $ 94,487,890 $ 54,911,668 $ 31,082,913 $ 36,074,818 $ 200,409,749

Main capital outflow on maturity 420,134,673 58,045,403 64,376,666 77,596,601 114,959,051 105,156,952

Gap (3,167,635 ) 36,442,487 (9,464,998 ) (46,513,688 ) (78,884,233 ) 95,252,797

December 31, 2010



Total 1 to 30 Days

From 31 Days to

90 Days

From 91 Days to

180 Days

From 181 Days


Main capital inflow on maturity $ 389,487,428 $ 114,290,286 $ 39,177,042 $ 27,438,622 $ 32,367,109 $ 176,214,369

Main capital outflow on

maturity 395,795,821 65,066,081 55,950,784 64,009,435 116,529,934 94,239,587

Gap (6,308,393 ) 49,224,205 (16,773,742 ) (36,570,813 ) (84,162,825 ) 81,974,782

Note: This table includes only the New Taiwan dollar amounts held by the head office and

domestic branches.

2) For U.S. dollar items

December 31, 2011

(In Thousands of U.S. Dollars)


Total 1 to 30 Days

From 31 Days to

90 Days

From 91 Days to

180 Days

From 181 Days


Main capital inflow on maturity $ 2,776,536 $ 975,097 $ 566,879 $ 174,925 $ 480,132 $ 579,503

Main capital outflow on

maturity 2,784,337 771,715 554,010 439,863 717,083 301,666

Gap (7,801 ) 203,382 12,869 (264,938 ) (236,951 ) 277,837

December 31, 2010

(In Thousands of U.S. Dollars)


Total 1 to 30 Days

From 31 Days to

90 Days

From 91 Days to

180 Days

From 181 Days


Main capital inflow on maturity $ 2,401,506 $ 874,660 $ 473,557 $ 314,321 $ 376,126 $ 362,842

Main capital outflow on maturity 2,376,235 998,603 384,184 222,346 664,519 106,583

Gap 25,271 (123,943 ) 89,373 91,975 (288,393 ) 256,259

126- 53 -

Note: This table includes only the total U.S. dollar amounts held by the head office, domestic

branches and OBU.

36. ACQUISITION OF ANOTHER FINANCIAL INSTITUTION’S ASSETS, LIABILITIES AND

OPERATIONS

The Bank acquired some of the assets, liabilities and operations (mainly 19 domestic branches), classified

as Package B of the Chinfon Bank, to expand the Bank’s branches and business and strengthen the Bank’s

operations, market position and competitiveness. The Bank made this acquisition at a price of NT$19.103 billion through winning an open bid on October 27, 2009. This amount will be subsidized by the

Resolution Trust Corporation (RTC) fund under the Executive Yuan. This acquisition was approved by

the Bank’s shareholders on January 19, 2010 and by the Financial Supervisory Commission of the

Executive Yuan on March 4, 2010. On April 3, 2010, the Bank took over the entire assets, liabilities and operations of Chinfon Bank’s Package B. Under the provision on price adjustment stated in the contract

between the Bank and the RTC, the Bank received an actual subsidy of NT$19,888,865 thousand.

Under the Statement of Financial Accounting Standards No. 25 - “Business Combinations,” the Bank

allocated the acquisition cost on the basis of the fair values of the related assets and liabilities; the allocated

amounts were as follows:

Assets

Cash $ 387,307

Due from other banks 365,143 Receivables, net 17,298

Discounts and loans, net 3,872,667

Properties, net 684,152 Other assets 190,252

Intangible assets 1,967,097

Total assets 7,483,916

Liabilities Payables 279,451

Deposits and remittances 26,769,884

Bank debentures 262,820 Other liabilities 60,626

Total liabilities 27,372,781

Subsidy payment by the Central Deposit Insurance Corporation $ 19,888,865

All the operating results of Chinfon Bank’s Pack B after April 3, 2010 were included in the Bank’s income

statement in 2010. However, for comparison purposes, the pro forma income statements in 2010 based on an assumption that the transaction took place on January 1, 2010 are shown as follows (the pro forma

income statements were unaudited):

Year Ended

December 31,

2010

Net interest income $ 3,968,176

Other noninterest net income 3,292,284

Net profit 7,260,460

Reversal of allowance for possible losses 590,727 Operating expenses (5,049,550)

Income before income tax 2,801,637

Income tax expense (807,805)

Net income $ 1,993,832

127

- 54 -

37. SEGMENT INFORMATION

Information provided to the Bank’s chief operating decision makers for resource allocation and segment

performance assessment focuses on types of goods or services provided or delivered. Based on Statement

of Financial Reporting Standards No. 41 - “Operating Segments,” the reportable segments were as follows:

a. Individual banking: Mainly Includes consumer banking loans such as mortgages, personal loans, car

loans, installment, etc., credit cards, individual deposits and wealth management;

b. Corporate banking: Mainly includes corporate-related business, foreign-currency business and

financial market business;

c. Others: Any business not included in individual and corporate banking.

