Stock Code: 2834Taiwan Stock Exchange Market Observation Post System:http://newmops.twse.com.twTBB's annual report is available at:http://www.tbb.com.tw
PUBLISHED IN MARCH 2011
臺灣中小企業銀行
TA
IWA
N B
US
INE
SS
BA
NK|
An
nu
al R
ep
ort 2
01
0
\\\\\\\\\\\\\\\\\\\\\
\\\\\\\\\\\\\\\\\\\\\
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
\\\\\\\\\\\\\\\\\\\\\
Annual Report 2010
http://www.tbb.com.tw
NOTICE TO READERSThis English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders' meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.
Taiwan Business Bank Head Office
Address: No. 30, Ta Cheng St., Taipei, Taiwan, R.O.C.Tel: 886-2-25597171Web Site: http://www.tbb.com.tw
Spokesperson
Name: Ching-Hua HsuTitle: Executive Vice PresidentTel: 886-2-25509179 /886-2-25597171 ext:1411E-mail Address: [email protected]
Deputy Spokesperson
Name: Shou-Tien LeeTitle: S.V.P & Chief Secretary Tel: 886-2-25505726 / 886-2-25597171 ext: 1511E-mail Address: [email protected]
Deputy Spokesperson
Name: Tzeng-Show Lin Title: V.P.& General Manager, General Affairs Dept. Tel: 886-2-25597108 / 886-2-25597171 ext: 1211E-mail Address: [email protected]
Stock Registration Agent
Name: Capital Securities Corp.Address: B1, No. 125, Sec. 2, Nan-King East Road, Taipei, Taiwan, R.O.C.Tel :886-2- 25077000Web Site: http://www.capital.com.tw
Rating Agency
Name: Taiwan Ratings Co.Address: 49F, No.7, Sec.5, Xinyi Road., Taipei, Taiwan, R.O.C.Tel: 886-2- 87225800Web Site: http://www.taiwanratings.com
The CPA-auditor of the Financial Report
Name: Phoebe Chung, Winnie FangName of Employer: KPMG Certified Public AccountantsAddress: 68F, Taipei 101 Tower, No.7, Sec. 5, Xinyi Road, Taipei, R.O.C.Tel: 886-2- 81016666Web Site: http://www.kpmg.com.tw
Flotation at Overseas Stock Exchange and Information Inquiry: None
We can be the best !
Contents
04
06
Ⅰ Message from the Management
Ⅱ Bank Profile
Ⅲ Organizational Framework
1. Organization Chart
2.Directors and supervisors information
3. List of major shareholders
4. Operations of Major TBB Units
Ⅳ Business Performance in 2010
1. The Domestic and Overseas Financial Environment
2. Restructure of TBB’s Organization
3. Results of Operating Plans and Strategies
4. Budget Implementation
5. Revenues, Expenditures, and Profitability
6. Research and Development
1314
14
14
16
16
16
0910
11
11
12
T a i w a n B u s i n e s s B a n k
1718
18
19
19
20
Ⅴ Business Plans for 2011
1. Operating Directions and Policies
2. Business Targets
3. Future Development Strategies
4. The Impact of Intensifying Competition, Government Regulations and Global Economic
5. Results of Latest Credit Rating
Ⅵ Financial Statements
1. Independent Auditor’s Report
2. Financial Statement in FY2010 and notes to Financial Statement
Ⅶ Implementation of Social Responsibility
Ⅷ Directory of Head Office and Branch Units
2122
23
9499
Message from the Management
Ⅰ Message from the Management
Message from the Management
Ⅰ Message from the Management
Ⅰ
Me
ss
ag
e f
ro
M t
he
Ma
na
ge
Me
nt
5
To break out of the shadows of the financial crises and liquidity contraction of 2008, the advanced countries
of Europe and America adopted a series of economic revitalization programs in 2010. These programs
helped to boost recovery in those countries, and the rapid recovery of mainland China and other emerging
countries stimulated continuing strong economic growth around the world. With exports serving as the
lifeblood of its economic growth, Taiwan benefited from the global recovery; its export momentum was
stronger than expected, private consumption and investment increased, and many economic indicators
turned sharply upward as the island’s economy rebounded strongly.
Along with the continuous heating up of the economy, the Taiwan Business Bank, with the support of our
customers and the hard work of our employees, registered a growth in profitability and in the development
of its various areas of business in 2010. Before-tax net profit amounted to NT$2.391 billion, a growth of
48% over 2009 and a 10-year high. Deposits and loans both exhibited stable growth over 2009 to reach
levels not seen in years.
In recent years the Bank has worked vigorously to clear up non-performing loans and strengthen the
control of loan risk. By the end of 2010 the amount of NPLs had been reduced to NT$10.526 billion and the
NPL rate lowered to 1.13%, down by 0.74 points from 1.87% in 2009. The coverage ratio was 79.17% at
the end of the year, an improvement of 31.72 points over 47.45% at the end of 2009 and the highest level
in recent years, reflecting a substantial improvement in asset quality.
The steady improvement of the domestic economy in 2011 will favor the expansion of banking businesses.
The TBB will continue the profit growth momentum of 2010 and work constantly to reinforce its operating
performance. We will carry out bank-wide marketing and strengthen cross-marketing in order to boost
fee income and achieve our profit growth target, and we will carry through with our four major operating
principles--pursuit of business performance, emphasis on shareholder equity, enhancement of employee
value-added, and fulfillment of corporate social responsibility--as we move into the ranks of outstanding
banks and create a brilliant business performance that will repay our shareholders for their support and
encouragement.
President
Tsan-Chang Liao
Chairman
Peter T.C. Lo
Bank Profile
Ⅱ Bank Profile
BA
Nk
Pr
of
ILE
7
Ⅱ
1. Establishment and History
The forerunners of the Taiwan Business
Bank were two private cooperative savings
institutins, one established in Taipei in
June of 1915 and the other in Tainan the
following month. The Taipei institution was
merged into another company in 1920
and the Tainan institution was reorganized
under a different name in 1926.
following the restoration of Taiwan
to China on oct. 25, 1945, these two
savings institutions, along with two others,
were taken over by the Taiwan Provincial
Government and, on Sep. 1, 1946 were
combined and reorganized into the Taiwan
Mutual financial Co. on May 31 the
following year this new financial institution
absorbed the Tokiwa real Estate Co.,
bringing its capitalization to NT$10 million.
Its name was changed to the Taiwan
Provincial Loans and Savings Co. on June
1, 1947 and again to the Taiwan Mutual Executive Vice President
Tzeng-Show LinLoans and Savings Co. in January 1948.
The government moved to promote Taiwan’s economic development and boost the growth of its small and
medium enterprises (SMEs) in 1975 by revising the Banking Law and writing in an additional provision for a
specialized SME bank. In line with this government policy, the Taiwan Mutual Loans and Savings Co. was
reorganized into the Medium Business Bank of Taiwan (later to be known as the Taiwan Business Bank,
or TBB) on July 1, 1976, whereupon it became a specialized bank charged with the provision of financial
assistance and guidance to SMEs. It has been cultivating the SME financial services field now for more than
30 years.
To adapt to the liberalized and internationalized financial environment, and work toward the government’s
vision of building Taiwan into an Asia-Pacific operations center, the TBB was converted into a private bank
on Jan. 22, 1998 and entered a brand-new era of operation. At the time of its reorganization in 1976 the
Bank had a capitalization of only NT$500 million, 50 branches, and 58 sub-branches; repeated capital
increases, undertaken to augment operating funds and strengthen the Bank’s operating foundation, have
boosted capitalization to NT$40,285.42 million today. The Bank has also continuously restructured its
organizational framework in response to business needs and the changing financial environment. Today, in
addition to the Auditing Department and Secretarial Department that operate under the Board of Directors,
the Bank’s headquarters management units include 18 departments under three major business groups and
three major management centers. Domestic business units number 125, including the Banking Department;
besides the offshore Banking Unit, there are also three overseas branches: Hong kong, Los Angeles,
Executive Vice PresidentTian-Chang Huang
Chief AuditorChien-Hwa Tu
Executive Vice PresidentChing-Hua Hsu
Bank Profile
Taiwan Business Bank ︱ Annual Report 20108
Sydney and one representative office in Shanghai. In addition, regional Centers have been set up to
reinforce control of the Bank’s asset quality through the centralized management of valuation, review, post-
loan management, and non-performing loans. Domestic Processing Centers have also been established in
northern, central, and southern Taiwan to enhance operating efficiency through the centralized handling of
domestic remittances and bills collection and withdrawal.
2. Bank M&A, reinvestment in related enterprises, and reorganization in 2010 and up to the end of February 2011
The Bank has undertaken no M&A or reorganization during this period. The Bank has reinvested in 2
enterprises, including the Taiwan Business Bank Life Insurance Agency Co., Ltd. and Taiwan Business Bank
Property Insurance Agency Co., Ltd., in which it owns 100% of shares.
3. Membership in a designated financial holding company, and date of membership: None
4. Major exchanages or transfers of shares by directors, supervisors, and others required to report shareholdings under Article 25, Paragraph 3 of the Banking Law: None
5. Major changes in operating rights, operating methods, or business content; other major events of sufficient import to affect shareholder rights; and their influence on the Bank: None
Corporate Governance
Ⅲ Organizational Framework
10111112
1. Organization Chart
2. Directors and supervisors information
3. List of major shareholders
4. Operations of Major TBB Units
Taiwan Business Bank ︱ Annual Report 201010
DomesticProcessing Center
offshoreBanking Branch
overseasBranches
President Executive VicePresident
operatingManagement Center
riskManagement Center
AdministrationManagement Center
CorporateBanking Group
PersonalBanking Group
Secretarial Dept.
Auditing Dept.
Loan Supervision CommitteeNPL Management Committee
Trust Asset Evaluation CommitteePersonnel Evaluation Committee
IT Planning & Development Committee
Treasury Group
Humanresources Dept.
AdministrationManagement Dept.
General Affairs Dept.
Accounting Dept.
risk Management Dept.
Loan Supervision Dept.
Credit Investigation Dept.
overdue Loan &Control Dept.
InformationTechnology Dept.
BusinessManagement Dept.
Treasury Dept.
InternationalBanking Dept.
Credit Card Dept.
Wealth ManagementDept.
Securities Dept.
Trust Dept.
Supervisorsresident
Supervisors
ALM CommitteeBusiness Strategy
Committee
General Auditor
risk ManagementCommittee
regional Center
Loan Supervision Div.
Appraisal Div.
Loan review Div.
overdue Loan & Control Div.
Securities Branches
Banking Dept.Domestic branches
Corporate AoPersonal Ao
foBranch operation
CorporateBanking Dept.
PersonalBanking Dept.
Shareholders'Meeting
1. Organization Chart
Board of DirectorsChairman of the
Board
Ⅲ
Co
rP
or
AT
E G
oV
Er
NA
NC
E
11
2. Directors and supervisors informationDec.31 2010
Title Name
Chairman of the Board Peter T.C. Lo
President & Managing Director Tsan-Chang Liao
Managing Director Shih-Tien Chiang
Managing Director Hsien Ming Hung
Independent Managing Director Len-Yu Liu
Director Liang Wang
Director Wan fu Lin
Director Hsueh-Shiang Chen
Director Li-Hua Lin
Director Chau-Jung kuo
Director Leonard f.S. Wang
Director Tsai-Yuan Lin
Director Hong-Yen Lee
Director Tien-Chai Su
Director Jong-Jyr kau
resident Supervisor Yung-Ming Chen
Supervisor rui-Ying Tsai
Supervisor Lan-Zhong An
Supervisor Ning-Zhi Lu
Supervisor Shun-Tian Chen
3. List of major shareholders Dec.31 2010
Name Shares %
Bank of Taiwan 778,010,028 19.31%
Mega financial Group 541,464,015 13.44%
Land Bank of Taiwan 109,409,840 2.72%
Ministry of finance 99,429,949 2.47%
fui Industrial Co., Ltd. 74,512,040 1.85%
Shi Chun Jin 51,840,820 1.29%
Management Board of the Public Service Pension fund 38,035,571 0.94%
Taichung Bank 37,440,000 0.93%
China Man-Made fiber Corporation 37,145,173 0.92%
first Commercial Bank 35,379,454 0.88%
Taiwan Business Bank ︱ Annual Report 201012
4. Operations of Major TBB Units
(1) Corporate Banking Group
This unit handles financial services for corporate customers, including business planning, promotion,
and improvement in respect to loan products, forex products, and corporate financial planning
products. It understands customers’ needs and proactively carries out marketing, and is responsible for
development and service in regard to the Group’s products and customers as well as for improvement
of the Bank’s asset quality, operating income, and profit. The Corporate Banking Dept. and International
Banking Dept. operate under the Corporate Banking Group.
(2) Personal Banking Group
This unit handles planning, promotion, and improvement of the Bank’s personal loan products, financial
planning for customers, and marketing services for financial planning products. It carries out proactive
marketing based on an understanding of customers’ needs, is responsible for development and
service in regard to the Group’s products and customers, and maintains improvement of the Bank’s
asset quality, operating income, and profit. The Personal Banking Dept., Credit Card Dept., Wealth
Management Dept., Securities Dept, and Trust Dept. operate under the Personal Banking Group.
(3) Treasury Group
The Treasury Group handles planning, promotion, and improvement of the Bank’s financial businesses,
and is responsible for development and service in regard to the Group’s products and customers as well
as for maintaining improvemenrt of the Bank’s asset quality, operating income, and profit. The Treasury
Dept. operates under the Treasury Group.
(4) risk Management Center
The risk Management Center handles risk control, maintenance of the quality of the Bank’s loan
assets, and investigation and review of loan cases and products, middle-office risk control for financial
planning, economic and financial research and industry investigation, and the collection of overdue
loans. The Loan Supervision Dept., Credit Investigation Dept., overdue Loan & Control Dept., and risk
Management Dept. operate under the risk Management Center.
(5) operating Management Center
This Center carries out TBB’s performance analysis, management and planning of operational
management and information operations, provision of abundant and necessary support for business
development, and simplification of operating procedures in order to achieve operational centralization
as well as to enhance operating efficiency and the formulation of bank-wide operating strategies. The
Business Management Dept. and Informaiton Technology Dept. operate under the Center.
(6) Administration Management Center
This Center is in charge of planning and implementation in regard to document administration, important
matters, legal affairs, public relations, human resources, procurement, and accounting systems, as
well as other matters that do not come under other units. The Human resources Dept., Administration
Management Dept., General Affairs Dept., and Accounting Dept. operate under the Administration
Management Center.
Fund Raising Status
Ⅳ Business Performance in 2010
141414161616
1. The Domestic and Overseas Financial Environment
2. Restructure of TBB’s Organization
3. Results of Operating Plans and Strategies
4. Budget Implementation
5. Revenues, Expenditures, and Profitability
6. Research and Development
Taiwan Business Bank ︱ Annual Report 201014
1. The Domestic and Overseas Financial Environment
With countries all over the world adopting unprecedented market intervention measures in 2010, plus
the stimulation provided by the large growth of self-initiated demand in emerging countries, real global
GDP topped the pre-financial tsunami level in the second quarter. After that, alarmed by the European
debt crisis and warnings of real estate bubbles in emerging countries, many countries turned to cautious
or contractionary monetary and fiscal policies; in addition, the restocking of inventories was coming to
an end, weakening the momentum for recovery. According to data compiled by Global Insight Inc. (GII),
the worldwide economic growth rate for 2010 was 4.1%.
In Taiwan, corporate investment and private consumption turned gradually upward along with the
recovery of the international economy and continued expansion in the emerging countries of Asia,
and the island’s export demand increased quarter by quarter. Domestic demand, too, turned upward
along with the economy, cross-straits relations continued warming up; and, from the relatively low base
of 2009, the largest service sectors (wholesale and retail sales, and catering) experienced growth
on a large scale. Production benefited by the beginning of recovery in the large economies, which
stimulated buying in trade markets, and industries increased production and investment; in addition, the
domestic political situation was relatively stable, helping real growth in 2010 to return to, and surpass,
pre-financial tsunami levels. According to statistics compiled by the Directorate General of Budget,
Accounting and Statistics, Taiwan’s economic growth in 2010 reached 10.82%.
2. Restructure of TBB’s Organization
To strengthen business concentration management and enhance operating efficiency, on Jan. 1, 2010
the TBB combined its regional Loan Supervision Center and regional overdue Loan & Control Center
into a regional Center and continued its six-region operating model, with four divisions in each region:
Loan Supervision, Appraisal, Loan review, and overdue Loan & Control.
3. Results of Operating Plans and Strategies
(1) Strengthened risk control, substantial improvement in asset quality, stable growth of profitability
and all areas of business, and issuance of a 2009 stock bonus of NT$0.4 per share—the first such
issuance in nine years.
(2) Implementation of small and medium business loan programs in line with government policy, to
outstanding results; achievement of good performance in carrying out the financial Supervisory
Commission’s “Program to Encourage Lending by Domestic Banks to Small and Medium
Enterprises.” The TBB was chosen for a “Special Award” for this program.
(3) Winning of a top A+ grade and listing among the top 10 in the Seventh Information Transparency
and Disclosure rankings of the Securities and futures Institute; also, achievement of good ranking
in the provision of credit guaranteed loans to SMEs, winning four awards.
(4) raising of NT$4 million in non-accumulated subordinated debentures without maturity dates and
NT$7.05 billion in long-term subordinated financial bonds to strengthen the Bank’s capital structure.
BA
Nk
Pr
of
ILE
15
Ⅳ
(5) Expansion of customer services by moving the Tung kang Branch to the Xiaogang District of
kaohsiung City and changing its name to Xiao Gang Branch, and the Cheng Yi Mini-Branch to Houli
District in Taichung City and renaming it the Hou Li Branch.
(6) receipt of permission from the Central Bank to establish the Yun kang Branch and Hwei Long
Branch as foreign exchange branches, providing customers with more convenient forex services.
(7) To strengthen services for overseas Taiwanese businesses, a business cooperation agreement was
signed with the Bank of Beijing and a Shanghai representative office was established with planned
upgrading to branch status after one year so as to expand business in China and strengthen
overseas deployment.
(8) Institution of a Gold Passbook business in response to customers needs for financial planning; and,
in line with government policy to encourage marriage and childbearing, introduction of a public-
benefit program designed to encourage marriage and childbearing through the presentation of gold.
(9) Establishment of an online “Centralized forex Data System” that shortens operating times and
provides for the centralized management of forex data.
(10) Joining of the Taiwan Tobacco and Liquor Purchase Card payment platform and inauguration of the
TTL purchase card business to increase the volume of credit card transactions and boost cross-
marketing synergies.
(11) China Union Pay Card cash withdrawal and balance enquiry at Taiwan ATMs, and introduction of
the Titanium Commercial Card in order to upgrade product competitiveness.
(12) Inauguration of the non-deliverable renminbi currency swap business at the offshore Banking Unit.
(13) Establishment of a “simplified account-opening system” to shorten the time required for customers
to open accounts, thereby effectively enhancing service quality and customer satisfaction.
(14) Planning and establishment of a fund transfer pricing (fTP) system to upgrade performance in the
management of funds and risk capital.
(15) Carrying out of a preferential early retirement program to invigorate the Bank’s human resources
and save personnel expenses; and, in line with manpower needs and the government’s policy to
encourage employment, carrying out of the recruitment of new employees.
(16) Strengthening of information safety management through ISo 27001 information safety
certification; upgrading of operating risk control capability.
(17) Carrying through with the ideal of care for society and fulfillment of corporate social responsibility
by organizing mountain-cleaning hikes and sponsoring nutritious breakfasts at primary schools in
remote areas; holding of MSE loan guidance seminars in industrial zones to assist with industrial
development, thereby fulfilling the TBB’s social responsibility and mission as a specialized small
business bank.
Taiwan Business Bank ︱ Annual Report 201016
4. Budget Implementation
(1) Average deposits in the Bank in 2010 were NT$1,025.7 billion, for a target achievement ratio of
97.39%.
(2) Average loans outstanding amounted to NT$895.5 billion, or 101.31% of the target.
(3) foreign exchange transactions undertaken during the year totaled US$52.2 billion, for a target
achievement ratio of 116.06%.
(4) The volume of securities brokerage was NT$336 billion, or 94.64% of the target.
(5) Mutual fund business amounted to NT$34.8 billion, achieving 108.19% of the target.
5. Revenues, Expenditures, and Profitability
Net income for 2010 was NT$16.245 billion, costs related to bad loans amounted to NT$4.116 billion, and
operating expenditures totaled NT$9.738 billion. Before-tax net profit on business operations amounted
to NT$2.391 billion and after-tax net profit to NT$2.006 billion, for a return on assets of 0.17%, return on
shareholder equity of 4.69%, net profit margin of 12.35%, and earnings per share of NT$0.50.
The Bank worked vigorously to improve its asset quality and strengthen its financial structure in 2010 by
writing off bad loans in the amount of NT$3.06 billion, bringing its broadly defined non-performing loan
ratio down to 1.13%. This substantially facilitated the Bank’s development of new types of business and
the upgrading of its profitability.
6. Research and Development
(1) The Bank has established a unit charged exclusively with surveying, analyzing, and conducting
research on the production, market and development trends of major industries in Taiwan and
overseas, and with the establishment and maintenance of an industry database. The Bank also
publishes periodicals.
(2) To meet the needs of business development and strengthen the Bank’s market competitiveness,
employees are encouraged to undertake their own innovation and development of new financial
products and business-improvement programs. A total of 71 employee-proposed cases were
accepted in 2010, and awards were given accordingly.
Operations Overview
Ⅴ Business Plans for 2011
18181919
20
1. Operating Directions and Policies
2. Business Targets
3. Future Development Strategies
4. The impact of intensifying competition, government regulations and global economic
5. Results of Latest Credit Rating
︱18
1. Operating Directions and Policies
(1) Corporate Banking
Concentration on small and medium-sized clients, cultivation of core customers, and focus on
core products to expand the scale of corporate loans and continuously reinforce the structure of
corporate loan.
(2) Personal Banking
Development of outstanding customer groups and integration of the resources of the Personal
Banking Group to fully realize cross-marketing synergies.
(3) financial Planning
reinforcement of financial operations capability, enhancement of flexibility and efficiency of capital
utilization, strengthening of financial market, and provision of a full spectrum of customized products
so as to increase customers’ foreign-currency investment and hedging channels.
(4) Profit Boosting and Profitability Strengthening
Expansion of interest spread, consolidation of main profit sources, and expansion of the ratio of fee
income so as to improve the structure of operating income.
(5) reinforcement of risk Control Capability
Thorough implementation of risk management mechanisms, working out of a professional division
of labor, strengthening of training in professional credit evaluation skills, and carrying through with
post-loan management work.
(6) Advancement of operating Performance
Improvement of the operating performance of middle- and back-office support units and
reinforcement of information processing capabilities so as to upgrade operating efficiency and
reduce operating risk.
(7) fulfilling of Corporate Social responsibility
The Bank continued its care of and provision of funding for disadvantaged groups for the cultivation
of communities and realization of care for society, while maintaining the social benefit and fulfilling
its corporate social responsibility.
(8) Enhancement of the Corporate Image
full use of media advertising in line with product and service innovation so as to enhance business
visibility, communicate the Bank’s operating philosophy, and establish a good corporate image.
2. Business Targets
The following targets for 2011 are set primarily in consideration of historical growth in the different areas
of business, growth projections of forecasting institutions for the next year, the development of the
banking environment and competitiveness of other banks, and maintenance and enhancement of the
TBB’s position in the market:
(1) Average deposits: NT$1,073.9 billion
Ⅴ
oP
Er
AT
IoN
S o
VE
rV
IEW
(2) Average loans outstanding: NT$948.7 billion
(3) foreign exchange transactions: US$54.5 billion
(4) Stock brokerage transactions: NT$377.0 billion
(5) Mutual fund business: NT$42.2 billion
3. Future Development Strategies
(1) The core SME businesses will be cultivated and the Bank will commit itself to the role of specialized
bank for SME financing and services so as to maintain its advantage in this niche.
(2) Integrated business marketing will be strengthened and management by objectives will be carried
out; cross-marketing will be used to expand core-customer business relations, enhance profitability,
and create corporate value and shareholder equity.
(3) Core customers will be cultivated and attention will be focused on core products; the spirit of all-
staff marketing will be translated into action, expanding the scale of key businesses while boosting
business competitiveness and market share.
(4) risk control will be strengthened, asset value will be maintained, the non-performing-loan ratio
will be reduced, reserves against bad debt will be increased, and the TBB will advance toward the
status of a quality bank.
(5) overseas and cross-straits businesses will be vigorously expanded and deployment in mainland
China and overseas will be strengthened to meet customer needs and new trends in the
development of cross-straits financing.
4. The impact of intensifying competition, government regulations and global economic
(1) Economic Cooperation framework Agreement (ECfA)
The cross-straits Economic Cooperation framework Agreement (ECfA) was signed on June 29,
2010, and became effective on Sep. 12 that year. The agreement expanded the opening of financial
markets on both sides of the Taiwan Straits; in response to the intensifying competition, the TBB
signed a cooperative agreement with the Bank of Beijing and set up a representative office in
Shanghai to strengthen services to overseas Taiwanese businesses and reinforce its overseas
deployment.
(2) Central Bank rules for the Extension of Loans Secured by Land and Housing Loans in Specified
areas
In view of the soaring prices of real estate in certain areas of Taiwan and the excessive
concentration of bank loans, Central Bank adopted a series of targeted prudential measures and,
in June of 2010, implemented the “Central Bank regulations Governing the Extension of Land
Collateralized Loans and Housing Loans in Specific Areas by financial Institutions.” The scope
of specified areas for housing loans was expanded in December of 2010, and restrictions on land
︱20
collateralized loans were added with the aim of assuring the healthy development of the home-loan
market and stabilizing domestic finance. The TBB follows Central Bank rules in carrying out the
control of home-loan risk.
5. Results of Latest Credit Rating
Date of Rating Rating CompanyRating Results
OutlookLong-term Credit Short-term Credit
Jan. 20, 2011 Taiwan ratings twa twA-1 Stable
Financial Statements
Ⅵ Financial Statements
2223
1. Independent Auditor’s Report
2. Financial Statement in FY2010 and notes to Financial Statement
Taiwan Business Bank ︱ Annual Report 201022
Independent Auditors' Report
The Board of DirectorsTaiwan Business Bank Co., Ltd.
We have audited the accompanying balance sheets of Taiwan Business Bank Co., Ltd. as of December 31, 2010 and 2009, and the related statements of income, changes in stockholders' 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 Certified Public Accountant's Examination and Certification of financial Statements of financial Institutions" and generally accepted auditing standards in the republic of China. Those 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 Taiwan Business Bank Co., Ltd. as of December 31, 2010 and 2009, 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 Statements for Public Banks", "Business entity accounting law" and "regulation on business entity accounting handling" and accounting principles generally accepted in the republic of China.
As described in Note 3, the Bank obtained the approval letter from financial Supervisory Commission at february 25, 2009, with the issuing number of fSCB(2) 09800039780, changed to adopt the generally accepted accounting principles in the republic of China and amortized all of the deferred loss on sale of non-performing loans amounted to $2,234,193 thousands in 2008.
kPMG
Taipei, Taiwan, r.o.C.March 1, 2011
Notice to readers
The accompanying financial statements are intended only to present the financial position, results of operation and cash flows in accordance with the accounting principles and practices generally accepted in the republic of China and not those of any other jurisdictions. The standards, procedures, and practices to review such financial statements are those generally accepted and applied in the republic of China.
