Looking back at the global economic situation in 2022, although the impact of the pandemic on major economies has gradually faded, the global economic growth momentum slowed due to the stalemate of the Russia-Ukraine war, escalating inflation, slowdown of China’s economic growth. As a result, volatility in capital markets and pandemic-prevention insurance claims had impacted the profitability of the financial industry. Fubon Financial Holdings’ net income reached NT$46.93 billion and its earnings per share of NT$3.54 led the sector for the 14th consecutive year. Consolidated total assets hit NT$10.6 trillion.
Beyond deepening its presence in Taiwan, Fubon Financial Holdings has steadily forged a regional network and developed innovative financial models through cross-industry alliances. Based on the foundation of its own advantages, we strive to integrate peer and cross-industry resources to enhance our financial service strength so as to provide diversified financial services for new and existing customers. In the meantime, we are injecting innovative energy through financial technology, integrating financial holdings’ resources, covering banking, insurance and asset management services in Greater China, and creating a diversified financial service platform and extending our tentacles to other regions in Asia. We achieved a major milestone on November 11, 2022 by acquiring JihSun Financial Holding Co., Ltd., paving the way for Taiwan’s first ever merger of domestic financial holding companies, and we will continue to seek various cooperation opportunities in the future. In addition to improving the operating results of the existing overseas businesses and focusing on Greater China and Asia, Fubon Financial Holdings will continue to evaluate M&A opportunities as we move steadily closer to our vision of becoming one of Asia’s first-class financial institutions.
Financial Sector Leader in EPS 14 Years in a Row
In 2022, Taiwan’s economy was still under the pressure of COVID-19. The pandemic outbreak in late April had a huge impact on private consumption in the second quarter. Meanwhile, exports and investment were supporting economic growth. However, inflation and accelerated rate hikes of major central banks suppressed demand, and inventory destocking pushed down exports growth sharply in the second half of the year and further dampened enterprises’ willingness to invest. Fortunately, with the impact of COVID-19 weakening, the rebound of private consumption boosted the economy, which grew moderately for the year.
In 2022, the global geopolitical situations were changeable and the sharp fluctuations in the capital market had affected the profit of the financial industry. Coupled with the impact of pandemic-prevention insurance claims, Fubon Financial Holdings´ net income reached NT$46.93 billion, with an earnings per share of NT$3.54, leading all financial holdings companies in Taiwan for the 14th consecutive year! The profit contribution mainly came from Fubon Life and Taipei Fubon Bank. Fubon Financial Holdings’ return on assets (ROA) and return on equity (ROE) were 0.45% and 6.19% respectively.
Despite the effect of capital markets volatility in 2022, Fubon Financial Holdings’ consolidated total assets maintained steady growth and reached NT$10,587.8 billion by the end of December 2022, an increase of 1% over the end of 2021, to remain Taiwan’s second largest financial holding company.
Fubon Life: Financially Sound, Profit Performance Continues to be Stellar
In 2022, due to the ongoing COVID-19 epidemic, high global inflation, and accelerated interest rate hikes by the Federal Reserve, the global capital markets were turbulent and economic growth momentum slowed, and the life insurance market faced major challenges. In response to drastic changes in the market, Fubon Life continued to deliver stable performance with flexible product and channel diversification strategies. First-year premium and total premium of NT$106.3 billion and NT$346.17 billion, respectively, both ranked second in the industry. Total assets grew stably to over NT$5.6 trillion at the end of 2022 ranked second in the industry, and net income of NT$65.54 billion topped the industry and was an important profit engine for Fubon Financial Holdings.
In terms of customer service, new technology applications such as mobile ID service was introduced to strengthen risk control, optimize processes, and enhance operational efficiency. In addition, Fubon Life rolled out sign language interpretation services and multilingual translation machines at customer counters in Taiwan to provide high-quality services and practice the Treating Customers Fairly principle in order to protect the rights and interests of customers.
Overseas, the Fubon Life’s Vietnam subsidiary focused on strengthening its sales team and developing diversified channels to operate in a stable growth model. Fubon Hyundai Life Insurance focused on capital management, continued to stabilize the scale of its pension market operations, and ensured the stable growth of the company. The Hong Kong subsidiary gradually oriented towards the sales of diversified products and concentrated on providing differentiated products and service to target customers.
