3Q06 Analyst Meeting...Chinese Taishin Cosmos United Chinatrust UWCCB Jih-Sun En-Tie Number of Accounts First Payment Date Debt Restructuring Program Payment Ratios amid 8 Leading

1

Investor PresentationNovember 8, 2006

2

Key Discussion Issues

A. Financial Performance and Capital Ratios

B. Consumer Credit Portfolio

C. Future Earnings Drivers

3

Note: *Including NT$1.86bn investment income from CHB. ROE is not annualized.

12.19

15.21

1.82

8,939

1~3Q/05

4.53

14.06

0.61

3,778

1H06

(8.19)4.09(4.98)ROE (%)

12.5613.99 12.79Book Value (NT$)

(1.01)0.57 (0.68)EPS (NT$)

(4,840)*3,044 (2,914)Net Income after Tax (NT$mn)

1~3Q/061Q062005

FHC Earnings Results after NT$13bn Provision

4

Note: Both ROA & ROE are not annualized.

Earnings Results - Subsidiaries

4.21 3.75 3.54 9.02 7.25 ROE (%)0.43 0.37 0.37 0.89 0.72 ROA (%)

13.15 12.92 13.99 13.37 13.05 Book Value (NT$)0.56 0.50 0.49 1.19 0.95 EPS (NT$)287 253 249 613 488 Net Income after Tax (NT$mn)

1~3Q/06 1H061Q06 20051~3Q/05TBF

3.03 0.58 1.34 3.12 0.21 ROE (%)1.25 0.24 0.50 1.08 0.08 ROA (%)

14.57 14.19 14.29 14.26 14.68 Book Value (NT$)0.44 0.08 0.19 0.45 0.03 EPS (NT$)585 108 253 593 41 Net Income after Tax (NT$mn)

1~3Q/06 1H06 1Q06 20051~3Q/05TSC

(17.46)5.18 3.60 (7.82)14.97 ROE (%)(0.86)0.30 0.20 (0.47)1.11 ROA (%)13.26 16.73 16.52 15.43 20.95 Book Value (NT$)(2.61)0.85 0.58 (1.32)2.84 EPS (NT$)

(7,241)2,556 1,742 (3,775)8,813 Net Income after Tax (NT$mn)

1~3Q/06 1H06 1Q0620051~3Q/05TSB

5

Bank Loan Breakdown

3Q05 4Q05 1Q06 2Q06 3Q06

Others Mortgage Corporate Unsecured Lending

540567592594

6.2%

39.4%

21.9%

32.5%

5.8%

34.8%

30.2%

29.2%

5.9%

32.6%

33.3%

28.2%

5.8%

31.0%

34.9%

28.4%

NT$bn

534

6.1%

37.4%

25.3%

31.2%

* Loan outstanding includes credit card revolving.** Unsecured lending includes cash card, credit card revolving & loan products and personal lending.*** Mortgage loans include first mortgage and second mortgage.**** Others include auto, SME and other products.

6

18,855

22,144

1,399 1,081

280(6,370)

321

1~3Q/05 NII Net Fee Investment Others OP Exp 1~3Q/06

Note: GA & Others include depreciation, taxes, services, rental… etc. Note: NIM calculation is based on accumulated figures.

9.710.3

9.2

6.8

5.4

3.80%

4.18%

4.69%

5.16%5.16%

3Q05 4Q05 1Q06 2Q06 3Q06

NII NIM

Earnings Impact

Bank Interest Income Analysis (NT$mn, %) FHC Pre-Provision Analysis (NT$mn)

FHC Operating Expense Analysis16,855

15,456

(330)(394)(675)

