responsibility corporatesocial CSR Report · financial institution in Asia,” but also utilized precision marketing with big data and AI in order to drive innova-tive capabilities

2018Annual

CSR Reportcorporate

socialresponsibility

First Financial Holding Co., Ltd. (hereinafter referred to as "FFHC" or "the Company") published its first corporate social responsibility (CSR) report in 2012 (for FY2011). To date, the Company has issued annual CSR reports for eight consecutive years, its most recent report being issued in June 2018. In addition, it also began publishing an English language edition of its CSR report in 2015 (for FY2014). The purpose of these reports is to actively engage and communicate with various classes of stakeholders in order to relay important information concerning FFHC and its numerous subsidiaries ("the Group"), including our sustainable development strategies, action plans, latest performance and achievements, and future plans and objectives.

Contact methodCorporate Governance Section, Administration Division, First Financial Holdings Co., Ltd.Tel: +886-2-23485366Fax: +886-2-23119691Address: No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei CityE-mail: [email protected]: http://csr.firstholding.com.tw/en/csr_report.html

Scope and boundaryThe contents of this Report encompass First Financial Holding Company and its seven subsidiaries: First Bank, First Securities, First Securities Investment Trust, First Life Insurance, First Financial Asset Management (hereinafter referred to as "First Financial AMC"), First Consulting, and First Venture Capital. The scope of the environmental performance ISO 14064-1 Greenhouse Gas Inventory includes all operations offices. All related statistics are calculated based on the general international standard indices, and all financial numbers are denominated in New Taiwan Dollars (NTD).

2013 2014 2015 2016 20172011 2012

0302

Reporting principles

ISO 26000 Social Responsibilities Guidance

United Nations Global Compact

Sustainable Development Goals, SDGs

The Global Reporting Initiative, GRI

Taiwan Stock Exchange Corporation

International Advocacy

GRI standards: Core option

GRI financial services sector disclosure standards

CSR Code of Conduct for TWSE/GTSM Listed Companies.

External assurance of reportStandard Certification Bodies

SAES No. 1 “Assurance Engagements Other than Audits or Reviews of HistoricalFinancial Information” (stipulated with reference to the International Standardon Assurance Engagements ISAE3000)

AA 1000 Assurance Standard application type 2 moderate level of assurance.

ISO 45001 Safety and Health Management System.

ISO 14064-1 Greenhouse Gas Inventory

ISO 50001 Energy Management System

ISO 14001 Environmental Management System

ISO 14046 Water Footprint

Reporting PeriodThe FFHC 2018 Corporate Social Responsibility Report (hereinafter referred to as "this Report") discloses the performance and actions of FFHC with regard to various aspects including economic, social, environmental, and governance for calendar year 2018 (January 1 to December 31, 2018). To better illustrate our latest advances and demonstrate chang-es in growth, some of the information contained in this Report goes back to 2015 to 2017. The revised histori-cal information has been disclosed in the appropriate section.

Deloitte

British Standards Institution, BSI.

British Standards Institution, BSI.

SGS Taiwan.

Report Information

Corporate Social Responsibility Reports frompast years

The Preparation and Filing of Corporate Social Responsibility Reportsby TWSE Listed Companies

ISO 14064-1 Other Indirect Emissions Inventory (Indirect greenhouse gasemissions in transportation - Business travel) Verification

ISO 14064-1 Other Indirect Emissions Inventory (Waste disposal in operations) Verification

Report information

Chairman’s Message

Awards and Acknowledgments

Performance Highlights in 2018

CSR Operation

Stakeholder Engagement

Sustainable Development Goals

02060810121534

Independent assurance opinion statement

Various Certifications

Global Reporting Initiative (GRI) Standards Content Index

GRI Financial Services Sector Supplement

United Nations Global Compact Principles

ISO 26000 Index Content Index

216222223228229229

CON

TEN

T

Green Finance Happy workplace Social HarmonySustainable GovernanceBusiness performance and profitability

Corporate governance

Risk management

Ethical corporate management

Protection of customer rights and interestsand improvement of customer satisfaction rate

Information security improvement

Prevention of money laundering, financialfraud and terrorism financing

Climate change risks and opportunities

Responsible investment, due diligence,and supplier management

Low-carbon operations and circular economy

Ecological and environmental sustainability

Digital finance innovation and inclusiveness

Human rights protection andgender equality

Professional development andmanagement reform

Talent recruitment and retention

Occupational Safety and Health

Implementation of inclusive finance

Charitable activities and performanceevaluation

19215410048155

160

170180

193198

101116

126141148

4956687782

9194

Chairman’s MessageSince its establishment in 1899, First Financial Group has been deeply rooted in Taiwan. Now, 120 years later, it continues to adhere to its brand spirit of "a century of tradition and innovative service." No matter how the external environment changes, the hundred-plus-year-old brand motivates us to work with caution and conscien-tiousness. We continuously and steadily improve the sustainable development of corporate governance, customer care, employee care, environmental sustain-ability, and social welfare. In 2018, all of the core businesses operated under the Group enjoyed continued growth, in accordance with the "deeper synergistic effects, shared value" strategy. The scale of group assets reached NT$2.94 trillion, and the consolidated net revenue was NT$60.249 billion, which represented an increase of 18.54% from 2017. Net profit after taxes was NT$17.332 billion. For four consecutive years, net profit has remained above NT$15 billion; the earnings per share (EPS) for 2018 was NT$1.40. The Company not only expanded its overseas market through First Bank and moved towards its goal of “developing into a regional financial institution in Asia,” but also utilized precision marketing with big data and AI in order to drive innova-tive capabilities and has devoted its efforts to the development of financial technology (FinTech): the company has received 15 invention patents and 39 utility model patents, which helps the Company provide its clients with more convenient and safer financial services.

In order to enhance the quality and credibility of the report, while pursuing financial performance, we contin-ue to strengthen corporate governance, enhance information transparency, and invite independent certification bodies to ensure and verify the Company's 2018 Corporate Social Responsibility Report in accordance with AA1000 TPYE 2, and SAE No.1 “Assur-ance Engagements Other than Audits or Reviews of Historical Financial Information” of the Accounting Research and Development Foundation of the Republic of China (with reference to the International Standard on Assurance Engagements ISAE3000). In order to improve the effectiveness of the reporting system, the companies of the group also revise their offense-reporting system by resolution of the board of directors, in which the internal auditing unit is responsible for handling reporting cases and assigning the case to units that have independent power for investigation. In addition, banks, securities companies, life insurance companies and investment trust subsidiaries have already completed Inherent Risk Assessment (IRA) reports in response to the increasingly stringent laws on anti-money laundering and countering terrorism financing; it has also revised the FFHC AML/CFT Plan, as well as the information sharing policy and control procedures. First Bank accepted the third round of mutual evaluations by the Asia/Pacific Group on Money Laundering (APG) in 2018, and received positive comments in complying with matters such as anti-money laundering and countering terrorism financing. In the future, the innovative blockchain patent for "cross-chain integration” will be applied to regulatory compliance technology to achieve a balance between risk manage-ment and business operations. Due to the implementa-tion of a well-executed corporate governance system,

FFHC was selected for inclusion as a constituent in the "TWSE Corporate Governance 100 Index" for the fourth year in a row, and achieved the highest standard by ranking in the top 5% in the TWSE Corporate Governance Evaluation for listed companies.

We also actively address environmental and social issues through our core businesses. We have established our Green Finance Committee to connect green products and services in the areas of green financing, green investment, green review, and green consumer finance. We support the long-term development of domestic renewable energy by coordinating syndicated bank loans as the lead arranger of largest solar cell manufac-turers in Taiwan, in order for the government to meet its target of 20GW of installed solar photovoltaic capacity by 2025. We have implemented inclusive finance, promoted friendly financial services, and provided a full range of financial services to all sectors and groups in society. We maintained a leading market share among all national banks for lending to SMEs for the ninth consecutive year, and we have promoted digital inclusion to support SMEs and micro-enterprises, which won the E-commerce Finance Award - Project for Bank Lending to SMEs. In addition, First Life Insurance integrates ESG issues into trust finance and insurance products, and was listed by the competent authority as an insurance company with excellent performance in the National Insurance Coverage Improvement Plan for the 22nd consecutive time. Whereas its "Max Lifeline Critical Illness Life Insurance” was awarded the Best Product Creativity Award of the Faith, Hope & Love Awards of Insurance in 2018.

First Bank will donate rebates that are a fixed proportion of the total value of credit card transactions from custom-ers with credit cards such as Living Green Card, Leezen co-branded credit card, Yilan Affinity Card and World Master Card, in order to contribute to the environment and society. Which includes matters such as: 1) Helping social welfare groups to replace existing lamps with LED light bulbs; 2) Assisting the Tse-Xin Organic Agriculture Foundation (TOAF) and the Bliss and Wisdom Education Foundation to promote the concept of organic vegeta-bles, water source protection programs and provide counseling for tribal industries; 3) Donations to the Yilan County Government for social welfare, tree planting, and protection. 4) Support student education and nutritious school lunches for economically disadvantaged students or for families encountering sudden changes by using the “School Education Savings Account” of the Ministry of Education.

In order to reduce environmental impact from our business operations, we established the “Green Building Certification Acquisition Project Team” in 2010 with the goal of renovating five of our old buildings to obtain Diamond-class Green Building Certificates from the Ministry of the Interior. We have so far renovated 22 old buildings, for which we have received Diamond-class Green Building Certificates. We have also extended this concept overseas: Our London branch in the UK has also applied for old building renovation, which has achieved “Very good” in the BREEM rating benchmarks, and is currently under renovation. Furthermore, in order to gain the awareness of employees and the public society on the importance of environmental conservation, our Wanhua Branch will be made into a classroom for 0706

Chairman, First Financial

environmental education with a "hydroponic green roof" and will become a center for green finance environment education. We were awarded the “Pastoral City Construction Achievement Competition and Pastoral Experts - Enterprise Award” of the Taipei City Govern-ment, the first awardee from the financial industry.

FFHC pays great attention on talent training. We comply with digital finance transformation, develop overseas market policies, implement legal compliance, promote anti-money laundering and internal control, provide cross-disciplinary talent recruitment and training programs. We also strengthen the compensation system and provide multiple welfare measures to build a friend-ly and safe working environment. In addition to obtaining the ISO 45001 Occupational Safety and Health Manage-ment System certification, FFHC was chosen for inclusion as a constituent in the "Taiwan High Compensation 100 Index" for the 5th consecutive year and in the “Taiwan Employment Creation 99 Index” for the 9th consecutive year.

While pursuing business performance, enterprises nowadays should also take into account social care and environmental protection issues to create long-term benefits for the enterprise and its stakeholders. FFHC set up its volunteer team in 2011, and invested in activities for cultural creation, environmental protection, athletic rising-star training, and caring for the disadvantaged; it also collaborated with National Taiwan University Hospi-tal to hold charitable concerts for eight consecutive years, provided the First Art Space for free domestic art exhibitions, engaged in long-term sponsorships of domestic elementary school and junior high school table tennis teams, established the First Bank table tennis men's team to train table tennis players, and won 3 gold medals, 5 silver medals and 9 bronze medals in interna-tional competitions. A total of 165 charitable activities were held in 2018, and the total of charitable activity costs and donations amounted to more than NT$84.7 million.

We adopt comprehensive strategies to fulfill corporate social responsibility, and the effectiveness of these strategies is widely recognized around the globe. Other than being included in the DJSI Emerging Markets Index for three consecutive years, we were included as a constituent for the first time in the "World Index” and received a silver medal in the RobecoSAM Sustainability Yearbook, both in 2018. FFHC is the only bank in Taiwan that is represented on the list of top five banks in the world. In January 2019, we were recognized on the CDP’s Climate Change A List in the UK, and we are the only financial institution in Taiwan to have received such glory, setting a record high for Taiwan's service industry. Moreover, we were included as a constituent in the FTSE4Good TIP Taiwan ESG Index and BSI Sustainability Excellence Award for two consecutive years. We also received the The Best Cloud-Based Initiative Application from The Asian Banker, and won the 11th TCSA Taiwan Corporate Sustainability Awards in the TOP 50 Corporate Sustainability Awards, the Gold Award in the Finance

and Insurance Group. In addition, ratings companies such as Taiwan Ratings, S&P, and Moody's all issued rating reports in 2018 approving the Group's strong market competitive advantages, stable corporate gover-nance, and business value in the financial industry, stating that the Group has distributed client bases, sound financial structures, good risk management, and premi-um asset quality, and recognized the Group as a bench-mark enterprise outstanding both in quality and quantity.

For 2019, we will adhere to the target of "strengthening partnerships" and "deepening integrative synergy,” and continue to integrate sales channels to expand our business profile geographically. We also focus on the core business of each sector, keep in line with interna-tional trends, and implement the "green finance" business philosophy in accordance with UN's 17 Sustain-able Development Goals (SDGs), thereby enhancing the integration of corporate social responsibility into core business strategies with sustainable innovation, stimulat-ing positive momentum on transforming the economy, society and the environment, setting up a model of a hundred year’s inheritance and sustainability.

Awards and Acknowledgments

0908

・First Bank received the 2018 "ACH Collection Business Transaction Volume Growth - Excellence Award" from Taiwan Clearing House

・First Bank received the "Celebrate 50-Year Anniversary of the Bank of the Lao for Contributions to the Economy and Finance Industry in Laos - Laos National Government Award"

・First Bank received the "SME Credit Guarantee Funds Awards for the Head Office" for SME credit guarantee businesses for the 11th time and two managers received the "Superior Performance Award for Managers".

03

05

・First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage Program" of the Financial Supervisory Commission for the 22nd consecutive time

・First Bank won third place in the 2018 Q4 payment collection store expansion contest in the 'Promote "Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd.

・FFHC ranked in the top 5% of the 5th Corporate Governance Assess-ment Program , and also ranked in the top 10% (top four)of the "Finance and Insurance" category of the listed companies.

・First Securities won first place in the "Warrants Breakthrough Prize" of OTC Taipei Exchange for the second half of 2018

・First Bank Forest Yilan Affinity Card was presented with "2018 Best Affinity Card of the Year" award by MasterCard International・FFHC became the first Company in Taiwan's financial industry to attain Leadership A List in the 2018 CDP climate change questionnaire・First Bank received the 2018 "Assistance for Agricultural Food Product Marketing Corporate Award" from the Agriculture and Food Agency

02

・First Bank received the "Golden Security Award" from the Joint Credit Information Center for the third time.

・FFHC was chosen for inclusion in the "FTSE4Good TIP Taiwan ESG Index" for the second consecutive year.

・First Bank Headquarters Building obtained the ISO 45001:2018 Safety and Health Management System certification from the British Standards Institution (BSI).

・First Bank Headquarters Building received an extension of the 2018 Healthy Workplace Certification from the Health Promotion Administration, Ministry of Health and Welfare.

・First Bank Credit Card Department - Zhongshan Building, Bade Building, and IT Building received the 2018 "Badge of Accredited Healthy Workplace" from the Health Promotion Administration, Ministry of Health and Welfare.

・First Bank Headquarters Building obtained the "2018 Dementia Friends" label from Taipei City Government Department of Health.

12

・First Bank was recognized as Benchmark Private Businesses and Groups in Green Purchasing by the Taipei City Government Depart-ment of Environmental Protection for the fourth consecutive year.

・FFHC was presented with the "Corporate Social Responsibility Award" by the British Standards Institution (BSI) for 2 years in a row.

・FFHC was presented with the "Top 50 Corporate Sustainability Report Awards – Banking and Insurance Award" at the 11th Taiwan Corporate Sustainability Awards by the Taiwan Institute for Sustainable Energy.

・First Bank Taoyuan Building received the "Energy Saving Benchmark Award - Silver Award for the Service Sector" from the Ministry of Economic Affairs Bureau of Energy Affairs.

・First Bank received the "Best System Stability award - Cross-Border Service" and “Best Service Innovation Award - Finance Blockchain Certification Services" for e-Money services from Financial Information Service Co., Ltd.

・First Bank won third place in the 2018 Q3 payment collection store expansion contest in the 'Promote "Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd.

11

・First Bank Taoyuan Building received the "Small and Medium Enterprise Electricity Saving Competition - Award of Excellence in Non-Manufacturing Category"from the Taiwan Power Company.・First Life Insurance received the "Outstanding Performance Award for Senior Insurance

Contest" in 2018 for small-sum elderly care insurance.・First Bank was presented with the " 2018 CSEA Customer Service Award-Best Customer

Service Innovation System Application" awarded by TCCDA.・First Bank was presented with the " The Best Cloud-Based Initiative, Application or

Programme " awarded by The Asian Banker.

10

01

2018

2019

・First Bank was officially designated as an "2017 Outstanding Green Procurement Organization" by the Environ-mental Protection Administration, Executive Yuan

・First Securities won the "Best Potential Award" in the "2018 Outstanding Securities Evaluation" from the Excellence magazine

・FFHC was selected for inclusion as a constituent in the 2018 Dow Jones Sustainability World Index and is the only one, ranking top 5 in DJSI World Index Banks industry group from 3,504 companies, in Taiwan banking industry.

First Financial Holding Company was selected for inclusion as a constituent in the Dow Jones Sustainability™ Emerging Markets Index for the third consecutive year. ・First Bank Credit Card Department - Zhongshan Building, Bade Building, and IT

Building received the "2018 Certified Excellent Breastfeeding Room" from the Taipei City Government Department of Health.

・First Bank was awarded the “Pastoral City Construction Achievement Competition and Pastoral Experts - Enterprise Award” of the Taipei City Government, the first awardee from the financial industry.

09

・First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage Program" of the Financial Supervisory Commission for the 21th time in the row.

・First Life Insurance's two versatile life insurance policies "Rich Life" and "Rich Expert" received recognition as excellent insurance policies from Smart magazine and First Life Insurance became the first insurance company with two selected insurance policies・FFHC was included as constituent stock in the FTSE4Good Emerging Index for 2 years in a row.・First Bank won second place in the 2018 Q2 payment collection store expansion contest in the 'Promote

"Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd.・First Life Insurance "Max Lifeline Critical Illness Life Insurance” was awarded the Best Product Creativity Award

of the Faith, Hope & Love Awards of Insurance in 2018.・First Bank was presented with the "Energy Leadership Awards - Industry and Commerce Division A" high

distinction award by the Taipei City Government.

08

07

・First Financial Holding Company received certification by the British Standards Institution (BSI) for the FFHC Corporate Social Responsibility Report for the sixfth consecutive year.

・FFHC was chosen for inclusion in the "Taiwan High Compensation 100 Index" for the 5th consecutive year.

・First Securities Investment Trust was presented with a certificate of appreciation by the Taipei Blood Center for participation in the "Equal Rights for the Blind and Blood Donation Event"

06

・First Bank sponsored Lingyun Junior High School in participation in the 2018 California Cup International Field Hockey Tournament in the United States and received a certificate of appreciation from Taoyuan City Government.

・First Securities sponsored the Taipei City Autistic Children Social Welfare Foundation and to be awarded the "Enthusiastic Public Welfare Certificates "

05

・First Bank organized the Going to the Campus and Community to Spread Financial Knowledge events and received a certificate of appreciation from the Banking Bureau.

・First Bank was presented presented with the " Outstanding Domestic Banks in Strengthening to Make SME Loans", "E-Commerce Industry Financing Special Award", Excellent Domestic Bank for Making Loans to Key Startups”, and " Excellent Bank to Participate in The Exporting Syndicated Loan Platform Program of the system, the Whole Plant and the Engineering Industry" awarded by The Financial Supervisory Commission.

04

・First Bank was presented with the "Credit Guarantee Partnership Award" for the 10th time and ranked as the number one bank in Taiwan in terms of SME lending market share for 8 years in a row.Three First Bank manag-ers were presented with the distinguishing "Superior Performance Award for Managers".

・First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage Program" of the Financial Supervisory Commission for the 20th consecutive time.

03

・First Securities Investment Trust made donations to the Down Syndrome Foundation R.O.C. and received a certificate of appreciation.02

01 ・First Bank was rated as the Best Co-brand Card of the year 2017.

・FFHC was chosen for inclusion in the "Taiwan Employment Creation Index 99 " for the ninth consecutive year.・FFHC was selected for inclusion as a constituent in the "TWSE Corporate Governance 100 Index" for the fourth

year in a row.・First Bank received second place in the 2017 "Performance Evaluation for Trust of Senior Citizens and Persons

with Disabilities" organized by the Financial Supervisory Commission.・First Bank received the "Love Hualien Assistance Award" for providing financing guarantee special loans for the 2018 Hualien earthquake.

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PERFORMANCEHIGHLIGHTSIN 2018

Economic

Society

Environment

Certification

NT$17.332billion

Consolidated net profit of NT$17.332 billionafter tax, remaining at NT$15 billion or higherfor the fourth consecutive year.

NT$10.13 billion

Coordinated the largest syndicatedbank loan of NT$10.13 billion forsolar cell manufacturers in Taiwanas the lead arranger to supportlong-term development funding forthe domestic renewable energyindustry.

Occupationalsafety

management

FFHC provides a safe andhealthy work environment.Headquarters Buildingintroduced "ISO 45001 Safetyand Health ManagementSystem" and obtained certification.

9years

With a total of 9,227 employees,FFHC was included in the"Taiwan Employment CreationIndex 99 " for the ninthconsecutive year.

5 year

Provision of competitivecompensation schemeand included in the “TaiwanHigh Compensation100 Index" for fiveconsecutive years.

3gold medals

We have supported the development of domesticsports for 24 consecutive years. We also continuedto sponsor the table tennis teams of 8 colleges, middleschools, and elementary schools in 2018. Four playerswere selected for the national team and they won 3gold medals, 5 silver medals, and 9 bronze medals.

22buildings

Obtained the "Diamond-class" Green Building Mark for 22 ofthe company's existing commercial buildings and reducedannual carbon emissions by 2,432 tons CO2e.

Firstcase

Wanhua Branch set up a “Ecological hydroponicgreen rooftop from solar power generation andrainwater harvesting systems" which combinedthe solar power generation, rainwater harvesting,and aquaponic systems and received the“Pastoral City Construction AchievementCompetition and Pastoral Experts - EnterpriseAward” of the Taipei City Government, the firstawardee from the financial industry.

TheOnly

Included as a constituent for the first time in the "World Index” and received a Silvermedal in the RobecoSAM Sustainability Yearbook. FFHC is the only bank in Taiwan thatis represented on the list of top five banks in the world.

7seats

External Directors account for 73% of allDirectors and female Directors account for47% (7 seats); the achievement rate of thefive main areas in the performance evaluationof the Board of Directors in 2018 was 94% andthe assessment results "exceeded standards".

49Awarded 11 financial technologyinvention patents and 38 utilitymodel patents. Acquire 49invention and utility model patentsfor finance technologies.

A ListThe first financialinstitution in Taiwan toattain CDP LeadershipA List recognition

37.12parks

Paperless business and operationsreduced carbon emissions by 14,594tons of CO2e, equivalent to the annualamount of carbon absorption by 37.12Daan Parks.

NT$84.7 million

NT$84.7 million wasinvested in environmentaland social engagement.

AllAll domestic and overseasbranches fully adopted the "ISO14064-1 Greenhouse GasInventory" and obtainedcertification.

1stProvided a total of NT$672.3 billion in loans toSMEs and became the leading lender to SMEsby market share in the banking industry for the9th consecutive year.

VeryGood

The London Branch in theUnited Kingdom applied forthe certification for oldbuildings based on theBuilding Research EstablishmentEnvironmental AssessmentMethod (BREEM) and wasrated "Very Good".

NT$446.2billion

Launched a new lendingservice aimed at supportingthe MOEA's "5 Plus 2" keydevelopment projects, resulting in a total of NT$446.2 billion innew loans.

1312

CSR Operation FFHC CSR Committee Functions

I CSR Organization StructureFirst Financial Holding (FFHC) has long been committed to monitoring trends in society and fulfilling our corporate social responsibility (CSR), with significant effort invested towards promoting corporate governance, the development of a sustainable environment, and supporting charities. In 2011, the FFHC Board of Directors approved the establishment of a "CSR Committee" to improve the efficiency of CSR promotion efforts. The chairman of FFHC is also the chairman of the CSR Committee and its members are drawn from the general managers of the First Financial Group. Under the CSR Committee are trans-company working groups on "Corporate Governance", "Customer Care", "Employee Care", "Environmental Sustainability" and "Social Welfare". A dedicated unit is also assigned by each subsidiary for CSR communications, liaison and the provision of related information. The core team consists of 78 people (1 chairman, 8 committee members, 2 conveners, 5 executive directors, and 62 people split among the various working groups). The CSR Committee is administered by the Corporate Governance Section of the Administration Department, and 5 designated people are responsible for the overall planning and promotion of CSR within the Group. The top-down approach ensures the effective and concrete implementation of each annual CSR objective.

In 2011 the FFHC Board developed a “CSR Policy” and “CSR Code of Conduct” (see the “Corporate Governance” section of the corporate website at http://www.firstholding.com.tw/tw/governance/manageRule.htm). The “CSR Policy” defines our commitment to the fulfillment of our CSR towards customers, employees, shareholders, community participa-tion, charity, development of a sustainable environment, products and services, and ethical corporate management. The “CSR Code of Conduct” are the overarching guidelines on the economic, environmental and social risks and impacts of our company and our subsidiaries. It is aimed at realizing sustainable development through promotion of economic, environmental and social advancement. In 2012, 2014 and 2016, the “CSR Code of Conduct” and “CSR Policy” were revised by the Board in response to international trends and regulatory developments. The revisions require Group companies to treat customers or consumers in a fair and reasonable manner. Resources for CSR fulfillment should also be invested in organizations that solve social or environmental issues on a continuous basis through a commercial model. These will facilitate the establishment of sustainable development guidelines for the environment or society, and ensure that our Group’s CSR policy is in line with international standards.

First Financial Holding Corporate Social Responsibility Organization Chart

•Ethical corporate management•Organizational strategy•Risk management•Regulatory compliance•Protection of shareholder rights•Information transparency•Internal control

CorporateGovernance WG

•Environmental sustainability policy•Corporate carbon reduction management•Green purchasing•Environmental sustainability awareness•Supply chain management

EnvironmentalSustainability WG

•Employee compensation•Employee welfare•Competency management•Employer/employee relations•Education and training•Employment environment

Employee Care WG

•Product and service responsibility•Customer data protection•Consumer rights protection•Customer relations management•Green product

Customer Care WG Social Welfare WG

First Financial Holding CSR Milestones

20112012 CSR Report certified byan independent certificationbody for the first timeReceived "Financial ExcellenceAward" from the TaiwanCorporate Sustainability ReportAwards and the "CreativeCommunications Role-ModelAward"

2012Published first CSR Report (2011)Revised FFHC CSR Code of ConductSet "No. 1 Brand in Green Finance" as thesustainable development targetPresented with "Newcomer Award" in the TaiwanCorporate Sustainability Report AwardsReceived Commonwealth CSR CorporateCitizenship Award

2014Revised FFHC CSR Code of Conduct, Policyand Committee Organic RegulationsReceived "Gold Award" and "ClimateLeadership Award" from the TaiwanCorporate Sustainability Report Awards14th Place in the Large Enterprises categoryof the Commonwealth Magazine CSRCorporate Citizenship Awards

2015Published first English version of CSR Report (2014)Revised FFHC CSR Committee Organic RegulationsReceived "Gold Award", "Transparency and IntegrityAward" and "Climate Leadership Award" from theTaiwan Corporate Sustainability Report Awards9th Place in the large enterprises category of theCommonwealth Magazine Corporate Citizenship AwardsReceived Excellence Award in the EnvironmentalFriendliness Category of the "Global Views CorporateSocial Responsibility Awards

2013Establish CSR CommitteeDefined FFHC CSR Codeof Conduct, Policy andCSR Committee OrganicRegulations

2017 Revised FFHC CSR Committee Organic RegulationsSelected for inclusion as a constituent in the Dow Jones Sustainability™ Emerging Markets Index fortwo years in a rowReceived "Taiwan Top 50 Corporate Sustainability Report Awards - Finance and Insurance IndustryGold Award" and "Talent Development Award"3rd Place in the large enterprises category of the Commonwealth Magazine Corporate CitizenshipAwardsReceived the "Financial Industry Model" award at the Global Views CSR AwardsIncluded as constituent stock in the FTSE4Good Emerging Index

2018 We were included in the DJSI Emerging Markets Index for three consecutive years; we were includedas a constituent for the first time in the "World Index” and received a silver medal in the RobecoSAMSustainability Yearbook. FFHC is the only bank in Taiwan on the list of top five banks in the world.We were the first financial institution in Taiwan to be recognized on the CDP’s Climate ChangeLeadership A List in 2018.Received "Taiwan Top 50 Corporate Sustainability Report Awards - Finance and Insurance IndustryPlatinum Award”Included as constituent stock in the FTSE4Good Emerging Index for two consecutive years

2016Revised FFHC CSR Code of Conduct, Policy and Committee Organic RegulationsNamed a constituent stock in the “Emerging Market Index”of the Dow JonesSustainability Indices (DJSI) upon participating for the first timeReceived "Taiwan Top 50 Corporate Sustainability Report Awards - Finance andInsurance Industry Gold Award" and "Talent Development Award"Received the “Best CSR Award” in the Banking and Finance Best Practice Awardsfrom the Taiwan Academy of Banking and FinanceReceived the “Financial Industry Model” and “Happy Enterprise Role-Model”awards at the Global Views CSR Awards

Board of Directors

Chairman(Chairman of FFHC)

Committee Members(Presidents of FFHC and subsidiaries)

•Social care•Community participation•Charitable activities•Corporate image

Stakeholder Engagement I Stakeholder identification and communicationThe opinions of stakeholders have served as the guiding principle for the development of the FFHC sustainable development strategy since the first CSR Report was published in 2011. The process of compiling the Environmental (E), Social (S) and Governance (G) issues of concern to stakeholders is used to internalize the issues as the corporate sustainability targets. The themes and aspects of sustainability of concern to stakeholders also form the basis for author-ing this report.

◎ Stakeholder identificationTo promote better stakeholder communica-tions, we embraced the spirit of the five main areas in the AA1000 Stakeholder Engagement Standards (AA1000 SES) regarding dependency, responsibility, influence, representativeness, and diversity by convening the CSR Committee’s Corporate Governance, Customer Care, Employee Care, Environmental Sustainabili-ty and Social Welfare working groups for joint discussion and identification of stakeholders. Group stakeholders were then divided into seven categories based on the experiences of each business unit and the finance industry as shown as follows:• Employees/Union/Retired employees• Shareholders/Investors/Analysts• Customers• Suppliers• Community/Non-profit organiza-

tions/Non-government organizations/Ac-ademics and experts

• Government and competent authorities• Media/financial institutions

◎ Collecting the issues of concernTo ensure that the practice of CSR is in keeping with international developing trends, CSR Committee working groups collected 20 sustainability issues based on international sustainability standards, such as the GRI Standards and AA1000, interna-tional initiatives, such as SDGs, CDP, and DJSI, and the Group's corporate Green Finance Sustainable Development Strategy.

01STEP

◎ Compile materiality analysis matrix for issues of concernThe 228 online surveys and 59 printed surveys were sorted according to degree of concern to stakeholders and impact on group operations to form the “Materiality Analysis Matrix” and “List of Communication Channels and Issues of Concern.”

05STEP

◎ Response to the issues were then compiled in accordance with the materiality analysis matrixAfter analyzing the 20 issues of concern using the matrix method, 2 issues of low stakeholder concern and low impact on group operations were eliminated. The 18 issues of medium-high concern/influence were chosen as issues for response. A total of 29 material aspects (including 4 financial services sector-specific disclosures) were identified and approved by the "CSR Committee."

06STEP

◎ Identifying priorities in connection to UN Sustainable Development GoalsTo effectively accord with the United Nations Sustainable Development Goals (SDGs), we considered social demands and international trends related to the core competencies of financial institutions and took three steps, specifically "internal discussions and survey on priorities," "integration of core competencies for setting objectives and execution plans," and "disclosure and communication" to include SDGs into the Group's sustainable develop-ment strategy. We also established targets for material topics and execution plans to communicate and disclose information to stakeholders in hopes of contributing to the state and society.

07STEP

◎ Reviewing the report to ensure that it covers all material aspectsThe CSR Report is authored by each CSR Committee WG based on the disclosure indicators and material topics approved by the CSR Committee then collated by the administrative unit before being submitted to the Chairman for review.

08STEP

◎ Serving as the guiding principle for company planning on sustainabilityTo ensure that the CSR implementations of FFHC reflect stakeholder expectation, the results of the analysis are not only disclosed in the report but also serve as the guiding principle for company planning on sustainability.