Taipei Fubon Bank and Jih Sun Bank: Unleash Core Competitiveness, and Profit has Reached a New High
In 2022, despite the challenges of major international events such as inflation, war, geopolitics and climate change, Taipei Fubon Bank and Jih Sun Bank continued to perform well, with Taipei Fubon Bank’s revenue and net income achieving double-digit growth compared to 2021, while Jih Sun Bank adjusted its operating strategy and improved employee productivity by aligning with Taipei Fubon Bank, and its net income also hit a 10-year high.
Taipei Fubon Bank continued to exert its core competitiveness through the proper use of the Group’s resources to enhance customer acquisition capabilities, and through diversified digital platforms and financial scenario development, to meet customers’ financial service needs, promote digital service innovation, build an investment portfolio of NTD ETF “Nano Investments No. 2” and matched credit card swiping and investment mechanisms to provide investors with tailor-made nano-investment digital wealth management services. At the same time, it launched functions such as video financial identity verification, online mortgage loan application, and online account opening for banking and securities customers to enhance customers’ digital experience. It was also committed to combining data technology and risk prevention, working with the Criminal Investigation Bureau to build an anti-fraud AI model to fulfill its role of protecting customers’ assets and rights. In addition, it developed green finance by implementing green credit approval processes, strengthening the promotion of innovative green financial products and establishing a Think ESG knowledge exchange platform to demonstrate its determination to achieve environmental sustainability together with customers.
In 2022, Taipei Fubon Bank actively responded to the government policy to focus on the operations of small and medium-sized enterprise customers, and won the “Relief and Revitalization Award” of the SME Credit Insurance Fund and the “Outstanding Performance Award” of the Central Bank of the Republic of China (Taiwan) for SME project loans. It was also committed to promoting age-friendly city policies and has won the excellent award in the “Trust Industry Property Trust Assessment for the Elderly and Persons with Disabilities” by the FSC for four consecutive years through the introduction of the exclusive full-service process for the elderly and the provision of sign language services in branches.
Fubon Insurance: Market Share Reaches 24.4%, Ranking No. 1 in the Market for 41 Consecutive Years
Although Fubon Insurance suffered a net loss due to the impact of pandemic-prevention insurance claims, it still leveraged the Group´s resources and diversified channel strategies to again set a new high in total written premium of NT$53.87 billion in 2022. With a market share of 24.4%, it led the non-life insurance market for the 41st consecutive year.
In terms of sustainability, Fubon Insurance obtained the ISO 14067 non-life insurance service product carbon footprint verification certification at the end of 2021 and then the carbon label from Environmental Protection Administration in April 2022. It has become a non-life insurance company with both carbon and carbon reduction labels by continuously establishing and optimizing low-carbon digital marketing processes, paperless processes in internal operations, and developing digital service platforms.
In terms of digital transformation, Fubon Insurance introduced Robotic Process Automation (RPA), which has completed the import of 75 operational items across 23 departments and saving an average of near 3,000 hours per month in 2022. In the field of financial patent, Fubon Insurance obtained 10 invention patents and 18 new patents, and it will continue to deepen its strategic developments in the field of financial patents in the future.
Fubon Insurance is deeply cultivated in Taiwan and continues to expand its overseas deployment. At present, it has property insurance subsidiaries in China and Vietnam, insurance brokerages in Thailand and the Philippines, and representative offices in Beijing, Malaysia and Indonesia. The Vietnam subsidiary has set up a head office in Ho Chi Minh City and branches in Hanoi and Binh Duong to provide Taiwanese businessmen in Vietnam and local customers with property security services.
Fubon Securities and JihSun Securities: Attach Equal Importance to Various Businesses; Actively Promote Diversified Businesses
In 2022, given the bearish sentiment of global financial markets, Taiwan’s stock market was also affected and showed a decline in both price and trading volume, which in turn affected the earnings performance of stocks. Fubon Securities posted net income of NT$2.74 billion and JihSun Securities reported net income of NT$2.15 billion. Although the market conditions worsened compared to 2021, Fubon Securities and JihSun Securities continued to actively promote their businesses and adapt to market conditions, and saw significant growth in both the securities lending business and the overseas bond business. In terms of brokerage market share, Fubon Securities was at 4.93% and JihSun Securities was at 2.96%, and combined to rank third in the market.