The auditors' report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors' report and financial statements, the Chinese version shall prevail.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
23
Ⅵ
TAIWAN BUSINESS BANK CO., LTD.BALANCE SHEETS
DECEMBEr 31, 2010 AND 2009(New Taiwan Dollars in Thousands)
DECEMBER 31, 2010 DECEMBER 31, 2009 Variance
Amount Amount %
assets
Assets:
Cash and cash equivalents (Note (4)(A) and (5)) $ 15,364,021 17,197,549 (11)
Due from the Central Bank and call loans to banks (Notes (4)(B) and (5)) 71,720,175 65,862,376 9
financial assets measured at fair value through profit or loss, net (Note (4) (C) and (7) (A)) 4,282,763 2,304,398 86
Bills and bonds purchased under resale agreements(Note(4)(D)) 2,519,348 1,233,898 104
receivables , net (Note (4)(E)) 19,710,207 18,278,698 8
Discounts and loans , net (Notes (4)(f) and (5)) 926,970,266 912,803,010 2
Available-for-sale financial assets, net (Note (4)(G) and (7) (A)) 14,928,355 16,916,010 (12)
Held-to-maturity financial assets ,net (Notes (4)(H) and (6)) 135,549,492 129,864,330 4
Investments under the epuity method , net (Note (4)(I)) 45,274 84,580 (46)
other financial assets, net (Notes (4)(J)) 4,318,281 4,204,756 3
Property and equipment, net (Note (4)(k)) 14,185,884 14,512,095 (2)
Intangible assets 192,567 109,706 76
other assets, net (Notes (4)(L)) 3,845,926 4,168,885 (8)
Brokerage accounts, net 8,802 18,570 (53)
ToTAL ASSETS $ 1,213,641,361 1,187,558,861 2
Taiwan Business Bank ︱ Annual Report 201024
DECEMBER 31, 2010 DECEMBER 31, 2009 Variance
Amount Amount %
LIABILITIES AND SToCkHoLDErS' EQUITY
Liabilities:
Deposits from the Central Bank and other banks (Note (4)(M) and (5)) $ 86,081,932 107,071,746 (20)
financial liabilities measured at fair value through profit or loss (Note (4) (N)) 325,945 255,387 28
Bills and bonds sold under repurchase agreements (Note(4)(o) and (7)) 9,950,660 4,130,048 141
Payables (Note (4)(P)) 23,782,204 25,658,647 (7)
Deposits and remittances (Note (4)(Q) and (5)) 992,348,193 964,087,905 3
financial debentures (Note (4)(r)) 44,000,000 33,050,000 33
Accrued pension liabilities (Note (4)(W)) 176,479 126,534 39
other financial liabilities (Note (4)(S)) 10,552,494 9,743,364 8
other liabilities (Note (4)(T)) 2,567,428 1,708,226 50
Total Liabilities 1,169,785,335 1,145,831,857 2
Stockholders' Equity:
Common stock (Note (4) (U)) 40,285,419 38,735,980 4
retained earnings:
Legal reserve (Note(4)(U)) 907,064 477,443 90
Special reserve (Note(4)(U)) 301,329 1,003,370 (70)
Undistributed earnings (Note (4)(U)) 2,341,339 1,612,124 45
Total retained earnings 3,549,732 3,092,937 15
other Items:
reservation for revaluation 196,068 196,068 -
Cumulative translation adjustments (Note (4) (U)) (93,880) 3,348 (2,904)
Unrealized gain and loss on financial assets (Note (4) (U)) (65,415) (301,329) 78
Net loss on unrecognized pension cost (15,898) - -
Total Stockholders' Equity 43,856,026 41,727,004 5
Significant Commitments and Contingencies (Note (7))
ToTAL LIABILITIES AND SToCkHoLDErS' EQUITY $ 1,213,641,361 1,187,558,861 2
fIN
AN
CIA
L S
TA
TE
ME
NT
S
25
Ⅵ
TAIWAN BUSINESS BANK CO., LTD.STATEMENTS OF INCOME
for THE YEArS ENDED DECEMBEr 31, 2010 AND 2009(New Taiwan Dollars in Thousands, except for earnings per share data)
For TheYear Ended
December 31, 2010
For TheYear Ended
December 31, 2009Variance
%Amount Amount
Interest revenue (Note (5)) $ 18,583,298 19,155,343 (3)
Less: Interest expense (Note (5)) (7,370,087) (9,304,413) (21)
Net interest income 11,213,211 9,850,930 14
Non-interest income net
Commisions and handling fee, net (Note (5)) 1,995,236 1,614,608 24
Gain or loss from financial assets or liabilities measured at fair value through profit or loss 361,581 474,358 (24)
realized gain or loss of available-for-sale financial assets, net 152,058 399,334 (62)
Held to maturity financial assets, net realized gains and losses 15 - -
Investment income recognized under the equity method (Note(4)(I)) 88,503 13,310 565
foreign exchange gain or loss, net 322,096 525,341 (39)
Gain or loss from other non-interest income, net (Note (5)) 173,168 18,387 842
Gain or loss from financial assets measured at cost, net (Note (4)(J)) 129,552 144,824 (11)
Gain or loss from sale of non-performing loans, net 120,497 - -
Brokerage commission 279,050 307,046 (9)
recovery from bad debts and past due accounts (Note (10)) 1,410,830 1,470,422 (4)
Loss on impairment Assets - (92,043) 100
Net revenue 16,245,797 14,726,517 10
Bad debt expenses (including provision for guarantee reserve)(Note(10)) (4,116,458) (3,655,648) 13
operating expenses:
Personnel expenses (Note (10)) (6,764,199) (6,434,198) 5
Depreciation and amortization expenses (Note (10)) (521,653) (506,210) 3
other selling and administrative expenses (2,452,214) (2,514,788) (2)
Total operating expenses (9,738,066) (9,455,196) 3
Earnings from continuing operations before income tax 2,391,273 1,615,673 48
Income tax expense (Note(4)(V)) (385,039) (183,604) 110
Net income $ 2,006,234 1,432,069 40
Before tax After tax Before tax After tax
Basic earnings per share (Note(4)(X))(in New Taiwan dollars) $0.59 0.50 0.42 0.37
Basic earnings per share-retroactive adjustment (Note(4)(X))(in New Taiwan dollars) 0.40 0.36
Diluted earnings per share (Note(4)(X))(in New Taiwan dollars) $0.59 0.50 0.42 0.37
Diluted earnings per share-retroactive adjustment (Note(4)(X))(in New Taiwan dollars) 0.40 0.35
Taiwan Business Bank ︱ Annual Report 201026
TAIWAN BUSINESS BANK CO., LTD.STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
for THE YEArS ENDED DECEMBEr 31, 2010 AND 2009(New Taiwan Dollars in Thousands)
Stock retained Earnings other Items
TotalCommon stock
Legal reserve
Special reserve
Undistributedearnings
Unrealized revaluation
appreciation
Net loss on unrecognizedpension cost
Unrealized gain and loss on finanical
assets
Cumulativetranslation
adjustments
Balance - January 1, 2009 $38,735,980 449,383 1,117,950 93,535 79,271 - (990,287) (13,083) 39,472,749
Special reserve reversed - - (1,117,950) 1,117,950 - - - - -
Net income for the year ended December 31, 2009 - - - 1,432,069 - - - - 1,432,069
Appropriation of 2008 earnings:
Legal reserve - 28,060 - (28,060) - - - - -
Special reserve - - 1,003,370 (1,003,370) - - - - -
Disposal of land - - - - 116,797 - - - 116,797
Unrealized gain and loss on finanical assets - - - - - - 688,958 - 688,958
Change in cumulative translation adjustments - - - - - - - 16,431 16,431
Balance - December 31, 2009 $38,735,980 477,443 1,003,370 1,612,124 196,068 - (301,329) 3,348 41,727,004
Special reserve reversed - - (702,041) 702,041 - - - - -
Net income for the year ended December 31, 2010 - - - 2,006,234 - - - - 2,006,234
Appropriation of 2009 earnings:
Legal reserve - 429,621 - (429,621) - - - - -
Common stock dividend 1,549,439 - - (1,549,439) - - - - -
Unrealized gain and loss on finanical assets - - - - - - 235,914 - 235,914
Increase in net loss on unrecognized pension cost - - - - - (15,898) - - (15,898)
Change in cumulative translation adjustments - - - - - - - (97,228) (97,228)
Balance - December 31, 2010 $40,285,419 907,064 301,329 2,341,339 196,068 (15,898) (65,415) (93,880) 43,856,026
Note: The Board of directors' remuneration $14,044 and $ 10,024 as well as employee bonuses $112,349 and $ 80,196 of
2010 and 2009 respectively have been deducted from the income statement, please refer to Note 4 (U).
fIN
AN
CIA
L S
TA
TE
ME
NT
S
27
Ⅵ
TAIWAN BUSINESS BANK CO., LTD.STATEMENTS OF CASH FLOWS
for THE YEArS ENDED DECEMBEr 31, 2010 AND 2009(New Taiwan Dollars in Thousands)
for The Year EndedDecember 31, 2010
for The Year EndedDecember 31, 2009
Cash flows from operating activities:
Net income $ 2,006,234 1,432,069
Adjustment items:
Depreciation 454,062 452,355
Amortization 67,591 53,855
Provision of bad debt expenses 4,116,305 3,661,352
Provision for securities trading loss reserve 1,168 14,234
Provision for default loss reserve 9,414 9,894
Provision for guarantee reserve 153 (5,704)
Provision for contingencies 6,471 8,295
Investment income recognized under the equity method (26,419) (13,310)
Cash dividend received recognized under the equity method 13,989 10,966
Loss on disposal of property and equipment 2,902 6,822
Gain or loss on disposal of financial assets measured at cost - (1,357)
Gain or loss on disposal of stock investment under the equity method (62,084) -
Unrealized valuation gain from financial assets or liabilities (221,497) (249,348)
reversal of impairment loss on financial assets - (369,576)
Gain on sale for non-performing loans (120,497) -
recovery written-off loans (1,410,830) (1,470,422)
Brokerage accounts, net 9,768 (15,301)
Loss on sale for discounts and loans 50,619 -
Net changes of operation assets and liabilities:
Net changes of operation assets:
(Increase) decrease in bills and bonds purchased under resale agreements (1,285,450) 3,311,984
Increase in receivables (1,128,916) (231,499)
Decrease in deferred tax assets 250,000 100,000
Net changes of operation liabilities:
Decrease in payables (1,876,443) (1,905,451)
Increase in accrued pension liabilities 34,047 863
Net cash provided by operating activities 890,587 4,800,721
Cash flows from investing activities:
Purchase of financial assets designated at fair value at initial recognition (1,693,131) (309,774)
Proceeds from disposition of available-for-sale financial assets 2,208,795 6,679,463
Purchase of held-to-maturity financial assets (5,685,162) (18,815,066)
Proceeds from disposition of financial assets measured at cost - 127,279
Proceeds from disposition of stock investment under the equity method 113,820 -
Purchase of property and equipment (174,117) (289,734)
(Increase) decrease in guarantee deposits paid (8,138) 78,195
Purchase of intangible assets (110,515) (67,179)
Decrease (increase) in due from the Central Bank and call loans to bank (5,857,799) 8,086,048
Taiwan Business Bank ︱ Annual Report 201028
for The Year EndedDecember 31, 2010
for The Year EndedDecember 31, 2009
Increase in discounts and loans (17,302,176) (27,557,390)
Proceeds from disposition of non-performing loan 254,903 -
Increase in other financial assets (151,042) (405,735)
(Increase) decrease in other assets (19,526) 797,909
Net cash used in investing activities (28,424,088) (31,675,984)
Cash flows from financing activities:
Issued for financial debentures 10,950,000 3,650,000
Increase (decrease) in bills and bonds sold under repurchase agreements 5,820,612 (4,870,442)
Increase (decrease) in financial liabilities measured at fair value through profit or loss 6,821 (23,192)
Increase in guarantee deposit-in 109,959 44,137
Increase in lease payable 1,132 -
Increase in other financial liabilities 807,998 421,208
Increase (decrease) in other liabilities 732,977 (13,506)
Decrease in deposits from the Central Bank and other banks (20,989,814) (8,505,844)
Increase in deposits and remittances 28,260,288 34,415,216
Net cash provided by financing activities $25,699,973 25,117,577
Net decrease in cash and cash equivalents (1,833,528) (1,757,686)
Cash and cash equivalents, beginning of the year 17,197,549 18,955,235
Cash and cash equivalents, end of the period $ 15,364,021 17,197,549
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 7,434,938 11,582,650
Income taxes $91,835 132,975
Non-cash investing and financing activities:
Capitalization of earnings $ 1,549,439 -
reclassified property and equipment to rental assets $16 194
fIN
AN
CIA
L S
TA
TE
ME
NT
S
29
Ⅵ
TAIWAN BUSINESS BANK CO., LTD.NOTES TO FINANCIAL STATEMENTS
December 31, 2010 AND 2009(Expressed in New Taiwan Dollars in Thousands, Unless otherwise Stated)
(1) OVERVIEWTaiwan Business Bank Co., Ltd. (the “Bank”) was formerly a general savings union known as “Taiwan Mutual
financing Bank” or “Tai-Shio Mutual financing Bank” when it was established in 1915. After several mergers and
acquisitions, it was renamed Taiwan Business Bank, Ltd. to serve as a financier and provider of banking assistance
to small and medium-size businesses. The Bank’s major lines of business are the following:
(A) As prescribed by the Banking Law, provides professional services tailored to the needs of small and medium-
size businesses;
(B) Trust and securities brokerage businesses as approved by the relevant authority;
(C) International banking business; and
(D) other relevant businesses as authorized by the relevant authority in-charge.
As of December 31, 2010, the Bank not only set up the banking dept., international dept., securities dept. and
trust dept. under head office but also has 124 domestic branches, 1 offshore banking unit, 3 overseas branches, 1
foreign office and 17 securities brokerage locations.
The Bank became listed on the Taiwan Stock Exchange on January 3, 1998.
Under the ”Statute for Privatization of State Enterprises” and upon the approval of Taiwan Province Government,
the shares of the Bank owned by the provincial government were sold to the public. In line with privatization of the
three other major Taiwan province government owned run commercial banks, the Bank had completed its own
privatization on January 22, 1998.
As of December 31, 2010 and 2009, the Bank had 5,010 and 5,150 employees.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe financial statements are the English translation of the Chinese version prepared and used in the republic of
China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language
financial statements, the Chinese version shall prevail.
The Bank’s financial statements were prepared in accordance with “regulations Governing the Preparation of
financial Statements for Public Banks”, “Business entity accounting law”, and “regulation on handling business
entity accounting” and generally accepted accounting principles of the republic of China. These significant
accounting policies and measurement basis are as follows:
(A) Basis of PresentationThe financial statements include the accounts of headquarters, domestic and overseas branches. All inter-
office balances and transactions are eliminated.
(B) Foreign Currency TranslationThe Bank recorded transactions in New Taiwan Dollars. The non-derivative foreign currency transactions of
the Bank are recorded at the rate of exchange prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange
ruling at the balance sheet date. Any resulting exchange differences are included in the income statement.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are
translated into the functional currency using the rate of exchange at the date of the initial transaction. Non-
monetary assets and liabilities measured at fair value in a foreign currency are translated into the functional
currency using the rate of exchange ruling at the balance sheet date. Any exchange differences resulting from
fair value variation through profit and loss are included in the income statement, and exchange differences
resulting from fair value variation through equity are accounted for as equity adjustments.
Assets and liabilities of overseas offices (including the offshore banking unit) are translated into New Taiwan
Taiwan Business Bank ︱ Annual Report 201030
dollars on spot rate on balance date. The beginning balance of retained earnings of overseas branches are
carried from last year’s ending balance. The income statement accounts translated into New Taiwan dollars
on weighted-average exchange rate .The translation differences are reflected as part of cumulative translation
adjustments under stockholders’ equity.
(C) Accountant EstimatesThe preparation of financial statements requires management to make estimates and assumptions to evaluate
and disclose the amounts of assets, liability, revenues, expenses, contingent assets and liabilities. Actual
results could differ from those assumptions and estimates.
(D) Asset ImpairmentExcept for those assets stated as non-applicable, the Bank assesses at each balance sheet date whether
there is any indication that an asset (individual asset or cash-generating unit other than goodwill) may have
been impaired. If any such indication exists, the Bank estimates the recoverable amount of the asset. The
Bank recognizes impairment loss for an asset whose carrying value is higher than the recoverable amount.
The Bank reverses an impairment loss recognized in prior periods for assets other than goodwill if there is
indication that the impairment loss recognized no longer exists or has decreased. The carrying value after the
reversal should not exceed the recoverable amount or the depreciated or amortized balance of the assets
assuming no impairment loss was recognized in prior periods.
(E) Cash and Cash EquivalentsCash and cash equivalent consists of cash on hand, petty cash, foreign currency on hand, cash in banks, but
excludes those items which have specified for designated purposes or restricted by contracts and law.
(F) Financial Assetsfinancial assets are classified into financial assets measured at fair value through profit and loss, available-
for-sale financial assets, held-to-maturity financial assets, and financial assets measured at cost and debt
instrument with no active market.
financial instruments held by the Bank are recorded on settlement date except for stocks and beneficiary
certificate investment which are recorded on trading date. financial instruments are initially recognized at
fair value plus transaction costs except for financial instruments held for trading purpose, which are initially
recognized at fair value. Subsequent to their initial recognition, the financial instruments held by the Bank are
classified according to the purpose of holding as follows:
(a) financial assets measured at fair value through profit or loss: These included financial assets or liabilities
held for trading and financial assets or liabilities designated at fair value at initial recognition. financial
assets and liabilities which are measured at fair value are classified as held for trading if they have been
acquired principally for the purpose of selling or repurchasing in the near term. The derivative financial
instruments held by the Bank, except for those designated as hedging instruments, are classified under this
account. In addition, hybrid instrument and a set of financial assets or liabilities accounted inconsistently
are booked as financial assets or liabilities designated at fair value at initial recognition. The set of financial
assets or liabilities are booked as financial assets or liabilities designated at fair value through profit or
loss at initial recognition in order to eliminate inconsistent accounting. In accordance with the Bank’s risk
control policy or investment strategy, a set of financial assets or liabilities and its components managed are
also designated at fair value.
(b) Available-for-sale financial assets: financial assets are measured at fair value and unrealized gains
and losses thereon are recognized as an adjustment item of stockholders’ equity. The impairment loss
is recognized if there is evidence indicating that a decline in the value of an investment is other than
temporary. If the impairment loss in the following period is reduced, reversal of loss for equity investments
is adjusted to stockholders’ equity, and reversal of loss for debt instrument is credited to current income if
the reduction of impairment loss resulted from a subsequent event.
(c) Held-to-maturity financial assets: financial assets are measured at amortized cost. The impairment loss
is recognized if there is evidence indicating that a decline in the value of an investment is other than
fIN
AN
CIA
L S
TA
TE
ME
NT
S
31
Ⅵ
temporary. If in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized, the previous recognized
impairment loss is reversed through the profit and loss .The carrying value after the reversal should not
exceed the amortized balance of the assets assuming no impairment loss was recognized.
(d) financial assets measured at cost: Equity instruments with no quoted market price and whose fair value
cannot be reliably measured are stated at cost. The impairment loss is recognized if there is evidence
indicating that a decline in the value of an investment is other than temporary, and the impairment loss is
irreversible.
(e) Debt instrument with no active market: These are debt instruments with no active market quote and
measured at amortized cost. The impairment loss is recognized if there is evidence indicating that a
decline in the value of an investment is other than temporary. If in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognized, the previous recognized impairment loss is reversed through the profit and
loss .The carrying value after the reverse should not exceed the amortized balance of the assets assuming
no impairment loss was recognized.
(G) Loans and AdvancesLoans and advances are recorded at principals outstanding, excluding unearned revenue. Interest revenue is
recognized on accrual basis using the interest method.
Interest accrual on loans and advances is suspended if either of the following occurs:
(a) Payment of principal or interest is delinquent for 6 months and beyond; or
(b) Payment of principal or interest is delinquent for less than 6 months but is already classified as a
delinquent loan.
The accrual interests of the suspension period is recognized as earnings when collected cash.
(H) Allowance for Credit Losses and Reserve for GuaranteeIn accordance with the “rules Governing the Evaluation of Loss reserve Provision on Bank Assets and
Disposal of overdue loans and Bad Debts ” issued by financial Supervisory Commission, Executive Yuan,
r.o.C, the Bank evaluates the non-credit assets in and off the balance sheet by the characteristic of the
assets in order to assess the possible loss and loss reserve provision .
The normal credit assets are classified as first class and the other bad credit assets are classified as different
categories, namely, second class “need to pay attention”, third class ” expected to regain’’, fourth class’’
difficult to recover’’ and fifth class as “irrecoverable’’ depending on the status of guarantee and length of time
overdue.
The Bank evaluate credit assets per aforementioned regulation and recognizes the minimum amounts of bad
debt expense and reserve for guarantee based on certain percentage of each class of credit assets such as
2% of the balance of second class credit assets, 10% of the balance of third class credit assets, 50% of the
balance of fourth class credit assets and 100% of the balance of fifth class credit assets.
Unrecoverable overdue loans and bad debts are written-off after deducting the recoverable portion .Upon
approval by the board of directors and notification to supervisors , the excess amount of written off loans over
such allowance or reserve is reflected as a current loss.
(I) Investments under the Equity MethodInvestees in which the Bank and its subsidiaries directly or indirectly, hold more than 20% of the outstanding
stock with voting power, or hold less than 20% of outstanding stock with voting power but has significant
influence over the investees are accounted for under the equity method.
Commencing from January 1, 2006, the Bank adopted the amended SfAS No. 5 “Long-term Investments
under Equity Method”. Under the standard, the difference between the investment cost and the net equity of
the investee acquired is recognized in accordance with this amended standard.
The difference between original investment cost and net equity value of the investee previously recognized is
amortized equally over 5 years due to the inability of analyzing underlying causes is no longer amortized from
Taiwan Business Bank ︱ Annual Report 201032
January 1 2006.
Upon disposition, gain or loss on disposal of long-term equity investment is calculated based on the difference
between selling price and book value. The remaining capital surplus arising from long-term equity investment
is adjusted to profit and loss based on the percentage of sales.
(J) Property and Equipment Property and equipment are stated at cost plus revaluation appreciation, if any. The cost for major
renovations, additions, and improvements are capitalized, while repairs and maintenance costs are charged to
current earnings.
Depreciation is provided by using the straight-line method over the estimated useful lives. revaluation
appreciation is depreciated over the remaining useful lives from the date of revaluation. The economic lives of
major property and equipment are as follows:
Buildings 10 to 50 years
Machinery 3 to 5 years
Transportation equipment 3 to 6 years
Miscellaneous equipment 5 to 8 years
Leased assets 5 years
Gain or loss from disposition property and equipment is included in current earnings.
(K) Deferred ChargesThe costs of installation for utilities, including electricity and water, as well as security facilities, are capitalized
and amortized equally over 5 years.
(L) Collateral AssumedCollaterals assumed are stated at the lower of net book value or net realizable value; i.e., the amount the Bank
receives when creditors cannot meet obligations and the collaterals and salvages are auctioned off. Under
SfB Letter ruling (2) 094801856 on July 11, 2005, collateral assumed must be disposed before December
31, 2005. If the Bank is unable to dispose the collateral assumed before December 31, 2005, it reserves a
provision for loss equal to the carrying value of the collateral assumed. on disposition of collateral, the related
provision is reversed. The selling price deducts the original book value of collateral assumed is recognized as
gain on sale of collateral assumed.
(M) Reserve for Default LossesIn compliance with the rules Governing Securities firms, the Bank provides monthly a default indemnity
reserve based on 0.0028% of securities brokerage turnover until the balance of the reserve reaches $200,000.
Such reserve may only be used to cover default losses from securities brokerage or otherwise upon SfC
approval.
(N) Reserve for Trading LossesIn compliance with rules Governing Securities firms, the Bank provides securities trading loss reserve at
the rate of 10% of net gain from trading of operating securities when net gain exceeds loss. This reserve is
reversed in the month when the loss is actually realized. Also, this reserve is made until the balance reaches
$200,000.
(O) Pension PlanThe Bank adopted the roC Statement of financial Accounting Standards (SfAS) No. 18, “Accounting for
Pensions”. An actuarial valuation of pension liability for defined benefit plan is performed on balance sheet
date, and a minimum pension liability is disclosed in the financial statements based on the difference between
the accumulated benefit obligation and the fair value of plan assets. The Bank follow SfAS18 to recognize the
pension cost.
Under the “Labor Pension Act” which became effective on July 1, 2005(hereinafter called the “new pension
plan’), if an old employee chooses to adopt the “new pension plan” and new employee adopts the contributory
defined benefit pension plan, the employer is required to contribute monthly an amount equal to not be less
fIN
AN
CIA
L S
TA
TE
ME
NT
S
33
Ⅵ
than 6% of the employees' monthly salary into the employees individual pension fund accounts with the
Bureau of Labor Insurance .Such contribution is charged to current expense account.
(P) Recognition of Interest Revenue and Commissions and Handling FeesInterest is recognized on an accrual basis . Interest accrual is suspended from the date when the loan is
reclassified to non-performing loan and only when the Bank received cash , the revenue is recognized.
Income from commission and handling fees are recognized when the Bank received cash or the revenue is
earned.
(Q) Income TaxesThe Bank adopted SfAS No. 22 “Accounting for Income Tax” to effect inter and intra- period income tax
allocation. Income tax effects from taxable temporary differences are reported as deferred tax liabilities, and
deductible temporary differences, prior years’ loss carry forwards, and investment tax credits are reflected as
deferred tax assets. Deferred tax assets are recognized subject to management’s judgment that realization
is more likely than not. Adjustments to prior year’s income tax expenses are reflected as current income tax
expense.
The 10% surtax on undistributed earnings is reported as current expense on the date when the stockholders
decided not to distribute the earnings during their annual meeting.
(R) Earnings per Share (EPS)EPS is based on the weighted-average number of shares outstanding. In the event of capital increase through
capitalization of retained earnings, capital surplus, or employee bonuses, EPS is retroactively adjusted based
on the percentage of capital increase, regardless of the period when the incremental shares are outstanding.
The Company’s employee bonuses issued by stocks were dilutive potential common shares. If the potential
common shares has a non-dilutive effect, the Bank should only disclose the basic earnings per share. on
the contrary, if the potential common shares have a dilutive effect, the Bank should disclose both the basic
and diluted earnings per share. In calculating the diluted earnings per share which should take the effect of
potential common shares to net income and the weighted-average number of common shares outstanding
share into consideration is based on the assumption that all dilutive potential common shares are outstanding
and of the current period.
(S) Significant Commitments and ContingenciesIf the loss from a commitment or a contingency is deemed highly likely and the amount thereof can be
reasonably estimated, such loss is recognized currently; otherwise only the nature of commitment and
contingency is disclosed in the notes to financial statements.
(T) Employee Bonuses and Directors’ EmolumentsEmployee bonuses and directors’ emoluments appropriated after 1 January 2008 are accounted for by
Interpretation (96)052 issued by the Accounting research and Development foundation. The Company
estimates the amount of employee bonuses and directors’ emoluments according to the Interpretation and
recognizes it as expenses. Differences between the amounts are approved in the shareholders’ meeting and
recognized in the financial statements, if any, and accounted for as changes in accounting estimates and
recognized as profit or loss.
Taiwan Business Bank ︱ Annual Report 201034
(3) REASONS FOR AND EFFECTS OF ACCOUNTING CHANGES: NONE
(4) SUMMARY OF MAJOR ACCOUNTS:
(A) CASH AND CASH EQUIVALENTS
December 31, 2010 December 31, 2009
Petty cash $ 7,725,985 7,964,126
foreign currency on hand 957,117 1,090,396
Checks awaiting clearing 4,077,457 6,321,952
Cash in banks 2,603,462 1,821,075
Total $ 15,364,021 17,197,549
(B) DUE FROM THE CENTRAL BANK AND CALL LOANS TO BANKS
December 31, 2010 December 31, 2009
Due from the Central Bank $ 50,751,661 42,957,367
Deposits transferred to Central Bank 142,261 260,144
Call loans to banks 20,826,253 22,644,865
Trust fund reserve 70,000 50,000
Securities deposited as trust fund reserve (70,000) (50,000)
Total $ 71,720,175 65,862,376
As of December 31, 2010 and 2009, in accordance with the Banking Law and the Central Bank Law, the
required reserve deposited by the Bank with the Central Bank amounted to $50,658,745 and $42,942,829, of
which $27,164,755 and $32,674,749 respectively, were restricted and such restriction may only be lifted when
the required reserve is adjusted to a lower amount.
Effective December 2000, in accordance with the amended “rules Governing Adjustments to and review of
Deposits in financial Institutions and reserve for other Liabilities”, the Bank provides the required additional
reserve on foreign currency deposits. As of December 31, 2010 and 2009, the required reserve with the
Central Bank amounted to $92,916 and $14,538 respectively, and its use is unrestricted.
As of December 31, 2010 and 2009, deposits collected on behalf of the armed forces, prisons, and other
national deposits amounted to $142,261 and $260,144, respectively, and their use are restricted.
Effective January 20, 2001, in accordance with the requirement of the Central Bank of China, the Bank
complies with Clause 34 of the Trust Law to treat the discretionary trust of investments in overseas marketable
securities as a default loss reserve. As of December 31, 2010 and 2009, the Bank deposited marketable
securities of $70,000 and $50,000, respectively, as a trust fund reserve.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
35
Ⅵ
(C) FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS-NET
December 31, 2010 December 31, 2009
financial assets held for trading:
Commercial paper $ 1,568,213 499,526
Negotiable certificates of time deposits - 1,794
Government bonds - 52,180
Listed and oTC stocks - 33,132
Beneficiary certificates 111,391 374,469
foreign exchange forward contracts 142,369 37,433
Currency swap contracts 143,814 55,193
Non- delivery forward contracts 4,552 4,104
Interest swap contracts 50,576 27,286
Currency option-call 24,685 17,866
Structured product option-call 396 -
Stock index futures 23,486 -
Sub-total 2,069,482 1,102,983
financial assets designated at fair value at initialrecognition:
overseas bonds 2,213,281 1,201,415
Total $ 4,282,763 2,304,398
Please refer to Note 7(A) for the information with regard to resale conditions for financial assets held for
trading shown above.
As of December 31, 2010, and 2009 the nominal amounts of unsettled financial derivatives instrument
contracts were as follows:
December 31, 2010 December 31, 2009
foreign exchange forward contracts $ 5,188,541 2,427,603
Currency swap contracts 47,891,798 43,254,786
Non- delivery forward contracts 771,775 1,801,635
Interest swap contracts 13,408,538 9,213,025
option contracts 1,694,449 1,161,920
(D) BILLS AND BONDS PURCHASED UNDER RESALE AGREEMENTS
December 31, 2010 December 31, 2009
Bills purchased under resale agreements $ 2,519,348 1,233,898
resale period 2011.1.3~2011.1.19 2010.1.4~2010.1.15
range of resale interest rate 0.49%~0.53% 0.26%~0.28%
resale price $ 2,519,669 1,233,981
Taiwan Business Bank ︱ Annual Report 201036
(E) RECEIVABLES -NET
December 31, 2010 December 31, 2009
Interest receivable $ 1,570,055 1,421,889
Bankers' acceptances receivable 2,488,679 2,078,151
revenue receivable 24,173 18,337
Accounts receivable 2,654,317 1,836,307
Income tax refundable 646,496 570,288
factoring account receivable 433,997 116,798
Spot exchange receivable 11,558,357 11,716,043
other receivables 479,547 678,436
Sub-total 19,855,621 18,436,249
Less: Allowance for doubtful accounts (145,414) (157,551)
net $ 19,710,207 18,278,698
(F) DISCOUNTS AND LOANS –NET
December 31, 2010 December 31, 2009
foreign currency imports/exports financing $ 374,912 675,396
Notes discounted 2,065,473 2,621,261
Customer overdrafts 42,441 456,099
Secured overdrafts 1,250,785 3,286,073
Short-term unsecured loans 119,894,984 163,058,691
Short-term secured loans 112,276,504 110,411,767
receivables from securities lending 2,827,001 2,130,060
Medium-term unsecured loans 217,914,601 191,887,904
Medium-term secured loans 125,019,211 108,101,402
Long-term unsecured loans 21,780,148 48,865,696
Long-term secured loans 321,581,535 273,137,548
receivables for margin loans 177,478 36,221
Non-accrual loans 10,098,590 16,319,421
Sub-total 935,303,663 920,987,539
Less: Allowance for doubtful accounts (8,333,397) (8,184,529)
net $ 926,970,266 912,803,010
(G) AVAILABLE-FOR-SALE FINANCIAL ASSETS-NET
December 31, 2010 December 31, 2009
Government bonds $ 5,748,892 5,535,954
Corporate bonds 705,536 703,539
financial bonds - 70,068
Beneficiary certificate 16,318 244,072
overseas bonds 7,847,252 10,334,537
Listed and oTC stocks 610,357 353,869
overseas stocks - 40,305
Subtotal 14,928,355 17,282,344
Less: Accumulated impairment - (366,334)
Total $ 14,928,355 16,916,010
Please refer to Note 7(A) for the information with regard to conditions on available-for-sale financial assets
shown above.
The Bank has recognized an asset impairment loss of $0 and $ 366,334 due to its investment loss in overseas
bonds, as of December 31, 2010 and 2009.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
37
Ⅵ
(H) HELD-TO- MATURITY FINANCIAL ASSETS-NET
December 31, 2010 December 31, 2009
Certificates of deposit with Central Bank $ 127,900,000 121,000,000
Corporate bonds 4,280,309 4,919,159
financial bonds - 399,962
Government bonds 2,378,146 2,112,151
Beneficiary certificates 133,467 516,251
overseas bonds 857,570 916,807
Total $ 135,549,492 129,864,330
As of December 31, 2010 and 2009, held-to-maturity financial assets provided and deposited as reserve for
trust loss and operational guaranty for provisional seizure by the court, international card payment reserve,
trust claim reserve and operating guaranty funds amounted to $797,600 and $850,700, respectively.
In order to comply with the immediate tax settlements mechanism of Central Bank and the interbank funds
transfer system, the Bank provided time deposits with Central Bank amounted to $24,100,000 and $10,500,000
as overdraft guarantee as of December 31, 2010 and 2009, respectively. The amount of the guarantee can be
modified anytime and the remaining amount could be served as liquid reserves.
(I) INVESTMENTS UNDER THE EQUITY METHOD -NET
December 31, 2010 December 31, 2009
Book Value Ownership% Book Value Ownership%
Primasia Investment Trust Co. Ltd (with original investment cost of $105,024) $ - - 55,298 20.00
Taiwan Business Bank Insurance Agency Co., Ltd. (with original investment cost of $2,000)
41,459 100.00 28,339 100.00
Taiwan Business Bank Property Insurance Agency Co., Ltd. (with original investment cost of $3,000)
3,815 100.00 943 100.00
Total $ 45,274 84,580
The Bank disposed 6,000,000 shares of Primasia Investment Trust Co., Ltd which is evaluated under the
equity method. The execution proceeds and profit amounted to 113,820 and 62,084 respectively and were
recognized as gain and loss under the equity method investment.
for the years ended December 31, 2010 and 2009, investment income recognized under the equity method
amounted to $26,419 and $13,310 respectively.
for the years ended December 31, 2010 and 2009, the Bank received cash dividend from Taiwan Business
Bank Insurance Agency Co., Ltd. amounted to $13,989 and $10,966, respectively.
for the ownership of investee companies held by the Bank exceeding 50%, the amount was not significant.
