Fubon Financial

Fubon Financial Holdings Passed 2016 Earnings Appropriation Paying NT$2 Cash Dividends Per Common Share

2017.06.16

Election Held for 15 Directors on the 7th Board Independent Director Seats Increased to 6

Proportion of Outside Directors Increased to 60% for Best Corporate Governance Practice

Fubon Financial Holdings (2881) held its 2017 annual general meeting today to resolve the appropriation of 2016 earnings, including payment of cash dividends totaling NT$2 per common share. An election was held during the AGM to elect 15 directors for the 7th board, including an addition of extra independent director seats to a total of 6 (representing 40% of the board). Meanwhile, the number of outside directors was increased to 9 (representing 60% of the board). These changes are evidence of Fubon's effort to enhance independence of the board in line with international trends, and to broaden the diversity of board members for best corporate governance practice.

Fubon Financial Holdings concluded its 2016 net income at NT$48.421 billion; after making the necessary provisions, a resolution was made to pay out NT$2 of cash dividends in the AGM held today. In addition, the Company will also be paying NT$1.024 billion of preferred dividends for the 600 million preferred shares issued at NT$60 per share, calculated based on preferred share dividend yield of 4.1% per annum and an holding period of 254 days (2016.04.22~12.31). The Chairman was authorized during the AGM today to set ex-rights dates for the above dividends.

An election was held during the AGM today to elect the 7th board of directors. The elected directors are: Richard Tsai, Daniel Tsai, Vivien Hsu, Eric Chen, Howard Lin, Jerry Harn, Chih-Ming Chen, Hsiu-Hui Yuan, Hsiu-Chu Liang, Louis Cheung, Ming-Je Tang, Shin-Min Chen, Chan-Jane Lin, Jung-Feng Chang, and Fan-Chih Wu. Amongst the list of elected directors, Chih-Ming Chen, Hsiu-Hui Yuan and Hsiu-Chu Liang are representatives of Taipei City Government, whereas Louis Cheung, Ming-Je Tang, Shin-Min Chen, Chan-Jane Lin, Jung-Feng Chang and Fan-Chih Wu are representatives of Ming Dong Co., Ltd.

Fubon Financil Holdings Chairman Richard Tsai said that Fubon has long been devoted to promoting sound corporate governance practices. Not only was it Taiwan's first public listed company to adopt an independent director system, it was also the first financial institution to have independent directors representing one-third of the board. Out of the 15 director seats in the 7th board, the number of independent director seats has been increased from 4 to 6, which represents 40% of the board. Managing Partner Louis Cheung of Boyu Capital Advisory Company Limited and NTU Professor Ming-Je Tang were re-elected as independent directors, while NTU Graduate Institute of National Development Part-time Professor Shin-Min Chen, NTU Accounting Professor Chan-Jane Lin, Research Fellow Jung-Feng Chang of Chung-Hua Institution for Economic Research First Research Division, and former Taiwan Financial Holdings President Fan-Chih Wu were newly elected as independent directors. All six independent directors have exhibited outstanding achievements in the commercial world or the academia. Their expertise will prove helpful to corporate governance and sustainability of Fubon Financial Holdings.

Furthermore, to accommodate capital requirements for business growth and other long-term strategies, Fubon Financial Holdings has adopted a diversified and flexible funding policy and passed a long-term funding plan in today's AGM that authorizes the board of directors to raise long-term capital by utilizing one or more solutions such as domestic cash issue (common or preferred shares), GDR issue (common or preferred shares), and overseas cash issue (common or preferred shares) depending on the current market condition and future capital requirements, at an appropriate timing and in compliance with Articles of Incorporation and relevant regulations, subject to a maximum of 1.5 billion shares. This funding strategy provides group synergy, and enhances the Company's competitiveness in shareholders' best interest.

Richard Tsai said that, due to sluggish performance, the global economy in 2016, profitability of the financial industry had declined in general as compared to the previous year. Nevertheless, Fubon Financial Holdings and subsidiaries still managed to secure the title of Taiwan's most profitable financial group for the 8th consecutive year against all odds with a total net income of NT$48.421 billion in 2016! Apart from Taiwan, Fubon Financial Holdings has also been active in regional expansions. At the end of 2015, Fubon Life acquired a 48% ownership interest in Hyundai Life Insurance (Korea) and took an important stride towards the Asian market; in April last year, Fubon Life's 100%-owned subsidiary - Fubon Life Insurance (Hong Kong) was opened for business and signified Fubon's venture into the Hong Kong insurance market. In March last year, Taipei Fubon Bank Singapore Branch was opened for business and has been used as the frontier to provide services to customers in the ASEAN market.

Fubon Financial Holdings continues to lead local peers in the Chinese market. In October last year, Fubon Financial Holdings was granted the approval by China Banking Regulatory Commission to acquire the remaining 20% ownership interest in Fubon Bank (China) from Shanghai Pudong Development Bank, which made Fubon Bank (China) a 100%-owned subsidiary of Fubon Financial Holdings and a critical gateway into the Chinese market. Fubon Bank (China) operates a network of 24 locations in China (including the approved Wuhan Branch) and is currently the largest Taiwanese bank in China. In November last year, the bank was awarded the license to perform RMB services to residents in China by China Banking Regulatory Commission, which made it the first Taiwanese bank able to provide RMB services to citizens in China, and the first Taiwanese bank to be fully licensed for banking service in China.

Richard Tsai further pointed out that Fubon Financial Holdings is also highly committed in sustainability. The Company initiated the "ESG Visioning Project” in the end of 2015 that introduced five main strategies targeting: leading investment, innovative finance, golden practice, honest lending, and tender care; a ESG task force was later assembled under the Corporate Governance and Sustainability Committee to coordinate various functions of the financial group to execute short/medium/long-term ESG strategies and action plans. Fubon Financial Holdings' ESG efforts have been well-received by sustainability rating agencies around the world. In 2016, the Company was chosen as one of the compositions of "DJSI - Emerging Markets" for the first time, making it the first and only Taiwanese financial holding company to be selected in the "FBN Diversified Financial Services and Capital Markets" category. In June this year, Fubon Financial Holdings was chosen as a composition of the MSCI Global Sustainability Indexes for the first time, and received Grade A from the MSCI ESG Rating in the Diversified Financial Category - Taiwan due to exceptional performance in economic, environmental and social aspects.

In the future, Fubon will continue to grow its presence in the Taiwan market while seeking investment opportunities in the Asian market. It will strive to adapt to the wave of digital transformation through financial innovation, maintain consistent growth through sustainability, and take progressive steps toward fulfilling its vision to become a first-class financial institution in Asia!