1~3Q/05 HR Marketing GA & Others 1~3Q/06

7

27,838

7,099

2,391 1,671

16,855

10,375

21,468

7,420

2,671 2,752

15,456

25,482

Net InterestIncome

Net Fee Income InvestmentIncome

Others OperatingExpense

Net Provision

1~3Q/05 1~3Q/06

146% YoY

-8% YoY

65% YoY12% YoY

5% YoY

-23% YoY

NT$mn Revenue Cost

1~3Q/06 FHC Revenue & Expense Analysis

Gain on short-term tradingReturn on long-term investment

Loan loss recoveryGains on FX & derivatives trading

8

Composition

Additional provision for unsecured lending in 4Q

Clean up overdue loans > 180 days as of year end

Future industry restructured needs through 2007

Breakdown by Product

Cash card 54.4%

Credit card revolving 7.1%

Credit card loan 18.1%

Personal lending 20.4%

Provision to Strengthen Financial Health

NT$13bn

9

Total Gross Provision for Unsecured Lending: NT$64.6bn in 05/06

17.5

4.53.7

26.2

5.13.22.1

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

NT$bn

* Additional provision NT$13bn in 3Q06.

NT$36.6bn for 2005

*

NT$25.7bn as of 3Q06

Approximately NT$28.0bn for 2006

10

Unsecured Provisioning History

(2005 + 1Q-3Q 2006, NT$bn)

8.2

10.8

11.5

31.8

Personal Lending

Card Loan

Credit Card

Cash Card

Provision as % of PeakPortfolio (Dec 2005)

38%

33%

17%

Total Gross Provisions for Unsecured Lending

34%

Total: NT$62.3bn

11

Impact on Capital Ratios:

107.2

105.4

10.1

7.3

Post Provision/NT$4bn Capital

Raising

113.4113.8106.4138.3DLR (%)

112.0109.9117.094.1FHC CAR (%)

Taishin FHC

10.711.110.510.2BIS (%)

7.77.76.86.8Tier 1 (%)

Taishin Bank

3Q06 Pre-provision2Q061Q06YE 2005

12

YE financial ratios after NT$4bn capital raisingCoverage > 70%NPL < 2.5%Credit card NPL < 3%BIS > 10%Tier 1 > 6%

Next stepTo recognize NT$9.7bn NPL loss as long as BISis sufficient

Financial Performance Summary

13

A. Financial Performance and Capital Ratios

B. Consumer Credit Portfolio

C. Future Earnings Drivers

14

Current Portfolio(Non Restructuring),

84.8

Restructuring, 32.2

NPL > M4, 10.7

Charge-off +NPL Disposal, 41.7

Net Payment, 17.4

Securitization creditenchancement, 4.8 Others, 5.9

Unsecured Portfolio – Dec 2005 Vs. Sep 2006

Note: Net payment means payment minus incremental outstanding.

Resolution of Dec 2005 Portfolio (NT$198bn)

15Note: Ratios represent non-restructured accounts as from April 2006.

Unsecured Portfolio Improving (Non-Restructured)

0%

3%

6%

9%

12%

15%

01/03 05/03 09/03 01/04 05/04 09/04 01/05 05/05 09/05 01/06 05/06 09/06

Personal Loan Overall Unsecured Cash Card Credit Card Card Loan

M1 Outstandings / M0 Current Outstandings

16

New Applications for DRP

DRP Applications Are Falling

8.0 8.2

33.9

55.6

19.3

12.910.5 10.7

8.5

2.35% 2.43%2.47%

3.70%

4.62%5.00%

5.41%5.83% 5.67%

0

10

20

30

40

50

60

Jan Feb Mar Apr May Jun Jul Aug Sep0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

New Applications by ID ('000) Interest Rate (%)

Weighted Average Interest

Rate: 4.16%

17

91%

Payment Ratio since May of 2006 (Lead + Non-Lead)

95% 96% 95% 95% 94%

5th Payment4th Payment3rd Payment2nd Payment1st Payment

Sep

Aug

Jul

Jun

May

91%

89%

85%

81%

77%

Actual Payment %

Note: Payment ratio means payment of restructured outstanding per month.