Therefore, the Bank did not prepare consolidated financial statements.
Taiwan Business Bank ︱ Annual Report 201038
(J) OTHER FINANCIAL ASSTES-NET
December 31, 2010 December 31, 2009
Non-accrual receivables $ 309,519 266,986
Less:Allowance for doubtful accounts (113,661) (76,144)
Non-accrual receivables-net 195,858 190,842
foreign currency long positions 18,899 3,313
financial assets measured at cost 2,272,385 2,272,385
Less:Accumulated impairment – financial assetsmeasured at cost (214,958) (214,958)
financial assets measured at cost-net 2,057,427 2,057,427
Debt instrument with no active market 1,500,000 1,500,000
restricted assets – Negotiable certificate of deposit 61,950 67,570
restricted assets – Zero-coupon bond 37,797 41,449
restricted assets – Banker's acceptance 446,350 344,155
Total $ 4,318,281 4,204,756
(a) financial assets measured at cost are as follows:
InvesteeDecember 31, 2010 December 31, 2009
Amount % Amount %
Taiwan Power Company $11,427 - 11,427 -
Taiwan Sugar Corporation 61,364 0.30 61,364 0.30
Sunysino Development Associated Inc. 17,440 3.96 17,440 3.96
"Taiwan Small & Medium Enterprises Devel. Co., Ltd." 29,000 4.84 29,000 4.84
Taipei forex Incorporation 7,000 3.53 7,000 3.53
financial Information Service Co., Ltd. 45,500 1.14 45,500 1.14
Evernight Investment Co., Ltd. 500,000 4.95 500,000 4.95
Taiwan Stock Exchange Corp. 198,012 0.95 198,012 0.95
Asia Pacific Telecom Co., Ltd. (originally named 300,000 0.46 300,000 0.46
Asia Pacific Broadband Telecom Co.,Ltd.)
Taiwan futures Exchange Co., Ltd. 20,000 1.00 20,000 1.00
koyon Capital Corporation (originally named koyon Small & Medium Enterprises Devel. Co.,Ltd.) 4,958 5.00 4,958 5.00
Taiwan Asset Management Corp. 1,000,000 5.68 1,000,000 5.68
Taiwan finance Asset Service Corp. 50,000 2.94 50,000 2.94
financial E-Solution Co., Ltd. 19,285 5.13 19,285 5.13
Taiwan Depository and Clearing Corp. 4,639 0.08 4,639 0.08
Taiwan Integrated Shareholder's Service Company 3,300 1.10 3,300 1.10
Yand Guang Asset Management Corp. 460 0.77 460 0.77
Subtotal 2,272,385 2,272,385
Less:Accumulated impairment-Asia Pacific (210,000) (210,000)
Telecom Co,Ltd.
Accumulated impairment- koyon Capital (4,958) (4,958)
Corporation
Total $2,057,427 2,057,427
There is evidence indicating that a decline in the value of Asia Pacific Telecom Co., Ltd. (originally named Asia
Pacific Broadband Telecom Co., Ltd.) is other than temporary, therefore, the Bank recognized impairment loss
of $210,000 in the past year. The Bank recognized impairment loss of $4,958 of koyon Capital Corporation
fIN
AN
CIA
L S
TA
TE
ME
NT
S
39
Ⅵ
(originally named koyon Small & Medium Enterprises Devel. Co., Ltd. ), which has already conducted
liquidation procedures in the previous year.
The Bank disposed 146,250 shares of United Taiwan Bank S.A. for $127,279 which resulted in a gain of $1,357
(recorded as gain from financial asset measured at cost) as of September 22, 2009.
(b) Debt instrument with no active market are as follows:
December 31, 2010 December 31, 2009InvesteeTaiwan High Speed rail Corp. Preferred Stock
$1,500,000 1,500,000
(K) PROPERTY AND EQUIPMENT-NET
December 31, 2010 Cost RevaluationAppreciation Total
Cost Land $6,538,600 2,422,644 8,961,244 Buildings 7,199,472 31,035 7,230,507 Machinery 2,180,087 - 2,180,087 Transportation equipment 332,854 - 332,854 Miscellaneous equipment 579,776 - 579,776 Lease improvement 87,002 - 87,002 Construction in progress 3,034 - 3,034 Prepayment for equipment 62,472 - 62,472 Leased assets 1,305 - 1,305
$16,984,602 2,453,679 19,438,281 Accumulated depreciation Buildings $2,611,603 16,617 2,628,220 Machinery 1,780,970 - 1,780,970 Transportation equipment 288,180 - 288,180 Miscellaneous equipment 520,893 - 520,893 Lease improvement 33,977 - 33,977 Leased assets 157 - 157
$5,235,780 16,617 5,252,397
net 14,185,884
December 31, 2010 Cost RevaluationAppreciation Total
Cost Land $6,538,600 2,422,644 8,961,244 Buildings 7,186,026 31,035 7,217,061 Machinery 2,193,919 - 2,193,919 Transportation equipment 341,158 - 341,158 Miscellaneous equipment 584,529 - 584,529 Lease improvement 84,183 - 84,183 Prepayment for equipment 180,613 - 180,613
$17,109,028 2,453,679 19,562,707 Accumulated depreciation Buildings $2,432,464 16,617 2,449,081 Machinery 1,756,309 - 1,756,309 Transportation equipment 285,305 - 285,305 Miscellaneous equipment 517,085 - 517,085 Lease improvement 42,832 - 42,832
$5,033,995 16,617 5,050,612
net 14,512,095
Taiwan Business Bank ︱ Annual Report 201040
(a) Land and buildings were revalued on June 30, 1975, July 1, 1981, July 1, 1990, July 1, 1992, July 1, 1996,
April 10, 1997 January 1, 2006 and January 1, 2009 in accordance with the “Land right Equalization Act”
or “Profit Seeking Enterprise Asset revaluation Act.”
(b) As of December 31, 2010 and 2009, the appreciation from revaluation of properties (including rental assets
under operating lease and reflected as other assets) both amounted to $2,709,196. The reserve for land
incremental tax thereon both amounted to $782,281 (reflected as other liabilities), and the net amount is
classified under unrealized revaluation appreciation.
(L) OTHER ASSETS
December 31, 2010 December 31, 2009
Supplies inventory $ 23,783 22,345
Prepayments 1,423,851 1,419,137
Non-operating assets,net 414,261 417,410
operating guaranty and settlement funds 74,347 71,055
Guarantee deposits paid 179,973 171,835
Less:Allowance for credit losses (28,710) (28,710)
Guarantee deposits paid-net 151,263 143,125
Collateral assumed 432,130 483,341
Less:Allowance for credit losses (432,130) (483,341)
Collateral assumed-net - -
Deferred income tax assets-net (Note (4)(V)) 1,757,869 2,007,869
Deferred charges 552 628
Temporary payments and suspense - 87,316
Total $ 3,845,926 4,168,885
Non-operating assets consisted of leased or idle land or buildings are as follows:
December 31, 2010 December 31, 2009
Rental Assets
Cost
Land $ 37,250 37,250
Buildings 52,449 52,433
Sub-total 89,699 89,683
revaluation appreciation
Land 43,967 43,967
Buildings 149 149
Sub-total 44,116 44,116
Cost plus revaluation appreciation 133,815 133,799
Less: Accumulated depreciation (19,714) (18,447)
Less: Accumulated impairment (1,738) (1,738)
net $ 112,363 113,614
fIN
AN
CIA
L S
TA
TE
ME
NT
S
41
Ⅵ
December 31, 2010 December 31, 2009
Idle Assets
Cost
Land $ 49,976 49,976
Buildings 97,244 97,244
Sub-total 147,220 147,220
revaluation appreciation
Land 211,401 211,401
Cost plus revaluation appreciation 358,621 358,621
Less: Accumulated depreciation (22,894) (20,996)
Less: Accumulated impairment (33,829) (33,829)
net $ 301,898 303,796
Net of rental assets and idle assets $ 414,261 417,410
As of both December 31, 2010 and 2009, land amounted to $69,205 was illegally occupied. Part of the illegally
occupied land would be disposed after the Bank received the certificate of legal costs and the rest would be
auctioned at appropriate time.
(M) DEPOSITS FROM THE CENTRAL BANK AND OTHER BANKS
December 31, 2010 December 31, 2009
Central Bank deposits $ 394,246 1,399,247
Call loans from Central Banks 6,490,000 4,182,880
Deposits from other banks 1,523,718 126,203
Call loans from banks 17,013,375 17,788,871
Bank overdrafts 747,455 1,745,734
Post office deposits 59,913,138 81,828,811
Total $ 86,081,932 107,071,746
(N) FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31, 2010 December 31, 2009
foreign exchange forward contracts $ 23,634 38,928
Currency swap contracts 66,511 16,237
Non-delivery forward contracts 4,497 3,473
Interest swap contracts 206,616 178,883
foreign exchange option - put 24,685 17,866
Structured options - put 2 -
Toatl $ 325,945 255,387
The nominal amount of unsettled financial derivatives instrument contracts of December 31, 2010 and 2009
please refer to (4) (C).
Taiwan Business Bank ︱ Annual Report 201042
(O) BILLS AND BONDS SOLD UNDER REPURCHASE AGREEMENTS
December 31, 2010 December 31, 2009
Bills sold under repurchase agreements $ 3,858,724 1,733,815
Bonds sold under repurchase agreements 6,091,936 2,396,233
Total $ 9,950,660 4,130,048
repurchase period 2011.1.3~2011.6.8 2010.1.4~2010.6.14
range of repurchase interest rate 0.25%~0.53% 0.1%~0.22%
repurchase price
Bills sold under repurchase agreements $3,859,097 1,733,896
Bonds sold under repurchase agreements 6,093,684 2,396,685
Total $ 9,952,781 4,130,581
(P) PAYABLES
December 31,2010 December 31,2009
Interest payable $ 1,623,774 1,688,624
Accounts payable 4,089,147 6,322,494
Bankers' acceptance 2,580,237 2,136,041
Accrued expenses 1,771,339 1,486,314
Proceeds collected on behalf of others 678,532 747,955
Deposits received from securities borrowers 132,305 128,692
Guaranteed price from securities borrowers 145,898 142,661
factoring payable 69,860 43,902
Spot exchange payable 11,577,585 11,713,259
other payable 1,111,155 1,246,388
others 2,372 2,317
Total $ 23,782,204 25,658,647
(Q) DEPOSITS AND REMITTANCES
December 31, 2010 December 31, 2009
Savings deposits $ 515,891,876 497,442,729
Time deposits 235,371,020 228,091,232
Demand deposits 219,065,510 217,206,507
Checking deposits 21,472,847 20,891,006
remittances 546,940 456,431
Total $ 992,348,193 964,087,905
fIN
AN
CIA
L S
TA
TE
ME
NT
S
43
Ⅵ
(R) FINANCIAL DEBENTURES
December 31, 2010
Terms of Transactions Bond Issued
Bonds Issue date Maturity date Interest Rate Type Amount
2001-1 11/20/2001 11/20/2011 The debentures bear annual interest rate of 3.7%.Simple interest is accrued and paid annually. one-fifth of the principal will be repaid annually from the sixth year.
Unsecured subordinated long-term financial debentures
$ 100,000
2007-1 8/23/2007 08/23/2014 The debentures bear annual interest rate, which is the index rate plus 0.49%. The index rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date. Simple interest is accrued quarterly and paid annually. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
5,000,000
2008-1 3/13/2008 09/13/2013 The debentures bear annual interest rate, which is the index rate plus 0.75%. Theindex rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date. Simple interest is accrued quarterly and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
3,000,000
2008-1 3/13/2008 09/13/2013 The debentures bear annual interest rate of 3.1%.Simple interest is accrued and paid twice a year.
Unsecured subordinated long-term financial debentures
450,000
2008-1 3/13/2008 03/13/2014 The debentures bear annual interest rate of 3.15%.Simple interest is accrued and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
1,100,000
2008-2 4/30/2008 04/30/2015 The debentures bear annual interest rate, which is the index rate plus 1.02%. The index rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date. Simple interest is accrued quarterly and paid annually. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
5,200,000
2008-3 12/30/2008 06/30/2014 The debentures bear annual interest rate of 3.2%. Simple interest is accrued and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
2,150,000
2009-1 6/10/2009 12/10/2014 The debentures bear annual interest rate of 2.45%. Simple interest is accrued and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
1,400,000
Taiwan Business Bank ︱ Annual Report 201044
December 31, 2010
Terms of Transactions Bond Issued
Bonds Issue date Maturity date Interest Rate Type Amount
2009-2 8/27/2009 8/27/2015 The debentures bear annual interest rate of 2.35%. Simple interest is accrued and paid once a year.The principal will be repaid in full at maturity.
Unsecuredsubordinated long-termfinancialdebentures
1,000,000
2009-1P 10/23/2009 None The debentures bear annual interest rate which is the seven Banks' board floating average interest rate for 1-year time deposit plus 1.29% for the seven years after the issue date. The interest rate will be the seven Banks' board floating average interest rate for 1-year time deposit plus 2.29% from the eighth year. The bond is redeemable per face balue at the interest payment date after seven years from the issue date under the consent of the competent authority.
Perpetualaccumulatedsubordinatedfinancialdebentures
12,000,000
2009-3 12/18/2009 12/18/2016 The debentures bear an annual interest rate of 2.5%,Simple interest rate is accrued and paid annually. The principal will be repaid in full at maturity.
Unsecuredsubordinated long-termfinancialdebentures
1,550,000
2010-1 3/5/2010 3/5/2017 The debentures bear an annual interest rate of 2.32%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.
Unsecuredsubordinated long-termfinancialdebentures
1,050,000
2010-2 9/2/2010 9/2/2017 The debentures bear an annual interest rate of 1.92%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.
Unsecuredsubordinated long-termfinancialdebentures
6,000,000
2010-1PA 9/23/2010 None The debentures bear annual interest rate which is the Chunghwa post's board average interest rate for 1-year time deposit plus 1.34% for the ten years after the issue date. The interest rate will be the Chunghwa post's board interest rate for 1-year time deposit plus 2.34% from the eleventh year. The debentures is redeemable per face value plus accrued interest at the interest payment date after ten years from the issue date under the consent of the competent authority.
Perpetualunaccumulatedsubordinatedfinancialdebentures
3,200,000
2010-1P B 9/23/2010 None The debentures bear an interest rate of 3.05% for the first ten years. The interest rate will be 4.05% from the eleventh year. The debentures is redeemable per face value plus accrued interest at the interest payment date after ten years from the issue date under the consent of the competent authority.
Perpetualunaccumulatedsubordinatedfinancialdebentures
800,000
$ 44,000,000
fIN
AN
CIA
L S
TA
TE
ME
NT
S
45
Ⅵ
December 31, 2009
Terms of Transactions Bond Issued
Bonds Issue date Maturity date Interest Rate Type Amount
2001-1 11/20/2001 11/20/2011 The debentures bear annual interest rate of 3.7%.Simple interest is accrued and paid annually. one-fifth of the principal will be repaid annually from the sixth year.
Unsecured subordinated long-term financial debentures
$ 200,000
2007-1 8/23/2007 08/23/2014 The debentures bear annual interest rate, which is the index rate plus 0.49%. The index rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date. Simple interest is calculated quarterly and paid annually. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
5,000,000
2008-1 3/13/2008 09/13/2013 The debentures bear annual interest rate, which is the index rate plus 0.75%. The index rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date.Simple interest is accrued quarterly and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
3,000,000
2008-1 3/13/2008 09/13/2013 The debentures bear annual interest rate of 3.1%.Simple interest is accrued and paid twice a year.
Unsecured subordinated long-term financial debentures
450,000
2008-1 3/13/2008 03/13/2014 The debentures bear annual interest rate of 3.15%.Simple interest is accrued and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
1,100,000
2008-2 4/30/2008 04/30/2015 The debentures bear annual interest rate, which is the index rate plus 1.02%. The index rate is the average offer of 90-days CP which is indicated in reuters page 6165 at 11 A.M Taipei time, 2 operation days prior to the interest commencement date. Simple interest is accrued quarterly and paid annually. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
5,200,000
2008-3 12/30/2008 06/30/2014 The debentures bear annual interest rate of 3.2%. Simple interest is accrued and paid twice a year. The principal will be repaid in full at maturity.
Unsecured subordinated long-term financial debentures
2,150,000
2009-1 6/10/2009 12/10/2014 The debentures bear annual interest rate of 2.45%. Simple interest is accrued and paid twice a year.
Unsecured subordinated long-term financial debentures
1,400,000
2009-2 8/27/2009 8/27/2015 The debentures bear annual interest rate of 2.35%. Simple interest is accrued and paid once a year. The principal is paid in full at maturity.
Unsecured subordinated long-term financial debentures
1,000,000
Taiwan Business Bank ︱ Annual Report 201046
2009-1P 10/23/2009 None The debentures bear an annual interest rate which is the seven Banks' board floating average interest rate for 1-year time deosit plus 1.29% for the seven years after the issue date. The interest rate will be the seven Banks' board floating average interest rate for 1-year time deposit plus 2.29% from the eighth year. The debentures will be redeemable per face value at the interest payment date after seven year from the issue date under the consent of the competene authority.
Perputual accumulsted subordinated financial debentures
12,000,000
2009-3 12/18/2009 12/18/2016 The debentures bear annual interest rate of 2.5%. Smple interest is accrued and paid once a year. Te principal is repaid in full at maturity.
Unsecured subordinated long-term financial debentures
1,550,000
$ 33,050,000
(S) OTHER FINANCIAL LIABILITIES
December 31, 2010 December 31, 2009
funds appropriated for loans $ 10,373,287 9,743,364
Lease payable 1,132 -
other miscellaneous items - finance debt 178,075 -
Total $ 10,552,494 9,743,364
(T) OTHER LIABILITIES
December 31, 2010 December 31, 2009
Advance interest $ 1,552 300
Advance revenue 155,783 111,709
other advances 29,072 37,386
Estimated reserve for land value incremental tax 782,281 782,281
reserve for guarantees 1 -
reserve for trading loss 88,591 87,423
reserve for default loss 96,536 87,122
reserve for contingent loss 41,321 35,212
Guarantee deposit-in 675,964 566,793
Temporary collections and accounts awaiting clearance
696,327 -
Total $ 2,567,428 1,708,226
(U) STOCKHOLDERS’ EQUITY(a) Common stock
As of December 31, 2010 and 2009, the paid-in capital for common shares of the Bank was $40,285,419
and $38,735,980 and the outstanding shares were 4,028,542 thousand shares and 3,873,598 thousand
shares.
Pursuant to the resolution approved by the stockholders’ meeting of the Bank on June 23, 2010, in order
to meet the need to increase capital and issue new shares, the Bank increased its authorized capital to
$60,000,000, the paid-in capital for common shares of the Bank was $40,285,419. Besides, Pursuant to
fIN
AN
CIA
L S
TA
TE
ME
NT
S
47
Ⅵ
the resolution approved by the shareholders’ meeting of the Bank on June 23, 2010, the Bank using the
reserve for capitalization of $1,549,439 from share premium-common stock to increase capital and issue
154,944 thousand shares. The case of capital increase has been submitted to financial Supervisory
Commission, Executive Yuan on August 11, 2010. Capital increase date set on September 14, 2010, the
replenishment of the case, the legal registration procedures have been completed.
(b) Capital Surplus
Under the Company Law, except for the additional paid-in capital and capital surplus arising from
donations, which can be used to increase capital or offset losses, capital surplus can only be used to
offset cumulative losses. SfC regulations permit capitalization of capital surplus only once a year, and the
amount should not exceed 10% of actual capital.
(c) Earnings Distribution and Dividend Policy
Under the Bank’s Articles of Incorporation, earnings are used initially to pay for income taxes and restore
cumulative losses. 30% of the remaining earnings is set aside as legal reserve. Special reserve is
appropriated from earnings if necessary for business expansion.
The remaining balance of these earnings, if any, is distributed as follows:
1. Dividends according to the proposal submitted by the Board of Directors to the annual stockholders’
meeting for resolution.
2. Employees bonus: 1% to 8%.
3. remuneration to directors and supervisor: 1%.
In principle, the amounts of cash and stock dividends shall be equal. If the ratio of capital held by the
Bank to risk assets is lower than the ratio stipulated by the government plus 1% after the distribution, cash
dividends per share shall not exceed $0.5, and the remainder is distributed as stock dividends. Employees’
bonus may be in the form of cash or stock dividends, depending on the board of directors’ resolution. The
Bank estimated employee bonuses $112,349 and 80,196, and the directors’ remuneration $14,044 and
10,024 for the years ended December 31, 2010 and 2009, respectively. This estimate was calculated
based on the estimated income before tax conversion from income before tax for the years ended
December 31, 2009, deduct legal reserve and special reserve multiply the distribution rate of employee
bonuses and remuneration directors remuneration of 8% and 1%. The shares of stock dividends were
calculated based on the closing price of the date before stockholder’s meeting and it also took into
consideration the effect of stock dividends. Differences between the amount approved at the shareholders’
meeting and recognized in the financial statement are accounted for as changes in accounting estimates
and recognized as 2011 profit or loss.
The resolved amounts of $80,196 and $10,024 of the employee bonuses and directors and supervisors
remuneration were consistent with the resolutions of the meeting of the shareholders held on June 23,
2010.
The information about the appropriations of employee bonuses and directors and supervisors remuneration
is available at the Market observation Post System website.
When the balance of legal reserve is still less than the level of total paid-in capital, payment of cash
dividends shall not exceed 15% of total paid-in capital.
Under the rules set forth by the SfC, special reserve is appropriated from retained earnings based on the
equivalent amounts of the contra accounts in the stockholders’ equity. This special reserve may not be
distributed as dividends to stockholders until the balances of these contra accounts in the stockholders’
equity is reversed.
Taiwan Business Bank ︱ Annual Report 201048
(V) INCOME TAXES(a) on December 31, 2010 and 2009, the components of deferred tax assets were as follows:
December 31, 2010 December 31, 2009
Deductible temporary difference due to provision for reserve for default loss and contingent loss $ 28,350 30,176
Deductible temporary difference due to provision for reserve for trading loss 15,032 17,451
Deductible temporary difference due to amortization of pension expense under SfAS 18 77,352 91,002
Provisions for impairment losses on available-for-sale financial assets - 73,267
Deductible temporary difference due to provision of allowance for bad debts exceeding limit - 40,383
Deductible temporary difference due to provision for impairment losses on other assets 10,927 12,856
Deductible temporary difference due to provision for impairment losses on other financial assets 36,543 42,992
Deductible temporary difference due to provision for contingent losses of lawsuit 51,113 60,134
Deductible temporary difference due to provision for unrealized loss on available-for-sale financial assets 23,290 78,463
Deferred loss on disposal of non-performing loan - 60,493
Available loss carryforward benefits 4,061,049 4,573,941
Tax effect on unused investment tax credits 16,876 22,561
Deductible temporary difference from cumulative translation adjustments 3,314 (192)
$ 4,323,846 5,103,527
(b) Deferred income tax assets and liabilities was as follows:
December 31, 2010 December 31, 2009
Deferred income tax assets $ 4,323,846 5,103,527
Allowance for deferred income tax assets (2,565,977) (3,095,658)
net $ 1,757,869 2,007,869
fIN
AN
CIA
L S
TA
TE
ME
NT
S
49
Ⅵ
(c) In compliance with the amendment of the Income Tax Act which was originally published on May 27, 2009,
the statutory income tax rate will be reduced from 25% to 20% commencing from year 2010. furthermore,
in compliance with the amendment of the Income Tax Act which was published on June 15, 2010, the
statutory income tax rate will be reduced to 17%. for the nine months ended December 31 2010 and 2009,
the Company and its subsidiaries adopted the “Income Basic Tax Act” in determining the income basic
tax, and its income tax rate is 17% and 25% respectively. The income tax expense for the year ended
December 31, 2010 and 2009 were calculated as follows:
For The Year Ended
December 31, 2010
For The Year Ended
December 31, 2009
Income tax computed on financial income at statutory tax rate (17% and 25%) $ 406,516 403,918
Permanent differences:
- Suspended securities transaction tax (34,299) (89,050)
- Net income from oBU operation (50,243) (117,919)
- recognized gain from financial assets and liabilities measured at fair value through profit or loss (58,089) (20,878)
- Provision of impairment loss on available-for-sale financial assets - 23,011
- Separation tax interest income - (4,331)
- Cash Dividend (25,104) (36,644)
- Gain on disposal of investment carried at cost - (339)
- Gain on investment recognized under the equity method (4,491) (3,328)
- Land transation tax-exempt 574 -
Temporary differences:
- Provisions for reserve for default loss and accidental loss 2,701 4,547
- Provisions for reserve for trading loss 199 3,558
- Deferred loss on disposal of non-performing loans (51,420) (482,932)
- Estimated contingent loss on lawsuit - 4,125
- Write-off of provision for bad debt (34,326) 363,644
Taxable income 152,018 47,382
Duduct: Loss carryforward (152,018) (47,382)
Income tax payable (current) - -
Decrease in deferred income tax assets 82,846 988,783
Cumulative effect of changes in income tax rate 762,145 1,258,396
Decrease in allowance for deferred income tax assets (594,991) (2,147,179)
Increase (decrease) in deferred income tax assets-cumulative translation adjustments (3,506) 11,393
overseas branch income tax expenses 91,835 65,448
Item separately taxed - 1,233
10% surtax on undistributed earnings 15,505 -
Underestimate (overestimate) prior income tax expense 10,374 (452)
Basic tax 20,831 5,982
Income tax expense $ 385,039 183,604
(d) The Bank’s income tax returns for years up to 2006 have been approved by the tax authority.
Taiwan Business Bank ︱ Annual Report 201050
(e) Imputation Credit Account and Tax Deductible ratio
December 31, 2010 December 31, 2009
Stockholders' imputation credit account $ 400,226 734,619
Stockholders' tax deductible ratio 17.09%(estimated) 33.33%(actual)
Components of inappropriate earnings:
December 31, 2010 December 31, 2009
Before 1997 $ - -
After 1998 2,341,339 1,612,124
Total $ 2,341,339 1,612,124
(f) As of December 31, 2010, the loss to reduce future year’s income base on Income Tax Law were as
follows:
Amount Deductible Year
2004 (authorized) $ 7,344,370 2005~2014
2005 (authorized) 13,799,316 2006~2015
2006 (authorized) 1,021,326 2007~2016
2009 (declared) 1,723,510 2010~2019
$ 23,888,522
(g) As of December 31, 2010, the vocational training expense or venture capital investing that could be used
to reduce future years income tax based on Statute for Upgrading Industries were as follows:
Amount Deductible Year
2007 (declared) 5,284 2007~2011
2008 (declared) 7,456 2008~2012
2009 (declared) 4,136 2009~2013
Total $ 16,876
(W) PENSION PLAN(a) for the years ended December 31, 2010 and 2009, the pension expenses were as follows:
For The Year Ended December 31, 2010
For The Year Ended December 31, 2009
Provisions for defined benefit plan $ 480,991 463,629
Provisions for defined contribution plan 62,417 59,196
Borrowed employees pension expense recoverd (165) (366)
Total $ 543,243 522,459
(b) The bank uses the defined benefit plan in the pension fund:
1. The pension fund deposited in Taiwan Bank was provided $446,496 and $458,119 in 2010 and 2009,
respectively.
2. The reverse for pension is saved in the Bank of Taiwan (known as the Central Trust of China previously,)
by the account name of Labor Pension fund Supervisory Committee. The annual contribution to the
pension was made at rate 8% of gross salary paid, and adjusted to 12% in october 2001, 11.3% in June
2002, 11.5% in March 2003, 12.8% in April 2004, 11.4% in May 2005, 14.6% in January 2006, 13.09%
in January 2007, 13.35% in January 2008, 13.67% in June 2009, and 13.80% in 2010. As of December
fIN
AN
CIA
L S
TA
TE
ME
NT
S
51
Ⅵ
31, 2010 and 2009, the accumulated amounts of the pension fund were $4,783,189 and $4,326,877.
3. Actuarial assumptions used to calculate net pension costs were as follows:
For The Year Ended December 31, 2010
For The Year Ended December 31, 2009
Discount rate 2.00% 2.50%
future salary increase rate 2.00% 2.00%
Projected long-term rate of return on assets 2.00% 2.50%
4. reconciliation between funded status and accrued pension liability per book was as follows:
December 31, 2010 December 31, 2009
Benefit obligstion:
Vested benefit obligation $ (3,953,162) (3,146,985)
Non-vested benefit obligation (1,006,506) (1,067,821)
Accumulated benefit obligation (4,959,668) (4,214,806)
Effect of future salary increases (1,220,443) (1,080,052)
Expected benefit obligation (6,180,111) (5,294,858)
fair value of pension fund assets 4,783,189 4,326,877
funded status (1,396,922) (967,981)
Unamortized balance of prior service cost 23,090 36,437
Unamortized balance of pension fund 1,236,341 805,010
Supplementary accrued pension liabilities (38,988) -
Accrued pension liabilities $ (176,479) (126,534)
5. As of the years ended December 31, 2010 and 2009, components of net pension cost were as follows:
For The Year EndedDecember 31, 2010
For The Year EndedDecember 31, 2009
Service cost 431,741 424,054
Interest cost 132,371 119,636
Actual return on pension fund assets $ (70,708) (27,242)
Loss on pension fund assets (43,674) (77,542)
Expected return on pension fund assets (114,382) (104,784)
Amortization 31,261 24,723
Net pension cost 480,991 463,629
As of December 31, 2010 and 2009, the vested benefit under the Bank’s employee retirement guidelines
amounted to 5,114,473 and 4,264,310, respectively.
