Macroeconomic Environment

Looking back to 2018, expanding global economic outlook and strong exports drove Taiwan's sustained and rapid economic growth rate of over 3% in the first half of 2018. However, in the second half of year, continued trade disputes between the US and China, the increase in downside risks for major economies, and increased stock market shocks gradually made the global market outlook more conservative, which impacted Taiwan's exports and consumption momentum, especially when faced with the pressure of drastic decrease in foreign demand. Economic growth declined with each season, and the annual economic growth rate dropped from 3.08% to 2.63%.

Having experienced continuous growth from 2017 to 2018, the base period of the global economic outlook is high. Along with negative impacts such as the diminishing effects of the US tax cuts, continued trade disputes between the US and China, and tight monetary policies of major central banks, slow economic growth in 2019 has become an inevitable trend. In the future, the monetary policies of the US Fed and major central banks in Europe and Asia, the follow-up development of the US-China trade war, and political and economical development of Europe and rising markets will be the three major economic focuses in 2019.

With the slow global economic growth, it is expected that the Taiwan's financial industry environment will face tough challenges in 2019. On the other hand, a series of policy support and loosened financial regulations from the FSC, is expected to bring more business opportunities to the financial industry and improve the innovative capabilities of products and services. However, with rising standards for company governance, legal compliance, and anti-money laundering, operating costs will go up accordingly, so the financial industry needed to become careful when providing relevant financial services, which will strengthen the competitiveness of Taiwan's financial industry.

Market Positioning and Competitiveness

In 2018, Fubon Financial Holdings’ four main subsidiaries were among the market share leaders in several business categories, as shown in the table below:

Subsidiary Item Market Ranking
(Overall/Private Banks)
Market Share
Fubon Life Total premium 2 15.5%
First year premium equivalent 2 14.3%
FYP through bancassurance 2 13.3%
FYP through tied agents 3 15.0%
First year premium 3 13.8%
Taipei Fubon Bank Loan Syndication 3/1 8.6%
Mortgage loan 5/2 5.9%
Loan balance of OBU and overseas branches 8/3 4.7%
Monthly per card spending (1) 2 NT$10,348
Fubon Insurance Commercial line 1 24.4%
Direct written premium 1 23.4%
Underwriting profits 1 NT$2.2bn
Personal line 1 23.0%
Fubon Securities Brokerage per branch(2) 1 0.14%
SPO amount 2 23.1% 2 23.1%
Emerging stock trading 2 22.8%
IPO amount 2 13.9%
Brokerage 3 6.0%

Note 1: Based on ranking of privately owned banks.
Note 2: Based on ranking of six credit card issuers with highest active card numbers

Looking ahead to 2019, the global economic slowdown and uncertainty over U.S.-China trade friction could hurt Taiwan’s manufacturing sector and the willingness to invest. Those factors, combined with financial market volatility and a conservative outlook for corporate earnings, will likely hinder the investment climate and consumer confidence and affect Taiwan’s domestic consumption and export growth. But increased public investment in infrastructure and policies to lure Taiwanese businesses operating overseas back to Taiwan could provide support for fixed investment.