09STEP

02STEP

◎ 228 online surveysFFHC used online questionnaires on our corporate website to establish how important sustainability issues are to each stakeholder.

03STEP

◎ 59 printed surveysApart from online surveys, the members of the CSR Committee (Presidents of FFHC and subsidiaries), WG conveners, executive directors, and members of each CSR Committee WG were then asked to evaluate each stakeholder's degree of concern on the 20 issues and impact on group operations.

04STEP

15

II Operation of the CSR teamEvery year, each working group of the CSR Committee compiles the E.S.G. Issues of Concern to FFHC stakeholders, then

draws up the short-term, mid-term, and long-term CSR targets, and drafts action plans for the following year. These are

discussed and revised internally at WG meetings before being submitted to the "CSR Committee" for review. Approved

proposals are then announced for implementation. Progress on each short-term target and action plan is then tracked

and reviewed on a quarterly basis by CSR Committee WG meetings. For each target not met, each working group must

propose a concrete improvement plan to the CSR Committee. At the end of the year, CSR performance from the preced-

ing year must be reported to the Board of Directors within four months. The 2018 CSR performance report was submitted

to the Board of Directors in March 2019, for their reference.

Review CSR report standard

Review implementation planfor each objective

Track and reviewthe progress of short-termtargets and action plans

Evaluate short-term, mid-term,and long-term CSR targets CSR

Committee

14

Board of DirectorsReport CSR implementationresults for the previous year

07CSR CommitteeReview execution and evaluateimprovement plan for unfulfilledshort-term targets

06

CSR Committee administration unitCompile the information submitted byeach working group

02

CSR CommitteeEvaluate short-term, mid-term, and long-term targetsand announce the implementation of action plans

04

Convene CSR CommitteeWorking Group MeetingsTrack and review short-termtarget completion on aquarterly basis

05

CSR Committee WorkingGroup MeetingDiscuss and revise short-term,mid-term, and long-term targetsand draft action plans

03

CSR CommitteeWorking Groups

Compile issues, draw up short-term,mid-term, and long-term

targets and draft action plans

01

Materiality analysis matrix for issues of concernThe selected 20 issues of concern are scored and then compiled into a materiality analysis with level of stakeholder

concern represented on the X-axis and the impact on group operations represented on the Y-axis, as shown below.

Based on the materiality analysis matrix, the two issues "Anti-competitive behavior" and "Effect of services on raw materi-

al consumption" were eliminated due to their low level of stakeholder concern and low impact on group operations.

The 18 issues listed as medium-high level of concern/effect were chosen for response on related management direction

and execution and implementation outcomes.

1 Identifying priorities in connection to UN Sustainable Development GoalsTo effectively accord with the United Nations Sustainable Development Goals (SDGs) and identify their relationship with

the Group's various operations, members of administrative units and various Work Groups of the CSR Committee

discussed the essence of the 17 SDGs and detailed objectives and issued a printed survey questionnaire on the connec-

tion between the Group's core competencies and the 17 SDGs. The 59 surveyed individuals include the Presidents of

the companies of the Group, WG conveners, executive directors and members of each CSR Committee WG. We use

the results to assess the connection between the Group's CSR implementation status and the UN SDGs. We eliminated

two issues regarding SDG 14 marine ecology and SDG 15 land ecology which are less closely associated with the

Group based on the survey results. We then listed 15 SDGs with higher levels of connection as our goals and estab-

lished corresponding annual CSR goals and implementation plans for review by the CSR Committee. We disclose the

achievement status of disclosure to stakeholders in the CSR Report (related SDGs and achievement status are detailed

in the chapter on Sustainable Development Goals).

2

Impact on Group operations

Low High

High

1716

•Ethical corporate management•Information security improvement•Corporate governance•Business performance and profitability•Prevention of money laundering, financial fraud and terrorism financing•Risk management

•Protection of customer rights and interests and improving satisfaction rate•Digital finance innovation and inclusiveness•Responsible investment, due diligence and credit, and supplier relationship management

•Occupational Safety and Health•Implementation of inclusive finance•Charitable activities and performance evaluation•Climate change risks and opportunities

•Ecological and environmental sustainability•Low-carbon operations and circular economy

•Anti-competitive Behavior•Effect of services on raw material consumption

•Talent recruitment and retention•Professional development and management reform•Human rights protection and gender equality

1.1 Learn about SDGs and SDG targets

3.2 Disclose progress on target completion in the CSR Report

Step 1Identify priorities

of SDGs

Step 3Disclosure andcommunication

Step 2Integrate core

competencies andestablish goals and

action plans

1.2 Distribute 59 printed surveys

3.1 Quarterly follow-up on target implementation status

2.1 Establish annual targets and announce the implementation of action plans

2.2 Submit plans to the CSR Committee for review and passage

Moderate

Mod

erate

Leve

l of s

take

hold

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once

rn

1918

List of stakeholder communication channels and issues of concern3

Employees/Union/Retired employees

Shareholder/Investor/Analyst

MaterialityEmployees are the company’s most important asset, and are crucial to the company's competitiveness. The support of employees is critical to our sustainable development and the most important component in our CSR fulfillment

Issue of concern• Professional development and manage-

ment reform• Occupational Safety and Health• Talent recruitment and retention• Ethical corporate management• Business performance and profitability• Human rights protection and gender

equality

Communication channel and frequency• Employee complaint hotline, fax, e-mail /

Permanent• Employee forum on internal website /

Permanent• First e-Academy digital learning system / Ad

hoc• Morning/evening business unit meetings /

Ad hoc• "Whistleblower section," "President's mailbox"

and "Ideas mailbox" / Permanent• Sexual harassment complaint hotline, fax,

e-mail / Permanent• Employer/employee meeting / Monthly• Employee Welfare Committee, Labor Safety

and Health Committee, Labor Pension Oversight Committee / Quarterly

• Employee Savings and Stock Ownership Committee / At least once a year

• Revision of collective bargaining agreement / Every 3 years

• Employee Commitment Survey / Annually

Communication highlights and accomplishments• Provision of competitive compensation

scheme / Included in the “Taiwan High Compensation 100 Index" for five consecutive years

• Employee Commitment Surveys are held to provide a channel for all employees to express their views. An Employee Commit-ment Survey was held in 2018, with a result of 82.39%.

• Persuade outstanding talent to remain in Taiwan through tangible action / Chosen for inclusion in the "Taiwan Employment Creation Index 99 " for the ninth consecutive year

• Provide high-quality employee training program / More than 1,305 employees have obtained the Certified Anti-Money Laundering Specialist (CAMS) certification.

• Create a safe and healthy work environment / First Bank Headquarters Building obtaining of the ISO 45001 2018 Safety and Health Management System certification from the British Standards Institution (BSI).

MaterialityTo protect shareholder equity and to treat all shareholders equally, a corporate governance system has been set up to ensure that shareholders enjoy the right to full information, participation, and decision-making on important company matters

Issue of concern• Business performance and profitability• Corporate governance• Risk management• Ethical corporate management• Responsible investment, due diligence, and supplier

management• Climate change risks and opportunities• Human rights protection and gender equality

Communication channel and frequency• Convening of general shareholder meeting, publication of

annual report and CSR report / Yearly• Business performance report / Monthly and quarterly• Hosting of investor seminars / Quarterly• Videos of investor seminars are concurrently published on our

corporate website for viewing by investors / Permanent and retained for one year

• Publication of corporate governance, investor seminar presenta-tions, financial information, annual reports, CSR reports, and related investors affairs in both English and Chinese on the corporate website / Ad hoc

• Telephone and e-mail of the spokesperson and investor relations department available from the corporate website's investor services section / Permanent

• Stakeholder survey in the corporate website's CSR section / Permanent

• Participation in the DJSI comparison, climate change question-naire, water questionnaire, and other international ESH ratings / Once a year

• Attend investor seminars at the invitation of securities brokers to communicate with investors / Ad hoc

• Participation in corporate governance-related non-government organizations / Ad hoc

MaterialityIn keeping with the philosophy of “Customer Service Comes First,” FFHC continues to provide customers with innovative products and quality services. We also ensure the transparency and security of products and service information while treating customers in a fair and reasonable manner to commit ourselves to improving customer satisfaction.

Issue of concern• Protection of customer rights and interests and improving satisfaction rate• Information security improvement• Implementation of inclusive finance• Climate change risks and opportunities• Digital finance innovation and inclusiveness• Responsible investment, due diligence, and supplier management

Communication channel and frequency• All of our Group subsidiaries have customer complaint channels, including business units, customer

service hotlines, and e-mail / Permanent• The companies' contacts are established on the Group's official website; we publish the telephone

number, address, and email of the contact person for customers to provide immediate feedback on issues and maintain smooth and open interactions

• Conduct customer satisfaction surveys through telephone surveys, e-mail surveys, customer service hotlines or outside survey firm / Ad hoc

• Accounts, latest financial information, event information etc. / Permanent• Statement on Protection of Customers' Data / Permanent• Planning and investment seminars, industrial park seminars, maintenance of customer relations, sharing

of energy conservation & carbon reduction experience, and green industry financial programs / Ad hoc• Hosting of service role-model competitions to improve the quality of customer service/ Annual

Communication highlights and accomplishments• Stewardship Principles Compliance Statement / Signed by subsidiary companies in securities, investment trust,

and life insurance, which have disclosed their compliance statement and votes on the Company's website• Improve customer service quality / Obtained the 2018 CSEA "Best Customer Service Innovation System

Application” Award from the Taiwan Contact Center Development Association• Commitment to providing diverse and innovative financial services / First Bank received the Best Cloud

Application in Taiwan Award from the Asian Banker• Support for SME development / The number one bank in Taiwan in terms of SME lending market share for 9

years in a row.• Care for the property safety of the elderly and people with disabilities / First Bank was ranked second

among in the "Asset Trust Evaluation of Trust Businesses for the Senior and the Disabled," and First Life Insurance received the "Outstanding Performance Award for Senior Insurance Contest" in 2018 for small-sum elderly care insurance

• Promotion of protection-type insurance products / First Life Insurance was recognized for excellent perfor-mance in the "Increasing National Insurance Coverage Program" of the

Financial Supervisory Commission for the 22nd consecutive time

Customers

Communication highlights and accomplishments• Stable earnings / consolidated net profit of NT$17.332 billion after tax,

remaining at NT$15 billion or higher for the fourth consecutive year• Established mechanism for shareholder interaction / Institutional

investors' opinions and issues of concern are reported to the Board regularly to assist all directors, executives and independent directors with understanding the opinions of shareholders.

• Improve the operational efficiency of the Board of Directors / Implement annual Board of Directors performance evaluations, the results of which are reported to the Board before the end of Q1 of the following year and disclosed on the Company's website

• The Company was selected as a constituent stock in DJSI Emerging Markets for the third consecutive year and was selected as a constituent stock in the DJSI "World Index" for the first time; received Leadership A List recognition in the CDP Climate Change Questionnaire

• Participation in the Asian Corporate Governance Association (ACGA) / As a Premium member of the ACGA, the Company analyzed the latest corporate governance information and reports, participated in annual forums and seminars, and accord with the latest development trends in corporate governance

2120

MaterialityCommunities form the social foundations for the development of FFHC. We actively participate in local community activities as part of our business operations and pay attention to how our operations affect the local community in order to build community rapport

Issue of concern• Charitable activities and performance

evaluation• Ecological and environmental sustainability• Climate change risks and opportunities• Low-carbon operations and circular economy• Responsible investment, due diligence, and

supplier management

Communication channel and frequency• Hosting of art exhibitions and concerts /

Regular• Hosting of blood drives, beach clean-up and

other green volunteer events, health seminar, and rural charity health clinics / Ad hoc

• Sponsorship of tennis, table tennis, swimming, road run, baseball and other sporting activities / Ad hoc

• Volunteer activities such as donations, show of support and environmental/organic practices / Ad hoc

• Participation in CSR-related non-government organizations / Ad hoc

• Hosting of energy-conservation symposiums and participation in green finance seminars / Ad hoc

Communication highlights and accomplishments•Assist students from poor families in their

studies / Assisted disadvantaged schoolchil-dren in Ankeng, Zhongzheng, and Erchong Elementary Schools for eight consecutive years and provided education assistance programs Sponsored the “Financial Service Industry Education Foundation” with NT$2.5 million in four consecutive years and helped 1,600 students from poor and disadvantaged backgrounds complete their studies in 2018 First Bank donated 1‰ of payments made with the World Card totaling NT$302,657 to the "School Education Savings Account" platform of the Ministry of Education, which in turn helped 237 disadvantaged schoolchil-dren

•Commitment to promotion of environmental sustainability and social welfare / Donated NT$84.7 million to social engagement in 2018, and 2,888 people volunteered their services

Community/Non-profit organization/Non-government organization/Academics and experts

MaterialityGovernment policies influence the direction of business operations. FFHC actively cooperates with government policies, complies with regulatory laws, and develops a sound business environment

Issue of concern• Ethical corporate management• Corporate governance• Prevention of money laundering, financial

fraud and terrorism financing• Risk management• Low-carbon operations and circular economy• Climate change risks and opportunities• Information security improvement• Occupational Safety and Health• Implementation of inclusive finance

Communication channel and frequency• Participate in seminars, symposiums, public

hearings, competitions and evaluations hosted by the competent authorities / Ad hoc

• Compliance with the relevant laws and policies of the competent authorities and cooperate with their monitoring and inspections / Ad hoc

• Disclose business-related information on the Market Observation Post System and corporate website / Ad hoc

• Participation in Earth Hour, ban disposable and melamine tableware, and the promotion of environmental protection through social media / Permanent

Communication highlights and accomplishments• Actively implemented corporate governance /

Implemented "Listed Company corporate Governance Evaluation" items and won top 5% in rankings of listed companies and top 4 in finance and insurance companies; Selected as a constituent stock in the "TWSE Corporate Governance 100 Index" for the 4th consecutive year

• Quarterly reporting of business overview / Reported business overview to the competent authorities every quarter to help the government keep track of the overall financial environment

• Participate in evaluations by government authorities / Won Taipei City Government's Excellence Award for "Energy Conservation Leadership - Industrial and Commercial Industries Group B," "Farm City Construction Results Contest and Farm Expert - Corporate Award," "Dementia Friends Organization Label," and "Health Promotion Label"; included as a constituent of the "FTSE4Good TIP Taiwan ESG

Governments/competent authorities

MaterialityMedia is one of the key channels for communi-cation between FFHC and the other six types of stakeholders. We disclose E.S.G-related information through the media at different times

Issue of concern• Business performance and profitability• Ethical corporate management• Information security improvement• Corporate governance• Digital finance innovation and inclusiveness• Talent recruitment and retention• Charitable activities and performance

evaluation

Communication channel and frequency• Participation in assessments, seminars and

conferences / Ad hoc• Establish a spokesperson and PR depart-

ment for liaising purposes / Permanent• Hosting of press conferences and issuing of

press releases / Ad hoc

Communication highlights and accomplishments• Improve corporate image / First Securities

won the "Best Potential Award" in the "2018 Outstanding Securities Evaluation" from Excellence magazine; First Life Insurance's two versatile life insurance policies "Rich Life" and "Rich Expert" received recognition as excellent insurance policies from Smart magazine, and First Life Insurance became the first insurance company with two selected insurance policies

• Joint media interviews / active interactions with the media to implement ESG perfor-mance

• Provision of industry information / The FFHC expert team provides daily updates on market conditions and financial products to help the public keep track of the financial market

Media/Financial institutions

MaterialityFFHC considers suppliers to be green partners. The supplier management mechanism is used to select qualified vendors who conform with the spirit of corporate sustainable development as long-term partners in building a green and sustainable future together

Issue of concern• Responsible investment, due diligence, and

supplier management• Ecological and environmental sustainability• Ethical corporate management• Charitable activities and performance

evaluation• Low-carbon operations and circular economy

Communication channel and frequency• Explicitly require vendors to conform to

international human rights, labor and environmental laws and regulations in purchasing and supply conditions and contracts / Review before tendering, audit at and after contract signing

• Transparency of tender information and publication on corporate website / Ad hoc

• Require companies that sell fund and insurance products through the bank to have compiled CSR reports or issued a CSR declaration / Before listing

• "Whistleblower section" / Permanent

Communication highlights and accomplishments•Green purchasing / Recognition as Bench-

mark Private Businesses and Groups in Green Purchasing by the Taipei City Government for the 4th consecutive year, while green purchasing amounted to NT$115.13 million

•Establishment of supplier management mechanisms / Established Supplier Manage-ment Guidelines as the Company and subsidiaries' policy and guidance principles for supplier management; established data on 30 categories of suppliers and completed 1,443 supplier surveys

Suppliers

2322

Materiality Issues and Material Topics4Material Issue/Corresponding chapterin GRI ManagementDirection

GRI Material Topics Corresponding SDGs and targetsCorrespondingSDGs

Risks and opportunities of key impact

Business performanceand profitability

GRI 201:Economic performance

8.1: Maintain growth in profitability in accordance with the gross domestic product (GDP).8.3: Promote development-oriented policies that support productive activities, job creation, entrepre-neurship, creativity and innovation, and encourage formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.8.5: Achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

• There are numerous banks in the domestic market, and the market is approaching saturation. The level of competition in the overall financial environment remains high, hindering growth in bank loans and profitability.

• Continuous FinTech innovation and artificial intelligence applications will weaken the role of traditional financial institutions and affect their business performance and profits.

• Green finance, renovation of unsafe and old buildings, and aging population issues will increase and spur the development of new sales and business models.

• Investment in digital banking and use of optimal business model will improve business management efficiency.

B,C,D

A

Corporategovernance

GRI 405:Employment diversityand equal opportunity

5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making12.6: Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle16.7 Ensure responsive, inclusive, participatory and representative decision-making at all levels 16.b. Promote and enforce non-discriminatory laws and policies for sustainable development

• Violation of corporate governance laws will result in disciplinary action by competent authorities and damage to the Company's image.

• Continuous strengthening of corporate governance can enhance Board operations and performance, build a positive image for the Company in sustainable management, elevate the Company's value, and increase investors' intention to invest in the Company.

B,C,D

Risk management 102-30:Effectiveness of risk management processesGRI 419:Social and economiccompliance

Set topic / Riskmanagement

13.3 Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.

• Violation of internal control regulations (legal compliance, risk management, and internal auditing) results in disciplinary action from the competent authorities, which damages the company's image.

• Changes in the laws of competent authorities, anomalies in the information system, inadequate personal information protection, and extreme weather that lead to risks of interruptions of operations or reputation or financial losses.

• Implementing risk management and adhering to internal control rules can effective lower or prevent operational risks to facilitate sustainable develop-ment.

• We use the innovative blockchain patent for "cross-chain integration" in regulatory compliance technology to achieve a balance between risk management and business operations.

B,C,D

Ethical corporatemanagement

GRI 205:Anti-corruption

16.5: Substantially reduce corruption and bribery in all their forms16.6: Develop effective, accountable and transparent institutions at all levels

• Unethical conduct might cause company loss or disciplinary actions by the competent authority, which damages the company's image.

•Implement ethical management, avoid corruption and other unethical matters, thus preventing disciplinary actions by the competent authority and establish-ing the company as an entity that conducts business with integrity.

B,C,D

Protection ofcustomer rightsand interests andimproving satisfactionrate

GRI 417:Marketing and labelingGRI 418:Customer privacyGRI 419:Socioeconomic Compliance

FS4: Procedures forimproving staff implementationof environmental and socialpolicies and procedures asapplied to business linesFS15: Policies for the fair designand sale of financial productsand services

12.6: Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle16.6: Develop effective, accountable and transparent institutions at all levels

• Violation of financial consumer protection laws will result in disciplinary actions from competent authorities and negatively impact the Company's image.

• To respond to competition from non-finance industries in the finance sector through technology expertise, the traditional finance industry must understand customers' needs and provide financial services that help customers in their daily lives and intensify connections with customers to maintain competitive advantages.

• Failure to securely protect personal information of EU citizens shall constitute violations of the EU's General Data Protection Regulation (GDPR) and penalties.

• Conduct customer satisfaction surveys to understand customer demands and plan corresponding improvement measures to improve customer satisfaction and build brand loyalty.

• Use big data analysis and diverse applications with personalized marketing triggering mechanisms for interactive marketing on digital channels or implement precision marketing in offline physical channels to build stronger relationships with customers.

B,C,D

Value Chain

Directimpact

Indirect impact

Impact onbusiness relations

2524

A

Information securityimprovement

GRI 203:Indirect economicimpactGRI 418:Customer privacy

Set topic / Informationsecurity protection

8.2: Achieve higher levels of productivity of economies through diversification, technological upgrading, and innovation, including through a focus on high value added and labor-intensive sectors. 9.b: Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for industrial diversification and value addition to commodities.

• Considerable use of FinTech applications (online loan platforms, new payment tools, and complex trading) challenges the company's information security capabilities.

• Losses of the Company or customers caused by information security issues involving insufficient internal security awareness and hacking attacks.

• The development of new technologies makes it more difficult to protect personal information, which affects customers' rights such as infringing on their privacy or losing their information.

• Reinforce information protection to reduce the Company's losses and protect customers' rights, thereby obtaining customer trust and higher customer satisfaction.

• Implement information security protection to effectively protect the Company's internal data, maintain normal operations of core systems, and facilitate sustainable development of the Company

B,C,D

Prevention ofmoney laundering,financial fraud andterrorism financing

GRI 419:SocioeconomicCompliance

16.4: Significantly reduce illicit financial and arms flows, and combat all forms of organized crime16.a: Build capacity at all levels to prevent violence and combat terrorism and crime.

• If the company fails to comply with operating procedures for the prevention of money laundering, financial fraud, and countering terrorism financing, it will suffer major penalties, which will damage the company's image and business development.

• The implementation of new regulations such as AML and CRS will substantially increase the company's legal costs.

• Implementing prevention of money laundering, financial fraud and terrorism financing facilitates international business expansion and sustainable management.

B,C,D

Climate changerisks andopportunities

GRI 203:Indirect economic impactGRI guidelines andfinancial servicessector disclosurestandards: Productportfolio

7.a: Promote investment in energy infrastructure and clean energy technology9.1: Develop high-quality, reliable, and sustainable infrastructure with post-disaster recovery to support economic development and welfare of mankind. Focus on providing affordable and fair channels for all9.2: Promote inclusive and sustainable industrialization and increase employment rate and GDP of industries9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes11.6: Reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.12.6: Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle13.2: Integrate climate change measures into national policies, strategies and planning13.3: Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning17.7: Promote the development, transfer, dissemination and diffusion of environmentally sound technologies to develop-ing countries on favorable terms, including on concessional and preferential terms, as mutually agreed

• Transaction records are kept to protect customers' rights. The financial service sector remains highly dependent on paper-based operations. Due to the rising awareness toward environmental protection, including sustainable forests, paper from farmed trees, reduction of air pollution and water pollution from paper-making, and frequent fierce forest fires and water shortages caused by climate change, the prices of paper products have risen, causing increases in the operating costs of the company.

• Environmental law amendments cause increase in operating cost due to strengthened control over industrial carbon emissions, which increases the credit risk of banks.

• Climate change results in an increase in extreme weather phenomena, which elevates the risks of asset damage or production delays due to flooding or drought, thus affecting the normal operation of industries and increasing the credit risk of banks.

• The finance industry plays an indispensable role in attaining the government's goal of reaching 20GW in installed capacity of solar power equipment by 2025. We can develop new opportunities for profitability in sustainable business opportunities in related industries.

• After being educated and trained on environmental issues, employees will become more sensitive to related risks and opportunities, which enables them to more effectively help the company to avert risks, seize opportunities, or engage with corporate customers in environmental sustainability and combating climate change.

B,C,D可負擔能源

Material Issue/Corresponding chapterin GRI ManagementDirection



Responsibleinvestment, duediligence, andsuppliermanagement

GRI 308:Supplier environmentalassessmentGRI 414:Supplier SocialAssessmentFS1: Policies withspecific environmentaland social componentsapplied to business linesFS2: Procedures forassessing and screeningenvironmental and social risksin business lines.FS3: Processes for monitoringclients’ implementation of andcompliance with environmentaland social requirements includedin agreements or transactions.

9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environ-mentally sound technologies and industrial processes12.6: Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle13.2: Integrate climate change measures into national policies, strategies and planning

• Loss of customers due to noncompliance with the Green Financing Review Principle or refusal to sign the CSR Declaration.

• Loss caused by investment in companies on the Do-Not-Invest List for CSR Violations.

• Some suppliers in Taiwan are monopolist or oligopolistic or are only agents and importers. The company cannot audit whether their production processes are environmentally friendly and low-carbon, and it is also difficult to negoti-ate with manufacturers.

• Products that are purchased in large varieties, large quantities, or small quantities make it difficult to establish a low-carbon supply chain similar to the manufacturing industry, thereby affecting Scope 3 greenhouse gas emissions.

• Suppliers who do not comply with environmental regulations or use harmful substances in their products may cause discomfort or health hazards to their peers and customers.

• Implement responsible investment and due diligence and credit policies to select customers who are willing to sustain their business and implement corporate social responsibility, thus reducing the occurrence of bad debts and increasing return on investment.

• The Company and its suppliers discuss issues related to climate change and environmental sustainability and share economic concepts to encourage supplier transformation and develop business opportunities for sustainability.

A,C E B

Value Chain

Directimpact

Indirect impact


2726

E

Ecological andenvironmentalsustainability

GRI 306:Effluents and wasteGRI 307:EnvironmentalCompliance

6.6: Protect water-related ecosystems6.b: Support and strengthen the participation of local communities to improve water and sanitation management11.6: Reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management12.1: Implement sustainable consumption and production12.2: Achieve the sustainable management and efficient use of natural resources12.4: Achieve the environmentally sound management of waste and reduce release to air, water, and soil12.5: Substantially reduce waste generation through prevention, reduction, recycling and reuse12.8: Ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature13.3. Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning

• Considerable increase in garbage and wastes will increase the operating cost of the company.

• Employees without proper education on the environment will impede the development of a sustainable environment and hinder the promotion of sustainability policies.

• After employees receive education and training on environmental protection and learn the main causes and consequences of various damage to the environment, they will dedicate themselves to environmental conservation tasks and realize the energy conservation and carbon emissions reduction goals set by the Company.

• If the company successfully transforms into the best green finance brand for customers, this image will positively influence our reputation and image at the international level.

B,C A,E

Digital financeinnovation andinclusiveness

FS8: Products andservices designed todeliver environmentalbenefits

8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all9.5: Upgrade the technological capabilities of industrial sectors, encourage innovation, and increase R&D expenditures9.b: Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities

• Integrated digital commerce and payment in online finance have changed customers' preferences. The increased cost in R&D expenditures has also impacted traditional financial products and businesses, and it is difficult to control the risks involved in digital operations, such as automatic account opening, loan extension, and loan repayment.

• The popularity of online and mobile devices has increased customers' acceptance of online banking or use of financial services with smart devices. Branches, ATMs, and other traditional channels are no longer the primary choices for customers' transactions with banks. We must adjust existing channels to respond to changes in customers' payment models and compete against non-bank competitors.

• In addition to strengthening employees' digital finance capacity in the digital finance era, we must also provide diverse digital equipment and grasp business opportunities in the e-commerce era. We shall actively initiate cross-sector collaboration and go beyond the over-the-counter service model of traditional banks.

• We shall actively keep abreast of financial innovation trends, develop digital, innovative, and inclusive services, expand additional fields of application, optimize digital channels, and increase business opportunities with customer groups that have embraced digitalization.

B,C,D




Low-carbonoperations andcircular economy

GRI 302:EnergyGRI 303:Water and effluent GRI 305:Emissions

6.3: Improve water quality, reduce release of toxic substances, and reduce the proportion of untreated wastewater6.4: Increase water-use efficiency across all industries and ensure sustainable withdrawals and supply of freshwater7.3: Double the global rate of improvement in energy efficiency8.4: Improve progressively global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation

• We predict that electricity prices will rise in the future as the power structure changes in Taiwan, resulting in an increase in the operating costs of the company. We also predict that the future electricity carbon emission coefficient will increase, which will prevent the Group from attaining carbon reduction results.

• The government is predicted to mandate users with a contractual capacity of 800 kW or more to use 10% of renewable energy. This type of energy is expensive and in short supply and might incur more operating cost or penalty risks to the company.

• If the government requires users with a contractual capacity of 800 kW or more to save 1% of electricity every year, the Group may be subject to government sanctions since it has already encountered bottlenecks before achieving this goal.

• Implementing energy conservation and carbon reduction facilitates saving operating costs.

• The Company will attract more investments by international investors if we become an internationally recognized E.S.G. company.

• The Company purchases eco-friendly products, supports vendors in develop-ing relevant technologies or acquiring environmental protection labels and certification to build a green sustainable society with our vendors.

B,C,D

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Human rightsprotection andgender equality

GRI 405:Diversity and equalopportunityGRI 406:Non-discriminationGRI 407:Freedom of associationand collectivebargaining

4.5: Ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations5.1: End all forms of discrimination against all women and girls everywhere5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making5.a: Give women equal rights to economic resources, as well as access to ownership and control over land and other forms of assets and financial services5.b: Enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women16.b: Promote and enforce non-discriminatory laws and policies for sustainable development

• If the Company does not create an equal employment environment and promote communication between labor and management, it may cause labor disputes and even standoffs. Failure to protect labor rights and promote gender equality will affect talent recruitment and retention and it may even impact the Company's business reputation and brand image and cause the Company to lose business.

B,C,D

• Including human rights protection into the Company's policies will help improve the Company's image and retention rate and it will also lower the turnover rate of new employees and talent training costs.

Professionaldevelopment andmanagement reform

GRI 401:EmploymentGRI 402:Labor/ManagementrelationsGRI 404:Training and education

4.5: Ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality16.6 Develop effective, accountable and transparent institu-tions at all levels

• The digital transformation in the finance industry requires the input of more cross-sector professional talent as well as the training and transformation of existing employees. Digital financial technologies are developing vigorously. If the Company does not cultivate FinTech experts and transform its business models in time, its business development and profits will be affected.

• Severe poaching of compliance officers and information security maintenance personnel in overseas branches has resulted in loss of middle-level execu-tives, causing talent management crisis in the company.

B,C,D

• The financial industry actively explores user demand and behavioral patterns in the IoT era. It incorporates talent that specialize in managing online communities, Internet, and AI sectors to help develop innovative financial services that meet more customer demand.

• The rapid development of FinTech gradually transforms branches into business consulting and financial marketing centers. Employees must learn about innovative services and technology applications to develop key winning strategies amid rapid changes in the industry.

Talent recruitmentand retention

GRI 401:EmploymentGRI 402:Labor / ManagementrelationsGRI 404:Training and education

4.4: Substantially increase the number of skilled youth and adults, including technical and vocational skills, for employ-ment, decent jobs and entrepreneurship4.5: Ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations8.5: Achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value8.6: Substantially reduce the proportion of youth not in employment, education, or training

• The rise of the FinTech and virtual banks has exacerbated the movement of talent in FinTech and increased hiring costs. Demand for talent changes drastically, and how companies build an environment to attract and retain talent will affect the sustainability of the Company.

B,C,D

• Establish comprehensive welfare measures and competitive compensation system to attract and retain key talent, reduce the gap in manpower caused by retirement waves, and build a solid foundation for sustainable develop-ment of the Company.

• Attracting talent from diverse backgrounds helps promote digital business model development and implement corporate sustainable development.

OccupationalSafety and Health

GRI 403:Occupationalhealth and safety

8.8: Protect labor rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants

• If the Company does not develop an occupational safety and health system by using a top-down approach, the probability of accidents or health hazards among employees will increase, causing an increase in the Company's personnel costs.

• Laws and regulations are becoming increasingly stringent. If the Company fails to comply with laws and regulations, it will be at risk of being punished by competent authorities and a negative impact to the Company's image.

B,C,D

• The Company maintains an occupationally safe and healthy corporate culture, in which employees' safety awareness is raised to pay more attention to health issues. Employees will be less likely to sustain injuries or illness, which decreases the personnel cost of the company and also protects the Compa-ny's intangible asset—its employees.

• Implementing management of occupational safety and health in accordance with law can contribute to a friendly working environment, secure the safety and health of employees, and enable employees to work more efficiently. It can also reduce occupational injury rates and reduce related personnel expenses.