Taiwan Business Bank ︱ Annual Report 201052
(X) EARNINGS PER SHARE
For The Year Ended Decemberber 31, 2010
For The Year Ended Decemberber 31, 2009
Before tax After tax Before tax After tax
Net income $ 2,391,273 2,006,234 1,615,673 1,432,069
Weighted Average number of common stock shares outstanding (in thousands) 4,028,542 4,028,542 3,873,598 3,873,598
Basic earnings per share (in dollar) $ 0.59 0.50 0.42 0.37
Basic earnings per share-retroactive adjustment:
Weighted-average shares of common stock outstanding-retroactive adjustment (in thousands)
4,028,542 4,028,542
Basic earnings per share-retroactive adjustment (in dollars) 0.40 0.36
Dilutive potential common shares (in thousands) (Note) 8,511 8,511 10,898 10,898
Weighted average number of shares outstanding for dulited EPS (in thousands) 4,037,053 4,037,053 3,884,496 3,884,496
Diluted earnings per shares (in dollars) $0.59 0.50 0.42 0.37
Diluted earnings per share-retroactive adjustment:
Weighted-average shares of common stock outstanding-retroactive adjustment (in thousands)
4,039,440 4,039,440
Diluted earning per share:
retroactive adjustement (in dollars) 0.40 0.35
(Note) The shares were calculated based on the stockholder's equity at the balance sheet date.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
53
Ⅵ
(Y) FINANCIAL INSTRUMENTS(a) fair value information
As of December 31 2010 and 2009, the fair value information of financial assets and liabilities is as follows:
Non-Derivatives Financial Instruments
December 31, 2010 December 31, 2009
Book value
Fair value
Book value
Fair value
Quoted prices
in active market
Determined value by
using valuation
techniques
Quoted prices
in active market
Determined value by
using valuation
techniques financial assets:
Cash and cash equivalents $15,364,021 - 15,364,021 17,197,549 - 17,197,549
Deposits with the central bank and call loans to banks 71,720,175 - 71,720,175 65,862,376 - 65,862,376
financial assets measured at fair value through profit or loss 3,892,885 3,892,885 - 2,162,516 2,162,516 -
Bills and bonds purchased under resale agreements 2,519,348 - 2,519,348 1,233,898 - 1,233,898
receivables, net 19,710,207 - 19,710,207 18,278,698 - 18,278,698
Discounts and loans, net 926,970,266 - 926,970,266 912,803,010 - 912,803,010
Available-for-sale financial assets, net 14,928,355 14,928,355 - 16,916,010 16,916,010 -
Held-to-maturity financial assets, net 135,549,492 - 135,549,411 129,864,330 - 129,716,503
other financial assets, net 4,318,281 - 4,318,281 4,204,756 - 4,204,756
operating guaranty and settlement funds 74,347 - 74,347 71,055 - 71,055
refundable deposits, net 151,263 - 151,263 143,125 - 143,125
Brokerage accounts, net 8,802 - 8,802 18,570 - 18,570
financial liabilities:
Deposits from Central Bank and other banks 86,081,932 - 86,081,932 107,071,746 - 107,071,746
Bills and bonds sold under repurchase agreements 9,950,660 - 9,950,660 4,130,048 - 4,130,048
Payables 23,782,204 - 23,782,204 25,658,647 - 25,658,647
Deposits and remittances 992,348,193 - 992,348,193 964,087,905 - 964,087,905
financial debentures 44,000,000 - 44,000,000 33,050,000 - 33,050,000
other financial liabilities 10,552,494 - 10,552,494 9,743,364 - 9,743,364
Guarantee deposit-in 675,964 - 675,964 566,793 - 566,793
Derivatives Financial Instruments
financial assets:
foreign exchange forward contracts $142,369 - 142,369 37,433 - 37,433
Currency swap contracts 143,814 - 143,814 55,193 - 55,193
Non-Delivery forwards 4,552 - 4,552 4,104 - 4,104
Interest swap contracts 50,576 - 50,576 27,286 - 27,286
foreign exchange option - call 24,685 - 24,685 17,866 - 17,866
Structured product options- call 396 - 396 - - -
Stock index future 23,486 - 23,486 - - -
financial liabilities:
foreign exchange forward contracts 23,634 - 23,634 38,928 - 38,928
Currency swap contracts 66,511 - 66,511 16,237 - 16,237
Non-Delivery forwards contracts 4,497 - 4,497 3,473 - 3,473
Interest swap contracts 206,616 - 206,616 178,883 - 178,883
foreign exchange options - put 24,685 - 24,685 17,866 - 17,866
Structured product options - put 2 - 2 - - -
Taiwan Business Bank ︱ Annual Report 201054
(b) Methods and assumptions used in estimating the fair values of financial instruments are specified below:
1. The fair value of short-term financial instruments is determined by their face value on the balance sheet.
Because these instruments will mature on short notice, the face value is used as a reasonable basis
for establishing the fair value. This method is applied to cash and cash equivalent, due from the Central
Bank and call loans to banks, bills and bonds purchased under resale agreements, receivables, Central
Bank deposits and deposits from other banks, bills and bonds sold under repurchase agreements,
payables, deposits and remittances, etc.
2. If there is a quoted price in an active market for the financial asset, including financial instruments
measured at fair value through profit or loss, and available-for-sale and held-to-maturity, the quoted
price is regarded as its fair value. If there is no quoted price in an active market for the financial asset,
its fair value is estimated on the basis of the result of a valuation technique that refers to quoted prices
provided by financial institutions. Ask (bid) is used to evaluate the selling (buying) position by the
Bank if the quoted price include ask and bid price. If there is not a quoted price for the financial asset,
transaction price close to the balance sheet date is the fair value.
3. Investments under the equity method and financial assets measured at cost are all unlisted companies.
The variation of the reasonable estimates of the investments’ fair value is not insignificant, and the
probability of the range of the variation can not be reasonable estimated. As mentioned above, the fair
value of the investments can not be measured reliably and is not disclosed in the financial statement.
4. fair value of financial derivatives (foreign exchange forward contracts, interest swap contracts, currency
swap contracts, cross currencies swap contracts and foreign exchange option) are established by
the amount of cash to be paid or to be received, assuming that the contract will be terminated on the
balance sheet date. There are reference reports from financial institutions for most of the financial
derivatives of the Bank. financial derivatives pricing model (ex. method of cash flow discount, Black-
Scholes model), which are popularly used by other banks, is used by the Bank. The factors and prices
from reuters or Bloomberg data system are used to calculate the fair value of the holding position.
(c) financial risk information
1. Market risk
Market risk is defined as the effect of the value of the position caused by the change of the market risk
factor (include interest rates, foreign exchange rates, equity securities prices and commodities price).
Market risk management, include identification of the market risk, measurement of the fair value, risk
control and the related report disclosure, is executed by the Bank to control the financial instruments
transactions loss of market risk in the tolerable range, and the limit management of the open positions
and stop loss is executed by the Bank as well.
2. Credit risk
The Bank’s financial instruments may lead to loss when a borrower or counterparty defaults on
payment. Therefore, the credit rating of the securities of the Bank investment must exceed certain
investment degree (BBB–). Major portion of the investment portfolio is denominated in New Taiwan
dollar comprising of certificates of deposit with the Central Bank whose credit rating is superior and
has no credit risk. for high credit risk corporate bonds and foreign securities, the Bank’s management
follows strict credit evaluation procedures and authorizes various Bank personnel to control credit risk.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
55
Ⅵ
The maximum credit exposure amount of the financial instruments the Bank held are as follows:
December 31, 2010 December 31, 2009
Financial Instruments Book valueMaximum
credit exposure
Book valueMaximum
credit exposure
Financial assets measured at fair value through profit or loss
Commercial paper $ 1,568,213 1,568,213 499,526 499,526
Negotiable certificates of deposits - - 1,794 1,794
Listed and OTC stocks - - 33,132 33,132
Beneficiary certificates 111,391 111,391 374,469 374,469
Government bonds - - 52,180 52,180
Overseas bonds 2,213,281 2,213,281 1,201,415 1,201,415
Discounts and loans 926,970,266 926,970,266 912,803,010 912,803,010
Available-for-sale financial assets
Government bonds 5,748,892 5,748,892 5,535,954 5,535,954
Corporate bonds 705,536 705,536 703,539 703,539
Financial bonds - - 70,068 70,068
Beneficiary certificates 16,318 16,318 244,072 244,072
Overseas bonds 7,847,252 7,847,252 10,334,537 10,334,537
Listed and OTC stocks 610,357 610,357 353,869 353,869
Overseas stcoks - - 40,305 40,305
Held-to-maturity financial assets
Certificates of deposit with Central Bank 127,900,000 127,900,000 121,000,000 121,000,000
Government bonds 2,378,146 2,378,146 2,112,151 2,112,151
Corporate bonds 4,280,309 4,280,309 4,919,159 4,919,159
Financial bonds - - 399,962 399,962
Beneficiary certificates 133,467 133,467 516,251 516,251
Overseas bonds 857,570 857,570 916,807 916,807
Derivatives financial instrument
Foreign exchange forward contracts 142,369 142,369 37,433 37,433
Currency swaps contracts 143,814 143,814 55,193 55,193
Non-delivery forward contracts 4,552 4,552 4,104 4,104
Interest swap contracts 50,576 50,576 27,286 27,286
Foreign exchange options - call 24,685 24,685 17,866 17,866
Structured product options - call 396 396 - -
Stock index future 23,486 23,486 - -
Total $ 1,081,730,876 1,081,730,876 1,062,254,082 1,062,254,082
Note: The maximum credit exposure amount applies to contracts with positive fair value on the balance sheet date.
When the Bank provides loan, loan commitment, and guarantee, the Bank performs strict credit review, under
which, it requires provision of collateral including cash, inventory, currency securities or other assets from
Taiwan Business Bank ︱ Annual Report 201056
loans, loans commitment, and guarantee. When the counterparty defaults, the Bank can enforce its right over
the collateral or other guarantee to effectively reduce credit risk.
Credit risk applies to contracts with positive fair value on the balance sheet date, off-balance-sheet
commitment and guarantee contracts. The Bank is exposed to concentration risk if counter-parties to financial
instrument transactions are engaged in similar activities, active in the same geographic region, or share
similar economic features that would cause their abilities to fulfill contractual obligations to be similarly affected
by changes in economic or other conditions.
Amount of contracts with concentration of credit risk were as follows:
December 31,2010 December 31,2009
Loans - by region:
Domestic $ 871,872,939 859,608,837
Southeast Asia (Note) 1,737,786 688,792
Other 51,613,246 44,373,802
Total $ 925,223,971 904,671,431
Note. Includes, Singapore, Thailand, Malaysia, Indonesia, etc.
December 31, 2010 December 31, 2009
Loans - by industry:
Manufacturing $ 252,200,147 251,162,443
Wholesale, retail and catering 75,930,789 71,585,550
Real estate industry 36,376,573 26,886,373
Water,electricity and gas 33,291,562 40,013,627
Government organization 132,476,085 135,699,036
Person 241,202,329 265,693,942
Other 153,746,486 113,630,460
Total $ 925,223,971 904,671,431
Because the Bank provides guarantee endorsements and commercial letters of credit as guarantee, it has
guarantee and credit commitments mostly confined within one year. Further, the Bank issues credit cards and
has loan commitments accordingly.
Contract amounts of financial instruments with off-balance-sheet credit risks were as follows:
December 31, 2010 December 31, 2009
Guarantees and letters of credit $ 26,201,152 28,064,622
Commitments on credit cards 19,845,768 21,184,013
$ 46,046,920 49,248,635
3. Liquidity risk
The Bank has established a funding liquidity risk crux to control liquidity risk from financial funding.
The ratio of gap to total assets and weekly average liquidity ratio are reported to Assets Liabilities
Management Committee periodically. In addition, in order to control assets liquidity risk and avoid
concentration of investment portfolio, the Bank invests limited amount to the same related enterprise,
single stock and single fund.
According to the nature of assets and liabilities , the Bank selects suitable grouping method to make the due analysis to
appraise the Bank's liquidity. The due analysis of December 31, 2010 and 2009 is as follows
December 31, 2010
Financial items
Within 1 month 1 month to 3months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent $ 15,364,021 15,364,021 - -
Due from the Central Bank and call loans to banks 52,623,966 52,623,966 14,662,982 14,662,982
Financial assets measured at fair value through profit or loss (Note 1) 2,069,482 2,069,482 - -
Bills and bonds purchasd under resale agreements 2,519,348 2,519,348 - -
Interest receivable 728,194 728,194 211,784 211,784
Factoring-account receivable 383,199 383,199 44,043 44,043
Accounts receivable 1,051,235 1,051,235 211,965 211,965
Discounts and loans 42,936,967 42,936,967 87,219,777 87,219,777
Available-for-sale financial assets 277,012 277,012 184,242 184,242
Held-to-maturity financial assets 65,386,137 65,386,137 35,007,068 35,007,068
Other financial assets- zero-coupon bonds - - - -
Other financial assets- trade acceptance - - 446,350 446,350
Other financial assets-negotiable certificates of deposits - - 61,950 61,950
Total assets $ 183,339,561 183,339,561 138,050,161 138,050,161
Liabilities
Deposits from the Central Bank and other banks $ 13,509,118 13,509,118 35,522,758 35,522,758
Financial liabilities measured at fair value through profit or loss 325,945 325,945 - -
Bills and bonds sold under repurchase agreements 9,726,587 9,726,587 149,160 149,160
Interest payable 346,788 346,788 452,414 452,414
Deposits and remittances(Note2) 625,631,388 625,631,388 108,832,908 108,832,908
Financial Debentures - - - -
Funds Appropriated for loans 6,750 6,750 1,000 1,000
Total liabilities $ 649,546,576 649,546,576 144,958,240 144,958,240
Net liquidity gap $ (466,207,015) (466,207,015) (6,908,079) (6,908,079)
fIN
AN
CIA
L S
TA
TE
ME
NT
S
57
Ⅵ
loans, loans commitment, and guarantee. When the counterparty defaults, the Bank can enforce its right over
the collateral or other guarantee to effectively reduce credit risk.
Credit risk applies to contracts with positive fair value on the balance sheet date, off-balance-sheet
commitment and guarantee contracts. The Bank is exposed to concentration risk if counter-parties to financial
instrument transactions are engaged in similar activities, active in the same geographic region, or share
similar economic features that would cause their abilities to fulfill contractual obligations to be similarly affected
by changes in economic or other conditions.
Amount of contracts with concentration of credit risk were as follows:
December 31,2010 December 31,2009
Loans - by region:
Domestic $ 871,872,939 859,608,837
Southeast Asia (Note) 1,737,786 688,792
Other 51,613,246 44,373,802
Total $ 925,223,971 904,671,431
Note. Includes, Singapore, Thailand, Malaysia, Indonesia, etc.
December 31, 2010 December 31, 2009
Loans - by industry:
Manufacturing $ 252,200,147 251,162,443
Wholesale, retail and catering 75,930,789 71,585,550
Real estate industry 36,376,573 26,886,373
Water,electricity and gas 33,291,562 40,013,627
Government organization 132,476,085 135,699,036
Person 241,202,329 265,693,942
Other 153,746,486 113,630,460
Total $ 925,223,971 904,671,431
Because the Bank provides guarantee endorsements and commercial letters of credit as guarantee, it has
guarantee and credit commitments mostly confined within one year. Further, the Bank issues credit cards and
has loan commitments accordingly.
Contract amounts of financial instruments with off-balance-sheet credit risks were as follows:
December 31, 2010 December 31, 2009
Guarantees and letters of credit $ 26,201,152 28,064,622
Commitments on credit cards 19,845,768 21,184,013
$ 46,046,920 49,248,635
3. Liquidity risk
The Bank has established a funding liquidity risk crux to control liquidity risk from financial funding.
The ratio of gap to total assets and weekly average liquidity ratio are reported to Assets Liabilities
Management Committee periodically. In addition, in order to control assets liquidity risk and avoid
concentration of investment portfolio, the Bank invests limited amount to the same related enterprise,
single stock and single fund.
According to the nature of assets and liabilities , the Bank selects suitable grouping method to make the due analysis to
appraise the Bank's liquidity. The due analysis of December 31, 2010 and 2009 is as follows
December 31, 2010
Financial items
Within 1 month 1 month to 3months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent $ 15,364,021 15,364,021 - -
Due from the Central Bank and call loans to banks 52,623,966 52,623,966 14,662,982 14,662,982
Financial assets measured at fair value through profit or loss (Note 1) 2,069,482 2,069,482 - -
Bills and bonds purchasd under resale agreements 2,519,348 2,519,348 - -
Interest receivable 728,194 728,194 211,784 211,784
Factoring-account receivable 383,199 383,199 44,043 44,043
Accounts receivable 1,051,235 1,051,235 211,965 211,965
Discounts and loans 42,936,967 42,936,967 87,219,777 87,219,777
Available-for-sale financial assets 277,012 277,012 184,242 184,242
Held-to-maturity financial assets 65,386,137 65,386,137 35,007,068 35,007,068
Other financial assets- zero-coupon bonds - - - -
Other financial assets- trade acceptance - - 446,350 446,350
Other financial assets-negotiable certificates of deposits - - 61,950 61,950
Total assets $ 183,339,561 183,339,561 138,050,161 138,050,161
Liabilities
Deposits from the Central Bank and other banks $ 13,509,118 13,509,118 35,522,758 35,522,758
Financial liabilities measured at fair value through profit or loss 325,945 325,945 - -
Bills and bonds sold under repurchase agreements 9,726,587 9,726,587 149,160 149,160
Interest payable 346,788 346,788 452,414 452,414
Deposits and remittances(Note2) 625,631,388 625,631,388 108,832,908 108,832,908
Financial Debentures - - - -
Funds Appropriated for loans 6,750 6,750 1,000 1,000
Total liabilities $ 649,546,576 649,546,576 144,958,240 144,958,240
Net liquidity gap $ (466,207,015) (466,207,015) (6,908,079) (6,908,079)
Taiwan Business Bank ︱ Annual Report 201058
December 31, 2010
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks 4,433,227 4,433,227 - -
Financial assets measured at fair value through profit or loss (Note 1) 233,351 233,351 771,666 771,666
Bills and bonds purchasd under resale agreements - - - -
Interest receivable 625,847 625,847 4,230 4,230
Factoring-account receivable 6,755 6,755 - -
Accounts receivable 1,364,425 1,364,425 26,692 26,692
Discounts and loans 264,395,629 264,395,629 118,585,666 118,585,666
Available-for-sale financial assets 2,960,705 2,960,705 5,013,689 5,013,689
Held-to-maturity financial assets 30,330,362 30,330,362 1,718,992 1,718,992
Other financial assets- zero-coupon bonds 37,797 37,797 - -
Other financial assets- trade acceptance - - - -
Other financial assets-negotiable certificates of deposits - - - -
Total assets 304,388,098 304,388,098 126,120,935 126,120,935
Liabilities
Deposits from the Central Bank and other banks 37,050,056 37,050,056 - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements 74,913 74,913 - -
Interest payable 769,512 769,512 43,423 43,423
Deposits and remittances(Note2) 237,999,504 237,999,504 16,839,987 16,839,987
Financial Debentures 100,000 100,000 - -
Funds Appropriated for loans 202,250 202,250 302,500 302,500
Total liabilities 276,196,235 276,196,235 17,185,910 17,185,910
Net liquidity gap 28,191,863 28,191,863 108,935,025 108,935,025
December 31, 2010
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks - - - -
Financial assets measured at fair value through profit or loss (Note 1) 885,000 885,000 175,764 175,764
Bills and bonds purchasd under resale agreements - - - -
Interest receivable - - - -
Factoring-account receivable - - - -
Accounts receivable - - - -
Discounts and loans 88,816,767 88,816,767 54,955,356 54,955,356
Available-for-sale financial assets 2,494,473 2,494,473 2,229,790 2,229,790
Held-to-maturity financial assets 855,869 855,869 631,028 631,028
Other financial assets- zero-coupon bonds - - - -
Other financial assets- trade acceptance - - - -
Other financial assets-negotiable certificates of deposits - - - -
Total assets 93,052,109 93,052,109 57,991,938 57,991,938
Liabilities
Deposits from the Central Bank and other banks - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements - - - -
Interest payable 6,411 6,411 178 178
Deposits and remittances(Note2) 3,021,581 3,021,581 8,080 8,080
Financial Debentures 3,450,000 3,450,000 9,650,000 9,650,000
Funds Appropriated for loans 767,250 767,250 716,330 716,330
Total liabilities 7,245,242 7,245,242 10,374,588 10,374,588
Net liquidity gap 85,806,867 85,806,867 47,617,350 47,617,350
fIN
AN
CIA
L S
TA
TE
ME
NT
S
59
Ⅵ
December 31, 2010
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks 4,433,227 4,433,227 - -
Financial assets measured at fair value through profit or loss (Note 1) 233,351 233,351 771,666 771,666
Bills and bonds purchasd under resale agreements - - - -
Interest receivable 625,847 625,847 4,230 4,230
Factoring-account receivable 6,755 6,755 - -
Accounts receivable 1,364,425 1,364,425 26,692 26,692
Discounts and loans 264,395,629 264,395,629 118,585,666 118,585,666
Available-for-sale financial assets 2,960,705 2,960,705 5,013,689 5,013,689
Held-to-maturity financial assets 30,330,362 30,330,362 1,718,992 1,718,992
Other financial assets- zero-coupon bonds 37,797 37,797 - -
Other financial assets- trade acceptance - - - -
Other financial assets-negotiable certificates of deposits - - - -
Total assets 304,388,098 304,388,098 126,120,935 126,120,935
Liabilities
Deposits from the Central Bank and other banks 37,050,056 37,050,056 - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements 74,913 74,913 - -
Interest payable 769,512 769,512 43,423 43,423
Deposits and remittances(Note2) 237,999,504 237,999,504 16,839,987 16,839,987
Financial Debentures 100,000 100,000 - -
Funds Appropriated for loans 202,250 202,250 302,500 302,500
Total liabilities 276,196,235 276,196,235 17,185,910 17,185,910
Net liquidity gap 28,191,863 28,191,863 108,935,025 108,935,025
December 31, 2010
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks - - - -
Financial assets measured at fair value through profit or loss (Note 1) 885,000 885,000 175,764 175,764
Bills and bonds purchasd under resale agreements - - - -
Interest receivable - - - -
Factoring-account receivable - - - -
Accounts receivable - - - -
Discounts and loans 88,816,767 88,816,767 54,955,356 54,955,356
Available-for-sale financial assets 2,494,473 2,494,473 2,229,790 2,229,790
Held-to-maturity financial assets 855,869 855,869 631,028 631,028
Other financial assets- zero-coupon bonds - - - -
Other financial assets- trade acceptance - - - -
Other financial assets-negotiable certificates of deposits - - - -
Total assets 93,052,109 93,052,109 57,991,938 57,991,938
Liabilities
Deposits from the Central Bank and other banks - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements - - - -
Interest payable 6,411 6,411 178 178
Deposits and remittances(Note2) 3,021,581 3,021,581 8,080 8,080
Financial Debentures 3,450,000 3,450,000 9,650,000 9,650,000
Funds Appropriated for loans 767,250 767,250 716,330 716,330
Total liabilities 7,245,242 7,245,242 10,374,588 10,374,588
Net liquidity gap 85,806,867 85,806,867 47,617,350 47,617,350
Taiwan Business Bank ︱ Annual Report 201060
December 31, 2010
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash and cash equivalent - - - - 15,364,021
Due from the Central Bank and call loans to banks - - - - 71,720,175
Financial assets measured at fair value through profit or loss (Note 1) 147,500 147,500 - - 4,282,763
Bills and bonds purchasd under resale agreements - - - - 2,519,348
Interest receivable - - - - 1,570,055
Factoring-account receivable - - - - 433,997
Accounts receivable - - - - 2,654,317
Discounts and loans 38,601,996 38,601,996 239,791,505 231,458,108 935,303,663
Available-for-sale financial assets 754,876 754,876 1,013,568 1,013,568 14,928,355
Held-to-maturity financial assets 1,248,427 1,248,427 371,609 371,609 135,549,492
Other financial assets- zero-coupon bonds - - - - 37,797
Other financial assets- trade acceptance - - - - 446,350
Other financial assets-negotiable certificates of deposits - - - - 61,950
Total assets 40,752,799 40,752,799 241,176,682 232,843,285 1,184,872,283
Liabilities
Deposits from the Central Bank and other banks - - - - 86,081,932
Financial liabilities measured at fair value through profit or loss - - - - 325,945
Bills and bonds sold under repurchase agreements - - - - 9,950,660
Interest payable 120 120 4,928 4,928 1,623,774
Deposits and remittances(Note2) 11,946 11,946 2,799 2,799 992,348,193
Financial Debentures 6,200,000 6,200,000 24,600,000 24,600,000 44,000,000
Funds Appropriated for loans 137,700 137,700 8,239,507 8,239,507 10,373,287
Total liabilities 6,349,766 6,349,766 32,847,234 32,847,234 1,144,703,791
Net liquidity gap 34,403,033 34,403,033 208,329,448 199,996,051 40,168,492
Note 1: The amount for financial assets measured at fair value through profit or loss is $4,282,763, which is consisted of financial assets for trading purposes amounting to $2,069,482, and financial assets designated at fair value at initial recognition amounting to $2,213,281.
Note 2: Amount for deposits and remittances shown in column “within 1 month” consists of checking deposits amounting to $21,472,847 demand deposits amounting to $219,065,510 and demand savings deposits amounting to $248,518,908.
December 31, 2009
Financial items
Within 1 month 1 month to 3months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent $ 17,197,549 17,197,549 - -
Due from the Central Bank and call loans to banks 45,677,719 45,677,719 10,680,017 10,680,017
Financial assets measured at fair value through profit or loss (Note 1) 1,102,983 1,102,983 - -
Bills and bonds purchasd under resale agreements 1,233,898 1,233,898 - -
Interest receivable 803,373 803,373 228,820 228,820
Factoring-account receivable 71,655 71,655 45,143 45,143
Accounts receivable 724,002 724,002 151,123 151,123
Discounts and loans 71,686,595 71,686,595 69,788,924 69,788,924
Available-for-sale financial assets 1,458,429 1,458,429 663,764 663,764
Held-to-maturity financial assets 74,900,000 74,900,000 28,400,000 28,400,000
Other financial assets- trade acceptance - - 344,155 344,155
Other financial assets- negotiable certificates of deposits - - 67,570 67,570
Other financial assets-zero-coupon bonds - - - -
Total assets $ 214,856,203 214,856,203 110,369,516 110,369,516
Liabilities
Deposits from the Central Bank and other banks $ 16,922,218 16,922,218 34,368,546 34,368,546
Financial liabilities measured at fair value through profit or loss 255,387 255,387 - -
Bills and bonds sold under repurchase agreements 3,652,999 3,652,999 401,461 401,461
Interest payable 357,180 357,180 457,405 457,405
Deposits and remittances(Note2) 581,327,287 581,327,287 98,810,922 98,810,922
Financial Debentures - - - -
Funds Appropriated for loans 92,500 92,500 1,000 1,000
Total liabilities $ 602,607,571 602,607,571 134,039,334 134,039,334
Net liquidity gap $ (387,751,368) (387,751,368) (23,669,818) (23,669,818)
fIN
AN
CIA
L S
TA
TE
ME
NT
S
61
Ⅵ
December 31, 2010
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash and cash equivalent - - - - 15,364,021
Due from the Central Bank and call loans to banks - - - - 71,720,175
Financial assets measured at fair value through profit or loss (Note 1) 147,500 147,500 - - 4,282,763
Bills and bonds purchasd under resale agreements - - - - 2,519,348
Interest receivable - - - - 1,570,055
Factoring-account receivable - - - - 433,997
Accounts receivable - - - - 2,654,317
Discounts and loans 38,601,996 38,601,996 239,791,505 231,458,108 935,303,663
Available-for-sale financial assets 754,876 754,876 1,013,568 1,013,568 14,928,355
Held-to-maturity financial assets 1,248,427 1,248,427 371,609 371,609 135,549,492
Other financial assets- zero-coupon bonds - - - - 37,797
Other financial assets- trade acceptance - - - - 446,350
Other financial assets-negotiable certificates of deposits - - - - 61,950
Total assets 40,752,799 40,752,799 241,176,682 232,843,285 1,184,872,283
Liabilities
Deposits from the Central Bank and other banks - - - - 86,081,932
Financial liabilities measured at fair value through profit or loss - - - - 325,945
Bills and bonds sold under repurchase agreements - - - - 9,950,660
Interest payable 120 120 4,928 4,928 1,623,774
Deposits and remittances(Note2) 11,946 11,946 2,799 2,799 992,348,193
Financial Debentures 6,200,000 6,200,000 24,600,000 24,600,000 44,000,000
Funds Appropriated for loans 137,700 137,700 8,239,507 8,239,507 10,373,287
Total liabilities 6,349,766 6,349,766 32,847,234 32,847,234 1,144,703,791
Net liquidity gap 34,403,033 34,403,033 208,329,448 199,996,051 40,168,492
Note 1: The amount for financial assets measured at fair value through profit or loss is $4,282,763, which is consisted of financial assets for trading purposes amounting to $2,069,482, and financial assets designated at fair value at initial recognition amounting to $2,213,281.
Note 2: Amount for deposits and remittances shown in column “within 1 month” consists of checking deposits amounting to $21,472,847 demand deposits amounting to $219,065,510 and demand savings deposits amounting to $248,518,908.