Fubon Securities and JihSun Securities introduced a customer segmentation management mechanism. From the standpoint of customer demand, it provided differentiated or customized services. Also, it continued to develop new customers and enhance the adhesiveness of existing customers, and thus boosted the activation rate of various products. In addition, both companies continue to optimize digital platforms to enhance customer experience, capture young customers, expand customer scale, and promote stable and diversified business development.
Looking ahead, the merger of Fubon Securities and JihSun Securities is expected to expand business scale and create synergy. In terms of business strategy, in addition to continuing to consolidate the core business of brokerage products, it will actively expand the wealth management business and the scale of recurring income. At the same time, it will continue to give full play to the synergy of the Group’s resource ecosystem to further augment customer base and business opportunities, actively strive for high-quality and indicative cases, boost the scale of underwriting, maintain market position and increase the return from proprietary trading.
Fubon Bank (Hong Kong): Strives to Enhance Competitiveness
Fubon Bank (China): Deepens Businesses with Taiwanese Businessmen, Promotes Technology Empowerment
In face of the economic recession in Hong Kong and turmoil in international financial markets, Fubon Bank (Hong Kong) continued to grow steadily in 2022, achieving double-digit growth in revenue and net income through continuous expansion of high-quality loan assets, increased investment scale and benefits from interest rate hikes. In addition to consistently diversifying its products and services to meet the financial needs of customers, Fubon Bank (Hong Kong) also enhanced its competitiveness through both virtual and physical channels. In terms of virtual channel, Fubon Bank (Hong Kong) launched a new personal mobile banking app “Fubon+” and stock trading app “FB Invest+” to meet investors’ expectations for managing their own finances. As for physical channel, in addition to opening SME Banking Service Centers in Kwun Tong and Tsim Sha Tsui, it also opened the first green branch in Taikoo Shing to guide customers’ experience in green financial services.
In 2022, the performance of Fubon Bank (China) was affected by adverse factors such as China’s economic slowdown, weak real estate market and government lockdown policies, and Fubon Bank (China) took optimizing the structure of assets and liabilities as its main operating goal. It also adhered to the goal of serving Taiwanese businessmen and implementing inclusive finance, and continued to deepen its operations in the China market, with 26 business locations around areas where Taiwanese-funded enterprises are concentrated, the scale and coverage rate of which are both ahead of other Taiwanese-funded banks. In addition to continuously enriching the range of financial products and optimizing services to meet customer needs, Fubon Bank (China) actively strengthened its digital technology capabilities to enhance customer service experience and business adhesion, and it improved collaboration efficiency by leveraging the Group’s diversified channel advantages so as to become the preferred bank for Taiwanese businessmen and enhance the popularity of Fubon’s brand in China.
Fubon Asset Management: Provides Full Range of Financial Services, Builds Comprehensive Asset Management Products Platform
In 2022, despite rising inflation, rate hikes and the slowdown of economic growth momentum, Fubon Asset Management still actively developed diversified products to meet the wealth management needs of investors, and its asset management scale grew steadily. For its asset management business, ETFs have become one of the important wealth management tools for investors. In addition to continuing to issue thematic ETFs such as Metaverse, REITs, and global ESG green energy funds, it also launched the Taiwan-US Twinstar Multi-asset Fund in response to the pressure of rising inflation. Fubon Asset Management also actively participated in government funds and fully fiduciary discretionary projects to enhance market share. As for its reinvestment business, the scale of China Founder Fubon Fund has increased significantly due to its active development of fixed income funds, Fubon Fund (Hong Kong) continued to expand its ETF product lines, and Fubon Private Equity planned to launch its second private equity fund.
Implement Risk Control, Maintain Strong Capital Structure
As its business has grown, Fubon Financial Holdings has put a premium on risk management, maintaining strong balance sheet strength and a level of asset quality that exceeds the market average. Those efforts resulted in a CAR of 125.29% in 2022, well above the minimum capital requirement of 100%.