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Implementationof inclusivefinance

GRI guidelines andfinancial servicessector disclosurestandardsFS14: Initiatives toimprove access tofinancial services fordisadvantaged people.FS15: Policies for thefair design and saleof financial productsand services

1.3: Implement appropriate national social protection systems and measures for all, including the lower levels of society, and achieve substantial coverage of the poor and the vulnerable 1.4: Ensure that all men and women, in particular the poor and the vulnerable, have equal access rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services (including microfinance)1.5: Build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social, and environmental disasters3.c: Substantially increase health financing8.3: Promote development-oriented policies that support productive activities, job creation, entrepre-neurship, creativity and innovation, and encourage formalization and growth of micro-, small- and medium-sized enterprises9.3: Increase the access of small-scale industrial and other enterprises, including affordable credit

• Provide inclusive financial products and services such as reverse mortgages. If the borrower survives the term of the borrowing period, the bank may not be able to dispose of the collateral to repay the principal and interest due to factors such as social responsibility. The time required by the heir to process the collateral may exceed 3 months. Overdue cases exceeding 3 months must be reported as overdue loans, which will affect the overall credit quality of the Bank.

• Foreign exchange control or financial policies implemented by least developed countries (LDCs) are unclear, and local network technology service projects are limited due to the lack of network infrastructure, thus economies of scale cannot be generated.

• Taiwan has become an aging society. In response to aging and low popula-tion growth, dividend products and wealth management will become mainstream in future market demand, and we will provide seniors with products such as retirement trusts and reverse mortgages "Comfort Loans." These measures will provide retirees with a source of income and expand diverse business opportunities.

• High savings rates of the citizenry ensure that insurance policies remain one of the main tools for investments by citizens. In addition, the conversion of labor pension to defined benefit plans also helps life insurance companies promote NTD asset products with pension security business opportunities.

• Use inclusive financial products and services and organize financial seminars to increase lending channels, insurance protection, and financial products for economically disadvantaged people and people living in remote areas, thereby expanding our customer base and enhancing the Company's image.

• The integration of core competencies of the financial industry and fulfillment of corporate social responsibilities will enhance risk control and management and contribute to the development of long-term professional economic and social risk management systems. It will also encourage corporate borrowers to pay attention to environmental protection and corporate social responsibili-ties, expand the influence in the financial sector, and take the lead in industrial and investment transformation.

B,C,D E

Charitableactivities andperformanceevaluation

GRI guidelines andfinancial services sectordisclosure standards:Local communitiesFS14: Initiatives toimprove access tofinancial services fordisadvantaged people.FS16: Initiatives toenhance financialliteracy by type ofbeneficiary

1.5: Build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters2.1: End hunger and ensure access for all people, in particular the poor and people in vulnerable situations, to safe, nutritious, and sufficient food all year round2.3: Double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, animal husbandry practitioners and fishermen, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment2.c: Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including that on food reserves, in order to help limit extreme food price volatility3.5: Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol4.5: Ensure equal access to all levels of education and vocation-al training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations4.7: Ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship, and appreciation of cultural diversity and of culture's contribution to sustainable development8.6: Substantially reduce the proportion of youth not in employ-ment, education, or training

• The benefits of charitable activities may be difficult to assess and sharehold-ers may question the effects of such activities on their interests.

• Most charitable activities require long-term continuous investment to reap benefits. We must learn to implement the most effective deployment of resources and integrate them with the core competencies of the finance industry to resolve social or economic issues. We must also conduct careful assessments.

• Invest in charitable activities and work with customers in cross-sector alliances. Integrate resources of different companies and jointly fulfill corporate social responsibilities. Integrate core competencies and help resolve social or economic issues to improve the Company's image, gain business revenue, and improve the Company's business performance.

A,B,C,D, E



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Explanation of Differences and Adjustments in Material Issues Compared to 20175

2018 Analysis ofMaterial Issues

Explanation of Changes in Material Topics Reason for Adjustment

Informationsecurityimprovement

Set Topic - Information securityprotection

Riskmanagement

Set topic - Risk management

The variations of online attacks change rapidly and pose significant challenges to the Group's information security strategies. The Group responds to information security threats and adopts risk-oriented information security protection mechanisms. In addition to setting up dedicated information security units and assigning corresponding levels of dedicated supervisors, we also established multiple standard operating procedures and protection measures and organized informa-tion security drills to improve the response and processing capacity for information security incidents.

The domestic and foreign financial environment changes rapidly. The Group has assigned dedicated risk management units to respond to various emerging risks and appointed external consultants to enhance risk awareness. We shall gradually adjust risk management strategies and establish related risk control mechanisms to improve the Group's overall competitiveness and risk-oriented defense capabilities.

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Note:

A. Suppliers

B. Front-end financial services for customers (product marketing and sales)

C. Financial transactions (loans and investments)

D. Back-end financial services for customers (digital financial services and backstage operations)

E. Old assets (replaced old machinery and equipment, waste disposal and resource recycling)

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Sustainable Development Goals

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Results and short/medium/long-term goals of sustainability practices of First Financial Holding Co., Ltd. in 2018

Medium/Long-Term Goals (2020-2024)Progress 2019 Goals2018 GoalsDescription

of MaterialityMaterial Issue

Businessperformanceandprofitability

Companies should pursue excellent business performance and profitability to maintain their operations and development, drive economic growth, and create employment opportunities.

Our pre-tax profit, return on equity (ROE), return on assets (ROA), cross-selling income, and earnings per share (EPS) all increased compared to 2017.

Our pre-tax profit, ROE, ROA cross-selling income, and EPS in 2018 increased 14.08%, 6.72%, 3.33%, 20.41%, and 12%, respectively, compared to 2017.

Our pre-tax profit, return on equity (ROE), return on assets (ROA), cross-selling income, and earnings per share (EPS) all increased compared to 2018.

Our expected financial targets are as follows:ROA≧1%ROE≧15%Our goal is for annual net profit growth to be no lower than the three-year average real growth rate of the domestic financial and insurance industries.

Corporategovernance

Corporate governance is the basis of sustainable corporate develop-ment and the core of corporate culture. It improves companies' long-term value and competitiveness.

Continue to conduct Board of Directors performance evaluations.Implement the Board diversity policy so that each gender accounts for at least 1/3 of directors.Actual attendance rate of all directors of the board averages above 80%.The 2018 Corporate Social Responsibility Report was verified by an independent certification body in accordance with AA1000 TPYE 2 and the ISAE3000.

The achievement of measurement indicators for the five aspects of Board performance in the 2018 evaluation was 94%, and the result was “Exceeds Standards”, which was reported in the 9th meeting of the 6th-term Board of Directors on February 21, 2019 for future reference.Members of the 6th-term Board of Directors have practical experience and expertise in banking, insurance, securities, law, accounting, finance, taxes, technology, and risk management. The number of female directors accounted for 47% (7 directors) of all directors as of the end of 2018.Actual attendance rate of all directors of the Board averaged 94.76% in 2018.The Company's 2018 Corporate Social Responsibility Report was verified by BSI and Deloitte in accordance with AA1000 TPYE 2 and ISAE3000.

Continue to conduct Board of Directors performance evaluations.Implement the Board diversity policy so that each gender accounts for at least 1/3 of directors and there is at least 1 female independent director.Actual attendance rate of all directors of the board averages above 80% and actual attendance rate of more than half of all directors reaches 80% or above.FFHC, First Bank, First Securities, and First Life Insurance have all established a corporate governance supervisor.First Life Insurance conducted IFRS 17 difference analysis and employee education and training.

Appoint external professional institutions, experts, or scholars to conduct an advanced Board performance evaluation in 2020, and establish remuneration to directors based on performance evaluation results.Add a provision on director and supervisor gender diversity in the Corporate Governance Best Practice Principles before the end of 2020.The number of seats for independent directors reaches at least 1/3 of all seats for directors in 2021 to strengthen the independence of the Board of Directors.First Life Insurance expects to complete its IFRS 17 policy, assessment basis and assumptions, financial impact analysis, system and actuarial model establishment, and financial statement preparation process before the end of 2023.

Riskmanagement

Due to the rapidly changing financial environment in Taiwan and overseas, implementing risk management and adhering to internal control rules can effective lower and prevent operational risks to facilitate sound operations.

Our expected financial targets are as follows:Double leverage ratio (DLR) < 120%Group CAR ≧ 110%First Bank achieved the management targets of 12.5%, 10.5% and 9.5% set for the CAR, Tier 1 and Common Stock Ratio, respectively at the end of 2018, and liquidity coverage ratio (LCR) net stable funding ratio (NSFR), and leverage ratio reached Basel Ⅲ or the competent authority's 90%, 100%, and 3% requirements.

Our DLR of 107.59% and Group CAR of 131.70% both reached the target for 2018.First Bank achieved the management targets of 13.57%, 11.58% and 10.96% set for the CAR, Tier 1 and Common Stock Ratio, respectively at the end of 2018, and LCR of 121.47%, NSFR of 131%, and leverage ratio of 6.32% reached Basel Ⅲ or the competent authority's requirements.

Our expected financial targets are as follows:DLR<120%Group CAR≧110%First Bank achieved the management targets of 12.75%, 10.75% and 9.5% set for the CAR, Tier 1 and Common Stock Ratio, respectively at the end of 2019, and LCR reached 100% of Basel Ⅲ requirements.In coordination with Basel Ⅲ, First Securities adjusted the new CAR system for securities firm in accordance with regulations of the compe-tent authority.First Life Insurance controls its equity and foreign exchange position according to risk. It optimizes data integration for bond investment products, and uses DV01 risk assessment to control its position measured at fair value.

Our expected financial targets are as follows:DLR<120%Group CAR≧110%The group completed an inventory of laws and regulations and compliance risk assessment (CRA) before the end of 2020.First Bank set the management targets of 13%, 11% and 9.5% for CAR, Tier 1 and Common Stock Ratio, respectively at the end of 2020, and to establish a risk-oriented internal audit system.First Securities will change the CAR calculation method from the advanced approach to the Delta-Plus approach before the end of 2024, and complete system implementation.First Life Insurance will integrate stock trading before the end of 2021, and upgrade value-at-risk assessment to the parameter method, historical simulation method, and Monte Carlo simulation to improve the model's predictive ability.

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Ethicalcorporatemanagement

Ethical manage-ment is an important value of corporate culture. Companies should incorpo-rate ethical management into their operational management strategy to prevent unethical conduct from affecting their corporate image and sustainabili-ty.

Establish the “FFHC Code of Conduct for Directors, Supervisors, Managers, and Employees” with signing rate reaching 100%.Implement the ethical management policy and provide education and training to 100% of employees.Convene a Ethical Management Committee meeting at least once a year and revise the Company's "Code of Conduct for Ethical Management" to strengthen related regulations on the reporting system.

The Chinese version “FFHC Code of Conduct for Directors, Supervisors, Managers, and Employees” was signed by 100% of employees of domestic subsidiaries, and the English version was signed by 100% of overseas employees.The Group provided a total of 162,264.55 hours of ethical management related training to all employees worldwide in 2018; the courses had a cumulative 61,549 participants with training rate reaching 100%.Convene one Ethical Management Committee meeting, revise the contents and approval level of the reporting system set forth in the "Code of Conduct for Ethical Management”, and the Board of Directors of each company reviews and approves the revision to their reporting system. The Group received 17 external reports and 9 internal reports in 2018, in which 2 reports were found to be unethical conduct after investigation. Each company reports improve-ment measures and personnel punishments to the Board of Directors, and also submits a report to the Ethical Management Committee for future reference.

The Company shall comply with related policies of competent authorities, the United Nations Convention against Corruption (UNCAC) and the Corporate Bribery Control Act (Draft) and other anti-corruption and anti-bribery policies to implement the Company's ethical management policies and include related systems, such as internal controls and internal audits.

Protectionof customerrights andinterestsandimprovingsatisfactionrate

Implement consumer protection and protection of customer rights to strengthen the connection with customers and maintain a competitive advantage.

Adjust internal operating regula-tions in coordination with the "EU General Data Protection Regula-tion" (GDPR).Appoint a data protection officer (DPO) in response to the GDPR.Prohibit international transmission in response to the GDPR principles.Establish a personal information leakage reporting mechanism in coordination with the GDPR.Cultivate a corporate culture which values financial consumer protec-tion and conduct regular promotion of the "Principles for Fair Treatment of Customers in the Financial Services Industry" to the staff, and set the training rate target of 100%.Strengthen personal information control measures and training programs. The target training completion rate is 100%.First Life Insurance carried out renewal of the "BS 10012 - Personal Information Management Systems” certification.The number of customer complaints to be lower than 570.Conduct self-evaluations of the "Principles for Fair Treatment of Customers in the Financial Services Industry” and report evaluation results to the Board of Directors of each company.

Revise the Personal Data Management Policy and establish the Guidelines for the Management of EU Resident Personal Information and Notices for the Management of EU Resident Personal Information.The Compliance Officer of the London Branch also serves as the DPO.Signed the SCC and carried out international transmission under the SCC regulatory framework.Established a personal information violation incident response, reporting, and prevention mechanisms.Companies in the Group organized training related to the "Principles for Fair Treatment of Customers in the Financial Services Industry". A total of 7,944 participants completed the training and the training rate was 100%;Companies in the Group organized training related to the "Personal Information Protection Act". A total of 7,968 participants completed the training and the training rate was 100%.First Life Insurance completed the renewal of the “BS 10012 - Personal Information Management Systems” certification.Received a total of 431 complaints in 2018, down 139 cases compared to 2017.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance all completed their 2018 Fair Customer Treatment evaluation, and submitted results to their respective Board of Directors. First Securities Investment Trust is not required to submit evaluation results to the FSC, but the remaining three subsidiaries all submitted reports to the FSC within the specified period.

Continue to conduct self-evaluations of the "Principles for Fair Treatment of Customers in the Financial Services Industry” and report evaluation results to the Board of Directors to protect customers’ rights and interests.Continue to organize sales and marketing training programs for various products and courses on penalties imposed on other banks, the Financial Consumers Protection Act, Personal Information Protection Act, Principles for Fair Treatment of Customers, and KYC operations. The training completion rate was 100%.First Life Insurance carries out the renewal of the “BS 10012 - Personal Information Management Systems” certification.Improve operation procedure based on customer complaints with the goal to reduce the number of customer complaints compared to the number of the previous year.

Informationsecurityimprovement

Facing new forms of cyber attacks that appear each day, the only way to effective-ly protect the Company and customers’ interests and achieve sustainable development is through the constant improvement of information security systems and manage-ment strategies.

Irregularly conduct vulnerability scanning, penetration tests, and social engineering exercises for all employees, and set the goal for failure rate of the 4 test items in the exercises to be lower than 6-10%.First Bank, First Securities, and First Life Insurance carried out the renewal of the ISO27001 Informa-tion Security Management System certification.Include network system security management, information security defenses, and emergency response mechanisms of the Company and its subsidiaries as key audit items.

FFHC, First Bank, First Securities, First Securities Investment Trust, and First Life Insurance have all conducted vulnerability scanning, penetration tests, and social engineering exercises for all employees, and the failure rate of the 4 test items was 0-3.8%, lower than the target of 6-10%.First Bank, First Securities, and First Life Insurance all completed the renewal of the ISO27001 Information Security Management System certification.The 2018 Audit Plan has included network system security management, information security defenses, and emergency response mechanisms of the Company and its subsidiaries as key audit items, and audits were completed according to the plan.

A local language version of the “FFHC Code of Conduct for Directors, Supervisors, Managers, and Employees” is provided to overseas business locations, and signing rate of local employees is 100%.Convene a Ethical Management Committee meeting at least once a year, and revise the FFHC Code of Conduct for Directors, Supervi-sors, and Managers in coordination with the Declaration of Financial Institution Responsible Persons established by the FSC, so as to manage responsible persons concurrently holding positions at non-financial businesses and implement corporate governance principles.

Conduct self-evaluations of the "Principles for Fair Treatment of Customers in the Financial Services Industry” and report evaluation results to the Board of Directors.Provide sales-oriented training and education programs to sales personnel and assistant supervisors on a periodic basis to reinforce knowledge and awareness of sales guidelines and rules for various products and business areas.Strengthen awareness towards know your customer (KYC) procedures and implement the procedures to prevent inappropriate sales.First Life Insurance obtained the new version “BS 10012 - Personal Information Management Systems (PIMS)” certification to strengthen personal information protection for customers.Implement prompt processing mechanisms for customer complaints. Each company shall be required to complete customer reconciliation and report the handling of customer complaints within the given deadline. Customer complaints shall also be analyzed by business type and customer feedback forwarded to the relevant units as reference for further improvements.The number of customer complaints was lower than the target for 2018.

Irregularly conduct vulnerability scanning, penetration tests, include important websites in the scope of anti-phishing services, commission an RSA to monitor and manage the computer operating environ-ment, conduct social engineering exercises for all employees, and lower the target failure rate.First Bank, First Securities, and First Life Insurance carried out the renewal of ISO27001:2013 certification.An IPS is deployed on the Internet, IDS systems are deployed at important server network segments, and external information security service providers are commissioned to provide 24-hour information security monitoring services.First Securities complete a firewall for web applications to strengthen the security of online transactions.

Irregularly conduct vulnerability scanning, penetra-tion tests, include all websites into the Group's scope of anti-phishing services (RSA), conduct social engineering exercises for all employees, and sequentially lower the target failure rate each year.First Bank, First Securities, and First Life Insurance continue to carry out the renewal of the ISO27001 Information Security Management System certifica-tion each year.


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Preventionof moneylaundering,financialfraud andterrorismfinancing

The implemen-tation of new regulations such as AML and CRS has substantially increase the company's compliance costs. The implementation of regulations to prevent money laundering, financial fraud, and terrorism financing will lower opera-tional risk, benefit international business expansion, and increase the scale of operations.

First Bank, First Securities, First Securities Investment Trust, and First Life Insurance commissioned an accountant to audit their AML/CFT assurance projects.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance are required to incorporate the NRA into their IRA reports, and revise related risk prevention plans.The AML/CFT supervisors, dedicated person-nel, and supervisors of business units of First Bank, First Securities, First Securities Investment Trust, and First Life Insurance are required to complete the number of AML/CFT training hours required by the law.Planned anti-money laundering and counter-terrorist financing training programs with case studies to improve related capabili-ties and implementation effectiveness; training rate reached 100%.The Wolfberg AML Questionnaire of First Bank is disclosed in the Corporate Social Responsi-bility Report and on First Bank's website to increase the transparency of AML information.Establish a high risk customer information sharing mechanism within the group.

First Bank, First Securities, First Securities Investment Trust, and First Life Insurance commissioned PWC audit their AML/CFT assurance projects, and gain assurance reports from PWC with the conclusion that it “presents fairly, in all material aspects”.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance have completed comprehensive IRA reports, which use the NRA to identify 8 types of crimes in Taiwan with very high risk of money laundering. The top three types of crimes in the STRs of First Bank are fraud, securities fraud, and tax crime, which is consistent with the statistics compiled by the competent authority in 2018 on suspicious transactions.The AML/CFT supervisors, dedicated personnel, and supervisors of business units of First Bank, First Securities, First Securities Investment Trust, and First Life Insurance all completed the number of AML/CFT training hours required by the law.FFHC, First Bank, First Securities, First Securities Investment Trust, and First Life Insurance, and First Financial Assets Management offered a total of 939.55 hours of AML/CFT training for their employees; the training courses had a cumulative total of 30,331 participants and training rate reached 100% in 2018.The Wolfberg AML Questionnaire signed by heads of overseas business units and compliance units is disclosed on First Bank's website, and a link to the questionnaire is provided in the Company’s 2018 CSR Report.A high risk customer information sharing mechanism has been established within the group, including reporting timing, time limit, list update operating procedures, subsequent due diligence, and risk control measures.

The first financial institution in Taiwan to be put on the Leadership A List of the CDP. Rated as level B in the CDP questionnaire for water security.Total emissions allowed (6,372 metric tons CO2e, 75% reduction) and emission intensity allowed (11.38 kg/m2, 83% reduction) in 2050 were calculated using current methods of Science Based Targets (SBT), and data collection, risk carbon matrix, opportunity carbon matrix, and estimates of related financial data were completed for general indicators and additional indicators of TCFD.Increase investment in green bonds by the equivalent of about NT$1.925 billion.The approved green financing included NT$108.247 billion in loans with NT$57.908 billion in balance of loans.Approved NT$550 million in green consumption loans.Approved new Industrial Innovation Plan Loans in the amount of NT$62.32 billion with NT$446.2 billion in balance of loans.As of the end of December 2018, the number of Leezen Cards in circulation was 49,581 and Living Green Cards was 29,843.Six new urban renewal financing projects and two financing projects for the reconstruction of dangerous and old buildings.

First Bank, First Securities, First Securities Investment Trust, and First Life Insurance commissioned an accountant to audit their AML/CFT assurance projects.Implemented and launched the AML system for overseas branches of First Bank, and plans were made to commission a third party to carry out comprehensive system verification.One hundred percent of all heads and personnel of AML units have obtained domestic or international certificates, and they continue to expand their specialized knowledge.

The green energy fund that raises funds and manages the construc-tion of solar power plants will complete the construction of solar power plants with installed capacity of 19 MW by the end of 2019, which is expected to reduce carbon emission by 1.9 metric tons of CO2e.52,000 Leezen Co-branded Cards in circulation.32,000 Living Green Cards in circulation.60,000 Forest Yilan Affinity Cards in circulation.Approved NT$110 billion in loans to green industries and green enterprises with the balance of loans at NT$60 billion.The balance of green consumption loans reaches NT$350 million.Approved new Industrial Innovation Plan Loans for the seven major industries in the amount of NT$60 billion with NT$410 billion in balance of loans.New urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings total 6 projects or above.

One hundred percent of all AML personnel at First Bank, First Securities, First Securities Investment Trust, and First Life Insurance obtain domestic or international certificates before the end of 2020, and continue to expand their specialized knowledge.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance commission an accountant to audit their AML/CFT assurance projects every year.

Climatechange risksandopportunities

Extreme weather is a risk to the global economy, but it also brings business opportunities. Companies must incorpo-rate the risks and opportuni-ties of climate change into their business decisions, identify and manage risks, and seize opportunities to achieve successful transformation for a sustain-able economy.

Fill out the CDP questionnaires for climate change and water security.FFHC shall adopt calculations and evaluations for Science Based Targets (SBT), the Task Force on Climate-Related Financial Disclosures (TCFD), scenario simulations and analyses, and education programs.Increased investments in green bonds by NT$500 million to help companies make green capital expenditures and raise their awareness of environmental protection.Approve green financing (including green industries and green companies) in the amount of NT$100 billion to companies with NT$55 billion in balance of loans.Implement the "green consumption loan" project with an annual loan credit line of NT$300 million to provide customers with funding for the purchase of green energy or energy-efficient products.Cooperate with government policy for advancing seven innovative industries including the "Asia Silicon Valley", "smart machinery", "green energy technologies", "biomedical technologies", "defense", "new agriculture" and "circular economy" by approving NT$60 billion in preferential loans for key innovative industries with NT$395 billion in the balance of loans.42,800 Leezen Co-branded Cards in circula-tion. 20,000 Living Green Cards in circulation.New urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings total 6 projects or above.

The green energy fund that raises funds and manages the construction of solar power plants will complete the construction of solar power plants with installed capacity of 27MW by the end of 2020, which is expected to reduce carbon emission by about 2.7 metric tons of CO2e each year.The number of Leezen Co-branded Cards in circulation reaches 60,000 cards at the end of 2024.The number of Living Green Cards in circula-tion reaches 50,000 cards at the end of 2024.The number of Forest Yilan Affinity Cards in circulation reaches 100,000 cards at the end of 2024.Cumulative amount of loans to green industries and green enterprises reaches NT$120 billion at the end of 2020 with the balance of loans at NT$63 billion.The balance of green consumption loans reaches NT$400 million in 2020.The balance of seven major Industrial Innovation Plan Loans reaches NT$430 billion at the end of 2024.Urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings between 2020 and 2024 total 30 projects or above.

全球夥伴



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Responsibleinvestment,duediligence,and suppliermanagement

As funding suppliers, financial institutions should integrate its core competen-cies and fulfill the social responsibility of the financial industry in the financial supply chain in order to achieve sustainable development of the environ-ment, economy, and society.

The investigation and review of 100% corporate loans should adopt the “Green Financing Review Principles” to assess and reduce the impact of the borrower, loan, and investee on environmental and social sustainability.Domestic business units must collect the CSR Declaration of all corporate credit customers and guide customers to fully implement CSR.The "Do-Not-Invest List for CSR Violations” is reviewed and revised every two weeks, and is provided through the group's securities investment platform for reference by FFHC, First Bank, First Securities, First Securities Investment Trust, First Life Insurance and First Investment Consulting.At least 32% of the included stocks in the domestic exchange-traded stock pools managed by First Securities Investment Trust must submit CSR reports.Establish the supplier management policy, 100% of suppliers sign the "Declaration on Human Rights and Environmental Sustainability Clauses,” overseas locations fill out the “Human Rights and Environmental Sustainability Evaluation,” and 100% of lessees have committed to using 45% of green construction materials during renovation.Periodically audit suppliers to determine if they violate environmental protection or labor laws, or if an occupational accident occurred. If yes, the supplier is requested to provide an improvement plan, otherwise their contract is terminated and the supplier is added to the monitoring list.

In 2018, we reviewed 37,565 projects (35,075 domestic projects and 2,490 overseas projects) according to the Green Financing Review Principles; these projects accounted for 100% of all financing projects. 3,729 projects were conditionally approved due to borrowers being involved in environmental pollution, threatened social welfare, violated human rights, or other risk issues, and 199 loan applications were rejected.In 2018, domestic business units requested a CSR Declaration from 16,659 corporate credit customers and overseas branches filled out a total of 2,913 CSR Assessment Forms; coverage reached 99.68%.The "Do-Not-Invest List for CSR Violations” is reviewed and revised every two weeks. As of the end of 2018, there were 16 stocks that are prohibited from investment. First Securities Investment Trust excluded investments in 3 stocks due to this list.55.80% of domestic stocks that the 6 domestic exchange-traded stock funds of First Securities Investment Trust invested in submitted CSR reports.Established the Supplier Management Guide-lines as the policy and guiding principles for companies in the group to manage suppliers; 100% of suppliers (1,443 companies) signed the Declaration on Human Rights and Environmen-tal Sustainability Clauses. Overseas locations completed "Human Rights and Environmental Sustainability Evaluations" for 522 vendors. 100% of lessees (121) made a commitment to use 45% of green construction materials during renova-tions.Visited 5 suppliers in 2018. None of the suppliers had any occupational accidents or violated environmental protection or labor laws.

Implement the Green Financing Review Principles in the investiga-tion and review of corporate loans and corporate bonds, focus on customers’ protection of the environment and society in the assessment, and guide customers to comprehensively fulfill their CSR; overseas branches completed 3,150 CSR Assessment Forms.At least 35% of the stocks in domestic exchange-traded stock pools of First Securities Investment Trust shall have submitted CSR reports.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance attend 80% of shareholders’ meetings of public companies they invested in, so as to urge the companies they invest in to strengthen corporate governance and fulfill the responsibility of institutional investors towards corporate governance.100% of suppliers sign the "Declaration on Human Rights and Environmental Sustainability Clauses,” overseas locations fill out the “Human Rights and Environmental Sustainability Evaluation,” and 100% of lessees have committed to using 45% of green construction materials during renovation.Periodically audit suppliers to determine if they violate environmen-tal protection or labor laws, or if an occupational accident occurred. If yes, the supplier is requested to provide an improvement plan, otherwise their contract is terminated and the supplier is added to the monitoring list.

The Green Financing Review Principles are applied in the investigation and review of corporate loans and corporate bonds to assess the impact of corporate customers on environment and social sustainability. Overseas branches complete a cumulative total of 6,400 CSR Assessment Forms by the end of 2024.At least 50% of the stocks in domestic exchange-traded stock pools of First Securities Investment Trust shall have submitted CSR reports.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance attend 90% of 2020 shareholders’ meetings of public companies they are invested in, so as to urge the companies they invest in to strengthen corporate governance and fulfill the responsibility of institutional investors towards corporate governance.100% of suppliers sign the "Declaration on Human Rights and Environmental Sustainability Clauses,” overseas locations fill out the “Human Rights and Environmental Sustainability Evaluation,” and 100% of lessees have committed to using at least 45% of green construction materials during renovation.Complete the comprehensive review of the supplier database by 2024, and check if suppliers were involved in environmental pollution, violated labor laws and regulations, or harmed social welfare, in which case an explanation is required, or the company is excluded as a potential partner.

Low-carbonoperationsand circulareconomy

To keep the increase in average temperature to below 2℃above pre-industrial levels, all companies have the obligation to reduce the emissions of greenhouse gases and reduce energy consumption.

The group’s Scope 1 (gasoline, diesel, natural gas, gas) and Scope 2 (electrici-ty) emissions decreased 227 metric tons compared to 2017.The group’s total water consumption is lower than 197.44 million liters.Obtain Green Building Mark for 5 of the company's existing commercial buildings.Install solar power generation systems on the rooftops of 2 buildings owned by the Group to use clean energy.100% of business locations obtain the ISO 14064-1 Greenhouse Gas Inventory System certification.Subsidiaries obtain the ISO 14064-1 Other Indirect Emissions Inventory (Indirect GHG Emissions During Transportation - Business Travels) certification.Total carbon emissions from business travels (point to point between overseas airports) lower than 420 metric tons CO2e.Adopt the "ISO 50001 - Energy Manage-ment System certification" for all First Bank's domestic branches.Added the item “ISO 14064-1 Other Indirect Emission Inventory”.

The group’s Scope 1 (gasoline, diesel, natural gas, gas) and Scope 2 (electricity) emissions decreased 405 metric tons compared to 2017.The group’s total water consumption was 194.46 million liters.The Group refurbished 5 existing commercial buildings and obtained the "Diamond-class" Green Building Mark. The Group has refurbished 22 existing buildings and obtained "Diamond-class" Green Building Mark since 2012.The Group has installed rooftop solar power generation systems on the rooftop of 4 buildings owned by the Group and at 8 business locations as of the end of 2018.100% of business locations implemented the ISO 14064-1 Greenhouse Gas Inventory System and obtained certification.First Bank, First Securities, First Securities Investment Trust, First Life Insurance and First Financial AMC all implemented "ISO14064-1 Other Indirect Emissions Inventory (Indirect GHG Emissions During Transportation - Business Travels)" and obtained certification. Total carbon emissions from business travels (point to point between overseas airports) was 418 metric tons CO2e.All 188 domestic branches of First Bank implemented the "ISO 50001 - Energy Manage-ment System” and obtained certification.Added the item “ISO 14064-1 Other Indirect Emission Inventory (Operational Waste Disposal)” and found that emission was 109 metric tons CO2e.

Reduce the Group's Scope 1 emission by 1% and Scope 2 emission by 0.5% compared to 2018.The group’s total water consumption is lower than 202.50 million liters.Use 50,000 kWh of renewed energy.Refurbish a total 26 of the company's existing commercial buildings and obtain Diamond-class Green Building Mark.Install solar power generation systems on the rooftop of 10 business locations.Added the item “ISO 14064-1 Other Indirect Emission Inventory”.100% of subsidiaries implemented "ISO14001 Environmental Management System”.Total carbon emissions from business travels (point to point between overseas airports) lower than 500 metric tons CO2e (Note).

Note: We plan to establish at least 7 new overseas business locations between 2019 and 2024, and therefore set a higher target for total carbon emission from business travels compared to 2018.

Reduce the Group's Scope 1 emission by 5% and Scope 2 emission by 3% in 2024 compared to 2017.The group’s total water consumption is lower than 202.50 million liters.Use 80,000 kWh of renewable energy in 2024.Refurbish a cumulative total of 37 of the company's existing commercial buildings and obtain the Diamond-class Green Building Mark in 2024. Install solar power generation systems on the rooftop of 20 business locations by 2024.100% of domestic business locations implement the "ISO 50001 Energy Management System" and "ISO 14001 Environmental Management System” and obtain certifications.Further increase items of “ISO 14064-1 Other Indirect Emission Inventory” in 2024. Total carbon emissions from business travels (point to point between overseas airports) lower than 550 metric tons CO2e in 2024 (Note).Note: We plan to establish at least 7 new overseas business locations between 2019 and 2024, and therefore set a higher target for total carbon emission from business travels compared to 2019.

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Ecologicalandenvironmentalsustainability

Technological advancements improve the quality of life but cause severe environmental and ecological issues. We can only protect the environment we live in by uniting the powers of all people to fight together for a sustainable environment.

Implement the "Green Volunteer Sustain-ability Program", organize 35 green volunteer activities, and promote environ-mental sustainability and ecological conservation.Implement controls for domestic waste produced by company headquarters. Set a cap of 64.2 tons on the amount of the entire group.Promote waste sorting and compile statistics on the volume of recycled resources. The total amount of recycled resources of all company headquarters shall exceed 23.2 metric tons.Donate 133 recycled personal computers and laptop computers.The four employees that were certified as environmental educators designed environmental education courses and lesson plans in preparation for the application for an environmental education facility.Arranged environmental education training courses and on average provide employ-ees with 2 hours of training each year.Assist groups for the underprivileged and social welfare institutions in replacing lights to LED lights.