December 31, 2009
Financial items
Within 1 month 1 month to 3months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent $ 17,197,549 17,197,549 - -
Due from the Central Bank and call loans to banks 45,677,719 45,677,719 10,680,017 10,680,017
Financial assets measured at fair value through profit or loss (Note 1) 1,102,983 1,102,983 - -
Bills and bonds purchasd under resale agreements 1,233,898 1,233,898 - -
Interest receivable 803,373 803,373 228,820 228,820
Factoring-account receivable 71,655 71,655 45,143 45,143
Accounts receivable 724,002 724,002 151,123 151,123
Discounts and loans 71,686,595 71,686,595 69,788,924 69,788,924
Available-for-sale financial assets 1,458,429 1,458,429 663,764 663,764
Held-to-maturity financial assets 74,900,000 74,900,000 28,400,000 28,400,000
Other financial assets- trade acceptance - - 344,155 344,155
Other financial assets- negotiable certificates of deposits - - 67,570 67,570
Other financial assets-zero-coupon bonds - - - -
Total assets $ 214,856,203 214,856,203 110,369,516 110,369,516
Liabilities
Deposits from the Central Bank and other banks $ 16,922,218 16,922,218 34,368,546 34,368,546
Financial liabilities measured at fair value through profit or loss 255,387 255,387 - -
Bills and bonds sold under repurchase agreements 3,652,999 3,652,999 401,461 401,461
Interest payable 357,180 357,180 457,405 457,405
Deposits and remittances(Note2) 581,327,287 581,327,287 98,810,922 98,810,922
Financial Debentures - - - -
Funds Appropriated for loans 92,500 92,500 1,000 1,000
Total liabilities $ 602,607,571 602,607,571 134,039,334 134,039,334
Net liquidity gap $ (387,751,368) (387,751,368) (23,669,818) (23,669,818)
Taiwan Business Bank ︱ Annual Report 201062
December 31, 2009
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks 9,504,640 9,504,640 - -
Financial assets measured at fair value through profit or loss (Note 1) 322,773 322,773 422,214 422,214
Bills and bonds purchasd under resale agreements - - - -
Interest receivable 349,586 349,586 40,110 40,110
Factoring-account receivable - - - -
Accounts receivable 907,087 907,087 30,049 30,049
Discounts and loans 271,312,956 271,312,956 122,048,937 122,048,937
Available-for-sale financial assets 4,314,231 4,314,231 3,100,867 3,100,867
Held-to-maturity financial assets 20,815,720 20,815,720 3,636,547 3,636,547
Other financial assets- trade acceptance - - - -
Other financial assets- negotiable certificates of deposits - - - -
Other financial assets-zero-coupon bonds 41,449 41,449 - -
Total assets 307,568,442 307,568,442 129,278,724 129,278,724
Liabilities
Deposits from the Central Bank and other banks 55,780,982 55,780,982 - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements 75,588 75,588 - -
Interest payable 797,146 797,146 64,981 64,981
Deposits and remittances(Note2) 263,921,352 263,921,352 16,120,718 16,120,718
Financial Debentures 100,000 100,000 100,000 100,000
Funds Appropriated for loans 96,160 96,160 506,250 506,250
Total liabilities 320,771,228 320,771,228 16,791,949 16,791,949
Net liquidity gap (13,202,786) (13,202,786) 112,486,775 112,486,775
December 31, 2009
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks - - - -
Financial assets measured at fair value through profit or loss (Note 1) 267,330 267,330 189,098 189,098
Bills and bonds purchasd under resale agreements - - - -
Interest receivable - - - -
Factoring-account receivable - - - -
Accounts receivable - - - -
Discounts and loans 76,435,604 76,435,604 48,629,906 48,629,906
Available-for-sale financial assets 4,115,635 4,115,635 1,221,005 1,221,005
Held-to-maturity financial assets 1,491,630 1,491,630 296,285 296,285
Other financial assets- trade acceptance - - - -
Other financial assets- negotiable certificates of deposits - - - -
Other financial assets-zero-coupon bonds - - - -
Total assets 82,310,199 82,310,199 50,336,294 50,336,294
Liabilities
Deposits from the Central Bank and other banks - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements - - - -
Interest payable 6,936 6,936 333 333
Deposits and remittances(Note2) 3,886,956 3,886,956 15,093 15,093
Financial Debentures - - 3,450,000 3,450,000
Funds Appropriated for loans 523,410 523,410 729,410 729,410
Total liabilities 4,417,302 4,417,302 4,194,836 4,194,836
Net liquidity gap 77,892,897 77,892,897 46,141,458 46,141,458
fIN
AN
CIA
L S
TA
TE
ME
NT
S
63
Ⅵ
December 31, 2009
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks 9,504,640 9,504,640 - -
Financial assets measured at fair value through profit or loss (Note 1) 322,773 322,773 422,214 422,214
Bills and bonds purchasd under resale agreements - - - -
Interest receivable 349,586 349,586 40,110 40,110
Factoring-account receivable - - - -
Accounts receivable 907,087 907,087 30,049 30,049
Discounts and loans 271,312,956 271,312,956 122,048,937 122,048,937
Available-for-sale financial assets 4,314,231 4,314,231 3,100,867 3,100,867
Held-to-maturity financial assets 20,815,720 20,815,720 3,636,547 3,636,547
Other financial assets- trade acceptance - - - -
Other financial assets- negotiable certificates of deposits - - - -
Other financial assets-zero-coupon bonds 41,449 41,449 - -
Total assets 307,568,442 307,568,442 129,278,724 129,278,724
Liabilities
Deposits from the Central Bank and other banks 55,780,982 55,780,982 - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements 75,588 75,588 - -
Interest payable 797,146 797,146 64,981 64,981
Deposits and remittances(Note2) 263,921,352 263,921,352 16,120,718 16,120,718
Financial Debentures 100,000 100,000 100,000 100,000
Funds Appropriated for loans 96,160 96,160 506,250 506,250
Total liabilities 320,771,228 320,771,228 16,791,949 16,791,949
Net liquidity gap (13,202,786) (13,202,786) 112,486,775 112,486,775
December 31, 2009
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash and cash equivalent - - - -
Due from the Central Bank and call loans to banks - - - -
Financial assets measured at fair value through profit or loss (Note 1) 267,330 267,330 189,098 189,098
Bills and bonds purchasd under resale agreements - - - -
Interest receivable - - - -
Factoring-account receivable - - - -
Accounts receivable - - - -
Discounts and loans 76,435,604 76,435,604 48,629,906 48,629,906
Available-for-sale financial assets 4,115,635 4,115,635 1,221,005 1,221,005
Held-to-maturity financial assets 1,491,630 1,491,630 296,285 296,285
Other financial assets- trade acceptance - - - -
Other financial assets- negotiable certificates of deposits - - - -
Other financial assets-zero-coupon bonds - - - -
Total assets 82,310,199 82,310,199 50,336,294 50,336,294
Liabilities
Deposits from the Central Bank and other banks - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Bills and bonds sold under repurchase agreements - - - -
Interest payable 6,936 6,936 333 333
Deposits and remittances(Note2) 3,886,956 3,886,956 15,093 15,093
Financial Debentures - - 3,450,000 3,450,000
Funds Appropriated for loans 523,410 523,410 729,410 729,410
Total liabilities 4,417,302 4,417,302 4,194,836 4,194,836
Net liquidity gap 77,892,897 77,892,897 46,141,458 46,141,458
Taiwan Business Bank ︱ Annual Report 201064
December 31, 2009
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash and cash equivalent - - - - 17,197,549
Due from the Central Bank and call loans to banks - - - - 65,862,376
Financial assets measured at fair value through profit or loss (Note 1) - - - - 2,304,398
Bills and bonds purchasd under resale agreements - - - - 1,233,898
Interest receivable - - - - 1,421,889
Factoring-account receivable - - - - 116,798
Accounts receivable - - 24,046 24,046 1,836,307
Discounts and loans 42,207,991 42,207,991 218,876,626 210,692,097 920,987,539
Available-for-sale financial assets 1,366,382 1,366,382 675,697 675,697 16,916,010
Held-to-maturity financial assets 31,215 31,215 292,933 292,933 129,864,330
Other financial assets- trade acceptance - - - - 344,155
Other financial assets- negotiable certificates of deposits - - - - 67,570
Other financial assets-zero-coupon bonds - - - - 41,449
Total assets 43,605,588 43,605,588 219,869,302 211,684,773 1,158,194,268
Liabilities
Deposits from the Central Bank and other banks - - - - 107,071,746
Financial liabilities measured at fair value through profit or loss - - - - 255,387
Bills and bonds sold under repurchase agreements - - - - 4,130,048
Interest payable 40 40 4,603 4,603 1,688,624
Deposits and remittances(Note2) 1,762 1,762 3,815 3,815 964,087,905
Financial Debentures 9,650,000 9,650,000 19,750,000 19,750,000 33,050,000
Funds Appropriated for loans 844,410 844,410 6,950,224 6,950,224 9,743,364
Total liabilities 10,496,212 10,496,212 26,708,642 26,708,642 1,120,027,074
Net liquidity gap 33,109,376 33,109,376 193,160,660 184,976,131 38,167,194
Note 1: The amount for financial assets measured at fair value through profit or loss is $2,304,398, which is consisted of financial assets for trading purposes amounting to $1,102,983, and financial assets designated at fair value at initial recognition amounting to $1,201,415.
Note 2: Amount for deposits and remittances shown in column “within 1 month” consists of checking deposits amounting to $20,891,006 demand deposits amounting to $217,206,507 and demand savings deposits amounting to $234,092,119.
4. Cash flow risk from interest-rate fluctuation and fair value risk from interest-rate fluctuation
The Bank’s investment in floating rate assets and the floating rate debt that the Bank possesses can
have an impact on the future cash flow and cause risks due to interest rate fluctuations. The risk
of change in fair value of fixed rate bonds can also result from interest rate fluctuations. In order to
hedge against potential risks resulting from interest-rate fluctuation, the Bank has signed interest swap
contracts after evaluating positions that are exposed to greater interest rate risk. The Bank has also
established interest rate control rules for risk measurement and related limits. In additional, asset and
liabilities management committee surveys the evaluation result of each interest rate risk measurement
index and related responding measures, which will achieve the Bank’s objective to periodically monitor
risks attributed by interest rate fluctuations.
Based on the structure of assets and liabilities as of December 31, 2010, net interest revenue increases
NT$20.93 million if interest rate increases 1BP (1%), budget ratio of 2010 NII was 0.170%.
Based on the structure of assets and liabilities as of December 31, 2009, net interest revenue increases
NT$20.25 million if interest rate increases 1BP (1%), budget ratio of 2009 NII was 0.140%.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
65
Ⅵ
December 31, 2009
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash and cash equivalent - - - - 17,197,549
Due from the Central Bank and call loans to banks - - - - 65,862,376
Financial assets measured at fair value through profit or loss (Note 1) - - - - 2,304,398
Bills and bonds purchasd under resale agreements - - - - 1,233,898
Interest receivable - - - - 1,421,889
Factoring-account receivable - - - - 116,798
Accounts receivable - - 24,046 24,046 1,836,307
Discounts and loans 42,207,991 42,207,991 218,876,626 210,692,097 920,987,539
Available-for-sale financial assets 1,366,382 1,366,382 675,697 675,697 16,916,010
Held-to-maturity financial assets 31,215 31,215 292,933 292,933 129,864,330
Other financial assets- trade acceptance - - - - 344,155
Other financial assets- negotiable certificates of deposits - - - - 67,570
Other financial assets-zero-coupon bonds - - - - 41,449
Total assets 43,605,588 43,605,588 219,869,302 211,684,773 1,158,194,268
Liabilities
Deposits from the Central Bank and other banks - - - - 107,071,746
Financial liabilities measured at fair value through profit or loss - - - - 255,387
Bills and bonds sold under repurchase agreements - - - - 4,130,048
Interest payable 40 40 4,603 4,603 1,688,624
Deposits and remittances(Note2) 1,762 1,762 3,815 3,815 964,087,905
Financial Debentures 9,650,000 9,650,000 19,750,000 19,750,000 33,050,000
Funds Appropriated for loans 844,410 844,410 6,950,224 6,950,224 9,743,364
Total liabilities 10,496,212 10,496,212 26,708,642 26,708,642 1,120,027,074
Net liquidity gap 33,109,376 33,109,376 193,160,660 184,976,131 38,167,194
Note 1: The amount for financial assets measured at fair value through profit or loss is $2,304,398, which is consisted of financial assets for trading purposes amounting to $1,102,983, and financial assets designated at fair value at initial recognition amounting to $1,201,415.
Note 2: Amount for deposits and remittances shown in column “within 1 month” consists of checking deposits amounting to $20,891,006 demand deposits amounting to $217,206,507 and demand savings deposits amounting to $234,092,119.
4. Cash flow risk from interest-rate fluctuation and fair value risk from interest-rate fluctuation
The Bank’s investment in floating rate assets and the floating rate debt that the Bank possesses can
have an impact on the future cash flow and cause risks due to interest rate fluctuations. The risk
of change in fair value of fixed rate bonds can also result from interest rate fluctuations. In order to
hedge against potential risks resulting from interest-rate fluctuation, the Bank has signed interest swap
contracts after evaluating positions that are exposed to greater interest rate risk. The Bank has also
established interest rate control rules for risk measurement and related limits. In additional, asset and
liabilities management committee surveys the evaluation result of each interest rate risk measurement
index and related responding measures, which will achieve the Bank’s objective to periodically monitor
risks attributed by interest rate fluctuations.
Based on the structure of assets and liabilities as of December 31, 2010, net interest revenue increases
NT$20.93 million if interest rate increases 1BP (1%), budget ratio of 2010 NII was 0.170%.
Based on the structure of assets and liabilities as of December 31, 2009, net interest revenue increases
NT$20.25 million if interest rate increases 1BP (1%), budget ratio of 2009 NII was 0.140%.
Taiwan Business Bank ︱ Annual Report 201066
A. Maturity analysis of expected repricing date or maturity date.
As of December 31, 2010 and 2009, the Bank’s expected repricing date and maturity date were not
affected by the contract date. The maturity analysis of the expected repricing date and maturity date
were as follows:
December 31, 2010
Financial items
With in 1 month 1 month to 3 months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) $ 31,508,624 31,508,624 14,662,982 14,662,982
Financial assets measured at fair value through profit or loss 1,568,213 1,568,213 45,239 45,239
Bills and bonds purchased under resale agreements 2,519,348 2,519,348 - -
Account Receivables 1,399,980 1,399,980 - -
Discounts and loans (excluding non-accural loans) 816,958,939 816,958,939 67,899,625 67,899,625
Available-for-sale financial assets 1,515,754 1,515,754 6,440,752 6,440,752
Held-to-maturity financial assets 65,282,302 65,282,302 35,930,676 35,930,676
Other financial assets-trade acceptance - - 446,350 446,350
Other financial assets-Negotiable certificates of deposit - - 61,950 61,950
Total assets $ 920,753,160 920,753,160 125,487,574 125,487,574
Liabilities
Deposits from other banks (Note 3) $ - - - -
Financial liabilities measured at fair value through profit or loss (IRS) - - 195,589 195,589
Call loans from banks and bank overdrafts (including call loan to central bank) 8,189,467 8,189,467 6,870,468 6,870,468
Bills and bonds sold under repurchase agreements 9,726,586 9,726,586 149,160 149,160
Savings deposits,Time deposits and demand deposits 367,094,120 367,094,120 48,899,085 48,899,085
Post office deposits 58,766,128 58,766,128 211,608 211,608
Funds appropriated for loans 9,199,212 9,199,212 - -
Financial debentures payable 4,600,000 4,600,000 7,500,000 7,500,000
Total liabilities $ 457,575,513 457,575,513 63,825,910 63,825,910
Interest rate sensitivity gap $ 463,177,647 463,177,647 61,661,664 61,661,664
December 31, 2010
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) 4,433,227 4,433,227 - -
Financial assets measured at fair value through profit or loss 684,159 684,159 501,959 501,959
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 27,284,094 27,284,094 4,723,966 4,723,966
Available-for-sale financial assets 493,788 493,788 1,138,840 1,138,840
Held-to-maturity financial assets 29,952,851 29,952,851 1,571,654 1,571,654
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 62,848,119 62,848,119 7,936,419 7,936,419
Liabilities
Deposits from other banks (Note 3) 1,494,088 1,494,088 - -
Financial liabilities measured at fair value through profit or loss (IRS) 11,027 11,027 - -
Call loans from banks and bank overdrafts (including call loan to central bank) 9,190,896 9,190,896 - -
Bills and bonds sold under repurchase agreements 74,913 74,913 - -
Savings deposits,Time deposits and demand deposits 547,899,386 547,899,386 5,612,266 5,612,266
Post office deposits 935,402 935,402 - -
Funds appropriated for loans 69,000 69,000 1,105,075 1,105,075
Financial debentures payable 12,100,000 12,100,000 - -
Total liabilities 571,774,712 571,774,712 6,717,341 6,717,341
Interest rate sensitivity gap (508,926,593) (508,926,593) 1,219,078 1,219,078
fIN
AN
CIA
L S
TA
TE
ME
NT
S
67
Ⅵ
A. Maturity analysis of expected repricing date or maturity date.
As of December 31, 2010 and 2009, the Bank’s expected repricing date and maturity date were not
affected by the contract date. The maturity analysis of the expected repricing date and maturity date
were as follows:
December 31, 2010
Financial items
With in 1 month 1 month to 3 months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) $ 31,508,624 31,508,624 14,662,982 14,662,982
Financial assets measured at fair value through profit or loss 1,568,213 1,568,213 45,239 45,239
Bills and bonds purchased under resale agreements 2,519,348 2,519,348 - -
Account Receivables 1,399,980 1,399,980 - -
Discounts and loans (excluding non-accural loans) 816,958,939 816,958,939 67,899,625 67,899,625
Available-for-sale financial assets 1,515,754 1,515,754 6,440,752 6,440,752
Held-to-maturity financial assets 65,282,302 65,282,302 35,930,676 35,930,676
Other financial assets-trade acceptance - - 446,350 446,350
Other financial assets-Negotiable certificates of deposit - - 61,950 61,950
Total assets $ 920,753,160 920,753,160 125,487,574 125,487,574
Liabilities
Deposits from other banks (Note 3) $ - - - -
Financial liabilities measured at fair value through profit or loss (IRS) - - 195,589 195,589
Call loans from banks and bank overdrafts (including call loan to central bank) 8,189,467 8,189,467 6,870,468 6,870,468
Bills and bonds sold under repurchase agreements 9,726,586 9,726,586 149,160 149,160
Savings deposits,Time deposits and demand deposits 367,094,120 367,094,120 48,899,085 48,899,085
Post office deposits 58,766,128 58,766,128 211,608 211,608
Funds appropriated for loans 9,199,212 9,199,212 - -
Financial debentures payable 4,600,000 4,600,000 7,500,000 7,500,000
Total liabilities $ 457,575,513 457,575,513 63,825,910 63,825,910
Interest rate sensitivity gap $ 463,177,647 463,177,647 61,661,664 61,661,664
December 31, 2010
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) 4,433,227 4,433,227 - -
Financial assets measured at fair value through profit or loss 684,159 684,159 501,959 501,959
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 27,284,094 27,284,094 4,723,966 4,723,966
Available-for-sale financial assets 493,788 493,788 1,138,840 1,138,840
Held-to-maturity financial assets 29,952,851 29,952,851 1,571,654 1,571,654
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 62,848,119 62,848,119 7,936,419 7,936,419
Liabilities
Deposits from other banks (Note 3) 1,494,088 1,494,088 - -
Financial liabilities measured at fair value through profit or loss (IRS) 11,027 11,027 - -
Call loans from banks and bank overdrafts (including call loan to central bank) 9,190,896 9,190,896 - -
Bills and bonds sold under repurchase agreements 74,913 74,913 - -
Savings deposits,Time deposits and demand deposits 547,899,386 547,899,386 5,612,266 5,612,266
Post office deposits 935,402 935,402 - -
Funds appropriated for loans 69,000 69,000 1,105,075 1,105,075
Financial debentures payable 12,100,000 12,100,000 - -
Total liabilities 571,774,712 571,774,712 6,717,341 6,717,341
Interest rate sensitivity gap (508,926,593) (508,926,593) 1,219,078 1,219,078
Taiwan Business Bank ︱ Annual Report 201068
December 31, 2010
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - -
Financial assets measured at fair value through profit or loss 885,000 885,000 - -
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 2,541,085 2,541,085 1,700,484 1,700,484
Available-for-sale financial assets 1,713,097 1,713,097 1,764,611 1,764,611
Held-to-maturity financial assets 560,945 560,945 631,027 631,027
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 5,700,127 5,700,127 4,096,122 4,096,122
Liabilities
Deposits from other banks (Note 3) - - - -
Financial liabilities measured at fair value through profit or loss (IRS) - - - -
Call loans from banks and bank overdrafts (including call loan to central bank) - - - -
Bills and bonds sold under repurchase agreements - - - -
Savings deposits,Time deposits and demand deposits 822,351 822,351 448 448
Post office deposits - - - -
Funds appropriated for loans - - - -
Financial debentures payable 1,950,000 1,950,000 5,950,000 5,950,000
Total liabilities 2,772,351 2,772,351 5,950,448 5,950,448
Interest rate sensitivity gap 2,927,776 2,927,776 (1,854,326) (1,854,326)
December 31, 2010
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - - 50,604,833
Financial assets measured at fair value through profit or loss 147,500 147,500 - - 3,832,070
Bills and bonds purchased under resale agreements - - - - 2,519,348
Account Receivables - - - - 1,399,980
Discounts and loans (excluding non-accural loans) 1,530,846 1,530,846 2,566,034 2,566,034 925,205,073
Available-for-sale financial assets 313,793 313,793 921,044 921,044 14,301,679
Held-to-maturity financial assets 1,248,427 1,248,427 371,610 371,610 135,549,492
Other financial assets-trade acceptance - - - - 446,350
Other financial assets-Negotiable certificates of deposit - - - - 61,950
Total assets 3,240,566 3,240,566 3,858,688 3,858,688 1,133,920,775
Liabilities
Deposits from other banks (Note 3) - - - - 1,494,088
Financial liabilities measured at fair value through profit or loss (IRS) - - - - 206,616
Call loans from banks and bank overdrafts (including call loan to central bank) - - - - 24,250,831
Bills and bonds sold under repurchase agreements - - - - 9,950,659
Savings deposits,Time deposits and demand deposits 750 750 - - 970,328,406
Post office deposits - - - - 59,913,138
Funds appropriated for loans - - - - 10,373,287
Financial debentures payable 2,500,000 2,500,000 9,400,000 9,400,000 44,000,000
Total liabilities 2,500,750 2,500,750 9,400,000 9,400,000 1,120,517,025
Interest rate sensitivity gap 739,816 739,816 (5,541,312) (5,541,312) 13,403,750
Note 1: The above amount included the revenue or cost of interest-yielding assets and interest-bearing liabilities which are affected by interest rate fluctuations.
Note 2: Cash in banks amounted to $ 2,603,462 which $2,471,564 is accrued interest and $131,898 is unaccrued interest. Total call loans to bank amounted to $20,826,253 which is accrued interest. Due from the Central Bank amounted to $50,751,661 of which $27,164,755 is accrued interest and $23,586,906 is unaccrued interest. Deposits transferred to the Central Bank amounted to $142,261 which is accrued interest.
Note 3: Deposits from other banks amounted to $1,523,718 of which $1,494,088 is accrued interest and $ 29,630 is unaccrued interest.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
69
Ⅵ
December 31, 2010
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - -
Financial assets measured at fair value through profit or loss 885,000 885,000 - -
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 2,541,085 2,541,085 1,700,484 1,700,484
Available-for-sale financial assets 1,713,097 1,713,097 1,764,611 1,764,611
Held-to-maturity financial assets 560,945 560,945 631,027 631,027
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 5,700,127 5,700,127 4,096,122 4,096,122
Liabilities
Deposits from other banks (Note 3) - - - -
Financial liabilities measured at fair value through profit or loss (IRS) - - - -
Call loans from banks and bank overdrafts (including call loan to central bank) - - - -
Bills and bonds sold under repurchase agreements - - - -
Savings deposits,Time deposits and demand deposits 822,351 822,351 448 448
Post office deposits - - - -
Funds appropriated for loans - - - -
Financial debentures payable 1,950,000 1,950,000 5,950,000 5,950,000
Total liabilities 2,772,351 2,772,351 5,950,448 5,950,448
Interest rate sensitivity gap 2,927,776 2,927,776 (1,854,326) (1,854,326)
December 31, 2010
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - - 50,604,833
Financial assets measured at fair value through profit or loss 147,500 147,500 - - 3,832,070
Bills and bonds purchased under resale agreements - - - - 2,519,348
Account Receivables - - - - 1,399,980
Discounts and loans (excluding non-accural loans) 1,530,846 1,530,846 2,566,034 2,566,034 925,205,073
Available-for-sale financial assets 313,793 313,793 921,044 921,044 14,301,679
Held-to-maturity financial assets 1,248,427 1,248,427 371,610 371,610 135,549,492
Other financial assets-trade acceptance - - - - 446,350
Other financial assets-Negotiable certificates of deposit - - - - 61,950
Total assets 3,240,566 3,240,566 3,858,688 3,858,688 1,133,920,775
Liabilities
Deposits from other banks (Note 3) - - - - 1,494,088
Financial liabilities measured at fair value through profit or loss (IRS) - - - - 206,616
Call loans from banks and bank overdrafts (including call loan to central bank) - - - - 24,250,831
Bills and bonds sold under repurchase agreements - - - - 9,950,659
Savings deposits,Time deposits and demand deposits 750 750 - - 970,328,406
Post office deposits - - - - 59,913,138
Funds appropriated for loans - - - - 10,373,287
Financial debentures payable 2,500,000 2,500,000 9,400,000 9,400,000 44,000,000
Total liabilities 2,500,750 2,500,750 9,400,000 9,400,000 1,120,517,025
Interest rate sensitivity gap 739,816 739,816 (5,541,312) (5,541,312) 13,403,750
Note 1: The above amount included the revenue or cost of interest-yielding assets and interest-bearing liabilities which are affected by interest rate fluctuations.
Note 2: Cash in banks amounted to $ 2,603,462 which $2,471,564 is accrued interest and $131,898 is unaccrued interest. Total call loans to bank amounted to $20,826,253 which is accrued interest. Due from the Central Bank amounted to $50,751,661 of which $27,164,755 is accrued interest and $23,586,906 is unaccrued interest. Deposits transferred to the Central Bank amounted to $142,261 which is accrued interest.
Note 3: Deposits from other banks amounted to $1,523,718 of which $1,494,088 is accrued interest and $ 29,630 is unaccrued interest.
Taiwan Business Bank ︱ Annual Report 201070
December 31, 2009
Financial items
With in 1 month 1 month to 3 months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) $ 44,636,247 44,636,247 8,180,017 8,180,017
Financial assets measured at fair value through profit or loss 658,939 658,939 182,093 182,093
Bills and bonds purchased under resale agreements 1,233,898 1,233,898 - -
Account Receivables 76,208 76,208 1,214,868 1,214,868
Discounts and loans (excluding non-accural loans) 740,711,201 740,711,201 37,241,415 37,241,415
Available-for-sale financial assets 3,984,662 3,984,662 6,669,081 6,669,081
Held-to-maturity financial assets 75,205,281 75,205,281 28,930,798 28,930,798
Other financial assets-trade acceptance - - 344,155 344,155
Other financial assets-Negotiable certificates of deposit - - 67,570 67,570
Total assets $ 866,506,436 866,506,436 82,829,997 82,829,997
Liabilities
Deposits from other banks (Note 3) $ - - - -
Financial liabilities measured at fair value through profit or loss - - 147,664 147,664
Call loans from banks and bank overdrafts 16,605,719 16,605,719 5,663,571 5,663,571
Bills and bonds sold under repurchase agreements 3,652,999 3,652,999 401,461 401,461
Savings deposits,Time deposits and demand deposits 330,171,243 330,171,243 47,614,330 47,614,330
Post office deposits 19,002,930 19,002,930 42,666,326 42,666,326
Funds appropriated for loans 6,347,438 6,347,438 - -
Financial debentures payable 4,600,000 4,600,000 4,300,000 4,300,000
Total liabilities $ 380,380,329 380,380,329 100,793,352 100,793,352
Interest rate sensitivity gap $ 486,126,107 486,126,107 (17,963,355) (17,963,355)
December 31, 2009
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) 4,504,640 4,504,640 - -
Financial assets measured at fair value through profit or loss 251,624 251,624 422,214 422,214
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 91,993,827 91,993,827 10,607,112 10,607,112
Available-for-sale financial assets 1,471,126 1,471,126 805,493 805,493
Held-to-maturity financial assets 20,557,944 20,557,944 3,202,601 3,202,601
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 118,779,161 118,779,161 15,037,420 15,037,420
Liabilities
Deposits from other banks (Note 3) 70,570 70,570 - -
Financial liabilities measured at fair value through profit or loss 31,219 31,219 - -
Call loans from banks and bank overdrafts 1,448,196 1,448,196 - -
Bills and bonds sold under repurchase agreements 75,588 75,588 - -
Savings deposits,Time deposits and demand deposits 555,834,076 555,834,076 7,249,662 7,249,662
Post office deposits 20,159,556 20,159,556 - -
Funds appropriated for loans 36,000 36,000 3,359,926 3,359,926
Financial debentures payable 12,100,000 12,100,000 100,000 100,000
Total liabilities 589,755,205 589,755,205 10,709,588 10,709,588
Interest rate sensitivity gap (470,976,044) (470,976,044) 4,327,832 4,327,832
fIN
AN
CIA
L S
TA
TE
ME
NT
S
71
Ⅵ
December 31, 2009
Financial items
With in 1 month 1 month to 3 months
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) $ 44,636,247 44,636,247 8,180,017 8,180,017
Financial assets measured at fair value through profit or loss 658,939 658,939 182,093 182,093
Bills and bonds purchased under resale agreements 1,233,898 1,233,898 - -
Account Receivables 76,208 76,208 1,214,868 1,214,868
Discounts and loans (excluding non-accural loans) 740,711,201 740,711,201 37,241,415 37,241,415
Available-for-sale financial assets 3,984,662 3,984,662 6,669,081 6,669,081
Held-to-maturity financial assets 75,205,281 75,205,281 28,930,798 28,930,798
Other financial assets-trade acceptance - - 344,155 344,155
Other financial assets-Negotiable certificates of deposit - - 67,570 67,570
Total assets $ 866,506,436 866,506,436 82,829,997 82,829,997
Liabilities
Deposits from other banks (Note 3) $ - - - -
Financial liabilities measured at fair value through profit or loss - - 147,664 147,664
Call loans from banks and bank overdrafts 16,605,719 16,605,719 5,663,571 5,663,571
Bills and bonds sold under repurchase agreements 3,652,999 3,652,999 401,461 401,461
Savings deposits,Time deposits and demand deposits 330,171,243 330,171,243 47,614,330 47,614,330
Post office deposits 19,002,930 19,002,930 42,666,326 42,666,326
Funds appropriated for loans 6,347,438 6,347,438 - -
Financial debentures payable 4,600,000 4,600,000 4,300,000 4,300,000
Total liabilities $ 380,380,329 380,380,329 100,793,352 100,793,352
Interest rate sensitivity gap $ 486,126,107 486,126,107 (17,963,355) (17,963,355)
December 31, 2009
Financial items
3 months to 1 year 1 year to 2 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) 4,504,640 4,504,640 - -
Financial assets measured at fair value through profit or loss 251,624 251,624 422,214 422,214
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 91,993,827 91,993,827 10,607,112 10,607,112
Available-for-sale financial assets 1,471,126 1,471,126 805,493 805,493
Held-to-maturity financial assets 20,557,944 20,557,944 3,202,601 3,202,601
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 118,779,161 118,779,161 15,037,420 15,037,420
Liabilities
Deposits from other banks (Note 3) 70,570 70,570 - -
Financial liabilities measured at fair value through profit or loss 31,219 31,219 - -
Call loans from banks and bank overdrafts 1,448,196 1,448,196 - -
Bills and bonds sold under repurchase agreements 75,588 75,588 - -
Savings deposits,Time deposits and demand deposits 555,834,076 555,834,076 7,249,662 7,249,662
Post office deposits 20,159,556 20,159,556 - -
Funds appropriated for loans 36,000 36,000 3,359,926 3,359,926
Financial debentures payable 12,100,000 12,100,000 100,000 100,000
Total liabilities 589,755,205 589,755,205 10,709,588 10,709,588
Interest rate sensitivity gap (470,976,044) (470,976,044) 4,327,832 4,327,832
Taiwan Business Bank ︱ Annual Report 201072
December 31, 2009
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - -
Financial assets measured at fair value through profit or loss 267,330 267,330 - -
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 10,105,281 10,105,281 4,827,449 4,827,449
Available-for-sale financial assets 387,507 387,507 1,205,200 1,205,200
Held-to-maturity financial assets 1,491,631 1,491,631 151,927 151,927
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 12,251,749 12,251,749 6,184,576 6,184,576
Liabilities
Deposits from other banks (Note 3) - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Call loans from banks and bank overdrafts - - - -
Bills and bonds sold under repurchase agreements - - - -
Savings deposits,Time deposits and demand deposits 1,865,467 1,865,467 5,346 5,346
Post office deposits - - - -
Funds appropriated for loans - - - -
Financial debentures payable - - 1,950,000 1,950,000
Total liabilities 1,865,467 1,865,467 1,955,346 1,955,346
Interest rate sensitivity gap 10,386,282 10,386,282 4,229,230 4,229,230
December 31, 2009
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - - 57,320,904
Financial assets measured at fair value through profit or loss - - - - 1,782,200
Bills and bonds purchased under resale agreements - - - - 1,233,898
Account Receivables - - - - 1,291,076
Discounts and loans (excluding non-accural loans) 4,726,572 4,726,572 4,455,261 4,455,261 904,668,118
Available-for-sale financial assets 1,188,430 1,188,430 566,264 566,264 16,277,763
Held-to-maturity financial assets 31,215 31,215 292,933 292,933 129,864,330
Other financial assets-trade acceptance - - - - 344,155
Other financial assets-Negotiable certificates of deposit - - - - 67,570
Total assets 5,946,217 5,946,217 5,314,458 5,314,458 1,112,850,014
Liabilities
Deposits from other banks (Note 3) - - - - 70,570
Financial liabilities measured at fair value through profit or loss - - - - 178,883
Call loans from banks and bank overdrafts - - - - 23,717,486
Bills and bonds sold under repurchase agreements - - - - 4,130,048
Savings deposits,Time deposits and demand deposits 218 218 125 125 942,740,467
Post office deposits - - - - 81,828,812
Funds appropriated for loans - - - - 9,743,364
Financial debentures payable 5,950,000 5,950,000 4,050,000 4,050,000 33,050,000
Total liabilities 5,950,218 5,950,218 4,050,125 4,050,125 1,095,459,630
Interest rate sensitivity gap (4,001) (4,001) 1,264,333 1,264,333 17,390,384
Note 1: The above amount included the revenue or cost of interest-yielding assets and interest-bearing liabilities which are affected by interest rate fluctuations.