95% 96% 95%93%

95% 96%93%

94% 95%

18

92%81%91%92%92%93%94%94%95%Payment %

95,1009,3042,83310,42317,8143,7709,25437,4154,287Actual

103,56011,5023,12911,32819,3044,0559,85839,8874,497PlannedTOTAL(BANK)

89%87%85%98%80%77%92%93%86%Payment %

10,2779832141,1662,0951891,0684,190372Actual

11,5511,1352521,1892,6182471,1604,518432Planned

2006/09

91%81%97%87%93%88%92%95%94%Payment %

13,4851,1113072,6922,1741611,4455,019576Actual

14,7881,3773183,0912,3321831,5685,306613Planned

2006/08

92%80%89%91%93%91%95%94%96%Payment %

27,3613,1024224,4653,1596253,52110,7281,339Actual

29,8723,8584724,8953,3816873,72111,4601,398Planned

2006/07

92%80%90%98%95%96%95%94%97%Payment %

30,2913,8818811,5606,7322,1922,81110,5821,652Actual

32,7864,8449831,5887,1082,2952,96211,3001,706Planned

2006/06

94%79%91%96%95%94%91%94%100%Payment %

13,6862271,0095403,6546034096,896348Actual

14,5632881,1045653,8656434477,303348Planned

2006/05

TOTAL(MONTH)En-TieJih-SunUWCCBChinatrustUnitedCosmosTaishinChineseNumber of

AccountsFirst Payment

Date

Debt Restructuring Program Payment Ratios amid 8 Leading Banks

As of 2006/09/28Note: Payment ratio is calculated by (previous month planned accounts-defaulted accounts)/current month actual payment in line with Banker’s Association definition.Applications exclude applications from non-lead banks.

19

A. Financial Performance and Capital Ratios

B. Consumer Credit Portfolio

C. Future Earnings Drivers

20

Medium Term Earnings Drivers

SustainableProfit

Growth thru Deepening

CustomerRelationships

Stabilize higher-yield consumer finance portfolio

Consolidation in prime and super-prime

Re-focusing resources on home equity

Deepening share in auto loan

Strengthen product and marketing coordination to expand wealth management

Building on bancassurance

Leveraging trust structures

Engaging the brokerage channel

Adding resources and focus to increase cash management and treasury fee income: Penetrating existing corporate relationships

Re-orienting business models in above areas to build on CHB investment

21

Hong Kong’s Experience: Important Indication for Taiwan

Market will similarly rebound starting in 2008

Rebound will be driven by expansion of prime and super-prime segments

Rebound will be accompanied by competitor consolidation of balances

USD billion

Our View for TaiwanUnsecured loan outstanding balance*

*Excluding Small business loans.Source: Annual report; HKMA report; lit search; team analysis.

22

Basis for Upside in Taishin’s Unsecured Portfolio

33%

16%24%23% 26% 23%

67%

77% 74%77% 76%

84%

Noborrowings

DBR up to 5x

DBR 6~10x DBR 11~15xDBR 16~20xDBR 21~25x DBR 25x+

% of outstanding on other banks

% of outstanding on Taishin1. Leverage new tools to

focus on prime and super-prime (target 2/3 of portfolio)

2. Tap existing customer base to consolidate balance of “weak”players

3. Leverage risk-based pricing to sustain 2%~3% ROA

Strategic Focus: Remain a market leader

Percentage of Taishin Customers by DBR Band

(10%)(3%)(5%)(7%)(10%)(62%)(3%)% of Taishincard holders

23

Taiwan Has a High Homeownership Base and High Untapped Equity, Signaling Potential

56%

69%

75%

86%Taiwan

UK

US

Hong Kong

% of total home equity

47

19

53

81

US Taiwan

100% = 14 trillion USD 1 trillion USD

Source: Euromonitor; US Federal Reserve Z1report; US SMR research; US Home Equity Wire; DGBAS Taiwan; Banking Bureau Taiwan.