Completed a total of 48 Green Volunteer events in 2018. The events had 1,601 volunteers, benefited 4,635 people, and purchased 2,220 kg of organic vegetables.The amount of domestic waste produced by group company headquarters was 59.9 metric tons.The total amount of recycled resources of all company headquarters was 42.33 metric tons.Donate 141 recycled personal computers and laptop computers.Completed three sets of environmental education teaching plans for adults, 5-6 graders, and parent-children, and organized 7 promotion events.In 2018, 35 sessions of environmental protection-related training were held and attended by 9,061 people. Each person on average received 2 hours or more of training.Assisted Daan Center for Individuals with Developmental Disabilities in replacing 265 LED lights, reducing carbon emission by 16.62 metric tons of CO2e.

A total of 40 green volunteer events will be held in 2019.Implement controls for domestic waste produced by company headquarters. Set a cap of 64.2 tons on the amount of the entire group.Promote and compile statistics on the volume of recycled resources. The total amount of recycled resources of all company headquar-ters shall exceed 23.18 metric tons.A total of 1,100 donated recycled personal computers and laptop computers was achieved.Achieve the design and trial implementation of 3 environmental education plans and host at least 3 environmental education and promotion activities.Arranged environmental education courses and on average provide employees with 2 hours of courses each year.Assist 1 social welfare institution in replacing lighting equipment with more efficient LED lights to create a sustainable homeland with low-carbon emissions.

Organize a cumulative total of 175 green volunteer events by 2024.Donate a total of 1,300 recycled personal computers and laptop computers by 2024.Obtain environmental education site certification.Include international case studies on the allevia-tion, response, and early warning measures for climate change into environmental education courses, organize environmental education and promotion activities for different age groups, and achieve the design of 5 environmental education plans and cultivate employees into experienced environmental education lecturers.Support eco-friendly cultivation by small farmers and purchase a cumulative total of 12,000 kg of organic produce by 2024.Assist 5 social welfare institution in replacing lighting equipment with more efficient LED lights by 2024 to create a sustainable homeland with low-carbon emissions.

Digitalfinanceinnovationandinclusiveness

The mobile payment amount was NT$14.8 billion in 2017 and grew to NT$47.8 billion in 2018. The use of digital channels for financial services has become the mainstream, and the complete-ness of the digital financial system makes financial services available in remote areas and reduce the digital divide. This is an industrial trend and also the financial industry's social responsibility.

Encourage customers to use electronic channels and achieve a utilization rate of 78% for electronic channels.Actively apply for invention and new utility model patents for finance technologies and acquire 36 patents for finance technologies.Continue to optimize system functions, e-speed loan provides customers with convenient online loan application services, and the goal is for 5,000 online applications in a year.Set a target for binding mobile payment to 45,000 First Bank credit cards.Application of Big Data analysis technolo-gy to establish cluster model and forecast model ,complete 10 precision marketing projects for target customer groups; complete 10 interactive digital marketing projects.Set a target for reaching 80,000 users in "smart customer services".

Achieved a utilization rate of 78.07% for electronic channels.A total of 49 FinTech patents have been acquired as of the end of 2018 to expedite the development of digital finance technologies.A total of 6,295 online applications were made using e-speed loan in 2018.132,646 credit cards have been bound to mobile payment.Complete 17 precision marketing projects for target customer groups; complete 31 interactive digital marketing projects.Users have used the "smart customer services" 122,986 times.

The target utilization rate of electronic channels is 80%.Obtained a total of 45 FinTech patents.The target number of online loan applications and mortgage applications using e-speed loan is 5,500.Set a target for binding mobile payment to 135,000 First Bank credit cards.Application of Big Data analysis technology to establish cluster model and forecast model ,complete 60 precision marketing projects for target customer groups.Set a target for reaching 120,000 users in "smart customer services".

Increase utilization rate of electronic channels to 87% before 2024.Obtained a total of 65 FinTech patents by 2020.The target number of online loan applications and mortgage applications is 6,000 loans each year by 2020.Application of Big Data analysis technology to establish cluster model and forecast model ,complete 90 precision marketing projects for target customer groups.

Humanrightsprotectionand genderequality

Labor rights and gender equality are employees' legal rights and the Company's responsibilities toward employees and society. They are the basis for sustainable social develop-ment.

100% of employees receive human rights protection training.The goal for salary ratio between male and female employees is 100%:100%.100% of security guards complete the Company’s human rights protection training courses.More than 83% of employees are a member of the union.Ensure open communications between the employer and employees and periodically convene employer-employee meeting.

Employees received human rights protection training (both physical and online) 18,730 person-times for a total of 20,938 hours; employee participation in training was 100%.The salary ratio of male to female employees was 100%:96% in 2017, and reached 100%:100% in 2018, reducing the salary gap.Security guards completed 12 human rights policy training sessions in 2018. Each session was 0.5 hours on average, and training completion reached 100%.Around 84.33% of First Bank employees are covered by the collective bargaining agreement through their union membership, up from the 83% in 2017.First Bank, First Securities, First Securities Investment Trust, and First Life Insurance convened 12, 4, 4, and 5 employer-employee meetings, respectively to improve labor relations and promote employer-employee cooperation.

Plan human rights protection related training courses to promote the Act of Gender Equality in Employment, sexual harassment prevention, and labor human rights protection; employee participa-tion in training was 100%.The goal for salary ratio between male and female employees is 100%:100%.Ensure open communications between the employer and employees and periodically convene employer-employee meeting.Implement the Prevention of Illegal Infringement at Work Plan to ensure the safety and physical and mental health of employees.

Organize human rights protection and gender equality policy related training courses with the target for 100% of employees to receive training.The goal for salary ratio between male and female employees is 100%:100%.Increase the number of employees who are covered by the collective bargaining agreement through their union membership.Ensure open communications between the employer and employees and periodically convene employer-employee meeting.Implement the Prevention of Illegal Infringement at Work Plan and sequentially lower the percentage of employees at risk each year.



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Professionaldevelopmentandmanagementreform

Talent is the key to winning in corporate competi-tions. Strengthening training systems to cultivate interdisci-plinary talent through innovation and reforms will enhance the competencies of all employees and guide the transfor-mation, growth, and sustainable development of companies.

Companies in the Group conduct the Employee Commitment Survey each year, and the overall commitment target is 75% or above.Strengthen employee education and training with a goal of 40 training hours or more per employee.Organize annual overseas talent selection and training projects and train at least 20 overseas manage-ment associates.The training assessment project is established based on the Kirkpat-rick Model to determine the effectiveness of training.

The overall professionalism score for group employees was 82.39%, with male employees achieving a score of 84.76% and female employees 80.64%; the questionnaire recovery ratio was 95.14%.Each employee received an average of 57.89 hours of training in 2018.Cultivated 26 overseas management associates in coordination with global business expansion.Establish indicators for Level 1-5 in the training program to assess training effectiveness.

Continue to conduct the Employee Commitment Survey with the goal for a recovery ratio of 91% and overall commitment exceeding 80%.Enhance employee professionalism and provide employees with an average of 50 hours of training.Organize annual overseas talent selection and training projects and train at least 20 overseas management associates.

Continue to conduct the Employee Commitment Survey with the goal for a recovery ratio of 92% and overall commitment exceeding 81%.Employees on average received 55 hours of training or more.One hundred percent of all AML officers obtain domestic or international certificates by 2024

OccupationalSafety andHealth

Creating a safe work environment, strengthening employee health management measures, and organizing health promotion activities will improve employee health and enhance corporate competi-tiveness.

Implement the "ISO 45001 Safety and Health Management System" and obtain certification.Continue to implement the "Human-Factor Hazard Prevention Plan” to increase the number of employees that make improvement and "Abnormal Workload-Triggered Diseases Prevention Plan" to lower the number of high, medium, and low risk employees, strengthening the management of employees' health.Continue to implement the "Maternal Employee Health Protection Plan" and "Female Night Shift Rotation Worker Safety Plan".Expand "low-dose lung CT scan" examinations to employees below 55 years of age.Occupational injury rate lower than 1%.

The head office obtained the "ISO 45001 Safety and Health Management System" certification, which covers a total of 1,432 regular employees, temporary employees, maintenance workers, security guards, and janitors.According to survey statistics of the Human-Fac-tor Hazard Prevention Plan, 66 employees were suspected of having human-factor hazards. Medical personnel looked into the cause and provided suitable improvement recommenda-tions, and 64 employees made improvements, up 7 employees compared with 2017. The Abnormal Workload-Triggered Diseases Prevention Plan was implemented and identified 8 high risk employees and 163 medium and low risk employees, which were all lower compared to 2017 (10 high risk employees and 213 medium and low risk employees.Of the 145 pregnant employees, 100 participat-ed in the Maternal Employee Health Protection Plan and filled out the Health Risk Assessment Form for Pregnant Employees; 11 employees returned to their posts after giving birth and filled out the Health Risk Assessment Form for Postpartum Employees. Medical personnel conducted assessments and verified risks and hazards.A total of 3,717 employees were examined in 2017-2018, and 12 employees were diagnosed with lung cancer.Occupational injury rate was 0.9% in 2018.

The target absence rate is lower than 1.25% and target occupation-al injury rate is lower than 1% under our efforts to reduce absence due to occupational injury and illness.Continue to implement the "Human-Factor Hazard Prevention Plan” to increase the number of employees that make improvement and "Abnormal Workload-Triggered Diseases Prevention Plan" to lower the number of high, medium, and low risk employees, strengthen-ing the management of employees' health.Continue to implement the "Maternal Employee Health Protection Plan" and "Female Night Shift Rotation Worker Safety Plan".Continue to implement the ISO 45001 Safety and Health Manage-ment System to improve occupational safety and health manage-ment.

First Bank will arrange doctors to provide on-site health service at units with 50 or more employees once a year starting in 2022, and nursing person-nel will provide on-site health service once a month.Continue to carry out tasks for "ISO 45001 Safety and Health Management System" certification.Continue to implement the "Human-Factor Hazard Prevention Plan” to increase the number of employees that make improvement and "Abnormal Workload-Triggered Diseases Prevention Plan" to lower the number of high, medium, and low risk employees, strengthening the management of employees' health.Continue to implement the "Maternal Employee Health Protection Plan" and "Female Night Shift Rotation Worker Safety Plan".

Talentrecruitmentandretention

Employees are the core of the financial service industry. Establishing complete welfare measures, competitive salary system, and fair and transparent promotion channels will attract outstanding talent and reduce talent loss.

First Bank on average raises salaries by 2% or more through promotions.Actively retain outstanding talent and achieve a retention rate of new employees at First Bank of 70% or above.The percentage of employees with disabilities reaches 1% and above.First Bank established an Employee Savings and Stock Ownership Trust to attract and retain talent through future benefits.Provide a competitive salary system and continue to be selected as a constituent stock of Taiwan Employment Creation Index 99 and Taiwan High Compensation 100 Index.

Besides raising salaries by 2.3% through promotions, all employees received a raise (about 3%) in 2018. The total salary adjustment in the past 2 years was 8%, out-performing the average market salary adjustment of 6.0%The retention rate of new employees at First Bank reached 91.47%.Hired 99 employees with disabilities, accounting for 1.07% of our workforce, exceeding the standard set by the competent authority.First Bank established an Employee Savings and Stock Ownership Trust, and 7,015 employees participated in the trust with employee participa-tion rate reaching 95%.FFHC was selected as a constituent stock of Taiwan Employment Creation Index 99 for 9 consecutive years and Taiwan High Compensa-tion 100 Index for 5 consecutive years.

First Bank on average raises salaries by 2% or more through promotions.Retention rate of new employees at First Bank reaches 70% and above.The percentage of employees with disabilities reaches 1% and above.Continue to be selected as a constituent stock of Taiwan Employ-ment Creation Index 99 and Taiwan High Compensation 100 Index.

First Bank on average raises salaries by 2% or more through promotions each year, and annual salaries are not lower than P60.Retention rate of new employees at First Bank reaches 70% and above.The percentage of employees with disabilities reaches 1% and above.Continue to be selected as a constituent stock of Taiwan Employment Creation Index 99 and Taiwan High Compensation 100 Index.



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Charitableactivities andperformanceevaluation

Work with customers in cross-sector alliances. Integrate social resources, integrate core competencies, and jointly resolve social or economic issues to improve the Company's image, gain business revenue, and improve the Company's business performance.

Implement the "First Turnaround Action School" and "First Cultural Education Train”, care for the underprivileged, and organize 50 loving volunteers activities.Organize concerts and provide art space free of charge to support domestic art heritage. Organize 3 large concerts, 6 NTU Hospital concerts, and 12 art exhibitions in one year.Continue to organize training programs for table tennis teams. Cultivate youth athletes and promote their participation in international competitions to gain experience. Organize table tennis and tennis championships.

Continued to implement the Disadvantaged Students Adoption Plan provide 452 underprivileged students at Ankeng, Zhongzheng, and Erchong Elementary School with education assistance courses. Sponsored the “Financial Service Industry Education Foundation” NT$2.5 million and helped 1,600 students from poor and disadvantaged backgrounds complete their studies. First Bank Cultural and Educational Founda-tion donated the 1‰ reward from domestic consumption amount using First Bank Glory+World Cards totaling NT$302,657 to the "School Education Savings Account" platform of the Ministry of Education, which in turn helped 237 disadvantaged students. A total of 66 Loving Volunteer events were held in 2018, attracting 1,287 volunteers and benefiting 10,811 people.Thirty-seven large concerts have been held since 2006. Besides inviting new singers and musicians to perform, organizations for the underprivileged and social welfare were also invited, attracting over 103,400 people to attend the events. The first and second floors of the FFHC headquarters building was transformed into an art space in 2011. The space allows local artists to exhibit their art for free each month. A total of 93 art and cultural exhibitions have been held and attracted over 93,000 visitors.Besides training First Bank table tennis team, we sponsored the table tennis teams of 8 colleges, junior high schools, and elementary schools in 2018. Four table tennis players were selected into the national team. First Bank table tennis team won a total of 3 gold, 5 silver, and 9 bronze medals and won NT$2.336 million in prize money in Taiwan and overseas. We have organized nationwide table tennis championships for 10 consecutive years and worked for 9 consecutive years together with Maxxis Group, a business customer, to hold the "First Holding Maxxis Cup National Tennis Team Tourna-ment".

We implemented the Disadvantaged Students Adoption Plan to extend the reach of our charitable efforts into schools so that students can concentrate on their studies. We also use employees' finance expertise to venture onto campuses or social welfare institutions and organize finance seminars for children, promoting finance and wealth manage-ment knowledge. We aim to organize 70 loving volunteer events in 2019.We aim to organize 20 green life carnivals, music festivals, and art exhibitions in 2019.We aim to organize 4 major sports competitions and table tennis camps in 2019.

Organize a cumulative total of 375 loving volunteer events by 2024, work together with customers and non-profit organizations in integrating the group's resources, expand our influence in social welfare, provide underprivi-leged children with remedial teaching, and help underprivileged children focus on their studies; make donations to a total of 1,400 students.Continue to organize domestic arts and cultural events and a cumulative total of 40 concerts to provide new singers and musicians with a stage for performance, and organize a cumulative total of 55 arts and cultural exhibitions to support domestic art talents.Support the development of domestic sports, organize a cumulative total of 20 sports events, sponsor table tennis teams of 8 schools, and cultivate 5 athletes with excellent potential by 2024.

Implementationof inclusivefinance

The integration of core competencies of the financial industry provides poor and disadvan-taged groups with equal rights to financial services. It is the finance industry's social responsibility to create a friendly environment for financial consumers.

Provided 100 "Loans for Young Entrepreneurs and Start-ups” and Loans for Minor Entrepreneurs, and the Small and Medium Enterprise Credit Guarantee Fund provided NT$110 billion in loans.Added 20 new financing projects for industries related to aging society and the growing number of cancer patients, such as medical biotechnology or long-term care industries.The balance of senior citizens’ retirement trust and disabled people's care trust reached NT$2 billion.Promoted the reverse mortgage Comfort Loan and added 20 new loan accounts.Offered 3 insurance products related to the trends of aging society and low birth rates.Installed 10 accessible ATMs and added accessible website ATM services to provide friendly financial services.New urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings total 6 projects or above.

Provided 153 "Loans for Young Entrepreneurs and Start-ups” and Loans for Minor Entrepreneurs, and the Small and Medium Enterprise Credit Guarantee Fund provided NT$145.6 billion in loans; ranked number one in SME loans for 9 consecutive years.Added 21 new loan projects for medical biotechnol-ogy and long-term care industries with a total amount of NT$2.29 billion.The balance of retirement trusts for the elderly and disabled people care trusts was NT$4.451 billion, and received second place in the Asset Trust Evaluation of Trust Businesses for the Senior and the Disabled.Approved 26 “Comfort Loans” or reverse mortgage loans with a total amount of NT$186 million.Offered 3 insurance products related to the trends of aging society and low birth rates, sold 555 effective policies with an insurance amount of NT$518.6 million.Installed 18 accessible ATMs and established accessible website ATM services. Obtained Conformance Level AA of the Web Content Accessibility Guidelines 2.0 and provide persons with disabilities with basic, equal, reasonable, and convenient financial services.Added six new urban renewal financing projects and two financing projects for the reconstruction of dangerous and old buildings in 2018.

Provided 100 "Loans for Young Entrepreneurs and Start-ups,” “Micro Loans for Female Entrepreneurs” and “Loans for Minor Entrepreneurs,” and the Small and Medium Enterprise Credit Guarantee Fund provided NT$110 billion in loans with the balance of loans at NT$75 billion.Provide 30 loans guaranteed by the Overseas Credit Guarantee Fund (Taiwan) and cumulative loan amount reached US$7,000,000.Added 20 new loan projects for medical biotechnology and long-term care industries.Provided 22 new “Comfort Loans” (reverse mortgage).The balance of senior citizens’ retirement trust and disabled people's care trust reaches NT$5 billion.Provided 150 micro insurance policies for the economically disadvan-taged to gain basic coverage at relatively low premiums.Install 10 accessible ATMs each year to provide friendlier services.New urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings total 6 projects or above.

Balance of "Loans for Young Entrepreneurs and Start-ups,” “Micro Loans for Female Entrepreneurs” and “Loans for Minor Entrepreneurs” estimated at NT$500 million; an estimated NT$115 billion in loans with the balance of loans at NT$75.5 billion provided by the Small and Medium Enterprise Credit Guarantee Fund.Approve at least 120 loans guaranteed by the Overseas Credit Guarantee Fund (Taiwan) with cumulative loan amount reaching US$35,600,000.Implement at least 100 loan projects for medical biotechnology and long-term care industries.Provide 25 new “Comfort Loans” (reverse mortgage) in 2020.Provide 900 micro-insurance policies.Install 10 new accessible ATMs each year to provide friendlier services.Urban renewal financing projects and financing projects for the reconstruction of dangerous and old buildings between 2020 and 2024 are expected to total 30 projects or above.



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SUSTAINABLEGOVERNANCE

Business performance and profitabilityMaterial TopicGRI 201: Economic performance

Management guidelinesPoliciesThe theme of the group's business strategies is "deeper synergistic effects, shared value".

CommitmentAs the growth in global economy rises in the horizon, the Group actively grasps opportunities for expansion in overseas markets and uncovers new momentum for growth in terms of business units' customer group penetration, cross-border integration, and innovative services.

Goals• With regard to the strategy of "deeper

synergistic effects," big data and artificial intelligence applications are combined for precision marketing, focusing on the core businesses of business entities and product penetration, which will further increase the integration value of various channels and facilitate profit sharing.

• As we build a new engine for the profitability of the Group, we integrate core businesses with CSR for creating value for society, creating a win-win-win economical, environment, and societal situation. These actions achieve the Group's goal of creating shared value."

DutiesWe continue to expand the business sectors and focus on the development of core businesses, concentrate on the integration of products and channels, integrate artificial intelligence for optimized operation efficiency, and include performance indicators of all businesses into evaluations to achieve growth in both the Group's scale of assets and profitability.

ResourcesThe subsidiary First Bank is the Group's main business entity. Group members include securi-ties, SITC, life insurance, financial asset manage-ment, venture capital and consulting, and leasing. The financial businesses other than banking satisfy customers' comprehensive product requirements in their life cycle.

Complaints mechanism• Hold domestic investor conferences and

announce the video file on the Company website for investors to view. Also, communi-cate with investors at the invitation of securities brokers during their investor conferences.

• Telephone and e-mail of the spokesperson and investor relations department available from the company website's investor services section.

• Hosting of press conferences and issuing of press releases.

• Publication of corporate governance, investor conference presentations, financial information, and related investors affairs in both English and Chinese on the company website.

Specific management practices• Implementation of measures related to market

penetration, digital applications and innova-tion, innovative products, and fulfilling corpo-rate social responsibilities.

• Implementation of local management ideals and leverage differences in local markets of overseas branches to promote unique businesses for each branch.

Assessment mechanisms• Achievement rate and growth of annual

earnings budgets and joint marketing target achievement rate and growth rate.

• Number of FinTech patents obtained.• Implementation of innovative financial products

and services

Results• In 2018, the Company's consolidated assets

amounted to NT$2.94 trillion with consolidated net income of NT$60.249 billion, and net earnings after tax of NT$17.332 billion, growing by 18.5% and 12.3% from 2017.

• In 2018, obtained a total of 11 FinTech invention patents and 38 utility model patents with goal attainment reaching 136%.

• The investment trust subsidiary raised the "AI Global Precision Medicine Fund"; the consult-ing subsidiary raised the green energy fund, and the bank subsidiary issued the "First Bank Forest Yilan Affinity Card" to provide customers with more diverse financial services.

• Profits from First Bank overseas branches (including OBU and subsidiaries in the United States) accounted for 45.32% in 2018.

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I Business performance and profitabilityThe subsidiary First Bank is the Group's main business entity. Group members include securities, SITC, life insurance, financial asset management, venture capital and consulting, and leasing. The Group's performance in 2018 was spectacular in all business sectors and we continue to expand overseas businesses toward our goal of becoming a "regional financial institution in Asia". We dedicated efforts on developing FinTech, new payment methods, artificial intelligence, big data research, and other core businesses and used smart services, channel transformation, cross-sec-tor collaboration, and digital platforms to develop diverse smart services, improve channel value, innovate FinTech applications, and strengthen infrastructure and the digital operations platform ton continue our transformation of business models. We consolidated our leasing operations in Mainland China in an effort to enhance the operational and management efficiency of our leasing business and in response to the latest supervisory trends. By integrating resources within the group, we are able to strengthen the risk tolerance and consistency of management goals for our leasing businesses in Mainland China.

We delivered another year of strong performance with growth across all our businesses, underpinned by the strength of our banking operations. The net income from financial products grew by 46.37%, which contributed to the most spectacular growth in profitability. Profits from First Bank overseas branches (including OBU and subsidiary branches in the United States) accounted for 45.32% of profits of the Bank and the Bank's SME lending market share ranked first among all banks for 9 years in a row. We ended 2018 with NT$2.94 trillion in total assets. Our consolidated net revenue increased 18.54% to NT$60.249 billion from the previous year. Our net profits surpassed the NT$15 billion mark for the fourth straight year, reaching NT$17.332 billion, or NT$1.40 per share.

As we pursue excellence in all areas of our operations, we are also committed to sustainable development by position-ing ourselves as the “top brand of green finance”. In addition to continuing to promote innovative green finance products and services to provide the funding necessary for green industries to develop and transform and thus support the transition to a low-carbon economy, we have also launched a smart customer service to meet the digital financial needs of the younger generation. Our efforts to be a responsible corporate citizen have received international recogni-tion, and our inclusion for many years straight in the DJSI Emerging Markets Index is the best testimony to our achieve-ments. The British CDP honored us with the pioneered A-grade financial institution for climate change survey in January 2019, which marked our group as the first ever winner of service sector in Taiwan.

Market Penetration

• The Bank continues to expand overseas businesses and received the FSC's authorization for setting up branches and offices in the United States, Europe, and Southeast Asia.

• Transnational platform boosts synergies from domestic and overseas sites

Digital Transformation

• The Bank received the Best Cloud Applica-tion in Taiwan Award from the Asian Banker

•First Bank's FinTech patents

•Electronic marketing for securities/invest-ment trust/life insurance channels

New Products

• FSITC raised the "AI Global Precision Medicine Fund"

• First Consulting raised green energy funds

• First Bank issued the "Forest Yilan Affinity Card"

Ethical corporatemanagement

• Included as a constituent stock in Dow Jones Sustain-ability Index (DJSI) Emerging Markets for the first time

• Included as constitu-ent stock in the "FTSE4Good Emerging Index" on the London Stock Exchange

• The only financial institution in Taiwan to attain Leadership A List recognition

1-1 Operating regions and countriesFFHC Headquarters is located at No. 30, Sec. 1, Chongqing S. Rd., Taipei City. The group has a total of 9,227 employees. Our operations are located across four continents: the Americas, Asia, Europe, and the Oceania. The subsidiary First Bank established 15 operations in Southeast Asia (including the Least Developed Countries such as Myanmar, Cambodia, and Laos) and it was the first Taiwanese bank to begin operations in Cambodia. In 2019, we plan to add two branches in Houston and the subsidiary in the United States, add the Frankfurt Branch, add the Jakarta Office and two additional branches under the Phnom Penh Branch in Cambodia. We shall respond to economic trends in all regions across the world and disperse overseas operation risks to build a close-knit global financial service network.

China/HongKong/Macao

SoutheastAsia

Bank: Tokyo Branch

Bank: London Branch

Bank: Guam Branch, Brisbane Branch

NortheastAsia

Bank: Hong Kong Branch, Macao Branch, Shanghai Branch, Shanghai Pilot FTZ Sub-branch, Chengdu

Branch, Xiamen Branch

Securities: First Worldsec (Hong Kong)

Leasing: FCB Lease (Chengdu), FCB International Leasing (Suzhou), FCB Lease (Xiamen)

Bank: Singapore Branch, Ho Chi Minh City Branch, Hanoi City Branch, Bangkok Office, Yangon Office, Phnom Penh Branch and its Chorm Chaov Sub-branch, Olympic Sub-branch, Chamkar Mon Sub-branch, Tuol Kouk Sub-Branch, Mean Chey Sub-Branch, Chraoy Chongvar Sub-Branch, Siem Reap Sub-Branch and Vientiane Branch (Laos), Manila Branch (Philippines)

Bank x 36 Securities x 1 Leasing x 3 ＝ Total sites40

Americas

Asia

Europe

Oceania

Bank: Los Angeles branch, New York branch, Vancouver branch, and Toronto Branch; First Commercial Bank (U.S.A.) branch and its 7 sub-branches including the Alhambra Branch, City of Industry Branch, Silicon Valley Branch, Irvine Branch, Arcadia Branch, Fremont Branch and Chino Hills Branch(opened in April 2019).

6

11

3

15

1

1

1

2

Our Group's overseas presence

5352

First Bank is the second largest bank in Taiwan by branch count and has 188 business locations and 479 automatic teller machines (ATM) throughout Taiwan.Our operations cover both urban and rural regions. We have established offices and ATM in remote regions such as Nantou, Pingtung, Hualien, Taitung and Penghu that can provide the full spectrum of financial services to rural residents at any time.

First Securities has 23 subsidiaries and 130 securities counters throughout Taiwan. In remote regions such as Penghu, Nantou and Pingtung, we have a total of 6 offices for providing "personalized" investment services to the general public. We also provide online, audio, and other diverse securities transaction systems to provide investors with more abundant and diversified transaction environment and services.

First Financial Holding takes reference from the impact on society, human rights and environment according to the risk graph before setting up operational bases, developing new business types, procuring, planning operational strategies, developing human resources, and conducting other business operations. All bases of operations communicate with local communities and we invest resources such as equity investment, business activities, donations, and volunteer charity events for organizations that solve social issues through business models to facilitate sustainable development of the communities.

For more information on First Bank's domestic and overseas branches, please refer to the Bank's website

1-2 Financial performanceIn 2018, our company's paid-in capital was NT$123.386 billion with consolidated assets of NT$2.94 trillion, consolidated

net income of NT$60.249 billion, net profit of NT$17.332 billion, and EPS of NT$1.40.

＊1：Profit or loss after tax includes non-controlling interests.＊2：Due to the issuing of dividends in 2018, past weighted average for ordinary shares outstanding for earnings per share was revised.＊3：The financial data and ratios were all prepared in accordance with IFRS.＊4：Grandson companies not included in the consolidated financial company include First Financial AMC B.V.I., and FCB Leasing B.V.I.

Item

Operatingability

Profitability

Unit: Thousands NTD

2016

2,541,156,335

2,349,127,413

192,028,922

45,090,598

17,284,157

21,778,169

14,279,891

1,567.84

0.69

9.10

1.42

38.33

2017

2,634,058,605

2,442,007,638

192,050,967

50,827,112

15,432,391

21,347,661

13,760,687

1,516.33

0.60

8.04

1.25

30.36

2018

Assets

Total liabilities

Shareholders’ equity

Net revenue

Profit or loss after tax

Operating expenses

Return On Assets(%)

Return on Ordinary Shareholders' Equity (%)

Earnings per share ( NTD )

Profit ratio (%)

Net revenue bybusiness category

Wholesale/corporate banking/

investment

48.32%

Wealth management2.67%Asset management1.08%

Retail 47.24%

Project financing0.685%

Profit performance trends in the past five years -ROA、ROE、EPS

0.61% 0.66% 0.69%0.60% 0.62%

R O A2014 2015 2016 2017 2018

1.52 1.551.45

1.27

1.40

E P S2014 2015 2016 2017 2018

9.53% 9.32% 9.10%

8.04%

8.58%

R O E2014 2015 2016 2017 2018

＊：ROA and ROE on the above graph are base on the audited after-tax profits;it does not includs EPS

1.6

1.5

1.4

1.3

1.2

1.1

0

2,935,204,4192,729,901,347

205,303,07260,248,74617,332,19922,906,43314,886,242

1,606.540.628.581.40

28.77

Employee welfare expenses(including salary expenses)

Average employee welfare expenses

5554

We also promote the establishment of universal values for domestic corporate sustainability/corporate social responsi-bilities to build a CSR culture. Subsidiary First Bank joined the Business Council for Sustainable Development of Taiwan (BCSD Taiwan) with Chairman serving as the director. This was used to promote and implement CSR concepts, as well as environmental protection and energy management. As there is a clear lack of understanding on sustainability concepts and execution talent among local companies, we sponsored the establishment of the Center for Corporate Sustainability. Chairperson serves an advising director and is actively involved in helping the Center with promoting corporate sustainability education and hosting international forums.

FFHC and its subsidiaries spent a total of NT$284.52 million on the following industries/corporate sustainability groups and organizations in 2018, and donated NT$231 million to the Small and Medium Enterprise Credit Guarantee Fund of Taiwan.

1-4 Participation in local and overseas organizations Our company and subsidiaries have joined the corresponding industry associations for banking, securities, insurance, trusts, investment trusts, investment consulting, venture capital, and leasing to promote the development of the domestic financial industry. Chairperson is also the executive director of the Bankers Association of the Republic of China and The Bankers Association of Taipei. Chairperson of subsidiary First Securities, is also a director of Taiwan Securities Association. We are actively engaging in related affairs to promote the healthy development of the overall financial industry.

To achieve the goals of corporate sustainable development, the Company responds to the government's strategy of enhancing corporate sustainable development and follows standards of the international community. We passed the review of the Asian Corporate Governance Association (ACGA) in 2018 and became a Premium Member of the ACGA. We obtain new knowledge of international corporate governance development from the research reports, seminars related to governance issues, and annual forum activities organized by ACGA.

1-3 Credit ratingAccording to the credit ratings issued by credit rating agencies such as Taiwan Ratings, S&P and Moody's for 2018, our Group enjoys a strong competitive advantage in the financial industry and is a model of sound corporate governance. In the financial market, we have demonstrated very solid corporate values, a distributed customer base along with sound financial structure, risk control and excellent asset quality. The results from the long and short-term credit ratings as well as future outlook are shown below:

＊：Calculated in accordance with Article 3, Paragraph 1, Subparagraph 31 of the Taiwan Stock Exchange Corporation RulesGoverning Information Filing by Companies with TWSE Listed Securities and Offshore Fund Institutions with TWSE Listed OffshoreExchange-Traded Fund.