Note 2: Cash in banks amounted to $ 1,821,075 which $1,741,146 is accrued interest and $79,929 is unaccrued interest. Total call loans to bank amounted to $22,644,865 which is accrued interest. Due from the Central Bank amounted to $43,217,511 of which $32,674,749 is accrued interest and $10,542,762 is unaccrued interest. Deposits transferred to the Central Bank amounted to $260,144 which is accrued interest.
Note 3: Deposits from other banks amounted to $126,203 of which $70,570 is accrued interest and $ 55,633 is unaccrued interest.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
73
Ⅵ
December 31, 2009
Financial items
2 years to 3 years 3 years to 4 years
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - -
Financial assets measured at fair value through profit or loss 267,330 267,330 - -
Bills and bonds purchased under resale agreements - - - -
Account Receivables - - - -
Discounts and loans (excluding non-accural loans) 10,105,281 10,105,281 4,827,449 4,827,449
Available-for-sale financial assets 387,507 387,507 1,205,200 1,205,200
Held-to-maturity financial assets 1,491,631 1,491,631 151,927 151,927
Other financial assets-trade acceptance - - - -
Other financial assets-Negotiable certificates of deposit - - - -
Total assets 12,251,749 12,251,749 6,184,576 6,184,576
Liabilities
Deposits from other banks (Note 3) - - - -
Financial liabilities measured at fair value through profit or loss - - - -
Call loans from banks and bank overdrafts - - - -
Bills and bonds sold under repurchase agreements - - - -
Savings deposits,Time deposits and demand deposits 1,865,467 1,865,467 5,346 5,346
Post office deposits - - - -
Funds appropriated for loans - - - -
Financial debentures payable - - 1,950,000 1,950,000
Total liabilities 1,865,467 1,865,467 1,955,346 1,955,346
Interest rate sensitivity gap 10,386,282 10,386,282 4,229,230 4,229,230
December 31, 2009
Financial items
4 years to 5 years Over 5 years Total
AmountEstimated
Receipt/Payment
AmountEstimated
Receipt/Payment
Amount
Assets
Cash in banks, due from the Central Bank and call loans to banks (Note 2) - - - - 57,320,904
Financial assets measured at fair value through profit or loss - - - - 1,782,200
Bills and bonds purchased under resale agreements - - - - 1,233,898
Account Receivables - - - - 1,291,076
Discounts and loans (excluding non-accural loans) 4,726,572 4,726,572 4,455,261 4,455,261 904,668,118
Available-for-sale financial assets 1,188,430 1,188,430 566,264 566,264 16,277,763
Held-to-maturity financial assets 31,215 31,215 292,933 292,933 129,864,330
Other financial assets-trade acceptance - - - - 344,155
Other financial assets-Negotiable certificates of deposit - - - - 67,570
Total assets 5,946,217 5,946,217 5,314,458 5,314,458 1,112,850,014
Liabilities
Deposits from other banks (Note 3) - - - - 70,570
Financial liabilities measured at fair value through profit or loss - - - - 178,883
Call loans from banks and bank overdrafts - - - - 23,717,486
Bills and bonds sold under repurchase agreements - - - - 4,130,048
Savings deposits,Time deposits and demand deposits 218 218 125 125 942,740,467
Post office deposits - - - - 81,828,812
Funds appropriated for loans - - - - 9,743,364
Financial debentures payable 5,950,000 5,950,000 4,050,000 4,050,000 33,050,000
Total liabilities 5,950,218 5,950,218 4,050,125 4,050,125 1,095,459,630
Interest rate sensitivity gap (4,001) (4,001) 1,264,333 1,264,333 17,390,384
Note 1: The above amount included the revenue or cost of interest-yielding assets and interest-bearing liabilities which are affected by interest rate fluctuations.
Note 2: Cash in banks amounted to $ 1,821,075 which $1,741,146 is accrued interest and $79,929 is unaccrued interest. Total call loans to bank amounted to $22,644,865 which is accrued interest. Due from the Central Bank amounted to $43,217,511 of which $32,674,749 is accrued interest and $10,542,762 is unaccrued interest. Deposits transferred to the Central Bank amounted to $260,144 which is accrued interest.
Note 3: Deposits from other banks amounted to $126,203 of which $70,570 is accrued interest and $ 55,633 is unaccrued interest.
Taiwan Business Bank ︱ Annual Report 201074
B. Effective interest rates
As of December 31, 2010 and 2009, the effective interest rates of financial instruments held and issued
the Bank are as follows:
Finanical items December 31, 2010 December 31, 2009
Assets:
Cash in banks -% -%
Due from the Central Bank 0.36% 0.45%
Call loans to banks 0.64% 0.61%
Financial assets held for trading 0.58% 0.28%
Available-for-sale financial assets 1.50% 1.81%
Held-to-maturity financial assets 0.82% 0.75%
Discounts and loans 1.76% 1.87%
Liabilities:
Deposits from other banks 0.07% 0.09%
Call loans from bank 0.27% 0.12%
Deposits 0.62% 0.82%
Financial debentures 2.12% 2.01%
4. Control risk and hedging strategy
In order to respond to domestic and foreign economic and financial situation and to strengthen asset
and liability structure so as to obtain steady earnings and growth, the Bank set up assets liabilities
management committee which is responsible for corporate-wide capital liquidity risk and bank interest
rate risk management. In the Assets Liabilities Management Committee, the general manager pluralizes
director commissioner, the vice-general manager serves as vice-director commissioner, the heads
of deposits, loans, risk management, financial trade, and capital deployment are members of Assets
Liabilities Management Committee .To control liquidity risk effectively, the Bank conclude each type of
liquidity risk measure index, for example New Taiwan dollars maturity gap limited amount, U.S. dollars
maturity gap limited amount and liquidity preparation ratio, setting up capital announcement system, and
concluding emergency response measure, to deal with the Bank happening liquidity crisis.
The Bank has set up rules for risk measurement, supervision and control for the new business or
product development.
The Bank set up limits for all the risks and periodically discusses and amends the limits to strengthen
risk management. Also, the Bank handles the risk by using risk transfer, avoidance, control.
(5) RELATED PARTY TRANSACTIONS
(A) Names of Related Parties and Relationship with the Bank
Name of Related Party Relationship with the Bank
Bank of Taiwan Corporate director of the Bank
Ministry of Finance, R.O.C Corporate director of the Bank
Land Bank of Taiwan Corporate supervisor of the Bank
Mega Financial Holding Co, Ltd Corporate supervisor of the Bank
Mega International Commercial Bank Affiliate
Chung Kuo Insurance Company, Ltd. Affiliate
Primasia Investment Trust Co., Ltd. Investee company under the equity method(Sold on October 2010)
Taiwan Business Bank Insurance Agency Co. Ltd. Investee company under the equity method
Taiwan Business Bank Property Insurance Agency Co. Ltd. Investee company under the equity method
OthersMajor shareholders, directors, supervisors, president, executive vice president, managers and their second tier of kinship.
(B) Significant Related Party Transactions(a) Cash in Banks
December 31, 2010 December 31, 2009
Amount % Amount %
Bank of Taiwan $ 126,247 4.85 108,241 5.94
Land Bank of Taiwan 98 - 91 -
Mega International Commercial Bank 2,038 0.08 5,978 0.33
Total $ 128,383 4.93 114,310 6.27
Interest rates are the same as those with regular clients.
(b) Deposits from Other Banks
December 31, 2010 December 31, 2009
Amount % Amount %
Land Bank of Taiwan $ 1,038 0.07 452 0.36
Mega International Commercial Bank 86 - 170 0.13
Total $ 1,124 0.07 622 0.49
Interest rates are the same as those with regular clients.
(c) Call Loans to Banks
For The YearEnded December 31, 2010
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $4,801,185 295,000 2,796 0.108%~1.00%
Land Bank of Taiwan 5,108,650 2,492,650 8,286 0.107%~1.32%
Mega International Commercial Bank 7,043,700 442,500 1,652 0.106%~4.68%
Total $16,953,535 3,230,150 12,734
For The YearEnded December 31, 2009
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $12,848,338 - 11,367 0.095%~1.9%
Land Bank of Taiwan 9,303,970 321,760 7,238 0.098%~3.3%
Mega International Commercial Bank 6,437,255 - 3,462 0.13%~5.0%
Total $28,589,563 321,760 22,067
Interest rates are the same as those with regular clients.
fIN
AN
CIA
L S
TA
TE
ME
NT
S
75
Ⅵ
B. Effective interest rates
As of December 31, 2010 and 2009, the effective interest rates of financial instruments held and issued
the Bank are as follows:
Finanical items December 31, 2010 December 31, 2009
Assets:
Cash in banks -% -%
Due from the Central Bank 0.36% 0.45%
Call loans to banks 0.64% 0.61%
Financial assets held for trading 0.58% 0.28%
Available-for-sale financial assets 1.50% 1.81%
Held-to-maturity financial assets 0.82% 0.75%
Discounts and loans 1.76% 1.87%
Liabilities:
Deposits from other banks 0.07% 0.09%
Call loans from bank 0.27% 0.12%
Deposits 0.62% 0.82%
Financial debentures 2.12% 2.01%
4. Control risk and hedging strategy
In order to respond to domestic and foreign economic and financial situation and to strengthen asset
and liability structure so as to obtain steady earnings and growth, the Bank set up assets liabilities
management committee which is responsible for corporate-wide capital liquidity risk and bank interest
rate risk management. In the Assets Liabilities Management Committee, the general manager pluralizes
director commissioner, the vice-general manager serves as vice-director commissioner, the heads
of deposits, loans, risk management, financial trade, and capital deployment are members of Assets
Liabilities Management Committee .To control liquidity risk effectively, the Bank conclude each type of
liquidity risk measure index, for example New Taiwan dollars maturity gap limited amount, U.S. dollars
maturity gap limited amount and liquidity preparation ratio, setting up capital announcement system, and
concluding emergency response measure, to deal with the Bank happening liquidity crisis.
The Bank has set up rules for risk measurement, supervision and control for the new business or
product development.
The Bank set up limits for all the risks and periodically discusses and amends the limits to strengthen
risk management. Also, the Bank handles the risk by using risk transfer, avoidance, control.
(5) RELATED PARTY TRANSACTIONS
(A) Names of Related Parties and Relationship with the Bank
Name of Related Party Relationship with the Bank
Bank of Taiwan Corporate director of the Bank
Ministry of Finance, R.O.C Corporate director of the Bank
Land Bank of Taiwan Corporate supervisor of the Bank
Mega Financial Holding Co, Ltd Corporate supervisor of the Bank
Mega International Commercial Bank Affiliate
Chung Kuo Insurance Company, Ltd. Affiliate
Primasia Investment Trust Co., Ltd. Investee company under the equity method(Sold on October 2010)
Taiwan Business Bank Insurance Agency Co. Ltd. Investee company under the equity method
Taiwan Business Bank Property Insurance Agency Co. Ltd. Investee company under the equity method
OthersMajor shareholders, directors, supervisors, president, executive vice president, managers and their second tier of kinship.
(B) Significant Related Party Transactions(a) Cash in Banks
December 31, 2010 December 31, 2009
Amount % Amount %
Bank of Taiwan $ 126,247 4.85 108,241 5.94
Land Bank of Taiwan 98 - 91 -
Mega International Commercial Bank 2,038 0.08 5,978 0.33
Total $ 128,383 4.93 114,310 6.27
Interest rates are the same as those with regular clients.
(b) Deposits from Other Banks
December 31, 2010 December 31, 2009
Amount % Amount %
Land Bank of Taiwan $ 1,038 0.07 452 0.36
Mega International Commercial Bank 86 - 170 0.13
Total $ 1,124 0.07 622 0.49
Interest rates are the same as those with regular clients.
(c) Call Loans to Banks
For The YearEnded December 31, 2010
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $4,801,185 295,000 2,796 0.108%~1.00%
Land Bank of Taiwan 5,108,650 2,492,650 8,286 0.107%~1.32%
Mega International Commercial Bank 7,043,700 442,500 1,652 0.106%~4.68%
Total $16,953,535 3,230,150 12,734
For The YearEnded December 31, 2009
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $12,848,338 - 11,367 0.095%~1.9%
Land Bank of Taiwan 9,303,970 321,760 7,238 0.098%~3.3%
Mega International Commercial Bank 6,437,255 - 3,462 0.13%~5.0%
Total $28,589,563 321,760 22,067
Interest rates are the same as those with regular clients.
Taiwan Business Bank ︱ Annual Report 201076
(d) Call Loans from Banks
For The YearEnded December 31, 2010
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $12,696,500 1,121,000 9,749 0.1%~0.83%
Land Bank of Taiwan 2,826,000 295,000 406 0.12%~4.17%
Mega International Commercial Bank 12,068,799 3,253,850 18,488 0.107%~4.55%
Total $27,591,299 4,669,850 28,643
For The YearEnded December 31, 2009
MaximumBalance
EndingBalance
InterestRevenue
AnnualInterest Rate
Bank of Taiwan $7,861,120 1,126,160 8,054 0.10%~1.11%
Land Bank of Taiwan 5,480,096 804,400 1,599 0.10%~0.86%
Mega International Commercial Bank 10,379,313 4,279,408 18,554 0.099%~3.44%
Total $23,720,529 6,209,968 28,207
Interest rates are the same as those with regular clients.
(e) Bank Overdrafts
For The YearEnded December 31, 2010
Maximum Balance(Note)
EndingBalance(Note)
InterestExpense
AnnualInterest Rate
Mega International Commercial Bank $ 145,738 41,364 3 2.50%
For The YearEnded December 31, 2010
Maximum Balance(Note)
EndingBalance(Note)
InterestExpense
AnnualInterest Rate
Mega International Commercial Bank $ 170,226 14,167 2 1.837%~2.5%
Interest rates are the same as those with regular clients.
Note: The differences between book balance and bank balance is due to the account in transit. The above
ending balance is the book amount and maximum balance, interest expense are according to bank
amount.
(f) Deposits
December 31, 2010 December 31, 2009
Amount % Amount %
Primasia Investment Trust Co., Ltd. $ - - 76,943 0.01
Taiwan Business Bank Insurance Agency Co., Ltd.
46,815 - 31,278 -
Taiwan Business Bank Property Insurance Agency Co., Ltd.
3,688 - 794 -
Others 1,375,288 0.14 3,757,651 0.36
Total $ 1,425,791 0.14 3,866,666 0.37
Interest rates are the same as those with regular clients.
FIN
AN
CIA
L S
TA
Te
Me
NT
S
77
Ⅵ
(g) Credit
December 31, 2010
Category
Number of clients
or name of related party
Maximum balance
Ending balance
Performing situations
Collaterals
Transaction terms are the
same as those with regular
clients
Performing loan
Non-performing
Loans
employee consumer loans
119 $258,507 239,353 239,353 - none/real estate none
Self-use residence collateral loans
103 308,628 282,620 282,620 - real estate none
Others Sun Tai 13,000 - - - real estate none
Yeh Hsiu Mei 3,500 3,500 3,500 - real estate none
Li Shuo Tian 7,948 1,797 1,797 - real estate none
Cheng Ching Loang 900 900 900 - real estate none
Wen Shi Chi 199 - - - real estate none
Lin Chi Chen 3,411 2,981 2,981 - real estate none
Li Huan Jang 4,700 3,677 3,677 - real estate none
Chen Ching Tsung 6,035 4,032 4,032 - real estate none
Huang Hsiu Chi 3,965 3,965 3,965 - real estate none
Hong Hui Na 2,636 - - - real estate none
Shih Ming Yu 12,410 12,410 12,410 - real estate none
Tsai Tsai Kun 3,386 - - - real estate none
Hsu Tien Liang 3,176 - - - real estate none
Wu Ying Che 60 - - - none none
Chen Nien Tzu 1,000 - - - real estate none
Hsiao Mao Te 978 - - - real estate none
Hsu Shan Chung 698 524 524 - real estate none
Chu Tsung Chou 3,199 3,148 3,148 - real estate none
Lu Wen 1,997 - - - real estate none
Lin Zeng Shou 1,990 1,990 1,990 - real estate none
Lin Ming Fu 200 - - - none none
Lin Show Chou 200 - - - none none
Lin en Shiang 100 - - - none none
Liao Ding Hwui 100 - - - none none
Song Ya Mang 10 - - - none none
Taiwan Business Bank ︱ Annual Report 201078
December 31, 2009
Category
Number of clients
or name of related party
Maximum balance
Ending balance
Performing situations
Collaterals
Transaction terms are the
same as those with regular
clients
Performing loan
Non-performing
Loans
employee consumer loans
126 257,563 241,427 241,427 - none/ real estate none
Self-use residence collateral loans
103 257,624 239,056 239,056 - real estate none
Others Sun Tai 22,000 13,000 13,000 - real estate none
Yeh Hsiu Mei 3,500 3,500 3,500 - real estate none
Li Shuo Tian 7,458 7,183 7,183 - real estate none
Cheng Ching Loang 900 900 900 - real estate none
Wen Shi Chi 380 213 213 - real estate none
Lin Chi Chen 3,620 3,500 3,500 - real estate none
Li Huan Chang 6,700 4,700 4,700 - real estate none
Chen Ching Tsung 5,030 5,030 5,030 - real estate none
Huang Shu Chi 1,999 1,903 1,903 - real estate none
Wu Ying Che 79 62 - 62 none none
Hsiao Mao Te 949 4 4 - real estate none
Chu Tsung Chou 2,898 2,897 2,897 - real estate none
Shih Ming Yu 2,234 2,234 2,234 - real estate none
Jiang Zhen Fu 776 776 776 - real estate none
Hsu Tien Liang 2,402 2,402 2,402 - real estate none
Lu Wen 1,879 1,879 1,879 - real estate none
(h) Guarantees of Credit: None
(i) Commissions and Handling Fees:
The Bank received handling fee for the sale of beneficiary certificates of Chung Kuo Insurance Company,
Ltd. amounting to $1,203 and $504 for the years ended December 31, 2010 and 2009, respectively. The
Bank received manpower support fee of $246,168 and $155,038 for the years ended December 31, 2010
and 2009, respectively, for providing personnel and communication resources to the Taiwan Business
Bank Insurance Agency Co., Ltd. The Bank received handling fee for the sale of funds of Primasia
Investment Trust Co., Ltd., amounting to $187 and $142 for the years ended December 31, 2010 and
2009, respectively.
(j) Rental Revenue:
The Bank received rental revenue of $968 and $1,228 for the years ended December 31, 2010 and 2009,
respectively, for renting to the Taiwan Business Bank Insurance Agency Co., Ltd. The Bank received rental
revenue of $345 and $259, respectively, for the years ended December 31, 2010 and 2009, for renting to
the Taiwan Business Bank Property Insurance Agency Co., Ltd.
(k) Derivatives financial instrument transactions: None
(l) Sales of non – performing loans transactions: None
FIN
AN
CIA
L S
TA
Te
Me
NT
S
79
Ⅵ
(C) Remunerations of directors, supervisors, presidents and vice presidents In 2010 and 2009, information on remunerations paid to directors, supervisors, presidents and vice presidents
by the Company were as follows:
For the Year Ended December 31, 2010
For the Year Ended December 31, 2009
Salaries $ 42,764 39,224
Incentives and compensation 6,671 6,773
Professional practice 68 111
employee Bonus 187 155
$ 49,690 46,263
The amount mentioned above included the estimation of employee bonuses and remuneration to directors
and supervisors. Please refer to the shareholders' equity for more details.
(6) PLEDGED ASSETS: please refer to notes 4(H) and (J) for more details.
(7) SIGNIFICANT COMMITMENTS AND CONTINGENCIES
(A) Securities sold under repurchase agreements
Assets
December 31, 2010
Par value Selling PriceDesignated repurchase
amount
Designated repurchase date
Financial assets measured at fair value through profit or loss $ 3,860,000 3,858,724 3,859,097 Prior to January 19,
2011
Available-for-sale financial assets 5,785,700 6,091,936 6,093,684 Prior to June 8, 2011
Total $ 9,645,700 9,950,660 9,952,781
Assets
December 31, 2009
Par value Selling PriceDesignated repurchase
amount
Designated repurchase date
Financial assets measured at fair value through profit or loss $ 1,735,000 1,733,815 1,733,896 Prior to
January 15,2010
Available-for-sale financial assets 2,215,800 2,396,233 2,396,685 Prior to June 14, 2010
Total $ 3,950,800 4,130,048 4,130,581
(B) As of December 31, 2010 and 2009, significant commitments and contingencies were as follows:
December 31, 2010 December 31, 2009
Marketable securities held for custody $ 4,892,865 4,895,694
Bills collected for others 93,013,266 86,780,964
Bills lent for others 15,786,615 14,655,289
Guarantees and letters of credit 26,201,152 28,064,622
Collaterals received 1,369 1,369
Trust liabilities 136,918,584 145,521,854
Travelers’ check in custody for sale 226,417 281,813
Items held for custody 13,770,905 14,540,024
Registered government bonds for sale 7,628,600 10,452,600
Registered short-term bills for sale 4,845,300 3,433,351
Notes held for custody 16,898,100 777,570
Taiwan Business Bank ︱ Annual Report 201080
(C) As of December 31, 2010 and 2009, refundable deposits for operating leases amounted to $89,790 and $76,644, respectively. Estimated future rental commitments are as follows:
Period Amount
01.01.2011~12.31.2011 $ 257,401 01.01.2012~12.31.2012 180,307 01.01.2013~12.31.2013 152,338 01.01.2014~12.31.2014 110,844 01.01.2015~12.31.2015 52,374 Total $ 753,264
(D) Estimated rental revenues from rental assets for the next 5 years are as follows:
Period Amount
01.01.2011~12.31.2011 $ 5,738 01.01.2012~12.31.2012 3,816 01.01.2013~12.31.2013 2,934 01.01.2014~12.31.2015 1,359 Total $ 13,847
(E) As of December 31, 2010 and 2009, major constructions in progress and purchases amounted to $289,200 and $305,930, respectively, of which $187,683 and $128,328, respectively, remained unpaid.
(F) The Bank’s trust department plans, manages, and operates trust services in accordance with the Banking Law and Trust Law. Special purpose funds are used to invest in marketable securities and the Bank also manages trust funds. The balance sheet and property accounts of the trust accounts as of December 31, 2010 and 2009 and trust income statement for the year ended December 31, 2010 and 2009 were as follows:
December 31, 2010Trust Balance Sheet
Trust assets Trust liabilitiesCash in bank $ 402,893 Payables $ 239Short-term investments 52,204,247 Securities held for custody 80,773,146Receivables 53 Trust capital 56,167,468Prepayment 1 Reserves and retained earnings (1,816,216)Real estate 3,538,244 Net income 1,793,947Securities custody 80,773,146
Total trust assets $ 136,918,584 Total trust liabilities $ 136,918,584
December 31, 2010Trust Property Accounts
Investments in:Cash in bank $ 402,893Short-term investments Common stock 339,980 Funds 51,864,267Receivables 53Prepayment 1Real estate Construction in Progress 1,110,687 Land 2,425,568 Buildings 1,989Securities custody 80,773,146
Total $ 136,918,584
Note: The amounts above included OBU transaction on “foreign currency designated trust funds investment in
foreign negotiable securities business” amounting to $796,347.
FIN
AN
CIA
L S
TA
Te
Me
NT
S
81
Ⅵ
December 31, 2009Trust Balance Sheet
Trust assets Trust liabilitiesCash in bank $ 592,655 Payables $ 418Short-term investments 53,348,849 Securities held for custody 80,328,729Receivables 23 Trust capital 65,204,860Prepayment 2 Reserves and retained earnings (947,416)Real estate 11,251,596 Net income 935,263Securities custody 80,328,729
Total trust assets $ 145,521,854 Total trust liabilities $ 145,521,854
December 31, 2009Trust Property Accounts
Investments in:Cash in bank $ 592,655Short-term investments Common stock 253,854 Funds 53,094,995Receivables 23Prepayment 2Real estate Construction in Progress 8,542,347 Land 2,707,047 Buildings 2,202Securities custody 80,328,729
Total $ 145,521,854
Note: The amounts above included OBU transaction on “foreign currency designated trust funds investment in
foreign negotiable securities business” amounting to $728,666.
Trust Income Statements
Investment items December 31, 2010 December 31, 2009
Trust Revenue
Interest income $ 582 838
Realized capital gain-Fund 4,803 667
Realized capital gain-Stock 713 -
Cash dividend income of common stock 770,425 778,419
Gains on property transaction 2,242,489 1,580,856
Other revenue 691 639
Sub-total 3,019,703 2,361,419
Trust expense
Administrative expenses 36,469 20,869
Storage expenses 929 845
Postage and phone/fax expense 133 1
Duties 81,394 21,131
Other expense 12,120 1,947
Losses on property transaction 1,093,725 1,380,434
Sub-total 1,224,770 1,425,227
Net income before tax 1,794,933 936,192
Income tax expense (986) (929)
Net income after tax $ 1,793,947 935,263
Taiwan Business Bank ︱ Annual Report 201082
(G)(a) In April 1996, the Bank’s World Trade Center Branch was sued for handling a letter of credit export
collection for Chin Seen Industrial Co., apparently because that company allegedly used a forged export
document and failed to ship the goods to the importer, the International Comagnie de Commercialisation et
d’Invertissement (I.C.C.I.) of the Republic of Zaire, suffered a loss thereon.
I.C.C.I., initiated a case with the Court of Commerce of Brussels in Belgium in November 1998, demanding
that the L/C opening bank (Banque Bruxelles Lambert, or BBL) and TBB jointly pay compensation for
the L/C in the amount of US$7,830 thousand plus interest, losses, and expenses. On August 31, 2005,
the Court of Commerce of Brussels rendered its judgment requiring the Bank to pay compensation of
US$7,674 thousand to I.C.C.I. The Bank has engaged a local attorney in Belgium to formally file an
appeal. The Bank has accrued the potential compensation of US$7,674 thousand in 2005.
(b) Jin-ye Industry Corporation (JIC) was a checking account client of the Bank’s Tai Ping Branch. The JIC’
s accountant falsified the seal to write checks and steal the deposit from the company. JIC filed a lawsuit
with Taichung District Court according to the claim right of consumption deposit which required the Bank
to return the deposit of NT$61,751thousand plus the interest. The Bank lost the first trial and appealed
to Taiwan Taichung High Court. Taichung High Court ruled the case unfavorable to the Bank and the
Bank should pay compensation of NT$30,876thousand and interest with annual rate of 5% from April 1,
2008 to settlement date to JIC. However, the Bank and the JIC were not willing to accept the judgment
and appealed to theSupreme Court and the case had been sent back to Taiwan Taichung High Court to
remand. Taiwan Taichung High Court sentenced the Bank won the re-appeal lawsuit on July 2010. JIC
was not willing to accept the judgment and appealed and it is under the trial of Taiwan Supreme Court.
In consideration of the fact that the ruling is not yet final and for the sake of prudence, the Bank has
recognized the compensation loss amounted to NT$32,000 thousand based on the judgment of Taiwan
Taichung High Court in 2008.
(c) Kang-Cheng Corp., which purchased secured and unsecured non-performing loans receivable of Wei
Lei Food Corporation (WLF), argued that the Bank should allocate the payment that it received from Ge
Riu Wei Assets Management Corporation (GWAM).For this reason, Kang-Cheng Corp.filed a lawsuit to
Shihlin District Court to oblige the Bank to pay Kang-Cheng Corp. NT$65,399 thousand plus the interest.
Shihlin District court ruled that the Bank should pay compensation of NT$46,106 thousand and interest
with annual rate 5% from May 26, 2006 to settlement date to Kang-Cheng Corp in the first trial. However,
the Bank has appealed to Taiwan High Court and won the lawsuit. Kang-Cheng Corp. was unwilling to
accept the judgment and, considering the compensation of NTD$38,941 thousand and interest, appealed
to the Taiwan Supreme Court. The case had been send back to Taiwan High Court to remand, and Taiwan
High Court sentenced Kang-Cheng Corp.won the lawsuit and the Bank should pay compensation of
NTD$38,941 thousand and interest with annual rate 5% from May 26, 1996 to settlement date to Kang-
Cheng Corp. The Bank appealed to Taiwan Supreme Court and the case is still under the trial. Upon
learning from the above case, Hua Nan Bank has filed a lawsuit against the Bank in July 2008, stating that
the Bank should return NTD$15,594 plus the interest to Hua Nan Bank from what they received from the
GWAM. The Bank lost the first trial and appealed. Taiwan High Court ruled that the Bank lost the lawsuit
and should pay Hua Nan Bank 10,250 thousand plus the interest with annual rate of 5% from July 18,
2008. The Bank has filed an appeal and it is under the trial of Taiwan Supreme Court. In consideration of
the fact that the ruling is not yet final and for the sake of prudence, the Bank has accrued the compensation
losses amounted to NT$16,500 thousand based on the judgment by the Shinlin District Court in the first
half of 2009.
(d) In September, 2006, the Bank received a formal complaint from Shihlin District Court, resulting from a
lawsuit filed with Shinlin District Court by the HSE and its manager under which the Bank is required to
FIN
AN
CIA
L S
TA
Te
Me
NT
S
83
Ⅵ
pay Hong Sheng Corp. and Tsai-Zheng-Lang compensation of NT$590 million and NT$10,000 thousand
for the early termination of the contract of the check deposit as it damaged HSe’s credibility and goodwill.
The Shinlin District Court ruled the case in favor of the Bank and the Bank won the lawsuit. However, HSe
and Tsai-Zheng-Lang were not willing to accept the judgment and appealed to Taiwan High Court. The
compensation appointed by HSe and Tsai-Zheng-Lang amounted to NT$16,000 thousand and NT$1,000
thousand, respectively. Taiwan High Court ruled the case in favor of the Bank and the Bank won the
lawsuit. However, Hong Sheng Corp. was not willing to accept the judgment and appealed to Taiwan
Supreme Court and Taiwan Supreme Court rejected the appeal in April, 2010. The Bank confirmed to win
the lawsuit.
(e) In January 2007, the Bank received the plaint of Chang Zhou Industry Corporation (CZI) impaled to the
Xin Ying Branch, CZI asserted that the Bank’s Xin Ying Branch accepted CZI ‘s checks which signed
by its former chairman who did not have the authority to act on behalf of the corporation. Hence, CZI
asserted that the Branch’s personnel did not exhaust their obligation because they should know the former
chairman did not have the authority to act on behalf of the corporation, but they still accepted the 120
checks. Therefore CZI requested the Bank together with the bank’s 6 employees and supervisors and
employees of CZI to either return the checks or compensate CZI for the loss including check’s face value
(amounting to NT$73,282 thousand), interest and default charge. (The trial has continuously added new
assertions: eventually CZI requested the Bank to return 120 checks or compensate the check’s face value
of NTD$73,291 thousand, interest and loans amounted to NTD$83,200 thousand, and operation loss
including interest which amounted to NTD$110,714 thousand). Taiwan District Court and Taiwan Tainan
High Court ruled the case in favor of the Bank in the first and the second trial. CZI was not willing to accept
the judgment and appealed to Taiwan Supreme Court. Taiwan Supreme Court abandoned the previous
judgment and sent it back to Taiwan Tainan High Court to remand. Taiwan Tainan High Court still ruled
the case in favor of the Bank and CZI was still not willing to accept the judgment and appealed to Taiwan
Supreme Court and Taiwan Supreme Court rejected the appeal in April, 2010. The Bank won the lawsuit,
but the Bank was notified by CZI in September, 2010 that CZI will re-appeal to Taiwan Supreme Court.