The accounting policies of each operating segment are the same as those stated in Note 2 to the financial statements.

Income and operating results

The income and operating results of the reportable segments of the Bank and its subsidiaries were as

follows:

Individual

Banking

Corporate

Banking

(Including

Overseas

Branches) Others Total


Net interest income $ 3,588,978 $ 1,769,408 $ (1,465,383) $ 3,893,003

Other noninterest net income Net service fee income 1,694,712 238,782 (134) 1,933,360

Other net income 1,868,641 1,035,876 (143,566) 2,760,951

Net profit 7,152,331 3,044,066 (1,609,083) 8,587,314 Reversal of (allowance for) possible

losses 275,652

(1,777,576)

667,463

(834,461)

Operating expenses (4,152,803) (897,288) (238,467) (5,288,558)

Segment income before income tax $ 3,275,180 $ 369,202 $ (1,180,087) $ 2,464,295


Net interest income $ 3,412,452 $ 1,685,304 $ (1,102,236) $ 3,995,520

Other noninterest net income Net service fee income 1,734,108 244,174 (68) 1,978,214

Other net income 1,329,700 1,310,139 4,602 2,644,441

Net profit 6,476,260 3,239,617 (1,097,702) 8,618,175

Reversal of (allowance for) possible losses (257,145) (495,068) 76,988 (675,225)

Operating expenses (3,640,101) (816,217) (482,505) (4,938,823)

Income before income tax from

segments $ 2,579,014 $ 1,928,332 $ (1,503,219) $ 3,004,127

128 - 55 -

Asset information by segment

The Bank’s measure of the assets and liabilities by segment is limited to the average amounts of deposits and loans. Thus, based on Interpretation 2010-151 issued by the Accounting Research and Development

Foundation, asset information by segment need not be disclosed.

Information about geographical areas

The Bank did not disclose geographical information because the operating income generated from overseas branches was less than 10% of the operating income of the Bank.

38. SIGNIFICANT FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The significant financial assets and liabilities denominated in foreign currencies were as follows:

December 31

2011 2010

Foreign

Currencies

Exchange

Rates

New Taiwan

Dollars

Foreign

Currencies

Exchange

Rates

New Taiwan

Dollars

Financial assets Monetary items

USD $ 1,386,155 30.29 $ 41,986,632 $ 1,243,554 29.50 $ 36,684,843 HKD 1,477,083 3.899 5,759,147 1,441,850 3.794 5,470,379 AUD 61,625 30.75 1,894,955 69,579 30.06 2,091,543 RMB 282,881 4.812 1,361,223 3,890 4.480 17,426 JPY 2,745,405 0.3904 1,071,806 5,091,936 0.3627 1,846,845 EUR 20,954 39.20 821,408 6,597 39.42 260,046 CAD 492 29.66 14,588 - - - SGD - - - 657 23.00 15,100

Nonmonetary items

USD 4,109 30.29 124,465 1,731 31.51 54,539 Financial liabilities Monetary items

USD 1,475,987 30.29 44,707,646 1,671,447 29.50 49,307,688 HKD 711,700 3.899 2,774,919 1,349,425 3.794 5,119,720 RMB 437,493 4.812 2,105,217 - - -

AUD 62,694 30.75 1,924,846 36,246 30.06 1,089,554 JPY 4,473,755 0.3904 1,746,554 1,434,280 0.3627 520,213 EUR 40,225 39.20 1,576,810 40,228 39.42 1,585,786 SGD 28,188 23.31 657,067 660 23.00 15,172 GBP 8,872 46.74 414,673 11,534 45.71 527,211 NZD 14,786 23.41 346,135 17,888 22.84 408,552 CAD 4,445 29.66 131,842 2,403 29.53 70,972

39. ADDITIONAL DISCLOSURES

a. Following are the additional disclosures required by the Securities and Futures Bureau for the Bank and

its investees:

1) Financings provided: Nil

2) Endorsement/guarantee provided: Nil

3) Marketable securities held: Table 1 (attached)

129

- 56 -

4) Marketable securities acquired and disposed of at cost or prices at least NT$300 million or 10% of

the paid-in capital: Nil

5) Acquisition of individual real estate at costs of at least NT$300 million or 10% of the paid-in capital: Nil

6) Disposal of individual real estate at price of at least NT$300 million or 10% of the paid-in capital: Nil

7) Service charge discounts on transactions with related parties in aggregated amount of at least NT$5 million: Nil

8) Receivables from related parties amounting to at least NT$300 million or 10% of the paid-in

capital: Nil

9) Sales of non-performing loans: Nil

10) Related information of investees on which the Bank exercises significant influence: Table 2

(attached)

11) Derivative transactions: Notes 6 and 31.

b. Investments in Mainland China

1) Names 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: Nil

2) Significant direct or indirect transactions with the investees, prices and terms of payment,

unrealized gain or loss: Nil

130

- 57

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2011 - 遠東國際商業銀行 · 1 2011年報目錄 2011Annual Report Contents 壹、營運績效...

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