Share dividend/Tax amountItem 2016

Cash dividends per share (NTD)

Dividends per share (NTD)

Income tax paid (Thousand NTD)

Retained earnings (Thousand NTD)

1.2

0.2

2,135,777

39,753,479

2017

0.9

0.1

2,515,764

38,019,583

2018

10.1

4,012,29142,446,725

Information on salary of full-time non-supervisory employeesItem 2017

Number of people

Average salary

7,699

1,114

2018

7,585

1,235

Percentage of change

(1.5)

10.9

Unit: Person; Thousands NTD

＊：Credit rating definitions can be found at the Moody’s (https://www.moodys.com), S&P (http://www.standardandpoors.com)and Taiwan Ratings (http://www.taiwanratings.com) websites.

First Financial Holding

Short-term

Taiwan Ratings

S & P

Moody’s

twA-1+

A-2

-

Long-term

twAA-

BBB

A3

Outlook

Stable

Stable

Stable

Rating date

2018.9.26

2018.9.26

2019.2.11

CompanyName

Industry/Corporate sustainabilitynon-government organization

CompanyName

Industry/Corporate sustainabilitynon-government organization

FirstFinancialHolding

• Bankers Association of the Republic of China• The Bankers Association of Taipei• Center for Corporate Sustainability• A．SDGs• Asian Corporate Governance. Association (ACGA)

First Bank

First Bank

First LifeInsurance

FirstSecurities

FirstSecuritiesInvestmentTrust

FirstVentureCapital

• Bankers Association of the Republic of China• Trust Association of R.O.C.• Securities Investment Trust and Consulting Association of the R.O.C.• Taiwan Securities Association• R.O.C. Bills Finance Association• The Insurance Agency Association of the Republic of China• The Bankers Association of Taipei • Asian Pacific Bankers Council• Asian Bankers Association• ICC Commercial Crime Services• European Bank for Reconstruction and Development (EBRD)• Taiwan Russia Association• Taiwan India Business Association• Taiwan Contact Center Development Association• Turnaround Management Association• Small and Medium Enterprise Guarantee Fund• Agricultural Credit Guarantee Fund• Chinese National Association of Industry and Commerce, Taiwan• Joint Credit Information Center• Taiwan Economic Association• Factors Chain International• National Association of Small & Medium Enterprises, R.O.C.• FS-ISAC• Financial Planning Association of Taiwan• Chinese International Economic Cooperation Association• National Credit Card Center• Overseas Credit Guarantee Fund (Taiwan)• Chinese Financial Research Association• Business Council for Sustainable Development of Taiwan (BCSD-Taiwan)

• Taiwan Energy Service Association (TESA)• International Swap and Derivatives Association (ISDA)• Digital Transformation Association• Taiwan Internet and E-Commerce Association (TiEA)• Taipei Interbank Money Center, Bankers Association of the Republic of China• Bankers’ Association for Finance and Trade (U.S.A)• Accounting Research and Development Foundation• Electronic Payment Committee, Bankers Association of the Republic of China• The Institute of Internal Auditors, R.O.C.

• The Life Insurance Association of the Republic of China• Life Office Management Association (LOMA)• The Actuarial Institute of the Republic of China• Taipei Bar Association• Sociey of Actuaries• American Acadamy of Actuaries• Insurance Anti-Fraud Institute• Taiwan Insurance Institute• Association of Certified Fraud Examiner• Information Systems Audit and Control Association (ISACA)• The Institute of Internal Auditors, R.O.C.

• Taiwan Securities Association• Chinese National Futures Association• Securities Investment Trust and Consulting Association of the R.O.C.

• Securities Investment Trust and Consulting Association of the R.O.C.• Pension Fund Association, R.O.C.

• Taiwan Venture Capital Association

5756

Corporate governanceMaterial TopicGRI 405: Employment diversity and equal opportunity

Management guidelines

PoliciesThe Company established the Articles of Incorporation, Corporate Governance Best Practice Principles, Rules of Procedure for Board of Directors Meetings and organiza-tional regulations of functional committees to establish a good corporate governance system, an effective corporate governance framework, protect shareholder equity, and strengthen the functions of the Board of Directors to incorporate corporate governance into the corporate culture.

Commitment• Directors possess the knowledge, skills, and experi-

ence necessary for performing their duties, are highly self-disciplined, and exercise their authority in accordance with the law, Company regulations, or decisions of the shareholders' meeting.

• We will ensure that shareholders are made fully aware of, and can participate in and decide on important matters of the Company and will treat them fairly.

GoalsEstablish an effective corporate governance structure; improve the Board of Directors' efficiency; increase information transparency.

Duties• Protect shareholder equity, respect stakeholders,

implement legal compliance, and strengthen internal management.

• Establish a tax governance strategy and implement tax governance to fulfill social responsibilities as a taxpayer.

ResourcesAppoint a senior manager to serve as the Corporate Governance Officer to take charge of related affairs of board meetings and shareholders' meetings, produce meeting minutes for board meetings and shareholders' meetings, assist Directors in taking office and continuing education, provide data required by Directors to perform their duties, assist Directors in legal compliance, evaluate the performance of the Board of Directors, take charge of Directors' liability insurance, and other corporate governance affairs as the highest ranking officer.

Specific management practicesThe TWSE Corporate Governance Evaluation indicators and international development trends will also serve as the highest guiding principles for further strengthening the corporate governance system to improve corporate governance standards.

Assessment mechanisms• TWSE Corporate Governance Evaluation• The performance appraisal result of the board of

directors• Implementation of Board member diversity.• Compliance of information disclosure with related

laws and regulations.• Implementation of tax governance mechanisms.

Results• According to the results of the 5th Corporate

Governance Evaluation (2018), the Company was rated as a top 5% listed company and top 10% (top 4) in the finance and insurance category. Based on the results of the evaluation, the Company shall continue to issue recommenda-tions to corporate shareholders to adjust the composition of the Board of Directors and increase the number of seats for Independent Directors to strengthen the independence of the Board of Directors. All improvement measures for internal control have been completed for the penalty imposed by the competent authority for reporting and disclosure operations in accordance with Article 46 of the Financial Holding Company Act.

• Selected as a constituent stock in the "TWSE Corporate Governace 100 Index" for the 4th consecutive year.

• The achievement rate of the five main areas in the 2018 Board Performance Evaluation was 94% and the board performance is considered "exceeds standards."

• There are currently 7 female directors (including independent directors) and they account for 47% of all Board seats.

• In 2018, We did not receive any penalties for violating regulations on information reporting, material information, and press conferences of listed companies.

• The 2017 tax management implementation status was reported to the Board of Directors."

Complaints mechanism• Publication of corporate governance, investor

conference presentations, financial information, and related investors affairs in both English and Chinese on the company website.

• Telephone and e-mail of the spokesperson and investor relations department available from the company website's investor services section.

• Participate in seminars, symposiums, public hearings, competitions and evaluations.

• Compliance with the relevant laws and policies of the competent authorities and cooperate with their monitoring and inspections."

II Corporate governanceWe adopted the candidate nomination and cumulative voting system in the election of the Company's 6th-term Directors in 2018. We also disclosed in detail the nomination and review standards and operating procedures to ensure the transparency of the nomination and election process and implement the board diversity policy. In compliance with the implementation schedule of the "Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing", we compiled the Company's tax governance report based on the income, profit before tax, and payment of business income tax of our operations across the world in 2017 in response to international development trends for tax governance and increase the transparency of taxation information.

To further improve the operating performance of the Board of Directors and make the results of the performance evaluation more objective, the Company appointed an external professional institution to carry out its 2017 Board Performance Evaluation. The results were reported during the 33rd meeting of the 5th Board of Directors on February 23, 2018. We also modified the indicators in the Company's "Board Performance Evaluation Questionnaire" based on the recommendations for improvements and the Corporate Governance Evaluation indicators. We changed the metrics of the questionnaire from "yes/no" options to tiered options to improve the effectiveness of the Board Performance Evaluation and the use of the results. The achievement rate of the five main areas in the 2018 Board Performance Evaluation was 94% and the board performance is considered "exceeds standards" and results were reported to the 9th meeting of the 6th-term Board of Directors on February 21, 2019.

In addition to revising the Company's Articles of Incorporation and related regulations in accordance with the amend-ments of the Company Act, the Company, First Bank, and First Securities have appointed Corporate Governance Officers and adjusted the roles of related departments in accordance with related regulations of the competent authori-ty in 2019. First Life Insurance will complete the appointment of the Corporate Governance Officer before the end of June 2019 to strengthen the corporate governance structure.

FFHC Corporate Governance Structure

Ethical Management

Shareholders’ Meeting

President Office of the President

Vice PresidentCorporate Governance Officer

EVPChief Compliance

Board of Directors

Chairman

Audit Committee

Remuneration Committee

CSR Committee

Strategy Development

Risk Management

Business Decisions

IT Development

Marketing Integration Chief Auditor

Adm

inistration

Division

Risk M

ana

gem

entD

ivision

BusinessD

evelopm

ent Division

Strateg

ic Planning

Division

Com

plia

nce and

Leg

al D

ivision

Aud

itD

ivision

Information

Technology D

ivision

AccountingSection

Business Administration Section

MarketingIntegration Section

AdministrationSection

CorporateGovernance Section

5958

2-1 Shareholder Structure and CommunicationDuring the FFHC 2018 Shareholders ' Meeting , we presented shareholders with an overview of our business in 2017 , final accounts , employee Board remuneration , and transfer of shares of First Life Insurance . Voting was also conduct ed on the 2017 annual report and consolidated financial report , distribution of profits , issuing of new shares for capita ization of profits , we elected the 6th term Directors and waived non compete clauses for Directors . The discussions and votes were carried out one by one for voting on agenda items. Shareholders questions were answered on the spot . We engaged in proactive shareholder communications through quarterly institutional investor meetings in Taiwan and by attending the institutional investor events held in Singapore by Deutsche Bank as well as the Non deal Roadshow (NDR) organized by Macquarie Securities in Hong Kong

2-2 Board Structure and OperationThe Company elected the 6th term Directors based on the candidate nomination system in 2018 . Shareholders holding at least 1% of all outstanding shares nominated candidates that meet qualifications for Directors and Independent Directors and have related professional skills for the Company s operations or experience in the finance industry. We analyzed the requirements for the Company's future development and the Group's emerging risks and nominated Independent Directors with professional knowledge of laws, finance, technology, and risk management to improvement in the quality of decision-making of the Board of Directors and implement the board diversity policy. The shareholders’ meeting elected 15 Directors (12 Directors and 3 Independent Directors). The average term of Directors was 3.16 years and the average age was 58.

Our company’s shareholder structure as of April 23 , 2019 is shown in the chart below

7.66%15.47%

35.91%26.32%

11.49%

3.15%

＊：The Company s number of shares of com mon stock outstanding is 12,338,557,223 the Company did not issue any preferredstock ).

Directors’age distribution

51~60 years=9 people

60%

61~70 years=4 people

26%

over the age of 71=1 people

7%41~50 years

=1 people

7%

Directors'gender composition

Women=7 people

47%

Men=8 people

53%

Board diversity policy

Composition

Overallrequiredabilities forthe Board ofDirectors

• Directors who serve concurrently as managerial officers of the Company or subsidiaries shall not exceed one third of the Board of Directors. The board shall have least one female member and Directors of any gender should account for at least one third of the Directors.

• Board members must experience in related industries such as banking, insurance, securities, and investment as well as professional skills in legal, accountanay, finance, tax, technology, or risk management.

• Shall not exclude any candidate based on any ground such as race, nationality or sex."

• Ability to make operational judgments.• Ability to conduct accounting and financial analysis.• Ability to manage business activities (including ability to manage subsidiaries).• Ability to handle crisis management.• Knowledge of the industry.• An understanding of international markets.• Leadership.• Ability to make policy decisions.• Risk management knowledge and skills."

Please refer to the Company's website on the implementation status of thediversity of board members

The professional backgrounds of the Company's 6th-term Directors are as follows:

1 2 4 53 6 7 8 90

Risk Management

Technology

Tax

Finance

Accountancy

Legal

Securities

Insurance

Banking

Governmentinstitutions

Governmentfund

Foreign institutionsand individuals

Financial institutions

Other institutionsinvestors

Individuals

Title Name Academic backgroundInitial

Appoint-ment

Experience in working with Global Industry Classifica-

tion Standard (CIGS)

Current role in financial holding company and

other companies

6160

Tsan-C

hang

Liao

(MO

F representa

tive)C

hien-Hao Lin

(MO

F representa

tive)Li-Shieu Tsa

i(M

OF rep

resentative)

Doris W

ang

(MO

F representa

tive)Shing-Rong Lo(M

OF representative)

Hung-Ju C

hen(M

OF representative)

201904/08

MBA, National Chiao Tung UniversityChairman, TCFHC and TaiwanCooperative Bank; Chairman, TaiwanBusiness Bank.

Chairperson ofFirst CommercialBank

Finance 201810/22

MBA, CSU-San Bernardino, CA, United States.EVP, Dept. of Investment, Dept. of Overseas Affairs, Capital Securities; EVP, Nomura Securities; EVP & Director of HK Branch, CTBC Securities; EVP, Dept. of Investment Banking, CTBC Bank.

Director & President ofFirst Securities; Director of FSA Asia Investment& First Worldsec Securities.

Finance

201902/18

Ph.D., Laws, University Trier, Germany.Deputy Minister, Ministry of Labor; Professor of Dept. of Law, Mingchuan University; Director of Dept. of Finance and Law, Mingchuan University; President, Taiwan Labor Law Association.Current as Deputy Minister, Ministry of Labor; Professor of Dept. of Law, Mingchuan University.

None N/A

201807/20

M.S, Economics, Indiana University.EVP, Bank of Taiwan; CEO, Bank Taiwan Insurance Brokers; SVP, Wealth Management Dept., Bank of Taiwan.

EVP, Bank of Taiwan. Finance

201904/17

B.S. Economics, Soochow University.SVP and Head of Credit Assets MGT Dept, Bank of Taiwan; GM of Hsinchuang & Lungshan Branch,Bank of Taiwan.

SVP and Head of Credit Assets MGT Dept, Bank of Taiwan; Director, Central Motions Picture Co.

Finance

200301/02

B.A., Foreign Languages and Literature, Tamkang University.Chairperson, Taiwan Coca-Cola Co.

Director of First Educa-tion Foundation; Chairperson of Golden Gate & Golden Garden Investment Co & Golden Gate Motor Co.

Finance,UnnecessaryConsume,NecessaryConsume

20095/22

B.S., Pharmacy, Taipei Medical University.EVP, Transamerica Occidental Life Insurance Co; EVP, TransGlobe Life Insurance Inc., Director, Mintai Fire & Marine Insurance Company.

Director of First Life insurance; Chairperson of Global InvestmentCo., Ltd.

Finance,Medical &Health,Informationtechnology

201806/26

Ph. D., Finance, National Taiwan University.Associate Professor, Finance Department, Ming Chuan University; Associate Professor, Depart-ment of Finance, Yuan Ze University; Associate Professor, Graduate Institute of Finance, National Taiwan, University of Science and Technology. Current as Distinguished Professor, Department of Finance, National Central University.

Independent Director of First Commercial Bank;Board Member of Taiwan Risk and Insurance Association.

Finance

201802/23

Bachelor of Laws, National Taiwan UniversityExecutive Vice President and Head of Strategy Planning Department, First Financial Holding;Chief Auditor, First Financial Holding;G.M. of HK Branch and Shih-Mao Branch,First Bank; SVP and Head of Business Planning & Admin. Division.

Chairperson of First Life; Managing Director of FCB; Director of Taiwan Asset Manage-ment Corp; Director of First Education Foundation.

Finance

201904/08

M.S., Finance, Ming-Chuan UniversityEVP & General Auditor, TaiwanFinancial Holdings; CSO, TaiwanFinancial Holdings; Director, BankTaiwan Life Insurance.

Managing Director & President of First Commercial Bank.

Finance

20089/26

Ph. D., Accounting, University of Kentucky.Professor, Dept. of Accounting, National Chung Hsing University; Dean of Library, Professor, VP, National Taipei University; Independent Director of BestCom Co.Current as Professor, Dept. of Accounting, National Taipei University.

Independent Director of Transcend Information Inc.; Chairperson of Accounting Research and Development Foundation and Taipei Trend Research Foundation; Supervisor of Telecom Technology Center; Chairperson, The Institute of Internal Auditors.

Finance,Medical &Health,NecessaryConsume,Informationtechnology

201510/26

B.S., Accounting, National Chunghsing University.Deputy Director of National TreasuryAdministration, M.O.F.; Deputy Headof Finance Dept., New Taipei City Government.Current as Director, National TreasuryAdministration, M.O.F.

None Finance

201806/26

Ph.D., Economics, UCLA, United States.Professor of Dept. of Economics, National Taiwan University; Associate Professor of Dept. of Economics, National Taiwan University; Editor, Taiwan Economic Review.Current as Professor of Dept. of Economic,National Taiwan Universty.

Managing Director of First CommercialBank; Member of International TradeCommission, Ministry ofEconomic Affairs.

Finance

Cha

irperson

Director

Director

Director

Director

Director a

nd Presid

ent

The backgrounds of the directors and independent directors are listed below

Title Name Academic background

Baseline date:2019.4.23

Initial Appoint-

ment




other companies

Director

Director

Director

Director

Director

Director

Indep

endent D

irector

Sharon C

hen(M

OF rep

resentative)

Shih-Hao Liu

(MO

F representa

tive)

Fang Kang(Bank of Taiw

anrepresentative)

Ming-Ren Yau

(Bank of Taiwan

representative)

Tien-Yuan C

hen(G

olden G

ate

Investment co.,Ltd

representa

tive)

An-Fn C

hen(G

oldenInvestm

ent co.,Ltdrepresentative)

Rachel J. H

uang

Title Name Academic backgroundInitial

Appoint-ment




other companies

6362

Chun-H

ung LinYen-Liang C

hen

201806/26

Ph.D., Economics, Iowa State University, United States. M.S,Computer Science/Engineering MGT, University of Missouri. Associate Professor, Chinese Culture University; Director, EMBA Program, Tamkang University; Dean, Dept. of Industrial Economics, Tamkang University; Director, Taiwan Economics Association.Current as Professor, Dept. of Industrial Economics, Tamkang University and Dean of Student Affairs.

Managing Indepen-dentDirector of First Commercial Bank; Director of Eminent II. Venture Capital; Chairperson of Yu-Gen Inc.

Finance

201806/26

Ph.D., Law, University of Mainz, Germany.Dean and Associate Professor, Institute of Financial and Economic Law, National Donghwa University; Professor and Dean, Dept. of Law, National Taipei University; Arbitrator, Chinese Arbitration Association; Arbitrator, Labor Disputes Dept., Taipei City Govern-ment.Current as Professor, Dept. of Law, National Taipei University.

Independent Director of First Commercial Bank;Member of Listing Qualification Committee,Taipei Exchange (GreTai Securities Market); Member of Petitions and Appeals Committee, Hualien County.

Finance

Routine meetings of our Company's Board of Directors are convened once every month. Directors are also notified of the agenda 7 days in advance so issues can be properly discussed and opinions exchanged during the meeting. In 2018, the Board was convened 13 times and average attendance by all directors reached 94.76% (99.48% if attendance by proxy is included).Directors actively participated in the meetings and discussions. Where a conflict of interest exists between the company’s interests and the interests of a director or the legal entity they represent, all directors exercised a high level of self-discipline in excusing themselves from the subsequent discussion and voting.

Please refer to the Company's Annual Report page 33-36 for the attendance of the Board of Directors and Directors'recusal from agenda items due to conflicts of interests in 2018

2-3 Board FunctionalityTo strengthen the professional know-how of the Company's board directors and enhance the effectiveness of corporate governance, the Company adhered to the "Directions for the Implementation of Continuing Education Directors and Supervisors for TWSE Listed and TPEx Listed Companies" and our company's "Implementation rules for continuing educa-tion of directors" which required new or returning directors to undertake 12 hours and 6 hours of continuing education training each year respectively. Our directors actively took part in external training and seminars on finance, risk management (at least two hours), business, commerce, accounting, law, anti-money laundering, countering terrorism financing, corporate social responsibility, internal control system, and financial reporting responsibility. They completed 191.8 hours of training in total during 2018 which exceeded the number of hours required by the competent authority.

The Company established the "Regulations Governing the Scope of Duties for Independent Directors" in 2009. Three independent directors were elected in the same year during the general shareholders' meeting. The "Remuneration Committee" subsequently established in 2011, the "Audit Committee" established in 2012, and the "Ethical Management Committee" established in 2015 are all functional committees made up of all (3) independent directors. The committees issue decisions on potential conflicts of interest such as remuneration for directors and managers, financial reports and ethical management policy. The Corporate Social Responsibility Committee established in 2011 is responsible for reviewing and supervising the implementation of material economic, environmental, and social issues.

Primary responsibilities and operations of each functional committee Operations of functional committees in 2018

• All of the Company's independent directors (3) are committee members, Independent Director Shyan-Yuan Lee (2nd term) and Independent Director Richal J. Huang (3rd term) served as conveners

• A total of 7meeting was convened in 2018 and average attendance was 100%.

Audit Committee

• All of the Company's independent directors (3) are committee members, Independent Director Hao-Ming Chu (3rd term) and Independent Director Chun-Hung Lin (4th term) served as conveners

• A total of 4 meeting was convened in 2018 and average attendance was 100%.

RemunerationCommittee

• All of the Company's independent directors (3) are committee members, Independent Director Ya-Hui Shen (1st term) and Independent Director Yen-Liang Chen (2nd term) served as conveners

• A total of 1 meeting was convened in 2018 and average attendance was 100%.

EthicalManagementCommittee

• The Company's chairperson serves as the Committee's chairperson, and presidents of the Group's subsidiaries are committee members

• A total of 1 meeting was convened in 2018 and average attendance was 100%CSR Committee

Indep

endent D

irectorInd

epend

ent Director

Please refer to the Company's Annual Report page 214-215 for information on the continuing education in 2018.

Please refer to the Company's website for information on the primary responsibilities of each functional committee

6564

2-4 Remuneration PolicyCompensation for company directors include director's remuneration, monthly payment, health exam costs (reimburse-

ment of actual costs up to NTD35,000) and travel costs (reimbursement of actual costs). The Directors' remuneration ratio

is recommended by the Remuneration Committee based on results of the annual Board performance evaluation and

overall business performance in accordance with the scope specified in Article 34-1 of the Company's Articles of

Incorporation. The remuneration is issued after the approval of the Board of Directors and it is reported to the general

shareholders' meeting. The Directors' remuneration has been approved in the shareholders' meeting which authorized

the Board of Directors to determine the remuneration of each individual Directors within a scope of NT$2,400,000 per

month. The remuneration of the Chairman shall be 1.25 times that of the remuneration for the President.

Remuneration Standard for the President and Approval Procedure In accordance with ＊1 Standard Approval Procedure

Articles of Incorp

oration

Employee Sa

lary Rules

Employee Bonus Rules

Employee C

ompensa

tion Rules

Fixed salaryRemuneration for the president is approved by the Board of Directors and periodicallyevaluated by the Remuneration Committee. Floating wages1. Performance bonus

Reviewed andapproved by theRemunerationCommittee ＊2and Board ofDirectors.

2. CompensationIf the Company was profitable during the year, then no more than 0.02% to 0.15% of the profits may be allocated as employees' compensation after deducting the employee and directors' bonuses from the pre-tax profits. Actual amount is based on the target completion rate that year in terms of pre-tax profits, earnings per share after tax, net yield and return on assets.

Indicator Description

Profitindicators 70% 107% 66%

15% 120% 16%

Includes the ratio of earnings before tax of the current year to the target number, and growth rate compared with theprevious year

Jointmarketingindicators

includes the ratio of joint marketingincome before tax of the current year to the target number, and growth rate compared wi th the previous year

15% 100% 13%Expensereductionindicators

Operating expenses minus hiring expenses divided by net income of the current year or target operating expenses, whichever is lower

98% 2%Riskindicators

Includes asset quality, customer complaints, regula tory compliance, andmajor incidents of internal control

103% 3%Strategicindicators

Otherindicators

Includ ing leadership skills , judgment , ethics , and othercompetency indicator

includes corporate governanceimplementation results, green financeimplementation results, corporateimage, and credit rating tha t year

Evaluation items in annual performance evaluations of the chairperson, president, and Board of Directors not only include financial performance indicators, but also non-financial performance indicators, such as corporate governance, green finance, social care, and sustainable environment. Evaluation results serve as a basis for the Remuneration Committee to review remuneration for employees (including the president) and directors. The ratio of fixed salary to variable salary of the President was approximately 3:1 in 2018. The performance bonus for the President is distributed in April to May each year. Material events that affect the Company's financial or non-financial interests that occur before the distribution shall be adopted as reference for the distribution of the performance bonus. With the exception of this measure, there are no other mechanisms for reclaiming the remuneration.

Compensation of Senior Executives

TitleFloating wages

Bonuses(B)

Remuneration C)

Numbercompany

shares held＊3

Fixed salary(A)

Market value ofshares held/fixedsalary per capita

(A) ＊3

One President ＊1

Proportion of remuneration

177,594

-

286,640

-

4,416

76%

5,387

77%

1,383

24%

969

14%

0

0%

664

9%

5,799

100%

7,020

100%

0.80

-

1.06

-

Total


464,234 9,80377%

2,35218%

6645%

12,819100%

0.95

＊1：The President Ms. Wu Ying was reassigned to the subsidiary First Bank in February 2018 and her post was filled by Vice President and G.M. of Strategic Planning Division Chien-Hao Lin.

＊2：One Vice President and one Chief Auditor. The Vice President and G.M. of Administration Department Ms. Mei-Chu Liao retired in March 2018 and her post was filled by Mr. Chao-Chung Chou who was reassigned to the subsidiary First Bank in August 2018. The post was then filled by Secretary General of the Board of Directors Mr. Frank Y.C Fang. The Chief Auditor was Ms. Yu-Hsiu Hsieh.

＊3：The number company shares held is calculated by the number of shares held by the incumbent, spouse, minor children, and in the name of others.

＊4：The market value of shares held is calculated based on the average price per share of NT$19.97 in the 30 business days prior to the end of 2018.

＊5：The President's total remuneration for 2018 was 4.17 times the average employee salary of NT$1.392 thousand and 4.62 times the employees' median salary of NT$1.255 thousand.

Weight(%)

Performancebonus ratiois calculatedbased on theachievement

status in2018

2018achieve-

mentrate

＊1：The establishment and revision of salary, bonus, and compensation standards for employees (including the president) must be reviewed and approved by the Remuneration Committee and the Board of Directors.＊2：The Remuneration Committee is formed by all independent directors, please refer to the Company's website for information on the independence of directors.

Calcula

tedsep

ara

tely

Totalremuneration

(A+B+C)

One Vice President andone Chief Auditor ＊2


Income tax

Income

6766

FFHC Tax Information Item 2017 Calculated average/ratio

Earnings before Tax

Reported Tax Rate (%)

Cash Taxes Paid

Cash Tax Rate (%)

Income taxexpense

18,148

3,453

737

14.97

2,516

13.86

2018

20,703

2,528

-843

16.28

4,012

19.38

19,426

2,991

-53

15.62

3,264

16.62

Unit: million NTD, %

Income tax in current period

Adjustment calculation

＊：1. Net profit before tax, income tax expense, and taxes paid are obtained from the 2018 Consolidated Financial Report of FFHC.

2. Income tax expenses = Income tax in current period + adjustment calculation.

Comparison of FFHC's average tax rate with GIGS's average effective tax rate and cash average tax rate for banking industries:

ReasonTax Impact

Explanation

Singlejurisdictiontax code

2017 2018

2017:• Average effective tax rate of peer industries was 24%, which was higher

than the FFHC's effective tax rate of 14.97%, primarily due to a lower flat tax rate (17%) in Taiwan where FFHC is based.

• The Group's cash tax rate in 2017 was 13.86%, which was higher than the 11.70% average cash tax rate other financial institutions.

2018:• Average effective tax rate of peer industries was 25.82%, which was

higher than the FFHC's effective tax rate of 16.28%, primarily due to a lower flat tax rate (20%) in Taiwan where FFHC is based.

• The Group's cash tax rate in 2018 was 19.38%, which was lower than the 21.28% average cash tax rate other financial institutions.

2017:The Group's actual tax rate was 13.86%, which was lower than the statutory tax rate of 17% mainly due to tax-free income from OBU in operating revenue.2018:The actual taxes paid amounted to NT$4,012 million which was higher than the taxed amount of NT$3,370 million mainly because the deferred income tax assets generated income tax benefits as Taiwan's income tax rate for profit-seeking enterprises was increased from 17% to 20% in 2018 and the Company's higher provisional income tax payment in 2018.

1,270 1,205

Timing (deferred) - Deferred incometax assets

737 -843

Cambodia6%

Taiwan41%

Canada4%

Japan3%

United Kingdom2%

USA21%

Australia4%

Mainland China, Hong Kong, and Macau

17%

2-5 Tax GovernanceFFHC established the following tax governance policy to lower tax risks and operating costs:• Compliance with local tax regulations: Adopting moderate approaches, conducting tax management in accordance

with the regulations, and being a socially responsible taxpayer. • Risk control: Monitoring and assessing changes in local and international tax regulations and the different interpreta-

tions on tax regulations by the tax authorities, and formulating appropriate responses. • Information trans parency: Regularly and properly disclosing tax related information for enhancement of the transpar-

ency of corporate information.• Tax expertise: Strengthening the skills of tax specialists, actively attending a variety of tax seminars, maintaining

continuous and effective communications with local tax authorities.

Income, pre-tax profit, and payment of business income tax by the Group in each country in 2018.

Taiwan92%

Australia

1%

Mainland China,Hong Kong, and

Macau2% Other2%

USA2%USA4%

Cambodia1%

Taiwan84%Canada

1%

United Kingdom

1%Cambodia2%

Other1%Japen1%

Pre-tax Profit

Mainland China,Hong Kong, and

Macau6%

Other2%

6968

Risk managementMaterial Topic102-30: Effectiveness of risk management proceduresGRI 419: Social and economic complianceSet topic / Risk management

Management guidelinesPoliciesThe Company shall establish an internal control

system and ensure its continuous and effective

operations to promote healthy operations.

CommitmentThe Company plans overall operation strategies,

risk management policies and guidelines, and

drafts operation plans, risk management

procedures and implementation guidelines.

GoalsCompliance with the operational benefits and

efficiency and ensure the reliability, timeliness,

transparency and regulatory compliance of

reporting.

DutiesEstablish three lines of defense in internal controls

and clarify the scope of duties of the three lines of

defense to maintain an effective and appropriate

internal control system.

ResourcesThe first line of defense is responsible for identifying

related risks in management and business activities;

the second line of defense is responsible for

assisting and supervising the first line of defense in

risk identification and management; the third line of

defense is responsible for assisting the Board of

Directors and senior management review and

evaluate the effectiveness of the internal control

system.

Assessment mechanisms• Conduct regular and irregular assessments on

main business activities, products, services, credit

loans, or business projects as well as compliance

risks such as management of material customer

complaints that may involve violations of

regulations. They shall also establish horizontal

communication mechanisms with other units on

the second line of defense.

• Include the evaluation opinions of the Compliance

and Legal Division on the compliance implemen-

tation of the management and heads of various

departments in their performance evaluations.

• Report compliance items to the Board of Directors

and the Audit Committee at least once every six

months. Propose weaknesses in compliance risk

management as well as plans and schedules for

supervision and improvement based on domestic

and international operations. The Board of

Directors shall set suitable reward and punish-

ment mechanisms to establish a culture of

compliance.

• Internal audit units shall report audit items

including the performance of compliance units

and the degree of compliance to the Board of

Directors and the Audit Committee at least once

every six months.

• Regularly conduct self-assessments on the internal

control system and regulatory compliance and

examine the effectiveness of the internal control

system.

• Evaluate the implementation of the regulatory

compliance system by FFHC divisions and

subsidiaries.

• In accordance with the implementation of Basel III

regulations as well as our own business develop-

ment and investment plans, First Bank shall

achieve the management targets of 12.5%, 10.5%

and 9.5% set for the CAR, Tier 1 and Common

Stock Ratio respectively by the end of 2018.

• Organize annual evaluations on the subsidiaries'

performance of internal audit operations and

include measures for improving the knowledge

and skills of auditors, risk-based auditing, methods

for assigning auditors, and other improvement

plans into the audit evaluation items. Include the

Company and subsidiaries' establishment of

material emergency incident processing mecha-

nisms and status of reports and handling such

incidents into key items in the audits.