US$800bn untapped

Homeownership Rate, 2005 Debt vs Untapped Equity, 2005

UntappedEquity

Debt Outstanding

24

Growth

Number of Customers

(‘000)

Product Holdings per Customer

39

142

21

60

31

PrivateBank/VIP e.g.

> NT$3mn

BankCustomersAUM NT$0.5

~3.0mn

TSCCustomers

AUM >NT$1.5mn

TaishinMortgage

Customers

Benz orInfinite CardHolders or

AnnualSpending >NT$0.5mn

1.42.51.92.94.1

Taishin’s Wealth Management Growth Potential

1. Adopted balanced AUM and fee strategy to increase share of wallet

2. Systematically tap Taishin customer base

3. Introduce new series of insurance and trust products

Strategic Focus: Go deep with existing customers

Note: Figures above are not over-lapping.

> 30

> 100

> 20

> 60

> 30

25

Taishin’s Wholesale Growth Potential

3%

42%

9%

20%

7%

3%81%

35%

Customer Number with Credit Line Revenue Contribution

OthersTBLMid CorpKey Account

100% 100%

1. Focus on deepening core relationship e.g. treasury, cash management

2. Targeting customers largely unserved by global banks

3. Emphasis on speed and simplified international links

Strategic Focus: Building of Mid Corp Base

Note: Key Account: Annual revenue > NT$10mn plus product holdings per account > 3Mid Corp: Annual revenue > NT$1.5mn plus product holdings per account > 3TBL: Annual revenue > NT$0.3mnDate as of Sept of 2006

26

Key New Additions to Management Team

Chinatrust, SVP of Retail Banking, 1 yearUBS Global Asset Management (Country Head) , 8 yearsDELOITTE Consulting, President , 5 years KPMG, Taiwan, Senior Vice President, 7 years

Sam LinHead of Private Banking & Wealth Mgmt

Sinopac Holdings, Wealth Mgmt & Securities Group, President, 4 years (Sinopac Securities, President, 7 years)China Development Industrial Bank, First VP, Head of Treasury & Trading, 5 yearsCore Pacific Securities, SVP, 4 years

Daw-Yi HsuGeneral Manager Wealth Mgmt Group

ABN Amro, Taipei, Vice President & Director, Global Markets, 12 yearsBank of America, Taipei, Relationship Manager, 3 yearsChina Development Industrial Bank,1 year

Niel ChangHead of Treasury Marketing

Financial Management Solutions (Singapore), Taiwan, Senior Partner, 6 yearsUBS Taipei, Managing Director & COO, 6 yearsWestpac Banking Co, 6 years in Tokyo, HK, and Taipei

Loofei HuangChief Risk Officer

McKinsey & Co, Director, 14 years in US & AsiaMerrill Lynch, Private Client, 2 years in Hong Kong & Taiwan

Greg GibbChief Operating Officer

27

Appendix

28

FHC Gross Fee Income Breakdown

3Q05 4Q05 1Q06 2Q06 3Q06

Others Brokerage Bancassurance Banking Charge Mutual Fund & Structured Product Credit Card