At the end of 2022, Taipei Fubon Bank’s BIS ratio reached 15.49%, demonstrating a strong capital structure. Asset quality was also maintained at an excellent level with its NPL ratio of 0.19% and coverage ratio of 701.78% both remained at a stable level.
Moody’s, S&P Global Ratings and Taiwan Ratings Corp. all gave Fubon Financial Holdings ratings that fully reflect its superior financial performance and leading market position over its peers.
The ratings of various rating agencies in 2022 are shown below:
|Rating Type||Ratings Agency||Credit Rating||Outlook||Effective Date|
|Standard & Poor’s||BBB+||A-2||Stable||2022/11/15|
|Domestic||Taiwan Ratings Corp.||twAA||twA-1+||Stable||2022/11/15|
Leading Green Finance, Integrating with International Community to Lay Cornerstone of Sustainability
In 2021, Fubon Financial Holdings redefined the Fubon ESG Visioning Project, with “Run For Green” as the main axis, focusing on four ESG strategies of decarbonization, digitalization, empowerment and connection, and it continues to lead the development of green finance in Taiwan.
Since 2017, Fubon Financial Holdings has signed or committed to abide by international standards and norms such as the Equator Principles (EPs), the Principles for Responsible Investment (PRI), the Principles for Sustainable Insurance (PSI), and the Principles for Responsible Banking (PRB). In 2019, it became a supporter of Task Force on Climate-related Financial Disclosures (TCFD), and led the financial industry to improve on the transparency of climate issues through the continuous release of TCFD reports. In 2020, it joined the World Economic Forum to become a driver of low-carbon capital markets. In 2022, it became a member of international sustainability organizations such as the Partnership for Carbon Accounting Financials (PCAF), the Asia Investor Group on Climate Change (AIGCC), the Climate Action 100+ initiative, and the Business Ambition for 1.5°C and the Race to Zero Campaign. With a positive attitude, Fubon Financial Holdings learns from international benchmarks, strives for exchange opportunities, and fully responds to the international sustainability development trend.
As the financial industry holds the funds of the market, Fubon Financial Holdings senses the responsibility of ensuring social stability in addition to financial stability in light of the threats of climatic risks. In 2021, Fubon Financial Holdings set new standards for the entry and divestment of high-carbon emission industries, paid attention to the progress of industrial transformation, urged the industry to make good use of funds to upgrade technology and capabilities, protected working rights and income sources, and maintained the economic stability of the society.
Fubon Financial Holdings also completed two important sustainability milestones in 2022. First, it officially became an RE100 member and committed to the full use of green energy in more than 600 business locations around the world by 2040. This is a major breakthrough in energy management and can help us upgrade the completeness and benefits of our green energy policies. Second, we officially passed the review of the Science Based Targets, set operational carbon reduction targets according to the 1.5°C scenario, and will reduce operational carbon emissions through independent energy saving, construction of solar photovoltaic equipment and procurement of renewable energy in the future, and is expected to reduce carbon emissions by 42% by 2030.
Selected in DJSI World Index for 6th Consecutive Year
In Social Aspect, Ranked First in Global Insurance Industry
Fubon Financial Holdings continues to utilize international standards to cultivate our sustainable operations initiatives, and has repeatedly won international recognition. We have been selected as a constituent of the DJSI World Index for the 6th consecutive year and is ranked No. 1 in the “social aspect” performance of the global insurance industry. We have also been selected as a constituent of the DJSI Emerging Markets Index for the 7th consecutive year and a constituent of the MSCI Sustainability Index for the 6th consecutive year.
In addition to the outstanding results in sustainable management, Fubon Financial Holdings also excels in corporate governance as we are the first financial holding company in Taiwan to introduce an independent director system. The independence and diversity of its board members are exemplary in the industry. In 2022, Richard M. Tsai, Chairman of Fubon Financial Holdings, was selected as one of the “Top 100 CEOs in Taiwan” by Harvard Business Review and “Best CEO” by “Institutional Investor”. Tsai has also been awarded the Asian Corporate Director Recognition Awards by the “Corporate Governance Asia” for four consecutive years since 2017 in recognition of his leadership and contribution to corporate governance and corporate sustainability.