Taiwan supreme court has rejected the appeal on November 2010.
(f) In October 2008, the Bank received a copy of petition filed by TCM Biotech International Corporation (TCM),
a client of the Bank’s Nei Hu Branch, to Shihlin District Court for requesting the Bank to return consumption
deposit plus the interest. TCM alleged that its deposits in the combinative account amounted to NT$20,632
thousand were transferred to third-party accounts. The foregoing was executed via fake fax withdraw slips
provided by the employee of TCM. Shinlin District Court ruled the case unfavorable to the Bank and the
Bank should pay compensation of NT$702 thousand and the interest with annual rate of 5% from October
21, 2008 to settlement date to TCM. However, the Bank was not willing to accept the judgment and
appealed and it is under the trial of Taiwan High Court.
(g) Since November 1999, a Taiwan Company Power (TPC) employee is suspected to peculate the electricity
fees handed in by customers. TPC investigated the case and claimed that in accordance with the
operating regulations which TPC authorized Taiwan Business Bank to act on the behalf of its receipts
and disbursements business contract, the Bank’s superintendent did not handle the authorized affair
personally, and this is against the contract. TPC indicted the Bank and filed a lawsuit to Shihlin District
Court, claiming a compensation loss which amounted to NT$32,568 thousand in August, 2009. Shihlin
District Court sentenced that the Bank won the lawsuit in June 2010. However, TPC was not willing to
accept the judgment and appealed to Taiwan High Court. It is under the trial of Taiwan High Court.
Taiwan Business Bank ︱ Annual Report 201084
(8) SIGNIFICANT CATASTROPHIC LOSSES: None.
(9) SIGNIFICANT SUBSEQUENT EVENTS:
According to the letter No.0990073857 issued by SFC on January 11, 2011, the Rules Governing
Securities Firms has been modified. The governing rules has deleted No 11 and No 12 rulings which
regulated that securities firms should provide reserve for default losses and trading losses. The balance
which securities firms provided for default losses and trading losses until December 31, 2010 should be
transferred to special reserve. The special reserve may only be used to cover companies’ losses or be
used to capitalize earning when the amount reaches half of the paid-in capital.
(10) OTHERS
(A) Disclosures required for bank financial statements
December 31, 2010 December 31, 2009
(a) Domestic loans and advances:
Private businesses $ 470,180,947 431,124,941
State enterprises 50,175,292 56,514,908
Governmental institutions 132,476,085 135,699,036
Non-profit organizations 4,241,342 4,153,079
Natural person 241,202,329 265,693,942
Financial institutions - 8,688
Others - 172
Sub-total 898,275,995 893,194,766
Foreign loans and advances:
Financial institutions 1,464,198 -
Non-financial institutions 25,483,778 11,476,665
Sub-total 26,947,976 11,476,665
Total $ 925,223,971 904,671,431
The above loans and advances included foreign currency long positions but excluded the non-accrual
receivables. As of December 31, 2010 and 2009, non-performing loans amounted to $10,098,590 and
$16,319,421, respectively.
For the Year Ended December 31, 2010
For the Year Ended December 31, 2009
(b) Allowance for Credit Losses:
Beginning balance $ 8,418,224 8,481,082
Bad debts expense (Note1) 4,116,305 3,661,352
Transfer-in 274,198 42,420
Charge-offs and advances (3,978,090) (3,723,475)
exchange differences (238,165) (43,155)
Recovery from written-off loans and advances 1,410,830 1,470,422
Beginning balance overaccrual transferred into revenue (1,410,830) (1,470,422)
ending balance (Note 2) $ 8,592,472 8,418,224
Note1. The detail of bad debts expense for the year ended December 31, 2010 and 2009 are as follows:
FIN
AN
CIA
L S
TA
Te
Me
NT
S
85
Ⅵ
For the Year Ended December 31, 2010
For the Year Ended December 31, 2009
Discounts, loans and non-accrual loans $ 4,040,152 3,516,572
Receivables and non-accrual receivables 76,153 144,780
Sub-total 4,116,305 3,661,352
Reversal of reserve for guarantee 153 (5,704)
Total $ 4,116,458 3,655,648
Note2. The detail of allowance for doubtful account as for December 31, 2010 and 2009 are as follows:
December 31, 2010 December 31, 2009
Allowance for doubtful accounts–receivables $ 145,414 157,551
Allowance for doubtful accounts–discounts and loans 8,333,397 8,184,529
Allowance for doubtful accounts–non-accrual receivables 113,661 76,144
ending balance $ 8,592,472 8,418,224
(B) Personnel, Depreciation, and Amortization Expense
Categorized as:
Nature
For the YearEnded December 31,2010
For the YearEnded December 31,2009
Operatingexpense Total Operating
expense Total
Personnel expenses
Salary expense 5,703,041 5,703,041 5,457,864 5,457,864
Health and labor insurance expense 343,422 343,422 325,722 325,722
Pension expense 543,243 543,243 522,459 522,459
Other expense 174,493 174,493 128,153 128,153
Sub-Total 6,764,199 6,764,199 6,434,198 6,434,198
Depreciation expense 454,062 454,062 452,355 452,355
Amortization expense 67,591 67,591 53,855 53,855
Total 7,285,852 7,285,852 6,940,408 6,940,408
Taiwan Business Bank ︱ Annual Report 201086
(C) Disclosures required under the Statement of Financial Accounting Standards No. 28:(a) Loan quality:
Momth/Year Items
December 31, 2010 December 31, 2009
Non-performing
loans Total loans
Non-performing loan ratio
Allowance for
doubtful accounts
Ratio of allowance
to non-performing
loans
Non-performing
loans Total loans
Non-performing loan ratio
Allowance for
doubtful accounts
Ratio of allowance
to non-performing
loans
Corporate finance
Secured $3,755,212 347,408,194 1.08% 2,554,750 68.03% 6,610,498 338,393,864 1.95% 976,508 14.77%
Unsecured 4,510,633 345,924,795 1.30% 4,510,445 100.00% 6,546,926 342,729,892 1.91% 6,126,734 93.58%
Customer finance
Residence mortgages (Note 4) 1,417,819 115,999,738 1.22% 688,689 48.57% 2,576,320 139,135,499 1.85% 549,981 21.35%
Cash cards 1,762 1,762 100.00% 1,762 100.00% 2,226 2,226 100.00% 2,226 100.00%
Small sum credit loans (Note 5) 48,000 107,349 44.71% 48,000 100.00% 102,106 226,216 45.14% 102,106 100.00%
Other (Note 6)
Secured 645,201 106,142,704 0.61% 382,273 59.25% 1,144,386 82,577,941 1.39% 161,550 14.12%
Unsecured 147,484 19,719,121 0.75% 147,478 100.00% 265,424 17,921,901 1.48% 265,424 100.00%
total 10,526,111 935,303,663 1.13% 8,333,397 79.17% 17,247,886 920,987,539 1.87% 8,184,529 47.45%
Overdue loans
Total receivables
Overdue ratio
Allowance for
doubtful accounts
Ratio of allowance to overdue
loans
Overdue loans
Total receivables
Overdue ratio
Allowance for
doubtful accounts
Ratio of allowance to overdue
loans
Credit cards 5,447 1,748,823 0.31% 30,756 564.64% 13,318 1,929,492 0.69% 13,309 99.93%
Factoring account receivables (Note 7) - 433,996 - 182 - - 116,798 - 44 -
Note 1. Non-performing loans are those reported according to the “Rules Governing the evaluation of Loss Reserve Provision on Bank Assets and Disposal of Overdue loans and Bad Debts”;The credit card-overdue loans are those reported according to the Bank Letter Ruling (4) 0944000378 dated July 6, 2005.
Note 2. Non-performing loan ratio = Non-performing loans÷ total loans; Credit card overdue loans ratio = Overdue loans÷ total receivables
Note 3. Ratio of allowance to non-performing loans = allowance for doubtful accounts ÷ non-performing loans; Ratio of allowance to non-performing loan of credit card = allowance for doubtful accounts÷ overdue loans
Note 4. Residence mortgage is where the borrower applies for the loan for purposes of purchasing property, construction or for repairs and provides the property belonging to the borrower, spouse or minors as collateral for the loan.
Note 5. Small sum credit loans are defined in accordance with the Bank Letter Ruling (4)09440010950 dated December 19, 2005, and does not include small sum credit card or small sum cash card.
Note 6. Other consumer finance excludes residence mortgage, cash card and small sum credit loan of secured and unsecured consumer loans and credit card loans.
Note 7. In accordance with the Bank Letter Ruling (5) 0944000494 dated July 19, 2005, when factoring accounts receivable without the right of recourse and indemnification is rejected by the supplier or insurance company, these loans are reported as overdue loans within three months.
The information below shows supplemental disclosures of loans and receivables that may exempted from
reporting as non-performing loans and overdue receivables, respectively.
December 31, 2010 December 31, 2009Loans may be exempted from reporting as a
non-performing loan
Receivables may be exempted
from reporting as overdue receivables
Loans may be exempted from reporting as a
non-performing loan
Receivables may be exempted
from reporting as overdue receivables
Pursuant to a contract under a debt negotiation plan $ 11,664 56,981 15,165 77,149
Pursuant to a contract under a debt liquidation plan and a debt relief plan
104,712 93,295 71,613 89,221
Total $ 116,376 150,276 86,778 166,370
FIN
AN
CIA
L S
TA
Te
Me
NT
S
87
Ⅵ
Note A: In accordance with the Bank Letter Ruling (1) 09510001270 dated April 25, 2006, a bank is required to make supplemental disclosure reporting credit information which was approved under the debt coordination mechanism of unsecured consumer debts by R.O.C. Bankers Association.
Note B: In accordance with the Bank Letter Ruling (1) 09700318940 dated September 15, 2008, a bank is required to make supplemental disclosure reporting credit information once debtors apply for pre-negotiation, relief and liquidation under the “Consumer Debt Clearance Act.”
(b) Credit risk concentration
December 31, 2010
Ranking Group enterprise Credit amount
Credit amount to stockholders' equity ratio
1 A company. Railway transportation 36,349,996 82.88%
2 B group. Petroleum and coal products manufacturing 14,896,024 33.97%
3 C group. Iron and steel melting 7,721,122 17.61%
4 D group. Liquid crystal panel and components manufacturing 7,353,701 16.77%
5 e group. Integrated circuits manufacturing 5,050,642 11.52%
6 F group. Other optoelectronic materials and components manufacturing 4,755,413 10.84%
7 G group. Other amusement and recreation services 4,700,000 10.72%
8 H group. Other financial agency 3,964,500 9.04%
9 I company. Real estate for sale and rental with own or leased property 3,371,760 7.69%
10 J company. Universities and colleges 2,150,000 4.90%
December 31, 2009
Ranking Group enterprise Credit amount
Credit amount to stockholders' equity ratio
1 A company. Railway transportation 28,684,011 68.74%
2 B group. Petroleum and coal products manufacturing 17,594,949 42.17%
3 K group. Iron and steel melting 6,106,786 14.64%
4 F group. Other optoelectronic materials and components manufacturing 5,198,458 12.46%
5 D group. Liquid crystal panel and components manufacturing 5,143,411 12.33%
6 e group. Integrated circuits manufacturing 5,017,571 12.02%7 L group. Integrated circuits manufacturing 4,758,893 11.40%
8 I group. Real estate for sale and rental with own or leased property 3,423,620 8.20%
9 G company. Other amusement and recreation services 2,240,000 5.37%
10 J company. Universities and colleges 2,150,000 5.15%
Note 1. The above table lists the top ten non-government and non-state-operated group enterprises which are ranked by the group enterprises credit amount. If the borrowers belong to an enterprise group, the aggregate credit balance of the enterprise should be calculated and disclosed as a code number for each such borrower together with an indication of the borrowers’ line of business. In addition, if the borrowers are enterprise groups, the enterprise group’s industry sector with the maximum exposure to credit risk in its main industry sector should be disclosed, along with the “class” of the industry, in compliance with the Standard Industrial Classification System of the R.O.C. posted by the Directorate-General of Budget, Accounting and Statistics, executive Yuan, R.O.C.
Note 2. Group enterprise is defined in accordance with Clause 6 of the “Supplementary Provisions to the Taiwan Stock exchange Corporation Rules for Review of Securities Listings”.
Note 3. Consists of loans (foreign currency imports financing, foreign currency export financing, notes discounted, customer overdrafts, short-term unsecured loans, short-term secured loans, receivables from securities lending, medium-term unsecured loans, medium-term secured loans, long-term unsecured loans loan-term secured loans, non-performing loans), foreign currency long positions, accounts receivable-factoring discount, bankers’ acceptance receivable, guarantees receivable.
Note 4. In the calculation of Credit amount to stockholders' equity ratio, the domestic bank should be calculated in the net value of head office. The Foreign bank should be calculated in the net value of Taiwan branch.
Taiwan Business Bank ︱ Annual Report 201088
(c) Interest sensitivity information
1. Analysis of interest rate-sensitive assets and liabilities (New Taiwan dollars in thousands)
1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $955,240,493 39,669,005 3,032,114 22,295,538 1,020,237,150
Interest rate-sensitive liabilities 474,900,012 447,261,606 44,104,614 27,298,716 993,564,948
Interest rate sensitivity gap 480,340,481 (407,592,601) (41,072,500) (5,003,178) 26,672,202
Net worth 43,856,026
Ratio of interest rate-sensitive assets to debt (%) 102.68%
Ratio of interest rate-sensitive gap to net worth (%) 60.82%
Note 1. Listed amounts are denominated in N.T. dollars of the head office and domestic branches, offshore banking unit, overseas branches. (i.e., excluding foreign currency amounts)
Note 2. Interest rate-sensitive assets and liabilities refer to revenue or cost of interest–yielding assets and interest–bearing liabilities, which are affected by interest rate fluctuations.
Note 3. Ratio of interest rate-sensitive assets to liabilities=Interest rate-sensitive assets÷ Interest rate-sensitive liabilities (New Taiwan dollars interest-rate-sensitive assets and New Taiwan dollars interest-rate-sensitive liabilities).
Note 4. Interest rate-sensitivity gap = Interest rate-sensitive assets - Interest-rate-sensitive liabilities.
2. Analysis of the interest-sensitive assets and liabilities (U.S. dollars)
1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $2,438,502 505,134 28,543 86,081 3,058,260
Interest rate-sensitive liabilities 1,509,566 1,858,932 132,742 70 3,501,310
Interest rate sensitivity gap 928,936 (1,353,798) (104,199) 86,011 (443,050)
Net worth 1,486,645
Ratio of interest-rate sensitive assets to debt (%) 87.35%
Ratio of interest-rate sensitivity exposure to net worth (%) (29.80%)
Note 1. Listed amounts are in U.S. dollars (i.e., excluding contingent assets and contingent liabilities) of the head office and domestic branches, offshore banking unit, overseas branches.
Note 2. Ratio of interest rate-sensitive assets to liabilities=Interest rate-sensitive assets÷ Interest rate-sensitive liabilities (U.S. dollars interest-rate-sensitive assets and U.S. dollars interest-rate-sensitive liabilities).
(d) Profitability
Item December 31, 2010 December 31, 2009
The ratio of return on assetsBefore tax 0.20% 0.14%
After tax 0.17% 0.12%
The ratio of return on shareholders' equity
Before tax 5.59% 3.98%
After tax 4.69% 3.53%
Net income ratio 12.35% 9.72%
Note 1. The ratio of return on assets=Income before (after) income tax expense÷ average assetsNote 2. The ratio of return on shareholders’ equity= Income before (after) income tax expense÷ average
shareholders’ equityNote 3. Net income ratio = Gain or loss before (after) income tax expense÷ Net incomeNote 4. Income before (after) income tax expense refers to income accumulated from January of the current year
to the current period.
FIN
AN
CIA
L S
TA
Te
Me
NT
S
89
Ⅵ
(e) The maturity analysis of assets and liabilities
1. Maturity analysis in New Taiwan dollars
December 31, 2010
Amount during the maturity period from the balance sheet date to due date
Total 1~30 days 31~90 days 91~180 days 181 days~1year Over 1 year
Major maturity capital inflow $1,125,168,194 156,989,329 110,891,326 188,472,864 108,072,959 560,741,716
Major maturity capital outflow 1,517,833,865 186,688,057 180,376,486 153,024,313 312,096,525 685,648,484
Gap (392,665,671) (29,698,728) (69,485,160) 35,448,551 (204,023,566) (124,906,768)
Note: Listed amounts are denominated in New Taiwan dollars (i.e., excluding foreign – currency amounts) of the head office and domestic branches, including commitment of credit agreement and estimates to outflow $395,541,155.
2. Maturity analysis in U.S. dollars
December 31, 2010
Amount during the maturity period from the balance sheet date to due date
Total 1~30 days 31~90 days 91~180 days 181 days~1year Over 1 year
Major maturity capital inflow $ 4,507,288 1,772,814 1,376,831 641,433 231,210 485,000
Major maturity capital outflow 5,925,279 1,779,478 1,138,844 475,037 694,195 1,837,725
Gap (1,417,991) (6,664) 237,987 166,396 (462,985) (1,352,725)
Note: Including commitment of credit agreement and estimates to outflow US$1,472,939.
(f) Capital Adequacy
Item December 31, 2010 December 31, 2009
eligible capital
Tier 1 capital 44,163,618 38,039,425
Tier 2 captial 32,191,330 30,521,345
Tier 3 captial - -
eligible Capital 76,354,948 68,560,770
Risk- weighted assets
Credit risk
Standardized approach 649,541,639 640,678,593
Internal ratings-based approach - -
Securitisation 66,734 279,214
Operational risk
Basic indicator approach 27,584,963 28,589,263
Standardized approach - -
Advanced measurement approach - -
Market riskStandardized approach 6,271,788 6,286,588
Internal model approach - -
Total 683,465,124 675,833,658
Capital adequacy ratio 11.17% 10.14%
Tier 1 capital / Risk-weighted assets ratio 6.46% 5.63%
Tier 2 capital / Risk-weighted assets ratio 4.71% 4.52%
Tier 3 capital / Risk-weighted assets ratio - -
Common stock equity / Total assets ratio 3.32% 3.26%
Leverage ratio 3.68% 3.24%
Note 1. eligible Capital = Tier 1 Capital + Tier 2 Capital + Tier 3 CapitalNote 2. Total Capital = Credit risk weighted asset + (market risk charge + credit risk charge)×12.5Note 3. Capital adequacy ratio= eligible Capital ÷ risk weighted asset. Note 4. Tier 1 capital / Risk-weighted assets ratio= Tier 1 capital ÷ Risk-weighted assetsNote 5. Tier 2 capital / Risk-weighted assets ratio = Tier 2 capital ÷ Risk-weighted assetsNote 6. Tier 3 capital / Risk-weighted assets ratio = Tier 3 capital ÷ Risk-weighted assetsNote 7. Common stock equity / Total assets ratio = Common stock equity÷ Total assetsNote 8. Leverage ratio= Tier 1 capital / Average total consolidated assets.
Taiwan Business Bank ︱ Annual Report 201090
(D) The maturity analysis of assets and liabilities, interest-yielding assets, interest-bearing liabilities, current average interest rates, and significant net positions of foreign currencies were as follows:(a) The maturity analysis of assets and liabilities: please refer to note (4)(Y)(C) to the financial statements.
(b) Interest-yielding assets, interest-bearing liabilities, and current average interest rates were as follows:
For The YearEnded December 31, 2010
For The YearEnded December 31, 2009
Average Value
Average Interest
Rate
Average Value
Average Interest
Rate
Assets
Cash in banks and call loans to banks $36,026,109 0.97% $ 51,756,389 1.39%
Deposits with the Central Bank 43,467,007 0.40% 48,833,682 0.46%
Bills purchased under resale agreement 1,457,178 0.38% 5,146,557 0.19%
Bonds purchased under resale agreement 138
Discounts and loans 895,497,159 1.80% 833,214,448 1.93%
Financial assets held for trading 1,649,251 0.42% 425,445 0.24%
Financial assets designated at fair value at initial recognition 1,827,914 2.07% 1,358,957 2.44%
Available-for-sale financial assets 15,133,969 1.62% 20,673,777 1.51%
Held-to- maturity financial assets 131,515,644 0.80% 129,752,836 0.87%
Liabilities
Deposits from the Central Bank 447,985 - $ 462,248 -
Deposits from other banks and call loans from banks 29,507,097 0.66% 27,208,832 0.68%
Demand deposits(including foreign currency) 448,009,412 0.27% 391,238,196 0.29%
Government deposits 12,809,805 0.38% 13,347,522 0.52%
Time deposits(including foreign currency) 235,564,864 0.70% 249,153,983 0.93%
Post office deposits 73,835,325 1.08% 86,278,738 1.15%
Time savings deposits 255,521,113 1.04% 263,421,927 1.45%
Bills sold under repurchase agreements 2,760,206 0.32% 5,232,725 0.13%
Bonds sold under repurchase agreements 5,078,643 0.31% 3,340,391 0.27%
Financial debentures 36,975,099 2.05% 30,292,338 2.36%
Funds appropriated for loans 10,123,617 0.34% 9,394,831 0.38%
(c) Significant net positions of foreign currencies
1. Significant net positions of foreign currencies
Currency
December 31,2010 December 31,2009
Foreign Currency Amount NT$ Amount Foreign Currency
Amount NT$ Amount
Significant net positions of foreign currency (Market risk)
USD 36,016 1,062,465 USD 37,603 1,209,898
JPY 251,401 91,057 CNY 19,875 93,670
CNY 18,480 82,540 AUD 1,612 46,555
HKD 14,354 54,403 eUR 692 31,992
AUD 1,348 40,463 JPY 70,178 24,422
Note 1. Main foreign currencies are the top five foreign currencies ranked in NTD value.Note 2. Net foreign currency is the absolute value of the net value of each foreign currency.
FIN
AN
CIA
L S
TA
Te
Me
NT
S
91
Ⅵ
2. Assets and liabilities of foreign currency
December 31, 2010 December 31, 2009
Amount Rate NT $ Amount Amount Rate NT$ Amount
Financial Asset
Monetary Item
USD $4,971,930 29.5000 146,671,935 4,081,166 32.1760 131,315,597
AUD 869,872 30.0281 26,120,560 582,701 28.8715 16,823,466
HKD 5,039,049 3.7900 19,098,097 3,258,127 4.1490 13,518,007
JPY 27,099,382 0.3622 9,815,000 25,719,131 0.3480 8,950,235
ZAR 2,105,749 4.4426 9,355,079 2,414,759 4.3425 10,486,171
eUR 199,103 39.2468 7,814,156 130,944 46.2305 6,053,607
NZD 126,994 22.7593 2,890,288 117,632 23.3437 2,745,965
GBP 36,966 45.5510 1,683,836 31,785 51.7358 1,644,422
CAD 35,938 29.5118 1,060,595 38,054 30.5856 1,163,903
CNY 71,741 4.4664 320,427 88,155 4.7129 415,467
SGD 7,975 22.8718 182,402 4,718 22.9239 108,155
KRW 5,762,080 0.0261 150,559 21,051,290 0.0275 579,672
CHF 4,203 31.5339 132,537 3,242 31.0789 100,758
THB 5,458 0.9788 5,342 120,307 0.9645 116,037
Other(Note) - - 17,468 - - 29,714
Non-Monetary item
USD $4,536 29.5000 133,804 2,855 32.1760 91,853
eUR 350 39.2468 13,735 10,485 46.2305 484,720
Other(Note) - - 96,304 - - 51,537
December 31, 2010 December 31, 2009
Amount Rate NT $ Amount Amount Rate NT$ Amount
Financial Liability
Monetary Item
USD $4,913,223 29.5000 144,940,079 4,037,733 32.1760 129,918,097
AUD 923,251 30.0281 27,723,427 575,238 28.8715 16,607,998
HKD 5,126,253 3.7900 19,428,602 3,418,799 4.1490 14,184,637
JPY 27,118,881 0.3622 9,822,062 25,719,818 0.3480 8,950,474
ZAR 2,105,504 4.4426 9,353,991 2,413,965 4.3425 10,482,723
NZD 126,981 22.7593 2,889,992 117,507 23.3437 2,743,047
GBP 36,942 45.5510 1,682,743 31,785 51.7358 1,644,422
CAD 36,043 29.5118 1,063,694 38,098 30.5856 11,652,248
CNY 53,254 4.4664 237,856 68,280 4.7129 321,798
SGD 7,664 22.8718 175,289 4,657 22.9239 106,757
KRW 5,761,150 0.0261 150,535 21,028,340 0.0275 579,040
CHF 4,360 31.5339 137,488 3,403 31.0789 105,762
THB 1,008 0.9788 987 123,179 0.9645 118,807
Other(Note) - - 19,700 - - 30,277
Non-Monetary Item
USD 3,952 29.5000 116,575 2,609 32.1760 83,953
Other(Note) - - 23,502 - - 10,553
Note: Consolidated disclosure is applied for other currencies not over NT$ 100,000,000
Taiwan Business Bank ︱ Annual Report 201092
(E) Account reclassificationCertain accounts in the 2009 financial statements have been reclassified to conform to the financial
statements presentation adopted in 2010. The reclassification did not have significant impact on the 2009
financial statements.
(11) DISCLOSURES REQUIRED:
(A) Information on significant transactions(a) Accumulative purchases or sales of the same investee companies amounting to over $300,000 or 10% of
paid-in capital: None.
(b) Acquisition of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(c) Disposition of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(d) Discount of commissions and handling fees with related parties amounting to over $5,000: None.
(e) Receivables from related parties amounting to over $300,000 or 10% of paid-in capital: None.
(f) Sale of non-performing loans information:
(1) Summary table of NPL disposal:
Trade date Counterparty Debt component Book value Sale price
Gains (losses) on
disposal
Additional term Relationship
2010.08.11UBS AG, London Branch
Unites the loan 128,653 101,980 (26,673) - -
2010.09.22 Goldman Sachs
Unites the loan - 88,113 88,113 - -
2010.10.04 Goldman Sachs
Unites the loan - 64,810 64,810 - -
(2) Disposal of a single batch of NPL up to $1,000,000 (excluding sales to related parties): None.
(g) Types of securitization goods and related information approved by financial assets securitization rules or
real estate securitization rules: None.
(h) Other significant transactions that might have influence over the decision making process of the financial
statements users: None.
(B) Information on investee companies:(a) Names, locations, and related information of investees on which the company exercises significant
influence:
Name of investee company
Address Main business scope
Shareholding ratio Book
Value
Investment gain or loss recognized
by the Company
Ownership as of December 31, 2010
NoteNumber of shares
Number of profoma shares
Total
Number of shares
Shareholding ratio
Taiwan Business Bank Insurance Agency Co., Ltd.
2F, No.158, Songjiang Rd Taipei City 104, Taiwan (R.O.C.)
Agent of personal insurance
100% 41,459 27,109 500,000 - 500,000 100% -
Taiwan Business Bank Property Insurance Agency Co., Ltd.
2F, No.158, Songjiang Rd Taipei City 104, Taiwan (R.O.C.)
Agent of property insurance
100% 3,815 2,872 300,000 - 300,000 100% -
Note 1: Shares of investee company held by the Bank, Director, Supervisor, President, Vice-President and related parties under the“Company’s Act”are included as profoma shares.
Note 2: (1) Proforma shares are the shares obtained from under the assumption that securities with right or derivative instrument contracts (have not been converted into stocks) can be converted into
FIN
AN
CIA
L S
TA
Te
Me
NT
S
93
Ⅵ
shares of investee company under Article 74 of“Company Act”for investment purposes.(2) Above mentioned “Securities with Right”is defined in Paragraph 1 of Article 11“Securities and Exchange
Law Enforcement Rules” for example, convertible corporate bonds and warrant certificates.(3) Above mentioned “Derivative Instrument Contract” conformed with the definition of derivative instrument of
SFAS No.34“Financial Instruments: Recognition and Measurement” for example, stock option.
(b) Loans to others: None.
(c) endorsement and guarantees for others: None.
(d) Marketable securities held as of December 31, 2010: None.
(e) Cumulative purchases or sales of the same marketable securities amounting to over $300,000 or 10% of
paid-in capital: None.
(f) Acquisition of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(g) Disposition of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(h) Discount of commissions of handling fees with related parties amounting to over $5,000: None.
(i) Receivables from related parties amounting to over $300,000 or 10% of paid-in capital: None.
(j) Investee companies’ financial derivatives transactions: None.
(k) Sales of non – performing loans amounting to over information: None.
(l) Types of securitization goods and related information approved by financial assets securitization rules or
real estate securitization rules: None.
(m) Other significant transactions that might have influence over the decision making process of the financial
statements users: None.
(12) BUSINESS SEGMENT FINANCIAL INFORMATION:
(A) Industry segments informationThe Bank's operation is only for banking business. Therefore, no disclosure of industry segment information is
required.
(B) Geographic segments informationDisclosure of financial information of the International Department is not required since the division's revenues
and identifiable assets represents less than 10% of total operating revenues and assets. Therefore, no
disclosure of geographic segment information is required.
(C) Export revenues informationThere are no export sales to individual customers that represent 10% or more of the Bank's operating
revenues. Therefore, no disclosure of export revenue information is required.
(D) Information on major customersNo single customer represents 10% or more of the Bank's operating revenue. Therefore, no disclosure of
export revenue information is required.
Implementation of Social Responsibility
Ⅶ Implementation of Social Responsibility
IMP
Le
Me
NT
AT
ION
OF
SO
CIA
L R
eS
PO
NS
IBIL
ITY
95
Ⅶ
Item Status of Operation
Divergence from Corporate Responsibility Rules for Listed Companies, and Reasons for Divergence
1. Realizing corporate governance(1) establishment by the
Company of a corporate social responsibility policy or system, and review of the results of implementation.
Corporate responsibility is clearly laid out in Article 1 of the Banks corporate charter.
No divergence.
(2) establishment and implementation by the Company of the operation of a unit in charge, either exclusively or concurrently, of corporate social responsibility.
This is under the centralized handling of the Administration Management Dept. and carried out by the different headquarters units within their scope of jurisdiction. The status of implementation is reported to the Board of Directors on an irregular basis.
No divergence.
(3) Implementation by the Company of corporate ethics training and education for directors and supervisors on a regular basis, incorporation of same into the performance assessment system, and establishment of a clear and efficient system of rewards and punishments.
1. The Bank provides information on education and training to directors and supervisors when necessary, and publishes information on their training on the Market Observation Post System
2. The bank provides instruction in corporate ethical standards and legal compliance in basic and professional training courses for new and on-the-job employees.
3. Clear provisions for punishment, up to dismissal, for corporate ethics violations, bribery, and corruption are written into the Bank’s guidelines for employee rewards and punishments and instructions for normal evaluation, and rewards are offered for the prevention or reporting of improper behavior or fraud, This encourages employees to follow the rules of corporate ethics and social responsibility.
No divergence
2. Development of a sustainable environment(1) efforts by the Company to
enhance the efficiency of resource utilization, and to use recyclable materials with a minimum impact on the environment.
