Macroeconomic Environment

The global enterprise and consumer confidence continued to grow in 2017; the global economy has displayed an overall improvement. Consumption and investment in developed countries continues to grow. The price of raw materials has gradually increased, which helps the economy of emerging markets to stay on the path of recovery. The policy of supply-side reform in China has shown significant results, and the price of crude oil has stabilized. Together, these two trends have boosted the global trading volume, and the export volume of Taiwan has vigorously increased; consequently, the confidence of domestic demand has also increased. Although the growth of private investment slowed down in the second half of the year, the Taiwanese economy outperformed expected growth due to exports and private consumption. Annual growth in 2017 increased from 1.14% to 2.86%. Economic improvement has encouraged higher revenue for enterprises. The central banks of major countries have also maintained their loose monetary policy. In addition, there have been no unexpected black swan events, such as US President Donald Trump initiating a trade war or European election results greatly affecting the integrity of the Euro system. Therefore, the economy of most countries outperformed expectations, and the global stock market also performed brilliantly.

In 2018, major countries from Europe, the Americas, and Asia actively continue with expansionary fiscal policy. This supports continued growth in Taiwan’s exports. Since enterprise profits and operational prospects have a positive outlook, the labor market continues to grow and enhance consumer confidence. Together, the growth momentum of private consumption will increase, eventually it will enhance the desire for enterprises to increase investment. The forward-looking infrastructure development program has been successively initiated. The program will gradually increase public investment and investment in general. Therefore, we predict that the domestic economy will steadily expand in 2018.

On the global scale, the economy is expected to maintain steady growth but with a mild rise in prices. The central banks in major countries are expected to tighten their monetary policies, but at a gradual pace. All these predictions dissolve some of the uncertainty that may cause dramatic fluctuations in the market. Therefore, we hold a more positive view on the global economy and investment prospects.

Market Positioning and Competitiveness

In 2017, Fubon Financial Holdings’ four main subsidiaries were among the market share leaders in several business categories, as shown in the table below:

Subsidiary Performance Item Market Ranking Market Share/amount
Taipei Fubon Bank
  • Average monthly spending per card (valid) continued to be the highest among the six largest card issuing banks.
  • Ranked first for syndicated loan share among private banks in Taiwan.
  • Ranked second in outstanding mortgages.
Loan Syndication (1) 1 4.3%
Monthly per card spending (2) 1 NT$10,362
FX derivatives 1 9.4%
Mortgage loan (1) 2 6.05%
Fubon Life
  • Renewal premiums (RYP) were up 18% from 2016 at NT$341.0 billion, also a record high. First-year premiums equivalent (FYPE) totaled NT$56.1 billion. Both RYP and FYPE were the second highest in the industry.
  • First-year premium, bank insurance channel sales, sales agents were all ranked third in the industry.
Renewal premium 2 15.8%
First year premium equivalent 2 15.1%
First year premium 3 13.8%
FYP through bancassurance 3 13.9%
FYP through tied agents 3 13.7%
Fubon Insurance
  • Ranked first in both personal insurance and corporate insurance
  • Ranked first in direct written premium with a market share of 23.2
  • Has led the domestic market in P&C insurance market share for 36 straight years
Direct written premium 1 23.2%
Average premium per employee (NT$mn) 1 NT$13.38
Personal line 1 22.7%
Commercial line 1 24.3%
Fubon Securities
  • Subsidiary Fubon Asset Management’s ETF AUM ranked second in the sector
  • Ranked second in emerging market transaction value
  • Retail brokerage per branch ranked first in the industry.
Brokerage per branch (3) 1 0.128%
SPO amount (NT$mn) 2 22.44%
AUM of overseas ETF (NT$mn) 2 67500
Emerging stock trading 2 20.73%
Brokerage 3 6.21%

Note 1: Based on ranking of privately owned banks.
Note 2: Based on ranking of six credit card issuers with highest active card numbers.
Note 3: Based on ranking among top 10 brokers.(At the end of 2017)

In 2018, Fubon Financial Holdings will focus its strategy for growth on three areas:

(1) Capitalize on Market Prospects and Opportunities ─ take advantage of the global economic recovery and the Federal Reserve’s rate hikes; expand assets under management and optimize the Company’s portfolio.
(2) Strengthen Channel Management ─ optimize the banking unit's branch network and increase Fubon Life’s market rate around Taiwan; expand the customer base and improve efficiency through digital and mobile services; exploit penetration synergy by intensifying cross-selling and co-marketing activities.
(3) Assess and Pursue Overseas Opportunities ─ develop new markets overseas and continue to look for acquisition and strategic alliance opportunities at home and abroad.