Results• Based on the compliance performance of each

unit evaluated in 2018, the results are submitted

to the president for approval. Compliance

deficiencies are used as a reference for person-

nel evaluations. The results of subsidiary perfor-

mance evaluations are reported to our Board of

Directors and then sent to the board of directors

of each subsidiary as a reference for personnel

evaluations.

• The Group Chief Compliance Officer Meeting is

held on a quarterly basis. In addition to reviewing

the implementation of compliance plans by

subsidiaries, internal control system deficiencies

review meetings, the Group's internal audit

coordination meetings, and self-assessment

meetings are held semi-annually to ensure the

effective operation of each subsidiary's internal

control system.

• The subsidiary First Bank has filed the 2018

Compliance Risk Assessment Report to the

competent authority.

• FFHC, First Bank, First Securities, First Securities

Investment Trust, and First Life Insurance

organized a total of 142.5 hours of regulatory

compliance education and training courses in

2018. A total of 10,008 people participated in the

training.

• Establish the Group's identification mechanisms

for emerging risks and establish mitigation

measures.

• First Bank achieved the management targets of

13.57%, 11.58% and 10.96% set for the capital

adequacy ratio (CAR), Tier 1 and Common Stock

Ratio respectively in December 2018. All targets

were higher than the targets of 12.5%, 10.5% and

9.5% established for the end of the year. Leverage

ratio was 6.32%, higher than the 3% minimum

required by the competent authority; net stable

funding ratio (NSFR) was 131% which was higher

than the minimum LCR of 100% stipulated by the

Basel regulations.

• We continue to monitor our short-term liquidity

recovery ability, and our LCR in January-December

was maintained around 120%, higher than the

minimum LCR of 90% stipulated by the Basel

regulations."

Complaints mechanism• Immediately respond to incidents to reduce the

hazard in accordance with FFHC's "Incident

Reporting Guidelines" and "Crisis Response

Principles."

• The Compliance Division is notified in accordance

with FFHC's Guidelines for Reporting Regulatory

Compliance Cases.

• Independent directors, the Audit Committee, and

the competent authority are notified in

accordance with the "Rules for the Regulatory

Compliance System" and the "Implementation

Rules for the Internal Audit System".

Specific management practices• Establish various business regulations and

procedure manuals, establish internal control

procedures, and implement regular self-assess-

ments to ensure risks are adequately managed.

• Established dedicated compliance units reporting

to the president and responsible for the planning,

management and execution of the regulatory

compliance system at their respective companies.

Establish procedures, plans, and mechanisms to

identify, assess, control, measure, and monitor risks

and independent reports on the compliance risks.

• Establish independent and effective risk manage-

ment mechanisms to assess and monitor the

respective risk-bearing capacity and current status

of risks already incurred, and to determine their

compliance with the risk response strategies and

risk management procedures.

• Establish internal audit units under the Board of

Directors and establish a chief auditor system to

take charge of evaluating the effectiveness of

internal controls and risk management systems

designed and implemented by the first and

second lines of defense, and propose timely

recommendations.

7170

III Risk managementOur company has established internal controls in accordance with the "Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries". The system covers all business activities and require joint compliance by the Board of Directors, management, and all employees. The Board of Directors shall be aware of the operational risks faced by the company or business, supervise its operating results and bears the ultimate responsibility for ensuring the establishment and maintenance of appropriate and effective internal control system.

In 2018, the Company failed to accurately report and disclose related information on the total balance of a transaction conducted between the Company and a subsidiary and was fined NT$2 million by the FSC. Related improvement measures were as follows:

Items for improvementsThe Company's handling of the Financial Holding Company Law Article 46, Item 1 is subject to the reporting and disclosure of the total transaction balances as stipulated in Item 2 of the same article. Due to a lack of correct reporting and disclosure of relevant information, the Financial Supervisory Commission, has fined the Company NT$2 million.

Improvements• In order to avoid any misstatements and delays in the future, the Company has held a discussion meeting on

the “Reporting and disclosure of Article 46 of the Financial Holding Company Law” on December 13, 2017 to re-examine data for reporting and disclosure. The list of Group companies needed to produce the report is adjusted. The Company will also strengthen reviews on the correctness of the information disclosed

• To ensure the timeliness of the reports, the Company will strengthen reviews on the list of corporate group that subsidiary First Commercial Bank, Ltd. has granted credit to and the data of affiliated companies. The Compa-ny will also enhance the following items:

A. The Company will enhance management on the total trade exposure of all the Group companies. This item shall be regularly submitted to the Board for review and shall be reported and disclosed in accordance to Article 46 of the Financial Holding Company Act.

B. Supervise subsidiaries to review the consolidation of list for corporate groups and make sure the accounts and data of affiliated companies are correct. Enhance monitoring the corporate groups that receiving credits and their maximum limits with timely update.

C. Supervise bank subsidiaries to strengthen credit management mechanism of the Group affiliates and to effectively control credit concentration risks.

• To enhance review on Group affiliates, the Company will purchase the survey of group companies list from China Credit Information Service, Ltd starting from 20182Q and make mapping with the list complied internally to ensure the accuracy of in- house list.

To improve the internal control system and strengthen the Company's controls, we established three lines of defense in internal controls and clarified the roles and scope of duties of the three lines of defense to ensure the organization structure meets the principles of the three lines of defense and their effective operations.

3-1 First line of defense - Internal inspection by business unitBusiness units are responsible for identifying, evaluating, controlling, and reducing risks derived from business activities based on their respective functions and scope of businesses. We established internal control procedures and execute risk management procedures to ensure that the execution of business operations meet the business policies and goals. We also organize self-inspection and self-assessments for internal controls and immediately propose improvement plans when processes and control procedures prove to be inadequate. In 2018, an assessment of corruption risks was conducted by all group subsidiaries and their business locations. For instance, First Bank conducted a systematic review and strengthened credit extension and management after loans to implement operation risk identification and assess-ment, strengthen asset quality management, and reduce risks of corruption.

3-2 Second line of defense - Sound compliance and risk management systemThe second line of defense includes the Risk Management, Compliance, and other units with related tasks (e.g. financial control, human resources, and legal affairs) which are responsible for formulating overall risk management policies for main risks, supervising overall risk-bearing capacity and current status of risks already incurred, and reporting the risk management status to the Board of Directors or senior management.

1 .Compliance systemFFHC, First Bank, First Securities, First Securities Investment Trust and First Life Insurance have all established dedicated compliance units reporting to the president in accordance of the law. These units are responsible for the planning, management and execution of the regulatory compliance system at their respective companies. FFHC is continuing to require all subsidiaries to enforce their compliance systems. Related developments are as follow:• Formulation of an annual compliance plan: At the end of each year, an annual compliance plan is to be developed for the following year. This shall be submitted

to each company’s board of directors for approval before implementation.• Regulatory change management: To stay up-to-date on regulatory changes, each subsidiary collects important regulatory changes that occurred during

the week and notifies the regulatory compliance supervisor of the responsible unit by e-mail. A regulatory change notices is then sent to related units at the beginning of each month, and the regulatory compliance supervisor exam-ines the changes and replies whether if it is necessary to revise related regulations and compliance contents. Contents of regulatory change are propagated to employees of each unit, and the regulatory compliance unit compiles a list of chapters and provisions reported by units as requiring revision in coordination with the law.

• Compliance training and self-assessment operations: Must be held by each subsidiary at least once every 6 months. Each department should also include the execution

of compliance self-assessment into their internal evaluations. FFHC, First Bank, First Securities, First Securities Invest-ment Trust, and First Life Insurance organized regulatory compliance education and training courses, a total of 10,008 people received a total of 142.5 hours of training in 2018.

• Implementation of the regulatory compliance system: The implementation of the regulatory compliance system by each subsidiary is reported to the Risk Management

Committee bimonthly and to the Board of Directors and the Audit Committee semi-annually.• Unit compliance performance evaluation: The compliance performance of each unit is evaluated by FFHC each year. The results are submitted to the president

for approval and as a reference for unit evaluations.• Subsidiary supervision: A. To strengthen management of the legal compliance systems of subsidiaries, the Company organizes the “Group

Chief Compliance Officers Meeting” every quarter to establish the state of compliance plan implementation at each subsidiary, the cause of major violations, and progress on corrective actions.

B. We evaluate the performance of subsidiaries with respect to the regulatory compliance system on an annual basis. The results are reported to the Board then sent to the board of directors at each subsidiary as a reference for person-nel evaluations.

C. The Company’s compliance unit visits subsidiaries for on-site inspections each year to ensure the effective imple-mentation of compliance mechanisms, provide recommendations on improvements and improve communications with subsidiaries.

D. Subsidiaries' legal compliance units shall formulate the compliance execution plan for the following year before the end of each year. The plans shall be reported to the Chief Compliance Officer of the Company's head office after they are approved in the subsidiaries' board meetings.

E. Subsidiaries shall report to the Company the improvement status based on opinions proposed by the internal and external audit units on their compliance systems as well as changes in regulations for which the amendment status of regulations shall be tracked.

F. Subsidiaries shall conduct the Compliance Risk Assessment (CRA) each year.• Regulatory compliance operations and regulations on reporting major incidents: To effectively implement the Group's compliance system, we established the Guidelines for Compliance Operations.

The Guidelines set forth operational standards for the compliance system of each subsidiary, and specify the scope of application for major violations of laws or rating lowered by the competent authority of finance. Furthermore, we established the “First Financial Group Compliance Notification Guidelines” to immediately learn about violations by the Company and subsidiaries and follow up on subsequent improvements and potential impact. The Guidelines specify the scope of compliance cases to be reported and established standard operating procedures (SOP) for reports to facilitate compliance by subsidiaries and help the Board of Directors and senior management quickly gain control of warnings, assessments, and response measures for the Group's regulatory compliance risks.

7372

• Key points of the 2019 compliance plan A. Continue to perform change management for related financial laws and regulations. B. Compliance implementation: This includes regular reviews of the compliance manual, conducting of compliance

self-assessments, bimonthly compliance reports to the Risk Management Committee and semi-annual compliance reports to the Board of Directors and Audit Committee, and evaluating the effectiveness of compliance implementa-tion by units and subsidiaries.

C. Organizing compliance training on new regulatory developments every 6 months. D. Report material violations of laws by the Company's departments and subsidiaries, credit rating lowered by the

competent authority of finance, prosecution of the person in charge or employees for crimes conducted in business operations, delivery of notices from the competent authority to state opinions, or other penalties imposed by compe-tent authorities, the results, and improvement status to the Risk Management Committee and Board of Directors in a timely manner.

E. Formulation of the “Subsidiary Management Schedule” to strengthen subsidiary supervision, enhance communica-tions with subsidiaries, and acquire an accurate picture of compliance implementation at subsidiaries.

F. Continue to review improvements to compliance functions. G. Follow up on the subsequent improvement status for audit opinions proposed by internal and external auditors to

manage and control improvement progress. H. To strengthen the legal compliance management and supervision structure of the Company and subsidiaries, we

appoint professional consultants to provide consulting services for the Compliance Risk Assessment (CRA), assist in the establishment of compliance risk assessment methodology, execute compliance risk assessments, and assist the Company in formulating the Group Legal Compliance Risk Assessment Report.

2.Risk management system:(1) Risk management policy and structureTo effectively manage the Group's operating risk, our company and subsidiaries have defined risk management policies and guidelines. Independent "Risk Management Committees" have also been established to regularly supervise the different types of risks within the Group, review each risk limit, set risk monitoring indicators and report the results of risk assessments to the Board. This is expected to keep the potential risks from each business within an acceptance range and achieve the ultimate goal of balancing risk vs. return.

The subsidiaries First Bank, First Securities, First Securities Investment Trust and First life insurance have all set up a "Risk Management Committee". Dedicated risk management units are also tasked with monitoring and reporting routine business risks. The remaining subsidiaries have also set up risk management teams or dedicated risk managers based on the nature of their business and their organizational scale to oversee all matters related to risk management.

In accordance with the spirit of corporate governance, FFHC actively assists each subsidiary with establishing the neces-sary risk management sc hemes. Apart from regular inspection and disclosure of the Group s risk exposure, we also formulate various risk monitoring indicators based on the requirements of the competent authority or changes in the economic environment . These include the establish ment and revision of risk management policies and monitoring indicators, such as revising th e Rules Governing Loans and Transactions between the FFHC and Subsidiaries with Stakeholders and FFHC Risk Taking Limit by a Single Subsidiary for Loans and Inves tments in a Single Individual or Stakeholder

Please refer to the Company's Annual Report page 76-87 for large fines or non-monetary sanctions imposedon the Group for violating economic and social laws and regulations in 2018

Please refer to the Company's Annual Report page 159 for key indicators(return on assets, return on equity, capital adequacy ratio, double leverage ratio,

overdue ratio and bad debt coverage ratio) of the Group in 2018

President

Risk Mgmt. Div.

Credit risk

Market risk

Liquidity risk

Insurance risk

Interest rate risk

Operating risk

• Risk policy

development

• Risk identification

• Risk measurement

• Risk monitoring

• Risk reporting

RiskManagementCommittee

(convened every2 months)

Board of Directors,Chairman

President

Risk Management Division

Monitors riskmanagementimplementation ateach subsidiaryRisk

ManagementCommittee

(convened every2 months)

First Bank:Risk Management Committee

First Securities: Risk Management Committee

First Securities Investment Trust:Risk Management Committee

First-life insurance:Risk Management Committee

Other subsidiaries:Risk Management Committee

Establishment of riskmanagementcommittees and unitsbased on the type/size of eachsubsidiary

Subsidiary First Bank capital adequacy ratio

2017

Ordinary share equity ratio

Tier 1 capital ratio

Capital adequacy ratio

Tier 1 Capital

Total exposure

Leverage ratio

11.25%

11.25%

13.42%

172,853,4392,707,099,168

6.39%3,008,925,655

6.32%

2018

10.96%

11.58%

13.57%

190,297,370

Unit: NT$1,000; %

(2) Emerging risks

Identification procedures for the Group's emerging risks

Risk identification Risk compilation Response to risks Continuous trackingCompanies perform emerging risk assessment and identification

Compile a list of the emerging operation and business risks identified by the companies of the Group to establish a list of emerging risks for FFHC

Establish mitigation measures for identified emerging risks of the Group to reduce the impact on operations or business

Regularly follow up on the implementa-tion status of mitigation measures and review the results

Board of Directors,Chairman

Ratio of regulatory capital to risk assets

7574

The Group's emerging risks and formulated mitigation measures are as follows:

Risk factor Impact on operations

Large-scalecyberattacks

Large-scale cyberattacks may affect information security and cause interruptions of operations or reputation or financial losses.

Mitigation measures

• To improve information security, we appointed information security compa-nies to conduct information security assessments, network security monitoring, and support in surveillance as well as anti-phishing and anti-Trojan services.

• We apply for flow cleaning services with ISPs who provide the connections for external online services to strengthen DDoS defense capabilities. We also adopt cloud-based DDoS protection for important websites as defense against massive DDoS attacks.

• We organize periodic social engineering exercises and information security training each year to improve employees' information security awareness. We use related information security systems to intercept malware and ransomware when employees connect to the Internet to reduce the possibili-ty of clicking on the links by mistake.

• To ensure the continuity of operations, we organize disaster recovery exercises regularly and established related regulations for employees to follow.

Mass datafraud

Mass data fraud or theft may cause leaks or severe alteration of sensitive customer information and lead to reputation crises or financial losses.

• Strengthen endpoint incident detection and analysis and manage the use of remote connection data to reduce data fraud and leaks of personal information.

• Use advanced and continuous threat protection systems to detect and defend against unknown external threats.

• Maintain the effectiveness of the anti-virus software and update virus database to prevent malware attacks.

• Continue to use information security assessments, social engineering tests, and training to improve internal protection capabilities and employees' awareness.

(3) Establish a corporate risk cultureTo strengthen the smooth operations of the Group's risk management mechanisms and establish a corporate risk culture, we organize related training on corporate governance or risk management for the Directors, Supervisors, senior management, and employees of the Group. We also established the employee proposal system to encourage employ-ees to actively identify and report potential risks. We provide employees with related risk management information in monthly risk management newsletters to promote employees' risk awareness and improve their professional skills.

(4) Business Continuity MechanismFFHC's head office has a defense team and SOP for emergency response, and obtained ISO 14001 Certification of Environmental Management System for the 4th consecutive year starting in 2015. To prevent major incidents, disasters, epidemics and financial system risks from impacting on company operations, the following response mechanisms have been defined:

The "Crisis Response Principles" and "Crisis Response Manual" have been drawn up. If a unit is affected by fire,explosion, hurricane, flooding, earthquake, robbery, bank run, group protest or epidemic, it should immediatelynotify the crisis center at the main branch and ask for assistance from the head office's business administrationunit. To monitor and respond more effectively to a crisis, SMS is used in addition to telephone contact to notifybranch managers in the disaster or affected region to report the damage situation by a given deadline. Theinformation is then collated and submitted to the management and relevant units.

The crisis response system proved its worth during the Hualien Earthquakes in 2018. The bank was able to swiftly collate and report the situation at all business units in nearby areas. Nearby employees were also notified to stay clear, reducing the risk of injury while maintaining the Company's normal operations. The event also showed employees the benefits and importance of regular disaster prevention drills.

Telephoneor SMS

Telephone or SMS

First Bank managersand business units

Chairman, FFHC President FFHCFFHC Risk

Management DivisionFirst Bank Headquarters

crisis center

First Bankbusiness unitsor

Disaster Response Mechanism

Telephoneor SMS

FFHC Incident Reporting Process

Under the “FFHC Incident Reporting Guidelines”, in the event of a man-made or natural disaster (e.g. earthquake, flooding, fire, hurricanes), serious failure of internal controls or a security incident ( e.g. Impacts on the company’s reputation, customer’s interests, or leads to serious loss of property) at a subsidiary, the informa-tion should be quickly transmitted, the extent of the disaster established and an effective response mounted to maintain the continuity of business operations as well as protect customer interests and employee safety.The Company shall adopt regulations on related management items and report the improvement measures for the risk incidents to the Risk Management Committee and the Board of Directors for review to reduce the frequency of future occurrences and losses.

Incident at FFHC

Designated emergencyliaison of FFHC

Written report from businessmanagement unit

Emergency liaison should notify FFHC Risk Manage-

ment Dept. by phone by SMS on the same day. Chairman and President should also

be notified as well.

Handle in accordance withthe relevant regulations at

FFHC or subsidiary

Emergency liaison shouldnotify FFHC Risk Management

Dept. by phone bySMS on the same day.

Chairman and Presidentshould also be notified as

well.

Risk Management Dept.determines

Incident at subsidiary

Designated emergencyliaison of subsidiary

Determine whether this isGrade A incident

Determine whether this isGrade B incident

Risk Management Dept.determines

• Emergency liaison at subsidiary should notify their business manage-ment unit and the FFHC Risk Management Division.

• Emergency liaison for FFHC business manage-ment unit should report incident through formal channels to the head of department. FFHC Risk Management Dept. should be notified as well.

Yes

Yes

Yes

Yes

NO

NO

NO

NO

Grade C

Upon notification, FFHC RiskManagement Department

reports incident through formalchannels up to the President.

Upon notification, FFHC RiskManagement Departmentreports incident through

formal channels up to theChairman

7776

Please refer to the Company's Annual Report page 70-75 for the 2018 Internal Control System Statement.

Implementation of the internal audit system in 2018 is as follows:Implementation plan

Self-audit meetings, internal control system self-audit results review, internal control systemdeficiency review meetings, and internal audit coordination meetings within the group

Number of times held

8 times

10 times

14 times

2 times

3-3 Third line of defense - Independent internal audit unit The Company, First Bank, First Securities, First Investment Trust, and First Life Insurance have established internal audit units under the Board of Directors. They implement audit operations independently and they audit and evaluate the effectiveness of internal controls and risk management systems designed and implemented by the first and second lines of defense. They provide timely advice on improvements, to ensure that the internal control system can continue to be implemented in a reasonable manner and to provide a basis for correcting the internal control system. We contin-ue to follow up on review opinions of internal audit units, accountants, and business administration units or deficiencies found during self-audits, and matters requiring improvement listed in the internal control system statement. Improve-ments are submitted in writing to the Board of Directors and Audit Committee and used as an important item for penal-ties and rewards and performance evaluations of related units, so as to maintain the effective and appropriate opera-tion of the internal control system.

The Auditing Division of the Board of Directors is the Company's internal audit unit. Its responsibilities include the estab-lishment and execution of the internal audit system, monitoring of audit activities at subsidiaries, auditing and assessing and documenting the performance of their internal audit system, and providing regular reports to the Board and Audit Committee. We also plan to introduce a digital audit management system before the end of 2020 to improve the perfor-mance and efficiency of internal audit operations.

The execution of our company's 2018 internal audit process and the preparation of the 2019 audit plan referred not only to the financial inspection guidelines issued by the Financial Supervisory Commission but also internal control performance ratings and business characteristics of each unit (including subsidiaries). In addition to risk management, the Group's internal control system is used to evaluate our management system and improve the effectiveness of the Group's internal control system self-evaluation. The subsidiary First Bank plans to apply to the competent authority for the adoption of a risk-based internal audit system before the end of August 2020 and establish risk-based internal audit assessment methodology and procedures. It shall set the frequency of internal audits based on the results of risk assess-ments to facilitate more efficient deployment of internal auditing resources.

General audits, project audits

Derivative trade audit

Auditing opinions and follow-up

Ethical corporate managementMaterial TopicGRI 205 :Anti-corruption

Management guidelinesPoliciesWe established the CSR Policy and Code of Conduct for Ethical Management to realize sound management and corporate governance through solid business operations and an ethical corporate culture, and also to help the Group achieve sustainable operation. We also established the FFHC Code of Conduct for Directors, Supervisors, and Managers and FFHC Code of Conduct for Employees to help directors, supervisors, managers, and employees understand and abide by the group's ethical and moral values.

CommitmentWe are committed to the business philosophy of integrity, transparency, and accountability, and established policies based on integrity. The policies are implemented in internal management and external business activities.

GoalsEnhance the corporate culture of ethical manage-ment, actively prevent misconduct, establish sound corporate governance and risk management mechanisms, prevent and detect fraud, and ensure the reliability of financial information.

DutiesEmployees of each subsidiary shall engage in commercial activities in a fair, ethical, and transparent manner. Employees may not directly or indirectly provide, commit to, require, or receive any improper benefits, and shall avoid having any dealings with any suppliers and customers having any record of unethical conduct.

Resources• The Ethical Management Committee is comprised

of all Independent Directors and it is responsible for the establishment or amendment of the ethical management policies of the companies and organizations of the Group.

• The Group's subsidiaries and organizations periodically provide employees with ethical management related education, training, and promotion.

• The Directors, Supervisors, managerial officers, and employees of the Group's companies sign the Code of Conduct of Directors, Supervisors, managerial officers, and employees at the end of each year or when they are appointed.

• When entering into a contract with a third party, the Group's subsidiaries and organizations shall have a full understanding of the other party's ethical practice and make the following items a part of the contract.

Specific management practices• The Group's subsidiaries and organizations have

an effective accounting system and internal control system for business activities at higher risk of unethical conduct and each department shall analyze their business activities that are at higher risk of unethical conduct, and shall establish an unethical conduct prevention plan, including operating procedures, code of conduct, and education and training.

• The Group's subsidiaries and organizations actively implement the policy of ethical manage-ment in internal management and external business activities.

Assessment mechanisms• The Committee regularly reports the implementa-

tion status of ethical management by companies and organizations of the Group to the Board of Directors and reviews improvement measures.

• Status of signatures of the Code of Conduct of Directors, Supervisors, managerial officers, and employees of the Group.

• Gross violations of ethical conduct by employees of the Group's companies and organizations shall be penalized in accordance with related laws or human resources management regulations; they shall also be included as a deduction in points in the annual performance evaluation.

Results• The Group's subsidiaries reported the "integrity

management status and measures" of 2018 to the Board of Directors. Our "Ethical Management Committee" reported the Group's ethical management status in 2018 to the Board of Directors, and reviewed improvement measures.

• The signature rate of the Code of Conduct by Directors, Supervisors, managerial officers, and employees of the Group in 2018 was 100%.

• There were 2 violations of ethical conduct after the reported cases were accepted and investigat-ed in 2018. In addition to instructing related units to review improvement measures and report the penalties imposed on personnel in violation of the regulations to the Ethical Management Committee for reference, the annual performance evaluation bonuses of the personnel in violation of the regulations were also reduced by three to nine percent or canceled.

Complaints mechanism• We have established whistleblowing systems for

the companies and organizations of the Group for internal audit units to take charge of process-ing reported cases.

• Establish a "Stakeholder Communications" section on the website to disclose hotlines or e-mails for contacting employees, investors, and customers.

7978

Education and trainingThe Company promotes ethical management related regulations to subsidiaries through the quarterly meeting of regulatory compliance supervisors from the headquarters of each subsidiary. We urge subsidiaries to organize educa-tion, training, and promotion events related to ethical management for employees, and to communicate the group's ethical management policy and whistleblower system. In 2018, the group provide all employees worldwide with a total of 162,264.55 hours of education and training for 61,549 participants. Counterparts that do business with the Company are invited to participate in the activities, so that they fully understand the Company's unethical conduct prevention plans and zero tolerance policy.

Unethical conduct casesWe handled 17 external whistleblower cases and 9 internal whistleblower cases in 2018. After investigation, 2 cases were determined to be unethical conduct cases. Related units were assigned to review the internal control system and operating procedures, propose improvement measures, report violators to the Company's Personnel Evaluation Committee, report the penalty to the Board of Directors, and then submit the report to the Ethical Management Commit-tee for future reference. The performance bonus of violators was reduced by 3-9% or not distributed in 2018.

We combined internal and external regulations into the FFHC Code of Conduct for Directors, Supervisors, and Manag-ers and FFHC Code of Conduct for Employees, to help directors, supervisors, managers, and employees understand and abide by the group's ethical and moral values. Contents include preventing conflict of interest, prohibiting employ-ees from concurrently holding positions, preventing employees from benefiting themselves or others, fulfilling their obligation to confidentiality and preventing insider trading, engaging in fair trade and preventing monopolies and anti-competitive practices, protecting and appropriately using Company assets, complying with laws and regulations, encouraging the report of any illegal or unethical conduct, prohibiting bribes and accepting bribes, creating an equal employment environment, and maintaining the health and safety of the workplace environment and personnel. The codes of conduct are signed by directors, supervisors, managers, and employees of all companies in the group at the end of the year and when they assume a new post. As of the end of 2018, the group's signing rate reached 100%.

The Company's “Ethical Management Committee” subordinate to the Board of Directors is the dedicated unit for imple-menting ethical management practices. The committee is formed by all independent directors and is responsible for establishing or revising the ethical management policy. To enforce the ethical management policy, the Group's subsid-iaries and organizations must regularly report (at least once a year) their "integrity management status and measures" to their Board of Directors. The committee will report the Group's integrity management status to the Company's Board of Directors and review improvement measures. Implementation status is as follows:

IV Ethical managementWe established the Code of Conduct for Ethical Management as our ethical management policy, and require compa-nies and organizations in the group to comply with this policy. We strengthened our whistleblower system and raised the level of authorization in June 2018. Companies in the group reviewed and passed revisions to their whistleblower system before the end of October 2018, in which internal audit units with independent authority were designated to handle whistleblower cases before the situation becomes more severe. We take caution against small matters to prevent them from damaging our business reputation, and thereby protect public interests.

histleblower System and Process

Assistance PlatformWe set up a Cantact Us section on the website to disclose contact, grievance, and whistleblower channels for employees, investors, and customers. We also set up a whistleblower section on our internal website to provide a whistleblower channel to employees.

Furthermore, the Whistleblower System Implementation Rules reviewed and passed by the Board of Directors is disclosed in the "Corporate Governance" section on our official website and internal website. Our subsidiaries all established a whistleblower system that was reviewed and passed by their respective Board of Directors.

Coordination CenterThe internal audit unit/supervisor at the Company and subsidiaries is responsible for handling whistleblower cases. Depending on the type of case, an independent unit is designated to conduct th investigation. For cases received by the Company and investigated by a subsidiary, the subsidiary is required to report investigation results to the Company.

Supervisory PersonnelIf the person being reported is a director, supervisor, or vice president or higher managerial officer, the investi-gation report shall be submitted to the Audit Committee or supervisor for review. If a whistleblower case is found to be true, the Company and subsidiaries will assign related units to review the internal control system and operating procedures, propose improvement measures to the Board of Directors, and then submit the report to the Ethical Management Committee for future reference. Major incidents or violations of the law shall be report-ed to the Company and relevant authorities in accordance with the FFHC Incident Reporting Guidelines and First Financial Group Compliance Notification Guidelines.

Reporting hotlineThe "Contact Us" section on our official website

Ethical management related education and training provided by the group to all employees worldwide in 2018

First Financial Holding

First Bank (Including subsidiaries)

First Securities (Including subsidiaries)

First Securities Investment Trust

First Life Insurance

First Financial AMC (Including subsidiaries)

First Consulting/First Venture Capital

Total hours

214

156,561.5

3,845.55

147.5

1,228.5

219.5

48

162,264.55

Number of people

193

57,043

3,328

295

378

288

24

61,549

Coverage

100%

100%

100%

100%

100%

100%

100%

100%Total

Ethical Management Education and Training in Recent YearsRegion/Target MethodYear

Global/Employees(persons)

Each subsidiary organized at least two ethicalmanagement training sessions

Organized the "Corporate Social Responsibility,Environmental Protection, and Energy ConservationSeminar"

Promoted during the quarterly "Group ChiefCompliance Officers Meeting"

Clauses on complying with the Ethical ManagementPolicy are included in contracts and the EthicalManagement Policy is promoted during contract signing.

2017

2016

2018

2017

2016

2018

2017

2016

Global/Supplier(companies)

Taiwan/Subsidiaries(companies)

Total numberof hours

297

124

Persons/Companies

31,797

15,055

Coverage

100%

100%

3

3

0.4

0.5

0.45

252

237

32

32

33

100%

100%

100%

100%

100%

0.25 256 100%

2018

External whistleblower cases

Internal whistleblower cases

Cases determined after investigation to be unethical conduct

Cases determined after investigation to be unethical conduct

Anonymous

Named

Anonymous

Named

14

3

2

2

7

0

Detailed as above.

80

Case contents and audit results Progress and Improvement Measures

Case SummaryA bank teller of First Bank applied for a mortgage at Branch A using a purchase agreement with a forged signature of a custom-er. After Branch B opened an account, it handed the passbook and debit card to the bank teller instead of the customer. The bank teller withdrew funds from the passbook from Branch B without the customer's consent.Investigation Results• The copy of the real estate purchase agree-

ment provided by the customer matched the original, and the signature and seal on the mortgage application form and loan agree-ment were from the customer, so there was no forgery of the customer's signature.

• After investigation, the account opening application form on Branch B's "Seal and Image Management System" does not show any record of the application form being delivered. Hence, there are deficiencies in account opening operations.

• The seal on the withdrawal slip at Branch B was found to be the same as the seal on the signature card.

Handling resultsThe bank teller engaged in unethical conduct by working together with an agent and customer in using a fake purchase agreement to apply for a mortgage. The bank teller was found in violation of the HR management rules and was imposed a major demerit by the Personnel Evaluation Committee on December 17, 2018.Improvement• The Operation Planning & Administration Division has

included regulations on account opening operations into teaching materials related to deposit and remittance, and also promoted the regulations during deposit and remittance related video conferences.

• The Consumer Finance Division revised the "Consumer Finance Real Estate Guarantee Loan Review Work Form" and added contents for "Dummy Account Pattern Inspection" to help business units prevent loans from dummy accounts. Cases referred from scriveners and real estate agents are monitored and any abnormalities will result in the case being put on a list of controlled sources.

• The Audit Division has included "remittance of loan principal and interest by bank tellers" as a risk detection indicator. When a similar case is detected, the business unit is asked to look into the matter. If there are still major concerns regarding the explanation provided by related units, then an investigation is conducted.

Case SummaryFirst Securities received a notice from the Financial Supervisory Committee (FSC) on August 8, 2018 to give a statement. First Securities was suspected of violating the Regulations Governing Securities Firms and would potentially be imposed a penalty by the FSC in accordance with the Securities and Exchange Act. The company was requested to give a statement and provide supporting documents.Investigation Results• A former salesperson at the company's Branch

A enticed customers to invest in convertible corporate bonds, claiming that it provided a 10% yield, and converted the funds into personal loans. The former salesperson engaged in lending with several customers and held their seals and passbooks.

• A former manager at the company's Branch A was aware that the former salesperson converted customers' funds intended for investment into personal loans, and engaged in lending with several customers, but the claimed to be unaware. This is clearly poor management and supervision.