1. Carbon powder ink cartridges are collected for recycling.
2. Used paper that is blank on the back is reused.
No divergence.
(2) establishment by the Company, in accordance with its industrial characteristics, of a suitable environmental management system
environmental cleaning and maintenance is carried out in accordance with the Bank’s “Cleaning and Maintenance Instructions for Business Units.”
No divergence.
(3) establishment of a dedicated environmental management unit or staff members to maintain the environment.
Business units carry out office environmental cleaning and disinfection on a regular basis, and the 17th of every month is designated as “TBB environmental Cleanliness Day” in order to maintain the working environment. The deputy chief of each unit is responsible for supervising this effort.
No divergence.
Taiwan Business Bank ︱ Annual Report 201096
Item Status of Operation
Divergence from Corporate Responsibility Rules for Listed Companies, and Reasons for Divergence
(4) Attention by the Company to the impact of climate change on operational activities, and formulation of a Company strategy for energy conservation, carbon reduction, and greenhouse gas reduction.
1. Bank-wide water conservation measures have been announced; use of water and electricity by the different units is monitored regularly, and is included in business performance evaluation.
2. The improvement of energy-saving measures is evaluated, the efficiency of equipment is enhanced, and the conservation of water and electricity is upgraded.
3. The Taipei City Government Statute for Autonomy in energy Conservation and Carbon Reduction is observed, and air conditioners in offices and business premises are set no lower than 26 degrees Celsius.
No divergence.
3. Maintenance of the public benefit(1) Conformity with labor
regulations, protection of employees’ legal rights, and establishment of appropriate management methods and procedures.
The Bank’s personnel regulations are written to conform to the relevant labor laws and regulations. Matters that affect the rights or welfare of the Bank’s employees are reported to the labor-management committee for discussion on a regular basis, or prior labor-management negotiations are carried out. There is also a channel for the expression of opinions by employees, fully protecting the legal rights of the Bank’s employees.
No divergence.
(2) Provision by the Company of a safe and healthy work environment for employees, and regular offering of safety and health education.
The Bank carries out three hours of worker safety education every three years, provides physical exams for new employees and, for existing employees, health exams every two years, taking care of employees’ physical health and reminding them of the importance of health.
No divergence.
(3) establishment and public announcement by the Company of a comsumer rights policy, and provision of a transparent and effective consumer complaint procedure for its products and services.
1. The Bank provides a standard contract for applications for its personal banking products, and the legal affairs unit reviews all product planning, marketing, and outsourced collection to assure compliance with regulations.
2. The Bank’s customer rights manual is published on its website, as well as model standard contracts and explanations of related fees.
3. The Bank has established a "TBB Procedure for Handling Customer Complaints" and has installed a toll-free service hotline, with information posted in prominent locations at business offices and ATMs. Complaints are accepted and processed immediately by the Administration Management Dept., Business Management Dept., and Credit Card Dept.
No divergence.
(4) The company cooperates with suppliers to enhance the fulfillment of corporate social responsibility.
In its procurement the Bank gives priority to products from domestic manufacturers of good reputation and with prominent brand names. Through the strict control of production processes by those companies, the Bank avoids procurement that has an unfavorable impact on the supplying communities, thereby fulfilling its corporate social responsibility.
No divergence.
IMP
Le
Me
NT
AT
ION
OF
SO
CIA
L R
eS
PO
NS
IBIL
ITY
97
Ⅶ
Item Status of Operation
Divergence from Corporate Responsibility Rules for Listed Companies, and Reasons for Divergence
(5) The company uses commercial activities, the donation of materials, corporate volunteer services, and other free professional services to participate in community development and charity activities.
TBB and all of its employees acknowledge their responsibility for environmental protection. We not only comply with the environmental regulations of the locations where we operate, but also track new developments in global environmental issues and take the lead in adopting new environmentally-friendly measures.
As global climate change becomes more severe, development and allocation of water resources has become a key issue in many countries. It is particularly vital in Taiwan. Our first principle of water use is reduction, followed by recycling.
Typhoon Morakot Disaster Relief Project, Typoon Morakot struck south Taiwan, causing Taiwan's most severe flooding in 50 years. TBB and all its employees are deeply saddened by the suffering caused by this typhoon, and we have assembled a "Typhoon Morakot Project Team" and have decided to donate to provide some small measure ofrelief to the people and places affected by this disaster.
No divergence.
4. Strengthened information disclosure(1) Method of disclosing the
Company’s information related to the relevance and reliability of corporate social responsibility.
Information on corporate governance and guidelines for the disclosure of information on the evaluation system is disclosed on the Market Observation Post System and the Company’s corporate website.
No divergence
(2) The Company’s compilation of a corporate social responsibility report, and disclosure of the status of CSR implementation.
The Bank does not compile a CSR report, but discloses information on CSR implementatation in the relevant portions of its Annual Report.
No divergence
5. If the Company compiles its own CSR rules in accordance with the “Corporate Social Responsibility Best Practice Principles for TWSe/GTSM-listed Companies,” please describe its operation and divergences by the established rules: (1) The Company has not formulated its own CSR regulations; but, in accordance with Article 1 of the Bank’s corporate
charter, “In line with national financial policy, the Bank’s goals are to provide financing for the public and small and medium enterprises, and to help SMEs improve their production equipment and financial structure and strengthen their operational management.” In pursuit of these goals the Bank fulfills its CSR to stabilize finance and assist enterprises and individuals with financing.
(2) To provide employees a safe and healthy work environment, including necessary health and emergency aid facilities, to reduce hazards to employees’ work safety and health, and to prevent occupational accidents, the Bank established “Labor Safety and Health Work Rules” in February of 2003. Dedicated personnel are designated to carry out scheduled labor safety and health inspections covering work safety and health standards as well as maintenance and inspection methods for various items of equipment. This assures the normal opration of related equipment, reduces the incidence of accidents, and protects the safety of personnel. The operation of this system has no divergence from the established rules.
(3) To develop a sustainable environment, the Bank implements a policy of energy conservation and carbon reduction. Internal water- and electricity-saving measures were established in March of 2010 and entred as an item of evaluation, and the Bank carries out assessment of implementation in order to improve the performance of equipment and upgrade the efficiency of energy use. This operation does not diverge from the established rules.
6. For other information to aid understanding of the Bank’s CSR operations (including systems and measures, and status of implementation, of environmental protection, social contributions, social service, social benefit, consumer rights, human rights, safety and health, and other CSR activities), Please refer to section 3 item 5.
7. If the Company’s products or CSR report has passed the verification standards of a related verification institution, please explain: (1) The long-term subordinated financial bonds issued by the Bank in 2010—99-1 issuance (NT$1.05 billion) and 99-2
issuance (NT$6 billion) were given a credit rating of twA- by Taiwan Ratings, and the 99-1 A issuance (NT$3.2 billion) and 99-1 B issuance of non-cumulative subordinated bonds without maturity dates were given a rating of twBBB+, also by Taiwan Ratings.
(2) An information security management system conforming to ISO 27001 was introduced and ISO certification was obtained, strengthening the Bank’s information security capabilities.
Taiwan Business Bank ︱ Annual Report 201098
(7) Implementation of honest operation, and measures adopted1. The Bank observes the relevant regulations in all its operating activities, and fulfills its tax obligations.
2. The Bank’s work rules state clearly that employees may not take advantage of their jobs to perpetrate fraud or
seek improper benefits for themselves or others, nor may they accept gifts or enjoy other improper benefits. The
Bank’s guidelines for employee rewards and punishments contain related punitive provisions to assure the Bank’
s honest operation.
3. For the Bank’s public tender projects, the “Guidelines for Construction Works and the Procurement and Sale of
Assets” state that “If companies that win bid tenders have a material relationship with the Bank, the matter must
be reported to the Bank’s Board of Directors for approval before the bidding result becomes effective” In addition,
the bidding company must assure that it has acted in accordance with the tender instructions, supplementary
explanations, and standards stipulated in the relevant laws and regulations, and that there was no fixing of bid
prices, borrowing of licenses to rig the bidding, or other illegal behavior, and confirm its material relationwhip with
the Bank during the bidding process; should there by any violation or concealing of facts, the bidder will allow the
Bank to confiscate the bid bond and discrepancy (performance) bond, and to cancel the business relationship,
without objection.
4. The above-mentioned Guidelines also stipulate work rules and ethics:
(1) The acceptance of construction work or procurement or sale of assets should be completed immediately after
acquisition or disposition, with no delay allowed, unless otherwise agreed with the counterparty.
(2) Personnel engaged in construction work or the procurement of property may not take charge of inspection
and acceptance of related cases, and accompanying inspection personnel may not supervise the inspection
of related cases. Personnel who handle the sale of property may not take charge of the inspection and
delivery of related cases.
(3) Personnel at all levels who handle or supervise construction or the procurement or sale of property are strictly
prohibited from accepting banquet invitations or gifts from related companies so as to assure cleanness and
integrity, and persons in charge of procurement should be regularly rotated.
5. The Auditing Dept. of the Board of Directors carries out general or special audits every year in accordance with
the regulations, comply by internal controls sytem and submits audit reports to the Board of Directors.
6. To identify, weigh, monitor, and report on major risks faced by the Bank, and to achieve the goals of rationalized
risk and compensation, the Bank has established a risk management policy and, in accordance with the
principles of that policy, has set up management systems for different kinds of risk.
(8) For information on corporate governance rules and related regulations, please visit the Market Observsation Post System website (http://newmops.tse.com.tw) and click on “corporate governance.”
(9) For a further understanding of the Bank’s governance operations, please visit the Bank’s website (http://www.tbb.com.tw) and click on “About TBB” and then “Investor Relations.”
Directory Of Head Office and Branch Units
Ⅷ Directory of Head Office and Branch Units
TBB’S OFFICES ADDRESS TEL NO. SWIFT ADDRESS
Head Office 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171
Banking Department 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171
Trust Department 15F, 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171
Securities Department (Banking Broker) 4F, 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171
International Banking Department 3F, 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171 MBBTTWTP
Chi Lin Branch 46, Sec. 2, Min Chen e. Rd., Taipei, Taiwan, R.O.C. (02)25417171 MBBTTWTP001
Chung Ho Branch 634-10 Gin Pin Rd., Chung Ho Dist., New Taipei City, Taiwan, R.O.C. (02)22427171
Po Ai Branch 419 Min Cheng 2nd Rd., Zuoying Dist., Kaohsiung City, Taiwan, R.O.C. (07)5567171
North Taoyuan Branch 985 Chung Zi Rd., Taoyuan City, Taoyuan Hsien, Taiwan, R.O.C. (03)3567171 MBBTTWTP004
Nan Ken Branch 381 Chung Cheng Rd., Luo Chu Shiang, Taoyuan Hsien,Taiwan, R.O.C. (03)3227171 MBBTTWTP005
Si Tuen Branch 107, Sec. 3, Taichung Kang Rd., Taichung City, Taiwan, R.O.C. (04)23587171 MBBTTWTP006
Chung Min Branch 301 Chung Min S. Rd., Taichung City, Taiwan, R.O.C. (04)23057171
Ta Ya Branch 161 Ta Ya Rd., Ta Ya Dist., Taichung City, Taiwan, R.O.C (04)25687171 MBBTTWTP011
Jen Ta Branch 183 Fengnan Rd., Nanzi Dist., Kaohsiung City, Taiwan, R.O.C. (07)3537171
Jen Ai Branch 357, Sec. 4, Jen Ai Rd., Taipei, Taiwan, R.O.C. (02)27217171 MBBTTWTP020
Sung Shan Branch 147, Sec. 4, Nan King e. Rd., Taipei, Taiwan, R.O.C. (02)27167171 MBBTTWTP021
Chien Cheng Branch (Banking Broker) 76 Nan King W. Rd., Taipei, Taiwan, R.O.C. (02)25507171 MBBTTWTP022
Shih Lin Branch 601 Chung Cheng Rd., Shih-Lin Chiu, Taipei, Taiwan, R.O.C (02)28117171
Yung Ho Branch 168 Chu Lin Rd., Yung Ho Dist., New Taipei City, Taiwan, R.O.C. (02)29277171
Hsin Tien Branch 192, Sec. 2, Chung Hsing Rd., Hsin Tien Dist., New Taipei City,Taiwan, R.O.C. (02)29117171 MBBTTWTP025
Hsin Chuang Branch 1&2F, 16, Sec. 1, Chung Hwa Rd., Hsin Chuang Dist., New Taipei City, Taiwan, R.O.C. (02)29907171 MBBTTWTP026
Hwa Cheng Branch 1&2F,25, Tou Chian Rd.,Hsin Chuang Dist., New Taipei City, Taiwan,R.O.C. (02)29977171
Sung Kiang Branch 158 Sung Kiang Rd., Taipei, Taiwan, R.O.C. (02)25377171 MBBTTWTP040
Taipei Branch (Banking Broker) 72, Sec. 1, Chung King S. Rd., Taipei, Taiwan, R.O.C. (02)23717171 MBBTTWTP050
Wan Hua Branch 146 Kwang Chow St., Taipei, Taiwan, R.O.C. (02)23387171
South Taipei Branch 93, Sec. 2, Roosevelt Rd., Taipei, Taiwan, R.O.C. (02)23697171
Fu Hsin Branch 390, Sec. 1, Fu Hsing S. Rd., Taipei, Taiwan, R.O.C. (02)27057171 MBBTTWTP070
Chung Shan Branch 17 Chang Chuen Rd., Taipei, Taiwan, R.O.C. (02)25517171 MBBTTWTP080
Chien Kuo Branch 4, Sec. 3, Min Chen e. Rd., Taipei, Taiwan, R.O.C. (02)25097171 MBBTTWTP081
Nai Hu Branch 15, Alley 360, Sec. 1, Nai Hu Rd. Taipei, Taiwan, R.O.C. (02)27997171 MBBTTWTP082
Taiwan Business Bank ︱ Annual Report 2010100
TBB’S OFFICES ADDRESS TEL NO. SWIFT ADDRESS
Nan King east Road Branch 311, Sec. 3, Nan King e. Rd., Taipei, Taiwan, R.O.C. (02)27127171 MBBTTWTP090
Chung Hsiao Branch 267, Sec. 3, Chung Hsiao e. Rd., Taipei, Taiwan, R.O.C. (02)27727171 MBBTTWTP100
east Taipei Branch 135, Sec. 4, Pa Te Rd., Taipei, Taiwan, R.O.C. (02)87877171 MBBTTWTP101
World Trade Center Branch 547 Kuang Fu S. Rd., Taipei, Taiwan, R.O.C. (02)23457171 MBBTTWTP102
Yung Trin Branch 552, Sec. 5, Chung Hsiao e. Rd., Taipei, Taiwan, R.O.C. (02)23467171
Nan Kang Branch 19-2 San Chung Rd., Nan Kang Dist., Taipei, Taiwan, R.O.C. (02)26553771 MBBTTWTP105
Sung Nan Branch 161, Sec. 1, Keelung Rd., Taipei, Taiwan, R.O.C. (02)27647171 MBBTTWTP110
Dong Hu Branch 152, Sec. 6, Min Chuan e. Rd., Taipei, Taiwan, R.O.C. (02)87929771
Ta An Branch 92, Sec. 2, Tun Hwa S. Rd., Taipei, Taiwan, R.O.C. (02)27007171 MBBTTWTP120
Shuang Ho Branch 356 Chung Ho Rd., Chung Ho Dist., New Taipei City, Taiwan, R.O.C. (02)22327171
Jim Ho Branch 403, Sec. 2, Chung Shan Rd., Chung Ho Dist., New Taipei City, Taiwan, R.O.C. (02)22287171
Wu Ku Branch 95 Wu Kung Rd., Wu Ku Industrial Zone, Hsin Chuang Dist., New Taipei City,Taiwan, R.O.C. (02)22987171 MBBTTWTP130
Lin Kuo Branch 1F-2, 188 Chung Shan Rd., Lin Kuo Dist., New Taipei City, R.O.C. (02)26037171 MBBTTWTP131
Pan Chiao Branch 2-1 Ming Te St., Pan Chiao Dist., New Taipei City, Taiwan, R.O.C. (02)29687171 MBBTTWTP140
Shu Lin Branch 1&2F-1,217, Sec. 1, Chung Shan Rd., Shu Lin Dist., New Taipei City, Taiwan, R.O.C. (02)26757171 MBBTTWTP141
Tu Cheng Branch 126, Sec. 2, Chung Yang Rd., Tu Cheng Dist., New Taipei City, Taiwan, R.O.C. (02)22737171 MBBTTWTP142
Hwei Long Branch 933 Chung Cheng Rd., Hsin Chuang Dist., New Taipei City, Taiwan, R.O.C. (02)82097171 MBBTTWTP143
Xi Zhi Branch 75, Sec. 1, Shin Tai 5th Rd., Xizhi Dist., New Taipei City, R.O.C. (02)26987171 MBBTTWTP144
Kee Lung Branch 9 Ai 3rd Rd., Keelung, Taiwan, R.O.C. (02)24237171
Pu Chya Branch(Banking Broker)
62-1, Sec. 2, Chung Shan Rd., Pan Chiao Dist., New Taipei City, Taiwan, R.O.C. (02)29547171
North San Chung Branch
137, Sec. 4, San Ho Rd., San Chung Dist., New Taipei City, Taiwan, R.O.C. (02)22867171
South San Chung Branch
232, Sec. 1, Chi Cheng Rd., San Chung Dist., New Taipei City, Taiwan, R.O.C. (02)29827171 MBBTTWTP153
Lu Chow Branch 42 Yeong Loh St., Lu Chow Dist., New Taipei City, Taiwan, R.O.C. (02)28477171
I Lan Branch 305 Sec. 2,Chung Shan Rd., I Lan City, I Lane Hsien, Taiwan, R.O.C. (03)9367171
Lo Tung Branch 15 Chung Cheng N. Rd., Lo Tung Chen, I Lan Hsien, Taiwan, R.O.C. (03)9567171
Su Aw Branch 96-1,Sec. 1, Chung Shan Rd., Su Aw Chen, I Lan Hsien, Taiwan, R.O.C. (03)9965051
Yang Mei Branch 146 Ta Cheng Rd., Yang Mei Chen, Taoyuan Hsien, Taiwan, R.O.C. (03)4786111
DIR
eC
TO
RY
OF
He
AD
OF
FIC
e A
ND
BR
AN
CH
UN
ITS
101
Ⅷ
TBB’S OFFICES ADDRESS TEL NO. SWIFT ADDRESS
Hu Kou Branch 76, Sec. 1, Chung Cheng Rd., Hu Kou Shiang, Hsin Chu Hsien, Taiwan, R.O.C. (03)5997171
Taoyuan Branch (Banking Broker) 99 Chung Hwa Road Tao Yuan City, Taiwan, R.O.C. (03)3317171 MBBTTWTP300
Ta Yuan Branch 80 Chung Shan S. Rd., Ta Yuan Shiang, Taoyuan Hsien, Taiwan, R.O.C. (03)3857171 MBBTTWTP301
Ta Shi Branch 80 Fu Hsin Rd., Ta Shi Chen, Taoyuan Hsien, Taiwan, R.O.C. (03)3887171
Chung Li Branch 157 Chung Shan Rd., Chung Li City, Taoyuan Hsien, Taiwan, R.O.C. (03)4277171 MBBTTWTP310
Nei Li Branch 74 Chung Hsiao Rd., Chung Li City, Taoyuan Hsien, Taiwan, R.O.C. (03)4557171 MBBTTWTP311
Hsin Ming Branch 282 Min Tsu Rd., Chung Li City, Taoyuan Hsien, Taiwan, R.O.C. (03)4027171
east Taoyuan Branch 1223, Sec. 2, One Shou Rd., Guei Shan Shiang, Taoyuan Hsien, Taiwan, R.O.C. (03)3297171
Hsin Wu Branch 257 Chung Shan Rd., Hsin Wu Shiang, Taoyuan Hsien,Taiwan, R.O.C. (03)4777171
Hsin Chu Branch 154 Tung Men St., Hsin Chu City, Taiwan, R.O.C. (03)5277171 MBBTTWTP320
Chu Pei Branch (Banking Broker)
128 Hsien Cheng 9th Rd., Chu Pei City, Hsin Chu Hsien, Taiwan, R.O.C. (03)5517171 MBBTTWTP321
Hsinchu Science BasedIndustrial Park Branch
489, Sec. 1, Guang Fu Rd., Hsin Chu City, Taiwan, R.O.C. (03)5637171 MBBTTWTP322
Pa Te Branch 789, Sec. 1, Chien Shou Rd., Pa Te City, Taoyuan Hsien, Taiwan, R.O.C. (03)3767171
Luong Tan Branch 64 Luong Yuan Rd., Luong Tan Shiang, Taoyuan Hsien, Taiwan, R.O.C. (03)4807171
Chu Tung Branch 6 Tung Lin Rd., Chu Tung Chen, Hsin Chu Hsien, Taiwan, R.O.C. (03)5947171
Chu Nan Branch 29 Po Ai St., Chu Nan Chen, Maio Li Hsien, Taiwan, R.O.C. (037)467171
Tou Fen Branch 90 Hsin Yi Rd., Tou Fen Chen, Maio Li Hsien, Taiwan, R.O.C. (037)687171 MBBTTWTP351
Maio Li Branch 606 Chung Cheng Rd., Maio Li City, Taiwan, R.O.C. (037)327171
Feng Yuan Branch (Banking Broker)
1 San Feng Rd., Feng Yuan Dist., Taichung City, Taiwan, R.O.C. (04)25267171 MBBTTWTP460
Houli Branch 1F., No.51, Wenming Rd., Houli Dist., Taichung City 421, Taiwan, R.O.C. (04)25587171
Tai Ping Branch (Banking Broker)
27 Chung Hsin e. Rd., Tai Ping Dist., Taichung City, Taiwan, R.O.C. (04)22707171 MBBTTWTP470
Ta Chia Branch 14 Chen Cheng Rd., Ta Chia Dist., Taichung City, Taiwan, R.O.C. (04)26867171
Sha Lu Branch 355 Chung Chew Rd., Sha Lu Dist., Taichung City, Taiwan, R.O.C. (04)26657171
Wu Jih Branch 616 Chung Hwa Rd., Wu Jih Dist., Taichung City, Taiwan, R.O.C. (04)23387171
Taichung Branch (Banking Broker) 224 Chung Cheng Rd., Taichung City, Taiwan, R.O.C. (04)22297171 MBBTTWTP490
Taiwan Business Bank ︱ Annual Report 2010102
TBB’S OFFICES ADDRESS TEL NO. SWIFT ADDRESS
Min Chen Branch 84 Min Chen Rd., Taichung City, Taiwan, R.O.C. (04)22267171 MBBTTWTP491
Hsing Chung Branch 136 Taichung Rd., Taichung City, Taiwan, R.O.C. (04)22877171
Pei Tuen Branch 53 Chin Hwa N. Rd., Taichung City, Taiwan, R.O.C. (04)22307171
Nan Tou Branch 139 Fu Shing Rd., Nan Tou City, Nan Tou Hsien, Taiwan, R.O.C. (049)2237171
Tsao Tuen Branch 604 Chung Cheng Rd., Tsao Tuen Chen, Nan Tou Hsien, Taiwan, R.O.C. (049)2357171
Pu Li Branch 434 Chung Cheng Rd., Pu Li Chen, Nan Tou Hsien, Taiwan, R.O.C. (049)2997171
Tan Tze Branch 135, Sec. 2, Chung Shan Rd., Tan Tze Dist., Taichung City, Taiwan, R.O.C. (04)25317171
Chu Shan Branch 919, Sec. 3, Chi Shan Rd., Chu Shan Chen, Nan Tou Hsien,Taiwan, R.O.C. (049)2637171
Chang Hwa Branch 61 Kuang Fu Rd., Chang Hwa City, Chang Hwa Hsien, Taiwan, R.O.C. (04)7257171 MBBTTWTP540
Ho Mei Branch 8 Ho An St., Ho Mei Chen, Chang Hwa Hsien, Taiwan, R.O.C. (04)7558131
Yuan Lin Branch 16 Min Chuan St., Yuan Lin Chen, Chang Hwa Hsien, Taiwan, R.O.C. (04)8377171 MBBTTWTP550
Pei Tou Branch 62 Kung Chien St., Pei Tou Chen, Chang Hwa Hsien, Taiwan, R.O.C. (04)8877171
erh Lin Branch 2 Chung Cheng Rd., erh Lin Chen, Chang Hwa Hsien, Taiwan, R.O.C. (04)8957171
Tou Liu Branch 109 Ta Tung Rd., Do Lui City, Yun Lin Hsien, Taiwan, R.O.C. (05)5347171
Pei Kang Branch 65 Wen Hwa Rd., Pei Kang Chen, Yun Lin Hsien, Taiwan, R.O.C. (05)7827171
Hu Wei Branch 45 Ho Ping Rd., Hu Wei Chen, Yun Lin Hsien, Taiwan, R.O.C. (05)6337171
Chia Yi Branch (Banking Broker) 132 Kuang Hwa Rd., Chia Yi City, Taiwan, R.O.C. (05)2287171 MBBTTWTP680
Ming Hsiung Branch (Banking Broker)
83, Sec. 3, Chien Kuo Rd., Ming Hsiung Shiang, Chia Yi Hsien, Taiwan, R.O.C. (05)2207171
South Chia Yi Branch 766 Shin Min Rd., Chia Yi City, Taiwan, R.O.C. (05)2867171
Hsin Ying Branch 216 Chung Shan Rd., Hsin Ying Dist., Tainan City, Taiwan, R.O.C. (06)6357171
Kai Yuan Branch 12 Chung Hwa Rd., Yun Kang Dist., Tainan City, Taiwan, R.O.C. (06)3117171
Yun Kang Branch 79 Chung Cheng S. Rd., Yun Kang Dist., Tainan City, Taiwan, R.O.C. (06)2517171 MBBTTWTP700
Shiue Chia Branch 87 Chung Shan Rd., Shiue Chia Dist., Tainan City, Taiwan, R.O.C. (06)7837171
Shan Hwa Branch 352 Chung Shan Rd., Shan Hwa Dist., Tainan City, Taiwan, R.O.C. (06)5816111
Yung Ta Branch 1532, Sec. 2, Yung Ta Rd., Yun Kang Dist., Tainan City, Taiwan, R.O.C. (06)2337171
Tainan Branch (Banking Broker) 185 Chung Cheng Rd., Tainan City, Taiwan, R.O.C. (06)2247171 MBBTTWTP710
DIR
eC
TO
RY
OF
He
AD
OF
FIC
e A
ND
BR
AN
CH
UN
ITS
103
Ⅷ
TBB’S OFFICES ADDRESS TEL NO. SWIFT ADDRESS
Jen Te Branch 339 Chung Shan Rd., Jen Te Dist., Tainan City, Taiwan, R.O.C. (06)2797171 MBBTTWTP711
Cheng Kung Branch 25 Kuong Yuan Rd., Tainan City, Taiwan, R.O.C. (06)2217171 MBBTTWTP720
east Tainan Branch 75, Sec. 2, Chung Hwa e. Rd., Tainan City, Taiwan, R.O.C. (06)2687171
An Ping Branch 67, Sec. 1, Chung Hwa W. Rd., Tainan City, Taiwan, R.O.C (06)2657171 MBBTTWTP730
Hua Lien Branch 247 Chung Shan Rd., Hua Lien City, Hua Lien Hsien, Taiwan, R.O.C. (03)8357171 MBBTTWTP760
Taitung Branch 335, Sec. 1, Chung Hwa Rd., Taitung City, Taitung Hsien, Taiwan, R.O.C. (089)327171
east Kaohsiung Branch 249 Chung Cheng 1st Rd., Kaohsiung City, Taiwan, R.O.C. (07)7167171 MBBTTWTP820
Kang Shan Branch (Banking Broker)
412 Kang Shan Rd., Kang Shan Dist., Kaohsiung City, Taiwan, R.O.C. (07)6227171 MBBTTWTP830
North Feng Shan Branch
28, Sec. 3, Chien Kuo Rd., Feng Shan Dist., Kaohsiung City,Taiwan, R.O.C. (07)7767171
Ling Ya Branch 31 Chingnian 1st Rd., Ling Ya Dist., Kaohsiung City, Taiwan, R.O.C. (07)5377171
Kaohsiung Branch 79 Wu Fu 3rd Rd., Kaohsiung City, Taiwan, R.O.C. (07)2717171 MBBTTWTP850
North Kaohsiung Branch (Banking Broker)
90 Fu Shing 1st Rd., Fu Shing Dist., Kaohsiung City, Taiwan, R.O.C. (07)2387171
Ta Chang Branch 116 Ta Chang 2nd Rd., Kaohsiung City, Taiwan, R.O.C. (07)3827171
Chien Chen Branch 378-3 Min Chien 2nd Rd., Chien Chen Dist., Kaohsiung City, Taiwan, R.O.C. (07)5355171
Jeou Ru Branch (Banking Broker) 255 Jeou Ru 2nd Rd., Kaohsiung City, Taiwan, R.O.C. (07)3137171 MBBTTWTP860
San Ming Branch(Banking Broker) 153 Chung Shan 1st Rd., Kaohsiung City, Taiwan, R.O.C. (07)2867171
Feng Shan Branch 157 Chung Shan Rd., Feng Shan Dist., Kaohsiung City,Taiwan, R.O.C. (07)7107171
Ta Fa Branch 1 Hwa Chung Rd., Ta Fa Industrial Zone, Ta Liao Dist., Kaohsiung City,Taiwan, R.O.C. (07)7887171
Ping Tung Branch(Banking Broker)
7 Han Kou St., Ping Tung City, Ping Tung Hsien, Taiwan, R.O.C. (08)7327171
Xiao Gang Branch 718 Hongping Rd., Xiaogang Dist., Kaohsiung City, Taiwan, R.O.C. (08)8016171
Chiao Chou Branch 100 Hsin Sheng Rd., Chiao Chou Chen, Ping Tung Hsien,Taiwan, R.O.C. (08)7807171
Offshore Banking Branch 3F, 30 Ta Cheng St., Taipei, Taiwan, R.O.C. (02)25597171 MBBTTWTP893
Los Angeles Branch 633, West 5TH St. Suite 2280 L.A. C.A. 90071 U.S.A. 213-8921260 MBBTUS6L
Hong Kong Branch Suite 2705-9,27/F,Tower The Gateway, Harbour City, Kowloon, H.K. 852-29710111 MBBTHKHH
Sydney Branch Suite3, Level24, 363 George Street Sydney, N.S.W.2000 Australia 612-92623356 MBBTAU2S
Shanghai Representative Office
47/F, Hong Kong New World Tower, 300 Huaihai Zhong Road, Shanghai 200021, China 86-21-51162893
Taiwan Business Bank ︱ Annual Report 2010104
Chairman
Taiwan Business Bank, Ltd.
Stock Code: 2834Taiwan Stock Exchange Market Observation Post System:http://newmops.twse.com.twTBB's annual report is available at:http://www.tbb.com.tw
PUBLISHED IN MARCH 2011
臺灣中小企業銀行
TA
IWA
N B
US
INE
SS
BA
NK|
An
nu
al R
ep
ort 2
01
0
\\\\\\\\\\\\\\\\\\\\\
\\\\\\\\\\\\\\\\\\\\\
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB TBB BB TBB BB TBB
\\\\\\\\\\\\\\\\\\\\\
Annual Report 2010
http://www.tbb.com.tw
NOTICE TO READERSThis English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders' meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.