Outstanding Performance of Subsidiaries Recognized by Numerous Awards
Fubon Financial Holdings also works with various sectors to promote sustainable actions through its subsidiaries. This includes Fubon Life cooperating with the Society of Wilderness to conduct a survey on river waste and Taipei Fubon Bank’s launch of sustainability-linked loans, and Taiwan’s first third-party certified syndicated green loan, and Fubon Insurance’s role as Taiwan’s largest green energy insurer in assisting the development of the green energy industry.
Fubon Life has been awarded the “Taiwan’s Best Life Insurance Company” by “World Finance” eleven times, selected as “Global Top 100 Insurance Brands” by “Brand Finance” for 6 consecutive years, and won the Dragon and Phoenix Insurance Awards – “Most Admired Life Insurance Company” 1st Place in the back office and field representative categories by “Risk Management, Insurance & Finance” for 12 consecutive years.
Taipei Fubon Bank has been awarded the “Global 500 Banking Brand” by “Brand Finance”, “Best Bank for ESG” by “Asiamoney”, “Best Employer Brand in Taiwan” by “HR Asia”, “Best Private Bank in Taiwan” by “Global Finance”, and “Global Renewable Energy M&A Deal of the Year” by “The Asset”.
Fubon Insurance has been awarded the Dragon and Phoenix Insurance Awards “Most Admired Property Insurance Company” 1st Place by “Risk Management, Insurance & Finance” for 12 consecutive years, the “Trusted Brand Survey Gold Award in Insurance category” by “Reader’s Digest”, and the “Outstanding Digital Customer Experience” by “The Digital Banker” for two consecutive years.
Fubon Securities has been awarded the “Best Wealth Management Award” for five consecutive years, and “Best Customer Services Award” for four consecutive years, and “Best Graphic Marketing Award” and “Consumer Finance Brand Award for Best Securities Firm Service Gold Award” for two consecutive years by “Wealth Magazine”, “Digital Information Security Gold Award” by “Commercial Times”, and “Best Securities House in Taiwan” by “Asiamoney”.
Four Foundations to Continue to Exert Positive Influence Through a Whole-Person Public Welfare Platform
With the evolution of times, Fubon’s four foundations were established according to the needs of the society at that time to comprehensively care for the society and accompany each ethnic group.
Fubon Charity Foundation aims to help the disadvantaged. The “Making Friends with Love” campaign has donated more than NT$110 million to help over 15,000 students. Nearly NT$40 million was invested in projects such as “Emergency Relief Fund” for individuals, medical fund accounts, education funds, poverty alleviation savings and this has helped 84,324 individuals.
Fubon Cultural and Educational Foundation promotes financial education through “Future Tycoon Outreach Program” benefiting more than 1,000 teachers and students and also cooperated with 18 branches of Taipei Fubon Bank to conduct 30 “Budding Tycoon Money Management Camps” to invite parents to accompany their children in establishing basic financial literacy.
In order to bridge art with life, Fubon Art Foundation used the Art Office solution to enhance the aesthetics of the public space, providing 66 works from 16 artists in 2022. It also cooperated with momo to set up a brand flagship pavilion, introducing 880 new products and hot-selling repurchased products from major international art museums, drawing more than 230,000 views.
Taipei Fubon Bank Charity Foundation continues to care for the elderly and physically and mentally disabled. In 2022, the foundation combined the winners of the Artistic Achievement Award Performance Category and Vox Nativa choir to hold the “Fubon Sounds of Nature” concert and continued to promote the “Fubon Family Caregiver Breather Journey” to reduce the physical and psychological burden of family caregivers.
Economic Growth Momentum Slowed
Continue to Improve Customer Service, Product Diversification
Looking forward to 2023, with easing COVID-19 restrictions, border reopening and the rise of minimum wage that lifts household disposable income, people are more willing to spend money and this makes private consumption the main driver of economic growth. However, as the global economy weakens, sluggish demand and industries’ destocking pressure will suppress exports and private investment growth. As a result, Taiwan’s economic growth this year is expected to slow compared to 2022. Besides, the level of overseas demand adds uncertainty to economic conditions.