NT$3.92bn

20.7%

11.8%

22.8%

16.9%

19.9%

7.9%

NT$3.53bn

21.7%

9.9%

27.9%

15.3%

18.8%

6.5%

NT$3.37bn

21.2%

8.5%

31.3%

15.3%

18.3%

5.5%

NT$3.32bn

20.0%

10.0%

36.5%

14.4%

15.1%

3.9%

NT$2.88bn

17.1%

11.2%

28.2%

13.8%

26.2%

3.5%

29

1~3Q/06 Bank Revenue & Expense Analysis

27,181

4,207

1,736 2,343

12,457 12,206

21,341

4,426

1,8983,106

11,200

27,470

Net InterestIncome

Net Fee Income InvestmentIncome

Others OperatingExpense

Gross Provision

1~3Q/05 1~3Q/06

125% YoY

-10% YoY

33% YoY

9% YoY5% YoY

-21% YoY

NT$mn Revenue Cost

Gain on short-term tradingReturn on long-term investment

Loan loss recoveryGains on FX & derivatives trading

30

3Q05 4Q05 1Q06 2Q06 3Q06

Others Bancassurance Banking Charge Mutual Fund & Structured Product Credit Card

Bank Gross Fee Income Breakdown

NT$2.83bn

29.2%

16.6%

10.9%

15.3%

28.0%

NT$2.39bn

31.8%

15.0%

13.7%

9.6%

30.0%

NT$2.27bn

36.4%

12.9%

15.4%

8.2%

27.1%

NT$1.88bn

25.5%

17.6%

18.8%

5.4%

32.6%

NT$1.91bn

32.2%

17.7%

17.0%

6.8%

26.3%

31

*Income includes NT$600mn fee on credit card reversed back from expense in 3Q05. Please note that net fee income ratio is on quarterly basis.

(NT$bn)

Bank Net Fee Income

2.1

1.2

1.61.5

1.3

16.2%

9.4%

14.8%

16.8% 17.2%

3Q05 4Q05 1Q06 2Q06 3Q06

Net Fee Income Net Fee Income %

*

32

Bank Key Indicators

-40.734.937.5Cost Income Ratio (%)

3.80

83.2

33

652

68

32

534

3Q06

-83.188.4Loan/Deposit Ratio**

-2830Corporate loan as % of total loan

-3135Demand deposit as % of total deposit

-

-3%

-

-10%

YTD

5.16

653

70

559

3Q05

5.16NIM (%)

671Deposit (NT$bn)

72

592

2005

Consumer loan as % of total loan

Loan* (NT$bn)

* Loan includes credit card revolving balance.**Not including credit card revolving in loan base.

33

Bank Gross Provision for Two Years: NT$69.1bn

4.9

5.04.5

26.6

5.73.72.7

13.0

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

NT$bn

NT$38.7bn for 2005

NT$27.4bn for 2005

Approximately NT$30.4bn for 2006

17.9*

* Additional provision NT$13bn in 3Q06.

34

Provision Allows to Strengthen Financial Health

139%

275%

80%83% 94% 54%

2.55%

1.48%

2.19%

1.48%

1.11%1.02%

0%

50%

100%

150%

200%

250%

300%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q060.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Coverage % NPL %

*

Note: NPL includes credit card revolving. *Including NT$13bn additional provision.

35

Loan Mix

-9.8%-10.0%534.2592.3593.7Total Loans

-37.4%-47.1%0.71.11.3Others

11.3%9.0%11.310.110.3SME

-9.1%-5.6%21.323.422.5Auto

-4.1%-2.8%33.234.734.2Other Consumer Loans

-29.5%-32.4%33.046.848.8Personal Loans

-37.1%-39.3%52.984.287.2Cash Card

-49.2%-55.1%16.332.036.2Credit Card Loan

-57.7%-58.1%14.634.534.9Credit Card Revolving

-40.9%-43.6%116.8197.5207.1Unsecured Loans

-12.6%-16.7%3.54.04.22nd Mortgage

9.4%15.3%207.2189.3179.61st Mortgage

9.0%14.6%210.7193.3183.8Housing Loans

-15.2%-15.2%360.7425.5425.1Consumer Loans

4.0%2.9%173.5166.8168.5Corporate Loans

YTD YoY3Q/06 2005 3Q/05 NT$bn

36

12,7789,000Preferred Shares54,43651,150Common Shares67,21460,150 Paid-in Capital

157,395 93,418 Shareholders' Equity2,155,771890,394 Liabilities2,313,166983,812 Total Assets

06/9/3005/9/30NT$mn

Balance Sheet

1,717 9,110 Net Income6,557 171 Net Income to Minority Shares

(4,840)8,939 Net Income to Parent Company(1.01)1.58 EPS (NT$)1,717 9,110 Net Income after Tax