• Self-inspection personnel:Self-inspection personnel became aware when customers personally visited a service counter to retrieve their funds, but failed to conduct an investigation and submit a report in accor-dance with the standards and provisions of the internal control system.

Handling resultsThe FSC's punishment notification on November 8, 2018 determined that the former salesperson and former manager have affected the normal operation of the securities business, and ordered the salesperson be dismissed and the manager be suspended for 1 month in accordance with the Securities and Exchange Act. The company was determined to be in violation of the Regulations Governing Securities Firms by failing to implement the internal control system, and was reprimanded in accordance with the Securities and Exchange Act.Improvement• The internal audit items handled by 13 salespeople at

Branch A each day were tracked for 10 consecutive days starting on November 14, 2018, and a complete audit report containing audit report forms, audit lists, and audit working papers was prepared.

• Salespeople at Branch A were required to conduct self-in-spections, and self-inspection personnel conducted inspec-tions for 10 consecutive days. A performance improvement record and notice was issued to salespeople that could not make improvements, and the salespeople were reported to the Personnel Evaluation Committee.

• Company employees were warned to avoid further violations when handling affairs. The branch's supervisor shouldered the responsibility of management and supervi-sor, and enhance internal self-inspection operations.

• Compliance and operations of personnel were promoted during morning meetings, monthly meetings, and irregular business meetings, and employees were required to make improvements.

• If a violation is discovered, violators were reported to the Personnel Evaluation Committee based on the severity of the violation, and repeat offenders were imposed more severe penalties.

81

8382

Assessment mechanisms• First Bank, First Securities, First Securities Investment

Trust, and First life insurance have audited the implementation of fair customer treatment and reported audit results to their respective Board of Directors.

• The target training completion rate of Personal Information Protection Act and Principles for Fair Treatment of Customers in the Financial Services Industry is 100%.

• The implementation of fair customer treatment is included in self-inspection and internal audit items.

• Has there been any violation of the laws or self-regula-tory rules related to information provision and labeling of products and service?

• Improve operation procedure based on customer complaints with the goal to reduce the number of customer complaints compared to the number of the previous year. (There were 570 customer complaints in the previous year)

Results• First Bank, First Securities, First Securities

Investment Trust, and First life insurance all completed audits of the implementation of fair customer treatment in 2018, and reported audit results to their respective Board of Directors. First Securities Investment Trust is not required to submit a report to the FSC, but the remaining 3 subsidiaries all submitted reports to the FSC within the specified time period.

• In 2018, each company promoted operations related to the "Principles for Fair Treatment of Customers in the Financial Services Industry". A total of 7,944 participants completed the training and the training completion rate was 100%; each company performed related training on the "Personal Information Protection Act". A total of 7,968 participants completed the training and the training completion rate was 100%.

• A total of 414 general self-assessments and 552 project-based self-assessments of the implementa-tion of fair customer treatment were conducted in 2018. A total of 206 general assessments and 219 project-based assessments of the implementation of fair customer treatment were conducted by audit units in 2018, supervising the implementation of related regulations by various units.

• In 2018, the Group has not sold any prohibited or controversial product, the information provision and labeling of our products and service have not violated related laws or self-regulatory rules.

• As of the end of December of 2018, a total of 431 customer complaint cases were accepted, which was 139 cases fewer than the number of cases accepted in 2017. The reduction in complaint cases was due to the establishment ATMs that prevented long queues for withdrawals, and the charges for interbank withdrawal fees.

• Through wealth management products review system, the First Bank discontinued 57 wealth management products and 9 insurance products; First Life Insurance discontinued 21 products to prevent imposing excessive risks on customers and to improve customers' investment perfor-mance and protect customer rights and interests.

• As of the end of December of 2018, First Bank, First Securities, First Securities Investment Trust and First Life Insurance had all completed customer satisfaction surveys and proposed improvement programs regarding the less satisfied items.

Protection of customer rights and interests and improving satisfaction rateMaterial TopicGRI 417: Marketing and labelingGRI 418: Customer privacyGRI 419: Socioeconomic Compliance

Management guidelinesPolicies• Continue to provide customers with innovative

products and high quality services, satisfy customers' needs and improve customer satisfaction.

• Financial product trading or services are provided to customers and related matters are handled based on the duty to exercise due care as a good administrator and fiduciary duty.

• Establish a KYP system and provide products or services that are suitable for customers based on KYC and KYP.

• Clearly establish and inform rights and obligations based on the principles of impartiality and good faith to ensure the information transparency and safety of products and services.

Commitment• We will comply with applicable laws and regulations,

including the Financial Consumer Protection Act, establish, announce, and abide by our customer rights policy, establish customer compliant and dispute settlement mechanisms, and properly handle customer complaints and disputes to protect customers' rights and interests.

• We will enter into contracts with customers regarding the provision of products or services based on impartiality and reason, equality and reciprocity, and good faith. We will fully explain important contents of products, services, and agreements and disclose related risks.

Goals• The risk management unit will establish and monitor

key risk indicators (KRI), including number of new products developed, number of severe customer complaints, average time for handling customer complaints, and number of financial customer dispute cases. These KRIs will enable the monitoring of financial derivatives development to reduce the number of customer disputes and implement the principle of fair customer treatment.

• Establish regulations, code of conduct, and anti-corrup-tion measures for related operations, adopt strict confidentiality measures for customers' information, and rigorously review products and services for risk control.

• Periodically organize education and training to step up the promotion of related businesses, strengthen the expertise of salespeople, and improve operating procedures to increase customer satisfaction.

Specific management practices• Include the principle of fair customer treatment into

internal audit items and compliance self-evaluation items.

• When the risk of new and current derivative financial products increases as a result of structural adjust-ments, or before sales using new offering methods, the products must first be reviewed by the New Derivative Financial Products Review Team.

• To prevent salespeople from engaging in inappropri-ate conduct for bonuses, quarterly detection reports are generated to examine customers' investments by salespeople, product contents, trading, and customer behavior.

• Amend or conduct related safety maintenance and strengthen personal information control measures and educational trainings in compliance with the implementation of Personal Information Protection Act.

• Self-evaluations of operational risk control for personal information management are regularly conducted to ensure the protection of personal information.

• The implementation status of personal information protection, personal information related deficiencies found by audit units, personal information incident reports, handling results, and prevention measures are reported to the Personal Information Protection and Management Committee semi-annually.

• First Bank established the "Guidelines for the Management of EU Resident Personal Information" and "Notices for the Management of EU Resident Personal Information" to provide a basis for the management of personal information belonging to EU residents.

• First Life Insurance completed the certification of BS10012 Personal Information Management Systems.

• Conduct customer satisfaction surveys through telephone surveys, e-mail surveys, webpage and customer service, or outside survey firm, review items they are dissatisfied with and ask relevant department to improve.

• The sale and provision of controversial products and service are prohibited.

• Cultivate a corporate culture which values financial consumer protection and conduct regular promotion of the idea of "Principles for Fair Treatment of Customers in the Financial Services Industry" to the staff.

• Post on the website the commitment on customer service, information security measures, depositors' rights and interests and standard fee schedules for all types of businesses.

• When publishing or broadcasting advertisements and carrying out solicitation or promotional activities, there shall be no falsehood, deception, concealment, or other conducts sufficient to mislead another party, and the truthfulness of the content of advertisements shall verified.

• Adopt a review system for wealth management products and process the complicated and high-risk products with care.

• Whether or not the complaints of each company were resolved or responded to customers within the required time limit.

• Statistics of customer satisfaction surveys and the satisfaction improvement program and its implementation.

• Improve the quality of the lectures by learning customer needs through all types of seminar surveys.

Complaints mechanism• All of our subsidiaries have customer complaint

channels, including business units, customer service hotlines, and e-mail.

• The companies' contacts are established on the Group's official website; we publish the telephone number, address, and email of the contact person for customers to provide immediate feedback on issues and maintain smooth and open interactions.

• Conduct customer satisfaction surveys through telephone surveys, e-mail surveys, customer service hotlines or an external market survey company, and use open questions for customers to provide feedback.

• Banks, securities, investment trust, and life insurance subsidiary companies have published their service commitment on the website.

FS4: Procedures for improving staff implementation of environmental and social policies and procedures as applied to business linesFS15: Policies for the fair design and sale of financial products and services

Resources• Financial products, funds and insurance products are

all examined by the related product review meetings before listing and sale.

• Ensure confidentiality of customer information through self-evaluation procedure of internal control system of the Company and self-checking operation of the Company and its subsidiaries.

• Deficiencies relating to the principle of fair customer treatment found by audit units during inspections or self-evaluations of compliance must be included in the designated audit items of monthly self-inspections by business units, thereby ensuring the effective implementation of laws.

• Collect and understand laws, regulations, and international standards related to products and services that are provided or sold, and continue to organize employee education and training to improve the customer service experience.

• Integrate products and services across organizations to provide customers with comprehensive solutions across businesses, and hold investment and wealth management seminars to provide investment analysis and advice for customers.

• Through means such as expanding Internet and app services and digitalizing physical business to satisfy customers' needs and improve service efficiency.

• Bonus standards for salespeople not only take into consideration financial indicators, but also customer or consumer rights and interests, as well as non-financial indicators, such as the risk of conflict of interest and compliance standards.

• Through the implementation of customer satisfaction improvement programs, optimize business procedure, service quality and customer care activities to improve customer satisfaction.

• Establish a consumer dispute settlement system and complaint channels for customer complaints or disputes, provide proper handling within the time limit and report back the handling results to the complain-ing customers or consumers.

Duties• Abide by laws and regulations relevant to consumer

protection and "Principles for Fair Treatment of Customers in the Financial Services Industry".

• Materials prepared for advertisements and other marketing activities must be managed in the internal control system to ensure there are no inappropriate contents, misrepresentations that mislead customers, or violate the related laws. The materials must be reviewed by the supervisor of the compliance unit before external use.

8584

Value customer privacy and information security - We abide by the "Joint Marketing Firewall Policy and Guiding Principles for FFHC and its Subsidiaries", publish our customer privacy protection policy on the respective websites of the Company and each of our subsidiaries, and have formulated "Management Guidelines for Trade Secrets and Intellectual Property", "Rules for Safeguarding Confidential Data" and confidentiality levels for various forms confidential documents (including paper and electronic formats), charts and diagrams, messages, computer software, and other media and items. In addition, we provide regular trainings to employees to increase knowledge and awareness of confidentiality procedures and strictly prevent external disclosure of personal and customer data. In 2018, each compa-ny performed "Personal Information Protection Act" related educational trainings, a total of 7,968 participants complet-ed the trainings which equaled to a 100% completion rate.

For the management of personal information protection, First Life Insurance continues to renew the certification of BS10012 Personal Information Management Systems every year; First Bank established the Personal Information Protec-tion and Management Committee, which is chaired by the president and is responsible for supervising operations of the personal information management system, and established the Personal Information Event Response Team to effectively respond to and handle personal information incidents. Complaints of personal information leakage and handling results in 2018 are as follows:

Principles for Selling Products of a Highly Complex or High Risk Nature - Complex high-risk products often involve highly specialized and complex financial or financial engineering, and the utmost caution must be taken prior to listing such products for sale in order to shield customers from taking on excessive risk. During the first quarter of 2016, First Bank completely ceased offering complex high-risk products. Moreover, for structured products, in addition to issuing investment risk notices, we also formulate special notices for customers to ensure they fully understand the content of available products. Regarding targets that offshore structured products link to, First Securities makes sure it meets the screening criteria and passes the selection of First Securities Investment Trust before linking. Further, to protect consumers' rights and interests, banks, insurance, securities, and investment trust subsidiary companies all implement Know Your Product (KYP), setting up review system for investment financial products. In 2018, 172 products were reviewed before listing, 87 products were delisted and discontinued to prevent imposing excessive risks on customers and to improve investment performance and protect customer rights and interests.

Channel

Customer Service Hotline

Filed a complaint with an external unit

File a complaint with the competent authority

Number of cases

2 cases (Through the FinancialOmbudsman Institution)

2

2 cases (Through the BankingBureau, FSC)

Handling results

Measures taken by First Bank in response to the EU's General Data Protection Regulation (GDPR) are as follows:Step

1. Adjust internal regulations incoordination with the GDPR

4. Response to the GDPR's restriction oninternational transfer

5. Established a personal information leakagereporting mechanism in coordination with the GDPR

3. Commissioned an external consultantto provide consultation services

Measures

Gained the understanding ofcustomers after communication.

1. Revised the "Personal Data Management Policy"2. Established the "Guidelines for the Management of EUResident Personal Information" and "Notices for theManagement of EU Resident Personal Information”"

2. Appoint a Data Protection Officer(Data Protection Officer, DPO)

Signed the SCC and carried out international transfer under theSCC framework

Established personal information violation incident response,reporting, and prevention mechanisms

V Protection of customer rights and interests and improving satisfaction rate

5-1 Implementation of Fair Customer Treatment To accommodate the Financial Supervisory Commission's promotion of the "Principles for Fair Treatment of Customers in the Financial Services Industry", in addition to the stipulation of "Code of Conduct for Ethical Management" which provides that during the research, development, procurement, provision, and sale of products and services of each company of the Group may not damage the rights and interests of consumers and other stakeholders, FFHC also formu-lated relevant operational procedures, codes of conduct, and held educational training programs. First Bank, First Securities, First Securities Investment Trust, and First Life Insurance have all formulated and promulgated a "Principles, Policies, and Strategies for the Equitable Treatment of Customers", and a "Customer Service Commitment" is published on the corporate website. In 2018, each company performed promotion of the idea of "Principles for Fair Treatment of Customers in the Financial Services Industry". A total of 7,944 participants completed the training and the training completion rate was 100%. The relevant measures included in the "Principles for Fair Treatment of Customers in the Financial Services Industry" implemented by FFHC are as follows.

Principle of fair and honest contract - Enter into contracts with customers regarding the provision of products or service based on impartialness and reason, fair and reciprocity, and good faith. Customers are informed of important provisions and given a detailed description of contents before signing and agreement, so as to protect customers' rights and interests.

Principle of due care and fiduciary duty - When accepting customers' appointment or delegation to provide products or service, it shall be proceeded according to applicable laws or contracts, abiding by due management guidelines, exercising the due care of a good administrator and fulfilling fiduciary duty. New types of products are handled in accordance with the Standard Operating Procedures for New Types of Products. Personnel of the compli-ance unit participate in the planning and design process of new types of products. If it is necessary to submit an application to the competent authority, the Chief Compliance Officer must produce a statement to properly protect customer rights and interests.

Principle of true advertising - We comply with marketing related laws, regulations, and self-regulation, and view the contents of advertisements as part of agreements. Before publishing or broadcasting advertisements and carrying out solicitation or promotional activities, a "self-check list for the legal compliance of the sales business advertisements or publicity materials of financial products", ensuring there is no falsehood, deception, concealment, or other conducts sufficient to mislead another party, and the truthfulness of the content of advertisements. In 2018, advertisements and publicity materials evaluated using the "self-check list for the legal compliance of the sales business advertisements or publicity materials of financial products" reached 100%, and there were no violations of marketing and advertising related laws, regulations, and self-regulations.

Principle of providing suitable products and services -New types of financial instruments are being developed on an almost daily basis resulting in an even wider array of available financial products. However, not all products are suitable for all customers, and the sales staff of wealth management, fund sale and insurance business at banks, securi-ties, investment trust, and life insurance subsidiary companies must abide by various interpretative rules and self-regula-tory rules established by respective competent authorities or business associations. A Know Your Customer (KYC) assessment must be done by all customers. In addition, suitable financial products must be offered to customers based on their wealth management requirements, investment suitability, and risk profile.

Principle of Notification and Disclosure - When collecting various fees, the items, unit price, and amount of fees are provided on the business premises or company website, and are indicated in an apparent font in the contract; important customer rights are interests are indicated in bold characters, and customers' attention is brought to the bold characters. Any changes or adjustments to fees, unless they are beneficial to the customer, must be notified or announced at least 60 days before they become effective. Product brochures are provided to customers when selling wealth management and investment products (such as NTD forward product brochure, gold passbook agreement, trust and wealth management product brochure, application document and derivative financial product brochure), and specify potential risks for future reference. Furthermore, customers are informed of important rights and interests in accordance with the regulations of the competent authority, e.g. gold passbook does not guarantee profits and trust products need to pay a channel remuneration fee. Related records are retained and product and service information are fully disclosed.

The compliance officer of the London Branch was appointedthe DPO

To ensure that personal information protection for UN residentscomply with the Standard Contractual Clauses (SCC) of theGDPR, we commissioned an accounting firm to conduct a riskassessment and information security inspection. The accountingfirm's assessment was there are "no risks that require immediateimprovement, so there is no need for subsequent riskmanagement plans.

8786

5-2 Customer satisfaction surveyCustomers' ratings and overall level of satisfaction with products and services is very important to us. We conduct annual customer satisfaction surveys over the phone and through e-mail questionnaires, web pages, customer service, and external market survey firms. Improvement measures are then proposed based on customer opinions and sugges-tions from the surveys.

Customer satisfaction survey of the most recent 4 years

SatisfactionSurvey Item

2018 Performance

2017 Performance

2016 Performance

2015 Performance

First Bank(Operation Planning& Admin. Division)

First Bank(Credit Card

Division)First

SecuritiesFirst Securities

Investment TrustFirst Life

Insurance

Overall service; greeting service; service attitude, correctness of business handling, business handling time, profession-alism and waiting time for business dealing at the counter

Telephone etiquette, planning of marketing activities, problem resolution and attitude

On-site customer satisfaction survey at participating locations and investment information services

Investment information services

Sales person-nel's attitude and familiarity with products

Number of samplesin 2018 (Number ofquestionnaires / Numberof active customers) (＊5)

85.23%

84.89% (＊1)

88.90%

89.04%

86.01%

80.64%

81.93%

83.3%

84.5%

84%

82.7%

85% (＊2)

96%

96%

98%

94%

77.4%

71.5% (＊3)

70.8% (＊4)

81%

388,685

／2,977,525

5,285

／715,657

258／32,532

1,057／33,538

1,439／15,837

＊1： The lowering of scores in 2017 was due to the score intervals in the questionnaire being adjusted from 11 intervals to 5 intervals, which caused the increase of differences between each score interval.＊2：In 2015, a customer satisfaction survey was conducted which analyzed how customers perceived our investment seminars, overall services, and e-trading system. ＊3、4：Calculated based on the Net Promoter Score. To supplement, the lowering of scores in 2016/2017 was due to the dissatisfactory performance of the sold investment products in the last 2 years which caused customers to suffer from investment losses.＊5：Definition of active customer: A customer who made a transaction within the past year or a new customer registered within the past six months that has one or more effective accounts.

Principle of equity between remuneration and sales performance - Establish remuneration system for the sale of financial products (such as bonus of product promotion under the staff bonus, and all types of bonus under the staff external bonus). We consider the achievement of financial product or service sales goals, and avoid distributing the full amount of bonuses immediately after a transaction is made. Besides referring to the financial indicators of sales perfor-mance, non-financial indicators such as customer complaints and customer satisfaction, compliance and deficiencies audited are all considered before distributing bonuses. Also, a portion of the bonus is deferred to ensure there was no improper sales activity.

Principle of guaranteed complaint resolution - Establish consumer complaints and disputes resolution mechanism. In addition to formulating the "Guidelines for Handling Customer Complaints" and procedures for handling various types of business disputes, the "Stakeholder Communications" section of FFHC's official website also includes online customer support for the Company and our various subsidiaries, a toll-free 0800 customer hotline, business inquiry hotline, and complaint e-mail. First Bank has also set up various real-time communication channels for handling customer requests and complaints, including a 24-hour customer service hotline and customer service e-mail. To properly handle financial consumer disputes and complaints, First Bank, First Securities, First Securities Investment Trust, and First life insurance report applications for financial ombudsman service each quarter to their respective Board of Directors; the types of financial consumer dispute cases, number of cases, compensation amount, and handling results are also periodically reported to the Board of Directors for future reference. Customer reconciliation and response must be completed within 7-30 days (depending on the subsidiary's regulations) for customer complaints, which are analyzed by business type, and customer feedback forwarded to the relevant units as reference for further improvements. In 2018, a total of 431 customer complaints were received, down 139 compared with 2017.

Principle of professionalism of sales personnel - Salespeople that provide customers with financial products or services are required to have the qualifications specified in the laws and regulations for each industry. If salespeople are required to be registered or receive a certain number of hours of education and training, persons who are not registered or have not completed training may not serve as salespeople.

Emphasis of the Board of Directors and specific measures - Besides establishing the "Policy of Fair Customer Treatment" and "Strategy for Fair Customer Treatment", which were submitted to the Board of Directors of each subsidi-ary for review and approval, audit opinions of internal audit units related to improvements on deficiencies in consumer protection are included in semi-annual compliance reports to the Board of Directors. The compliance units of First Bank, First Securities, First Securities Investment Trust, and First life insurance all completed audits of the implementation of fair customer treatment in 2018, and reported audit results to their respective Board of Directors. First Securities Invest-ment Trust is not required to submit a report to the FSC, but the remaining 3 subsidiaries all submitted reports to the FSC within the specified time period.

Company name

First Bank

Key Tasks in 2018

• Twenty six product review meetings were convened; a total of 152 products passed the review, and 66 products met conditions requiring delisting.

• Two insurance companies have signed the CSR Declaration and 11 prepared CSR Reports. 42 companies issued a CSR Declaration.

• 34 companies signed the compliance statement for the "Corporate Investors Stewardship Principles".

Twenty nine insurance product evaluation group meeting were convened, 16 new products were sent to competent authority for provisional review, 150 products were partially altered and sent to competent authority for provisional review, 21 discontinued products were sent to competent authority for provisional review.

FirstSecurities

First SecuritiesInvestmentTrust

FirstLife Insurance

• Five financial products and services review meetings were convened; a total of 4 products passed the review, and no products met conditions requiring delisting.

• Two companies issued a CSR Declaration.• Two companies signed the compliance statement for the "Corporate Investors Stewardship

Principles".

All 24 funds were classifiedinto different fund risk levelsaccording to regulations.

Risk class/No. of Cases

RR4／9

RR5／8

RR1／3

RR2／0

RR3／4 Total：24

8988

5-4 Customer Care EventsTo promote financial knowledge and improve different groups' ability to utilize financial tools and services, we provide information on financial products and services needed by customers in different stages of life through various seminars that tour rural, urban and remote areas. We provide customers with information on different financial products and offer investment analysis and advice to maintain good customer relationships and expand our wealth management business.

5-3 Optimization of Business Processes and Service Quality1・First Bank's Personal e-Bank electronic certificates, physical OTP, and Citizen Digital Certificates support multiple browsers; integrates the official website, simple electronic bank, and simple online ATM; comprehensively upgraded to gain the AA rating of Web Content Accessibility Guidelines 2.0; added an insurance section for customers to access information on effective policies, apply for balance certificates, and access insufficient balance information on the date of deposit or withdrawal.

2・Added functions to the e-mobile app, including " First Bank mobile payment - fee/tax payment, display QR code for payment, and phone barcode", "Online AI customer services", "Quick login", "Digital savings account opening/document supplement", "Transfer NTD savings deposit to time deposit", and "NTD term deposit cancellation/maturity".

3・"e-speed loan" makes it convenient for customers to calculate their credit limit online when they are considering applying for a mortgage, making it convenient for young customers to apply for loans. As of the end of December 2018, a total of 2,266 online loan applications with a total loan amount of NT$6,755,880,000 were approved on e-speed loan.

5・To establish a highly-motivated service spirit and a warm and humble service attitude for the employees, the First Bank holds "the best service personnel at deposits and remittances counter" selection every year in order to cultivate correct service etiquette of the staff at the counter and improve the overall corporate image. A total of 183 staff were selected as "the best service personnel at deposits and remittances counter" in 2018.

2018 satisfaction improvement program and its implementationFirst Bank

(Operation Planning &Admin. Division)

First Bank(Credit Card Division)

FirstSecurities

First SecuritiesInvestment Trust

First LifeInsurance

• Include service quality and customer waiting time as a supervision item

• Customer feedback from satisfaction surveys are summarized and provided to related business administration units and branches for review and improvement

• Organize service quality audit contests

• Organize selections of the best deposit/remittance service personnel

• Deposit/remittance personnel organize education and training

• Organize service quality mock exercises

• On-site inspections of business units

• Regional centers help supervise business units in improving service quality, and notify the last 5 branches in terms of customer waiting time via e-mail each month to assist with tracking improvements

• Business administration units are responsible for describing the implementa-tion status of customer feedback

• Organized 2 service quality audit contests

• Organized selections of the best deposit/remittance service personnel and invited the service person-nel to share their experi-ence

• Deposit/remittance personnel organize education and training sessions each quarter

• Organized monthly service quality mock exercises

• Conducted on-site service quality inspections of 188 domestic business units through mystery shoppers

• Provide differentiat-ed benefits and discounts to card holders based on customers' needs, and strengthen communication with card holders

• Develop new types of products in coordination with digital mobile trends and optimize customer services

• Enhanced communi-cation with card holders through physical and digital platforms, such as official Line account, EDM, app push notifications, bills, and physical advertising of credit card discounts at branches

• Offered Apply Pay, Leezen Card 2.0, Smile Card 2.0, and the Yilan Affinity Card jointly offered with Yilan County Government, provided card holders with travel promotion plans, and increased the stickiness of card holders through promotions organized in coordination with major department stores and online channels

• Continue to optimize the electronic trading system

• Develop an AI stock picking app

• Increase the flexibility and convenience of the electronic trading system

• Continue to optimize the AI stock picking app

Continue to provide investment information and increase its frequency through electronic platforms

Continue to provide financial information, investment trends, and analysis of material market information through EDM, Line, Facebook, and videos of fund managers, allowing customers gain the latest investment information

• It is recommended to increase interactions with policy holders and provide discounts, provide policy holders with a birthday gift lucky draw, and plan more policy holder activities

• IImplement an online insurance enrollment process optimization project

• Improve the specialized knowledge of salespeople on insurance products and strengthen product risk control mechanisms

•Provided exclusive EDM notifications and services to policy holders with different attributes to increase the stickiness of policy holders

•Adjusted the website structure and presentation of web pages, and optimized the online insurance enrollment process

•Organized 49 insurance product and sales training courses for sales channel employees in 2018. The training courses had a total of 207 hours and 8,285 participants, and increased the professional knowledge and skills of sales personnel

•Stepped up promotion of profit taking and stop loss mechanisms to customers to improve their performance management

Improvem

ent prog

ram

Execution

4・First Life Insurance continues to reinforce the functions of "e-Services" app mobile service platform. The app's online change functions had been increased to 10 items, which provided the insured immediate policy search, change and convenient and practical personalized functions. An insurance product that can be purchased online was also added to the online insurance platform. As of the end of December 2018, there were a total of 911 online insurance cases, increase 24%, which accumulated to an insurance amount of 3821.43 million. The general public can get the most sufficient protection through the easiest and quickest insurance processes.

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Information security improvementMaterial TopicGRI 203: Indirect economic impactGRI 418: Customer privacySet topic / Information security protection


PoliciesThe "Information Security Management Regulations for FFHC and its Subsidiaries" was established to strengthen information security management by the Company and its subsidiaries, and ensure the security of information systems, equipment, network, and data.

CommitmentWe will strengthen information security management, and protect and control data, systems, equipment, and network to ensure the security of information systems, equipment, network, and data.

Goals• Establish a network security management framework,

strengthen security mechanisms of information systems, and strengthen system access control.

• Periodically execute information security tests and patches, and improve security controls during system development and maintenance.

• Ensured the security of information systems, equipment, network, and data.

DutiesEstablish an information security protection mechanism, implement the emergency response plan, and comply with information security standards set by the trade association.

Resources• Established an IT Development Committee responsible

for reviewing the group's information security regulations, and for tracking and reviewing major IT incidents that were reported.

• Selected independent directors with an expertise in technology. Establish a dedicated information security unit – "Digital Security Division" that is not subordinate to the IT Division, and appointed the former director of the National Center for Cyber Security Technology and deputy director of the Cybersecurity Technology Institute as a vice president.

• Establish a business continuity plan and implement information security training.

Specific management practices• Assessment mechanismsblished an IT Emergency

Response Team to respond to cyber threats.• Established the IT Management Guidelines,

Guidelines for Disaster Recovery Plan, and Guidelines for Reporting Information Security Incidents, carried out disaster recovery drills on an annual basis, and handled information security incidents in a timely manner.

• Carried out social engineering rehearsals for all employees.

• Continued to carry out ISO 27001 Information Security Management System certification.

Assessment mechanisms• Social engineering rehearsals within the scope of

security monitoring are organized at least once a year for all employees. The failure rate of the four test items in the rehearsals achieved the goal of being lower than 6-10%.

• Organized information security training sessions to raise employees' awareness of information security.

• Implementation of information security measures.

Results• FFHC, First Bank, First Securities, First Securities

Investment Trust and First Life Insurance all organized social engineering rehearsals for all employees in 2018. The failure rate of the four test items in the rehearsals was in the range 0-3.8%, achieving the goal of being lower than 6-10%.

• In 2018, 32 information security related training sessions were held and attended by 2,682 people.

• There were no information security incidents in 2018.

• First Bank, First Securities, and First Life Insurance all obtained ISO 27001 certification in 2018. First Bank hired Information Security Service Digital United to provide network security surveillance services, and also hired RSA Security to provide support in surveillance as well as anti-phishing and anti-Trojan services.

• First Bank, First Securities, First Securities Investment Trust, and First Life Insurance also prepared their Declaration on Overall Information Security in 2018."

Complaints mechanism• Announce the "Confidentiality measures for customers'

information."• Report information incidents for immediately response

in accordance with the "Incident Reporting Guide-lines."

• Information security incidents are reported in accordance with the "Guidelines for Reporting Information Security Incidents" to lower the impact on operations and loses and prevent the incident from reoccurring.

2018 Customer Care Events Schedule

Financial Planning Country Road ShowWe worked together with BNP Paribas Asset Management and First Securities Investment Trust in organizing theFinancial Planning Country Road Show, helping general consumers gain financial knowledge

Taipei, Hsinchu, Taichung, Tainan, Kaohsiung sessions in total participants1,5289

Financial Planning Workshop for CustomersPromote the correct consumer finance and wealth management concepts through financial product introduction, explanationof key topics and promotional offers.

First Bank business units 19,553832

Financial Planning Clinic Seminar

FC personnel conduct one-on-one review of customers' assets and provide advice.

30 branches throughout northern, central and southern Taiwan 55230Customer care investment checkup seminar in rural communitiesFirst Securities organized customer care investment checkup seminars in rural communities to provide customers withinformation and recommendations of the latest financial products.

Taoyuan City, Zhongli District, Hsinchu City, Tainan City, Chiayi City sessions in total 1575

Mother's Day/Father's Day Workshop

Widely invite customers to jointly promote social welfare under the theme of caring for society.

Taipei,Taichung,Kaohsiung sessions for Mother's Day/ sessions for Father's Day 1,0063 3

Insurance and Financial Planning SeminarsTo help foster greater understanding of insurance and wealth management concepts among our customers, First LifeInsurance and First Bank worked together in holding seminars to provide customers in northern, central, and southernTaiwan with the latest information on insurance products and recommendations.

Taipei,Taichung,Kaohsiung 540

Wealth Management Seminar and Celebrity Wealth Management Online WebinarsFirst Securities Investment Trust promotes investment and wealth management concepts through face-to-face presentations,forums, and webinars, teaching citizens about financial products, while sharing investment information that the market isconcerned about.

34 sessions in Taipei, Taichung, Kaohsiung and First SecuritiesInvestment Trust's official website + 12 Online Webinars 1,419

6

Reaching the Next Pinnacle of Corporate Success - Lecture SeriesThe Reaching the Next Pinnacle of Corporate Success - Lecture Series toured each industrial park, providing thelatest financial information and investment advice, promoting green financing review principles and green energy,preferential loans for key industries, and sharing energy-saving and carbon reduction measures and results.