In addition, Fubon Financial Holdings has officially merged with JihSun Financial Holdings on November 11, 2022, accomplishing the first phase of the unprecedented “Merger of Two Financial Holding Companies” in Taiwan´s financial history. It is expected that completing the merger of subsidiaries and sub-subsidiaries in the first half of 2023 will help strengthen our banking and securities businesses, expand overall economies of scale and efficiency, balance the business development and revenue sources of the financial holdings company, provide customers with quality and diversified products as well as convenient financial services, and at the same time promote domestic consolidation and drive toward positive development of Taiwan’s financial industry. The above reflects in Fubon Financial Holdings’ optimism about Taiwan’s overall industrial prospects and its commitment to continuing to invest in Taiwan.
The key strategies and goals for 2023 for Fubon Financial Holdings’ main subsidiaries are as follows:
(1) Fubon Life: Looking forward to 2023, the headwinds of the global economic trend have not abated, the life insurance market will not only be affected by economic factors, but also the strict supervision of the competent authorities, and intensified industry competition. As such, the overall life insurance business is still facing severe challenges. Fubon Life will continue to adapt to changes in the market environment, adjust its product strategy in a timely manner, expand the applications of digital technology, integrate the Group’s resources, and provide heart-warming customer service.
(2) Taipei Fubon Bank and Jih Sun Bank: With six major strategies, including optimizing the asset-liability structure, building a new digital brand, attaching importance to asset preservation of wealth management customers, diversifying overseas deployment, realizing the synergy of merger with Jih Sun and implementing the sustainable operations of Fubon’s image as the main axes of operations, we seek to continue to uphold the core values of integrity, kindness, professionalism and innovation, to create maximum welfare for shareholders, customers and society, and steadily moves towards the vision of becoming one of “Asia first-class financial institutions”. We are also committed to making the value of the Fubon brand grow and deeply rooted in the hearts of the people.
(3) Fubon Insurance: Continue to exert the positive influence of insurance, implement social responsibility to promote sustainable development, strengthen risk management and control, and grasp market trends to accelerate the pace of digitalization. For our overseas initiatives, we hope to seize the opportunities for performance growth and profitability through the rigorous underwriting of insurance, monitoring of business quality, providing a variety of insurance products and developing diversified sales channels.
(4) Fubon Securities and JihSun Securities: Continue to consolidate the brokerage business, actively expand the penetration rate of wealth management products, deepen the operation of various customer groups, optimize the functions of the system platform, strengthen the cooperation between physical and digital channels, expand the customer activation rate of both securities companies and improve the service capacity of institutional investor services. By effectively integrating the resources of Fubon Financial Holdings subsidiaries, we can expand the group’s customer base, and by upgrading our ESG activities, we can ensure the realization of corporate sustainable operations and social responsibility goals.
(5) Fubon Bank (Hong Kong): Beyond strengthening the momentum of SME and personal loan businesses to expand its asset scale and optimize its asset structure, Fubon Bank (Hong Kong) will set up an overseas wealth management service center to capture cross-border wealth management opportunities in Taiwan and the Greater Bay Area. Other priorities will include upgrading the bank’s digital platform and promoting green finance policies to optimize customer experience and fulfill its corporate social responsibility.
(6) Fubon Bank (China): While steadily building up assets and liabilities, optimizing the bank’s structure and strengthening risk resilience will be the main strategic axes, Fubon Bank (China) will also actively promote capital-light business transformation and enhance innovation capabilities. Efforts will be made to form strategic alliances with Fintech enterprises to develop new business models to expand the scope of banking services and enhance overall operating synergy.
(7) Fubon Asset Management: The main priorities will be to bolster existing product lines and issue cash flow income and bond funds that are benefiting from rate hikes based on market trends and investors’ wealth management needs. Another goal is to incorporate ESG and sustainability factors into the asset management DNA. Through shareholder activism, we will exert investment influence and practice responsible finance to achieve the strategic goal of sustainable investment.
Looking forward to 2023, as it balances both risk management and stable business growth, Fubon Financial Holdings will continue to deepen its presence in Taiwan and expand in Asia, relying on acquisitions and equity participation opportunities to expand its financial services network. The pursuit of business success will be complemented by the injection of innovative energy and demonstrating sustainable competitiveness through Fintech as the company moves towards its vision of becoming one of Asia’s first-class financial institutions.
Richard M. Tsai
Fubon Financial Holdings