772 Impact from SFAS No. 34587 2,659 Income Tax

1,532 11,769 Net Profit before Income Tax23,830 10,375 Provisions23,557 16,855 Operating Expense48,919 38,999 Operating Revenue

2,610 1,535 Others12 (20)Gain from LT Investment

1,556 1,586 Trading Gain9,708 8,059 Net Fee Income

13,886 11,160 Other Income27,349 9,211 Interest Expense62,382 37,050 Interest Income35,033 27,839 Net Interest Income

1~3Q/061~3Q/05NT$mn

Income Statement

Financial Statements – Taishin FHC (Consolidated)

37

Financial Statements – Taishin Bank

-4,000 4,000 Preferred Shares

-8.4%27,812 30,354 Common Shares

-7.4%31,812 34,354 Paid-in Capital

-35.2%41,257 63,664 Shareholders' Equity

-0.2%785,842 787,233 Liabilities

-2.8%827,099 850,897 Total Assets

YoY06/9/3005/9/30NT$mn

Balance Sheet

-(2.61)2.84 EPS (NT$)

-(7,241)8,813 Net Profit after Income Tax

-146 -Impact from SFAS No. 34

-(2,002)2,194 Income Tax

-(9,389)11,007 Net Profit before Income Tax

145.8%25,506 10,376 Net Provisions

-24.6%16,117 21,383 Pre-tax, Pre-provision Profit (PPP)

-(212)647 Non-operating Income (Loss)

-10.1%11,200 12,456 Operating Expense

-20.7%107 135 Others

-19.0%578 714 Investment Income

12.8%1,077 955 Net Trading Income (Loss)

5.2%4,426 4,207 Net Fee Income

-21.5%21,341 27,181 Net Interest Income

-17.1%27,529 33,192 Operating Income

YoY1-3Q06 (A)1-3Q05 (A)NT$mn

Income Statement

38

Financial Statements – Taiwan Securities

-13,255 13,255 Paid-in Capital

-1.2%19,311 19,542 Shareholders' Equity

-15.0%27,461 32,290 Total Liabilities

-9.8%46,772 51,832 Total Assets

YoY06/9/3005/9/30NT$mn

Balance Sheet

1366.7%0.44 0.03 EPS (NT$)

1326.8%585 41 Net Profit after Income Tax

-32 -Impact from SFAS No. 34

-45.5%423 776 Income Tax

19.5%976 817 Net Profit before Income Tax

-166 (82)Non-Operating Income (Loss)

-4.1%2,704 2,821 Operating Expense

-18.4%199 244 Others

16.9%811 694 Net Interest Income

-61.3%487 1,259 Gain (Loss) on Trading

22.5%158 129 Net Underwriting Revenue

33.4%1,859 1,394 Net Brokerage Revenue

-5.5%3,514 3,720 Operating Income

YoY1-3Q06 (A)1-3Q05 (A)NT$mn

Income Statement

39

Financial Statements – Taishin Bills

-5,140 5,140 Paid-in Capital

0.1%6,757 6,748 Shareholders' Equity

-7.1%56,314 60,615 Liabilities

-6.4%63,071 67,363 Total Assets

YoY06/9/30 05/9/30NT$mn

Balance Sheet

-41.1%0.56 0.95 EPS (NT$)

-41.2%287 488 Net Profit after Income Tax

-194 -Impact from SFAS No. 34

-22.9%91 118 Income Tax

-69.6%184 606 Net Profit before Income Tax

-50.0%18 36 Net Provisions

-68.5%202 642 Pre-tax, Pre-provision Profit (PPP)

-2.5%118 121 Operating Expense

-85.7%1 7 Others

-24.0%437 575 Net Trading Income (Loss)

-33.0%75 112 Fee Income

-(193)69 Net Interest Income

-58.1%320 763 Operating Income

YoY1-3Q06 (A)1-3Q05 (A)NT$mn

Income Statement

40

Q & A

Thank You