Taichung City Precision Machinery Innovation Technology Park,Tai Yuen Hi-Tech Industrial Park, Kaohsiung Software Park,Dapumei Precision Machinery Park, Taichung Harbor RelatedIndustrial Park, Nankang Software Park, Pingtung AgriculturalBiotechnology Park, Neihu Technology Park

7758 sessions in total participants

sessions in total

sessions in total

participants

participants

participants

participants

participants

participantssessions in total

9392

6-2 Information Security MeasuresTo ensure the continuity of operations, an “IT Emergency Response Team” has been set up by FFHC to respond to network threats. The highest level supervisor (or a designated person) of the information unit serves as the convener, and members include the deputy supervisor of the information unit and responsible persons of systems. The IT Manage-ment Guidelines and Guidelines for Disaster Recovery Plan were established to provide a basis for emergency response during a disaster. Disaster recovery drills are carried out semi-annually, and the Guidelines for Reporting Information Security Incidents was established for employees to immediately handle information security incidents. To build the right concepts of information security among employees, 32 related training sessions were held in 2018 and attended by 2,682 people. FFHC, First Bank, First Securities, First Securities Investment Trust and First Life Insurance all organized social engineering rehearsals within the scope of security monitoring for all employees. The failure rate of the four test items in the rehearsals, specifically clicking on links, opening attachments, returning reply slip, and opening mail, was in the range 0-3.8%, achieving the goal of being lower than 6-10%. We strengthened information security education in hopes of preventing malware from infiltrating through social engineering.

If an information security incident occurs and causes FFHC and subsidiaries to be imposed a severe penalty, their performance score will be deducted in accordance with the Employee Bonus Rules, resulting in a lower performance bonus that year. FFHC and subsidiaries were not imposed penalties by the competent authority due to an information security incident in 2018.

First Bank has an independent third party conduct information security evaluations, which examine the completeness and appropriateness of existing control measures for the overall computer system, and discover potential information security threats and vulnerabilities. This provides the basis for implementing control measures in technical and manage-ment aspects, and improves network and information system security capabilities.

To ensure the security of network and information systems and provide customers with secure automated services, First Bank, First Securities, and First Life Insurance have all obtained the ISO 27001 certification. The subsidiaries periodically commission a certification unit for renewal and triennial re-certifications to maintain the effectiveness of their certificate, so as to provide more secure financial products and trading procedures. First Bank purchased "information system illegal conduct insurance" to prevent sustaining financial losses from computer systems being hacked. First Bank also hired Information Security Service Digital United to provide network security surveillance services, and hired RSA Security to provide support in surveillance as well as anti-phishing and anti-Trojan services.

The responsibilities of the IT Emergency Response Team are as follows:

• Review and adjustment of the recovery plan and test items.

• Review of emergency response measures and related announcements

• Review of the course of events and handling results.

• Review of other matters.

First Bank's information security emergency response plan:Emergency response plans and drill scenarios

1. Response plan for abnormal ATM withdrawal incidents:Simulated emergency response measures for branches being robbed by hackers.

2. Response plan for website under DDoS attack:Simulated emergency response measures for branches under DDoS attack by hackers.

3.Local backup plan for servers:Simulated emergency response measures for switching to servers of the TaichungCenter when servers in the Taipei Center malfunction.

4.Information security defense plan for the website application system:Simulated emergency response measures for when the Bank's website services areembedded with a Trojan horse or malicious link by hackers.

5.Remote backup plan for servers:Simulated emergency response measures for switching all information services tothe Taichung Center when the Taipei Center encounters a disaster.

Time drill was completed Drill results

6.SWIFT abnormal remittance response plan:Simulated emergency response measures for when hackers hack the SWIFTsystem and transfer funds.

2018/5/17 Met expectations

Met expectations2018/9/4





VI Information security improvement

6-1 Information Security Management Framework and StrategiesWe established an IT Development Committee with the president of FFHC as the chairperson. Committee members

include vice presidents, the head of the Information Technology Department, presidents of subsidiaries, and vice

presidents responsible for IT operations (or managers with an expertise in IT). The IT Development Committee is

convened regularly to discuss and review IT development, IT security and management issues at each subsidiary. The

head of the dedicated information security unit or the highest level supervisor and the chairperson, president, and chief

auditor of First Bank, First Securities, First Securities Investment Trust, and First Life Insurance jointly issued the 2018

Declaration on Overall Information Security of each subsidiary, which was submitted to the Board of Directors of each

subsidiary and then disclosed on the MOPS.

The Board of Directors of FFHC reviewed and passed the Information Management Policy and Guidelines to support

the group's overall business development and ensure the effective utilization of IT resources, while giving consideration

to the security of information systems and operations. The policy and guidelines stipulate that FFHC and subsidiaries

must establish information management regulations based on the characteristics of their industry. Furthermore, the IT

Management Guidelines was established in coordination with information management related laws and regulations

to strengthen the information systems, network equipment, and data security of FFHC and subsidiaries, and also to

strengthen internal control functions. Provisions on the use and security of IoT equipment were added to the Information

Security Management Regulations in response to the requirements of the Bankers Association of the Republic of China

on IoT equipment. The Internal Control System contains detailed rules and manuals for information security/online

security risks, including application system operations management, hardware and environment management, network

management, webpage management, e-mail security management, computer user access rights management,

disaster recovery procedures, subsidiary supervision and computer file preservation, storage and processing principles.

First Bank established a dedicated information security unit – "Digital Security Division" that is not subordinate to the IT

Division in 2016, so as to overhaul our digital banking operations and information security management. Pei-wen Liu,

the former director of the National Center for Cyber Security Technology and deputy director of the Cybersecurity

Technology Institute was appointed as a vice president. It is responsible for planning IT strategies, establishing and

managing the information security policy, managing system and network security, planning the IT infrastructure, and

implementing and maintaining the information security management system.

Please refer to the MOPS for the Declaration on Overall Information Security of each company.

• Review the group's IT development strategy

• Review the group's IT structure

• Review the group's information security regulations

• Plan the group's IT resource integration

• Review the annual IT development and investment plans

of subsidiaries and review implementation results

• Track and review major IT incidents that were reported

• Other IT management related matters requiring

coordination between FFHC and Subsidiaries

IT DevelopmentCommittee

Duties

9594

Assessment mechanisms• The implementation of AML/CFT by each

subsidiary is reported to the Risk Management Committee bimonthly and to the Board of Directors and the Audit Committee semi-annual-ly.

• We incorporate important laws and regulations such as the Money Laundering Control Act and Counter-Terrorism Financing Act into compli-ance matters of responsible departments. Compliance self-evaluations are conducted semi-annually, and written exams or sampling inspections are administered to determine if personnel understand and comply with laws and regulations.

• Meetings between dedicated AML/CFT supervisors of each subsidiary and on-site visits are carried out on a quarterly basis, during which subsidiaries report and exchange their AML/CFT implementation status.

• The effectiveness in controlling financial frauds.

Results• Subsidies for CAMS membership fees and

registration fees and incentives totaled NT$73,404,905 in 2018. As of the end of 2018, a total of 1,305 employees obtained CAMS.

• The Company and subsidiaries have estab-lished AML/CFT policies, procedures, and control measures in accordance with regula-tions, and continue to review and optimize current AML/CFT related internal regulations and operating procedures. Current functions and threshold parameters are periodically reviewed and adjusted based on risks, and subsidiaries continue to organize training for employees.

• In 2018, 939.55 hours of AML/CFT related training sessions were held and attended by 30,331 people.

• In 2018, a total of 18 fraud attempts were successfully prevented, resulting in NT$4.23 million in fraudulent funds being blocked.

Prevention of money laundering, financial fraud and terrorism financingMaterial TopicGRI 419: Socioeconomic Compliance

Management guidelinesPoliciesThe "FFHC AML/CFT Policy" is a consistent set of anti-money laundering and counter terrorist financing guidelines established to maintain financial stability, combat criminal and terrorist financing activities, and prevent facilitating money laundering and terrorist financing activities through the provision of financial products or services of the company.

CommitmentTo enhance group's AML/CFT, we made a commitment for subsidiaries to create a culture that attaches importance to AML/CFT, and will allocate sufficient manpower and provide sufficient resources for the implementation of AML/CFT operations, actively enhancing th group's AML/CFT capabilities. We will raise the AML/CFT awareness of all employees so that AML/CFT operations are properly carried out.

GoalsWe will establish the group's joint defense framework through periodic meetings, on-site visits, and continual supervision of AML/CFT implementation by subsidiaries, preventing financial crime at the Group level. We hope to thereby comply with international AML standards and regulations, protect lawful and reasonable business activities, maintain the reliability of the financial system, and ensure the security and order of the financial market.

Specific management practices• We established the "FFHC AML/CFT Policy,"

"FFHC AML/CFT Plan," and "FFHC AML/CFT Group Information Sharing Policy and Control Procedures," for the effective implementation of AML/CFT. We continue to revise internal regulations in coordination with the latest AML regulations announced by the competent authority.

• We supervise and review the implementation of AML/CFT by subsidiaries to make improve-ments:

1.During quarterly meetings, subsidiaries give reports on the implementation of AML/CFT.

2.In order to keep the Board of Directors informed of the Group's AML/CFT plan implementation, a semi-annual report is given on the management of regulatory changes related to AML/CFT; results of audits by financial inspection agencies, the Company's Audit Division, the audit unit of each subsidi-ary, or an independent third party, as well as improvement measures; statistics and descriptions of comprehensive risk assess-ment results, the AML/CFT plan, and AML/CFT controls; review and improvement of the AML/CFT system and operations; subsidiaries supervising the compliance of reinvestment enterprises with AML/CFT; assignment and training of AML/CFT personnel; key points of the AML/CFT plan for the next six months; sharing recent cases related to AML/CFT.

• To actively prevent financial frauds in order to avoid loss of property for customers.

Complaints mechanism• Reports on the implementation status of

subsidiaries (such as improving deficiencies found in audits, personnel training, and number of STRs), reports on risk assessment results (prevention plan tracking), and reports on major incidents.

• Group management and high risk customer information sharing mechanism.

Resources• Subsidiaries have invested adequate resources

and manpower to strengthen the AML/CFT mechanism, and hired Deloitte to provide consulting services for optimizing the Group's money laundering and terrorist financing risk assessments.

• We subsidize Certified Anti-Money Laundering Specialist (CAMS) membership fees, registra-tion fees, and incentives, and provide extra credit for passing AML/CFT related certifica-tions.

DutiesSupervise subsidiaries in periodically conducting comprehensive evaluations, establish risk prevention plans, examine internal regulations on AML/CFT and AML operating procedures, and periodically evaluate information system functions and parameter thresholds, the appoint-ment of dedicated units or supervisors, and the organization of education and training.

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2. Incentive measures and activitiesFFHC, First Bank, First Securities, and First Life Insurance provided subsidies for CAMS membership fees and registration

fees and incentives that totaled NT$73,404,905 in 2018. As of the end of 2018, a total of 1,305 employees obtained

CAMS. Furthermore, First Bank provides extra credit for CAMS and AML/CFT certifications when considering employees

for promotions.

3. Non-face-to-face customer due diligence:We live in an era where smartphones are banks, which was brought by the trend of digitalization. First Bank encoun-

tered the issue of identity verification when new customers open a digital account with the smartphone app. First Bank

uses the customer's account, Chinese name, date of birth, and mobile phone number at another bank (there are current-

ly 22 domestics banks that accept identity verification), along with dual ID documents uploaded by the customer on the

app for two-factor authentication. After verifying that the account is opened by the customer via a phone call, subse-

quent account opening procedures are carried out according to the bank's due diligence procedures.

4. Control measures for high-risk customerWe stipulated in the FFHC AML/CFT Plan that PEPs of foreign governments, terrorists/terrorist organizations under

economic sanctions or identified or investigated by a foreign government or international AML organization, and

individuals, legal persons, and groups designated in accordance with the Counter Terrorism Financing Act shall be

directly viewed as high-risk customers. Subsidiaries may specify the types of customers that are directly viewed as

high-risk customers based on their business patterns and with consideration to related risk factors. We require subsidiar-

ies to periodically examine whether if they have sufficient information for identifying customers and beneficial owners,

and ensure that the information is updated. For high risk customers, the information must be examined at least once a

year, and different control measures must be adopted for high-risk customers and customers with specific high risk

factors based on the risk prevention policy and procedures, so as to effectively manage and reduce known risks.

VII Prevention of money laundering, financial fraud and terrorism financing

7-1 The Group's AML/CFT Management FrameworkFFHC continues to strengthen its AML/CFT mechanisms, and has stepped up its supervision and management of

overseas business locations' compliance with AML/CFT regulations. For example, First Bank began appointing full-time

AML/CFT supervisors at 43 medium to large business locations in January 2018, so that it can meet international

standards and control AML/CFT operations. The full-time supervisor may concurrently hold the position of regulatory

compliance supervisor and conduct self-audits, but may not be involved in any other operations to ensure the position's

independence.

Regular internal training thatuses cases for learning

Computer training courseself-evaluation form

The laws/regulations manager isresponsible for company-wide internalnetwork training

The laws/regulations unit providesface-to-face training

Face-to-face training by external institutions

Mandatory annual training

Total 30,331 people attended the courses with a total of 939.55 hours

FFHC

41 people3.5 hours

Banks

8,980 people220.5 hours


33 people2 hours

658 people28 hours

413 people16 hours

Securities

107 people1.5 hours


76 people7 hours


102 people104 hours

SecuritiesInvestment

Trust

142 people2 hours

144 people1 hours

32 people2 hours

255 people64.5 hours

56 people21.5 hours

16 people216 hours

LifeInsurance

62 people4 hours

259 people17 hours

92 people32.5 hours

22 people128 hours

AMC

143 people1 hours

3 people3 hours

4 people11 hours

7-2 Implementation of Anti-Money Laundering and Counter Terrorism Financing

1. Education and trainingTo improve the abilities and performance of the group's employees in AML/CFT, categories of AML/CFT education and

training courses organized by FFHC, First Bank, First Securities, First Securities Investment Trust, and AMC in 2018 are as

follows:

Board of Directors

First Bank First SecuritiesFirst Securities

Investment TrustFirst Life

Insurance

Supervisor: 1 /Personnel: 11

FFHC Compliance Department

Chief Compliance Officer(Supervisor/Vice President)

Director: 1Supervisor: 1Handlingpersonnel: 3(1 dedicatedpersonnel)

Each subsidiary isrequired to identify,assess, and controlits own ML risk

Effectiveness ofthe design andmanagement ofthe audit andtesting system

FFHC Audit Unit




Anti-Money Laundering and Counter Terrorism Financing Organization Structure

First CommercialBank(USA)

FCB LeasingFirst Worldsec

SecuritiesSecurities

First CapitalManagement

9998

6. Monitoring criminal activity such as ML/TFFirst Bank uses the 53 suspicious trading patterns of ML/TF in the appendix of the Model Guidelines for Banks' AML/CTF Policies and Procedures announced by the Bankers Association of the Republic of China for monitoring. First Bank issued 1,359 STRs in 2018, nearly doubling compared with the 716 STRs in 2017, showing its achievement in preventing and monitoring ML/TF.

The 8 types of crime with extremely high threat of ML in Taiwan identified in the National Risk Assessment issued by the Anti-Money Laundering Office, Executive Yuan were used for classification. The top three most common types of crime in STRs of First Bank were fraud, securities fraud, and tax crime. This is consistent with the statistics of transac-tions suspected of ML/TF compiled by the competent authorities (such as prosecutors offices, police departments, Ministry of Justice Investigation Bureau, and Ministry of Finance National Tax Administration) in 2018, showing the quality of First Bank's STRs.

7. AML-related Information DisclosuresFirst Bank discloses AML information and the Wolfberg AML Questionnaire it signed in the AML section of its website to increase AML information transparency.

7-3 Preventing financial fraudIn recent years, there has been a noticeable increase in the number of financial fraud incidents. To better safeguard its customers' assets, First Bank has formulated the "Over-the-Counter Caring Checklist" and "Fraud Prevention and Large-sum Withdrawal Precautions for Depositors at Business Units". Furthermore, with regard to withdrawals and transfers made by customers, in cases where transfer requests to designated accounts or cash withdrawals made by senior citizens exceed a certain threshold, or in cases where the monetary amount, frequency, or circumstances of a transaction are deemed suspicious or abnormal and thus potentially indicating fraudulent activity, it is the policy of First Bank to make a reasonable inquiry as an expression of concern to protect its customers. When necessary, local police precincts are notified to dispatch officers to conduct verification measures or provide a police escort for customers making large-sum cash withdrawals. First Bank is dedicated to complying with all government policies and regulations aimed at curbing fraud and abuse and helping to identify and report scammers and frauds to the authorities. In addition, we provide our bank tellers with detailed instructions and training on how to handle suspicious incidents in a courteous manner, including analyzing the details of actual cases of fraud provided by local law enforcement and media reports concerning the latest information on scams and other fraud techniques, thereby strengthening our ability to effectively stop these scams from occurring. In 2018, a total of 18 fraud attempts were successfully prevented, resulting in NT$4.23 million in fraudulent funds being blocked.

5. Measures superior than what the law requires• We commissioned Deloitte to provide AML optimization services to strengthen AML/CFT related regulations of subsid-

iaries and the group's AML/CFT policy, establish consistency between the group's IRA methodology and risk assess-ment, and optimize the AML system, operating procedures, and internal regulations of subsidiaries. Deloitte also provided guidance and assistance to subsidiaries First Securities, First Securities Investment Trust, and First Life Insurance in establishing more comprehensive AML/CFT control measures.

• The FSC only requires banks and insurance companies to commission an accountant to audit AML/CFT assurance projects. However, in order to verify the AML/CFT implementation status of other subsidiaries - First Securities and First Securities Investment Trust, and ensure that they properly conduct ML/TF risk assessments, we commissioned PwC, the accounting firm that audited the AML/CFT project of First Bank and First Life Insurance, to also audit the AML/CFT project of First Securities and First Securities Investment Trust, increasing the strength and depth of audits to ensure the consistency of the group's methodology and assurance project audit standards. The four subsidiaries above all received the conclusion "present fairly, in all material aspects" in PwC's assurance report.

First Bank Customer Due Diligence (CDD) procedures are as follows

1. Check and authenticate customer identity• Request application form

for opening an account and business dealings

• Request the customer's identification documents

• Establish non-face-to-face customer due diligence methods for electronic payment and digital banking

2. Check and identify the beneficial owner• Request the Articles of

Incorporation, sharehold-ers list, and identification documents of the customer and its institutional shareholders for identifica-tion, and examine if bearer shares were issued.

3. Request information on senior management• Request declaration from

senior management and beneficial owner

System• Connect to

World Check database, search for the names and determine if they are PEPs, on the Specially Designated Nationals List for terrorist financing, and terrorists or terrorist groups identified or being investigat-ed by foreign governments or international organizations.

• Manual determination and comparison.

• Input results into "customer risk rating transac-tion," integrate the customer's risk score, determine the customer's risk level, and then create a financial file for the customer.

• Immediately generate the customer's risk level

Control measures for high-risk customer• Reject the application to

open an account Execute the "lending and

deposit watchlist mainte-nance transaction" to add the customer on the blocked persons list for system control:

1. If the customer is under economic sanctions, an individual, legal entity or organization sanctioned by the Ministry of Justice in accordance with the Terrorism Financing Control Act, or is a terrorist/terror-ist group identified or investigated by a foreign government or internation-al organization.

2. Compile a Suspicious Transaction Report (STR) according to regulations

If the customer is on the Specially Designated Nationals List, report the customer and freeze the customer's assets.

• Allow the customer to open an account１.If the customer is a

domestic PEP, increase the customer's risk score by occupation, and adopt different levels of control measures based on the customer's risk level.

2. If the customer is a foreign PEP, list the customer at a high risk level and raise the review level to senior vice president or manager.

Examine whether if there is sufficient information for

identifying customers and beneficial owners at least once a year, and ensure that the information is

updated

Independent third party assurance• The

indepen-dent auditing function for the effective-ness of the AML/CFT system is specified in the "First Bank Overall AML/CFT Plan."

• Indepen-dent third party assurance results and report were approved by First Bank's Board of Directors.

Retain the document records above for 5 years

4. Understand the nature of the relationship and purpose for dealing with the customer• Request the business

dealing statement

Fraud

Securities fraud

Tax crime

Corruption

Drugs

Organized crime

Gambling

Third party ML

Total

3,839

491

267

198

132

105

103

0

5,135

74.76

9.56

5.20

3.86

2.57

2.04

2.01

0

100

Statistics of cases of competent authorities

Number of cases Ratio (%)

144

15

9

2

8

0

6

0

184

78.26

8.15

4.89

1.09

4.35

0

3.26

0

100

Number of cases Ratio (%)

Types of cases in STRs of First Bank

Custo

mers

that o

pene

d new

acco

unts

or en

gage

in ne

w bu

sines

s dea

lings

101

GREENFINANCE

Climate change risks and opportunitiesMaterial TopicGRI 203: Indirect economic impactGRI: guidelines and financial services sector disclosure standards: Product Portfolio


100

Policies• To ensure the implementation of our CSR

Policy, the Company established CSR Committee which had "Customer Care" and "Environmental Sustainability" groups to carry out our business philosophy of "Green Finance".

• First Bank set up "Green Finance Commit-tee", supporting the development of "Green Finance" with four approaches as "Green Financing", "Green Consumer Finance", "Green Examination" and "Green Investment".

• The Environmental Sustainability Group of the CSR Committee is tasked with identifying potential climate change risks and planning sustainable response measures.

CommitmentFirst Bank invests resources in related green finance industries through equity and business activities to increase the scope and strength of green finance products and fulfill social responsibilities.

Goals• Combine core competence to assist in

industrial transformation and achieve the goal of "No. 1 Brand in Green Finance".

• Introduce the Task Force on Climate-re-lated Financial Disclosures (TCFD) framework to analyze the Group's climate change risks and opportunities and strengthen the Company's climate change governance.

Duties• Support the development of green and

sustainable industries: Combine core competence to assist in the industrial upgrading of green industries like wind power, bicycles, biofuel, fuel cells, organic agriculture, electric vehicles, pollution remediation and recycling, and provide funding for their operation and develop-ment. Provide assistance and develop investments targeted at green energy industries.

• Provide energy saving products and services: Make sure business operation, products and services do not influence ecological conservation; lower the impacts of products and services to the environ-ment; reduce energy consumption; and assist the development of clean energy.

Resources• Play the role of the finance industry in

the capital supply chain and create sustainable finance.

• Host energy-conservation symposiums, Corporate Gold Workshop, and environmental education to facilitate exchanges with customers, suppliers, and various stakeholders through related promotion events and communi-cate the Group's green finance products, policies, or ideals.

Specific management practices• CSR Committee of the Company determines climate change

management policy; senior executives of each business group direct business management units to propose execution strategy, execution plan, short, medium and long-term goals and KPI, follow up on the results and regularly report the execution performance and conduct reviews.

• Establish defense corps for responding to typhoons, flooding, earthquakes, bank runs, epidemics, fires, explosions and other emergencies to manage climate change risks.

• Gather domestic and foreign environmental protection and energy saving and carbon reduction trend and changes in the environmental regulations through news, websites of environmental groups, external consultants, Environmental Protection Administration and environmen-tal protection bureau of local governments, information of the industry and international reports.

Assessment mechanisms• Add 4 new urban renewal financing cases• Extend credit loans to companies and provide green financing

(including green industries and green companies) with the targets of NT$100 billion for approved loans and NT$55 billion in balance of loans.

• Launch the processing of “Industrial Innovation Plan Loans” with an annual loan approval target of NT$60 billion and an outstanding loans target of NT$395 billion.

• Continue to implement the "green consumption loan" project with a target annual loan credit line of NT$300 million to provide customers with funding for the purchase of green energy or energy-efficient products.

• Set the target outstanding volume of Living Green Card at 20,000 and LEEZEN Co-Branded Card at 42,800 and donate a certain percentage of credit card consumption amount to the foundation for the charitable events promoting environmental sustainability and organic agriculture, so the card holders can make contributions to the earth while using the credit cards.

Results• Added 6 new urban renewal financing cases• As of the end of December 2018, domestic branches approved a

total of NT$108.247 billion in loans and NT$57.908 billion balance of loans in green financing (including green industries and green companies). Overseas branches approved a total of US$330 million in loans with US$210 million in balance of loans.

• As of the end of December 2018, new “Industrial Innovation Plan Loans” loan approval amounted to NT$62.32 billion and credit balance was NT$446.2 billion.

• As of the end of December 2018, new “green consumption loans” loan approval amounted to NT$550 million.

• As of the end of December 2018, the outstanding volume of LEEZEN Co-Branded Card were 49,581 and "Green Credit Card - Living Green Card" were 29,843. Cumulative donations from the two cards amounted to NT$88.6 million.

Complaints mechanism• The “Stakeholder Communications” zone set up on our official

website discloses communication channels such as the complaints hotline number or e-mail box, etc. for our employees, investors and customers to file their complaints.

• Stakeholder survey in the corporate website's CSR section.

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Building "the No. 1 Brand in Green Finance" Milestones

2010Formed the "Green Building Certification Program" team to open the way to green finance.Promoted "Urban Renewal Financing" to encourage the renewal of aging communi-ties.Launched the "No.1 Promoter in the Energy Industry" financial plan, making First Bank the first domestic bank to offer a financing program for the ESCO industry.Established the Organic Agriculture Assistance Project and launched the first charity co-branded card based on the concepts of "going organic to stay healthy" and "environmental conservation". The card enables First Bank to team up with customers to help small organic farmers that lack manpower and financing in order to protect the land of Taiwan.

2011Defined the CSR Policy and Code of Conduct, and also established a CSR Committee to set annual environmental conservation targets and action plans.Launched the "Green Energy Industry Loan" to support the development of the green energy industry.

2012Set a sustainable development target of "becoming the number one brand in green finance".Required the headquarters building to reduce its GHG emissions in 2015 by 12% compared to 2011.Launched the "Renewable Energy Creation Loan" to help business owners purchase renewable energy generation equipment.The FFHC headquarters building (opened in 1982) received the Green Building Mark certification (passing grade), making it the first redevelopment project of its kind in Taiwan to comply with the high standards of the new green building specifications.Cultivated the concepts of energy conservation and reducing our carbon footprint among employees and reinforced the application and implementation of environmental education principles.Installed a rainwater recycling system at the headquarters building, therebyhelping to conserve water resources.

2013In 2012, a target was set to reduce the headquarters building's GHG emissions by 12% by 2015 compared to 2011, and the goal was achieved ahead of schedule in 2013.Signed up for the Carbon Disclosure Project (CDP)Set electricity, water, fuel and gas conservation targets for each company. The annual reduction target must also be no lower than the ratio set for the previous year.Incorporated ISO 50001 Energy Management System guidelines for the IT Building for the first time and received certification.Incorporated ISO 14064-1 Greenhouse Gas Inventory System guidelines for five company locations including the IT building for the first time and received certification.

2014Formulated the Green Financing Review Principles based on the Equator Principles, enabling us to better protect the environment and incorporate sustainable principles into our core business operations.Lighting systems at all company locations have been upgraded to only use LED fixtures.

2015Defined the tenets of "Green Partners" and extended the ideals of the Equator Principles to banking and insurance products. A "Do-Not-Invest List for CSR Violations" was also established as a reference for group companies to use during investment reviews.Established the 3-step Supplier Management Procedure to join suppliers in protecting the local environment.Employees obtained "Environmental Educator Qualifications" certification, allowing them to plan and formulate the content of the Company's environmental education courses.Arranged for employees to take part in online environmental education courses to ensure all employees have a good understanding of environmental protection and sustainability awareness.Implemented the "zero waste bin" policy, which maximizes the effect of our recycling efforts by using more effective sorting methods.Completed the introduction of environmental accounting and reporting procedures at First Bank.Launched mobile credit cards and debit cards, which use smart phone functionality to reduce plastic waste and carbon emissions.Incorporated ISO 14001 - Environmental Manage-ment System guidelines at the FFHC Headquarters building for the first time and received certification.

2016Launched the "Preferential Loans for Key Develop-ment Projects" plan, which is a new lending service aimed at meeting the financing needs of key development projects in the areas of green technology, modern agriculture, and businesses involved in the circular economy.Established two solar-powered bank branches and six solar-powered electronic billboards.Introduced indoor air quality self-management at 189 company locations and established real-time indoor air quality monitoring systems at 8 company locations.Purchased electronic scooters for our corporate fleet, enabling us to more effectively reduce our CO2 emissions.Held a Environmental Protection and Energy Conservation Competition which resulted in reducing our energy consumption by 89,000 kWh and issuing 18 awards to employees.Incorporated PAS 2060 - Carbon Neutrality guidelines at four locations including the Wanhua Branch building for the first time and received certification.Incorporated ISO 14046 Water Footprint guide-lines at the headquarters building for the first time and received certification.Incorporated ISO14064-1 Other Indirect Emission Inventory (Indirect greenhouse gas emissions in transportation - Business travel) for the first time and received certification.

2017First Bank set up "Green Finance Committee", supporting the development of "Green Finance" with four approaches as "Green Financing", "Green Consumer Finance", "Green Examination" and "Green Investment".First Bank, First Securities, First Securities Investment Trust, First Life Insurance and First Financial AMC all introduced "ISO14064-1 Other Indirect Emissions Inventory (Indirect greenhouse gas emissions in transportation - Business travel) and had been tested and verifiedFirst Bank obtained "ISO 14001 Environmental Management System" verification for 7 operating officesThe first one in the financial industry of Taiwan that obtained the "Counter Service Carbon Footprint PCR Formulation and Inventory of Environmental Protection Administration" verificationSet up "Solar Power Generation and Rainwater Recycling Ecological Hydroponic Green Roof" at Wanhua branchCharitable event with cross-industry alliance-Green Light Love ProjectRated as level B in both CDP questionnaires for climate change and water security. Launched "Green Credit Card - Living Green Card"Launched projects of "green consumption loan" for purchasing green energy or energy saving productsThe only one in the financial industry of Taiwan that extended the "ISO 14064-1 Greenhouse Gas Inventory" to its 33 foreign operating offices

2018FFHC received the Climate Change A List rating and Water Resources B List rating from the Carbon Disclosure Project (CDP) in 2018 and became the first Company in Taiwan's financial industry to attain Leadership A List.All First Bank's 188 domestic branches adopted the "ISO 50001 - Energy Management System certification".All 192 business locations of First Bank, First Securities, First Securities Investment Trust, First Life Insurance and First Financial AMC achieved "ISO 14001 Environmental Manage-ment System" certification Yilan Branch green building obtained the only "Diamond-class" Green Building Mark for historical site in Taiwan.First Bank collaborated with Yilan County Government and issued the "Forest Yilan Affinity Card". First Bank donated 0.3% of regular purchase payments for use in tree planting, tree protection, and social welfare activities.We coordinated the syndicated bank loan of over NT$10 billion for the largest solar cell manufacturer in Taiwan as the lead arranger.We raised and managed a green energy fund of NT$330 million for investment and construction of solar power plants with total installed capacity of approximately 27MW.First Bank London Branch applied for the certification for old buildings based on the Building Research Establishment Environmental Assessment Method (BREEAM) and was rated "Very Good" for its own office building improvement project.

105104

In response to the potential positive and negative financial impact of extreme weather on FFHC, the Environmental

Sustainability Group of the CSR Committee is tasked to identify potential climate change risks and opportunities and

assemble all subsidiaries and each business management department to perform correspondence of indicator match

using the TCFD (Task Force on Climate-Related Financial Disclosures) framework, improve the downward differences

and check and identify the operation risks and opportunities of the Company due to physical, transformation and other

aspects. It shall establish a risk and opportunity matrix and use the outcomes of the matrix analysis to establish risk

management strategy regarding the major risks as the core response action to the climate change, and estimate

management cost and financial impact accordingly. The goal is to strengthen the Company's climate change gover-

nance, systematically connect assessments and finances, reduce risks, and gain business opportunities.

To avoid the investments and financing risks derived from climate change, our Green Finance Committee-Green

Examination Group identified and assessed the environmental risk factors and revised the related policies or principles

of credit and investment review to prevent financing risks arising from climate change; also, related policies or

principles were included into the climate change management policy of CSR Committee of the Company while senior

executives of each business group directed business management units to propose execution strategy, execution plan,

short, medium and long-term goals and KPI, follow up on the results and regularly report the execution performance to

the Board of Directors and conduct reviews.

Assemble each subsidiaryand business managementdepartment and divide theminto groups based on thenatures of business.

01

Adopt risk reduction measure andanalyze its the cost corresponds withits performance; if it was analyzedto be feasible, then perform the riskreduction measure.

06

After performing the risk reduction and transfermeasures, assume the risk when it occurs andrecover as soon as possible.

09

After performing the risk reductionmeasure, analyze its possible financialimpact and evaluate whether or not totransfer the risk, such as purchaserelevant insurance, if the financialimpact is severe.

07

Evaluate the sufficiency of the said reductionand transfer measures and if there is roomfor improvement. Draw up the standardresponse process for the next risk.

08

Provide risks and opportunitieslist and discuss the definition ofeach risk and opportunity andits relevance to the business ofthe Company.

02

Calculate risk or opportunity index.

04

Evaluate the impactstrength and occurrencefrequency.03

Draw significant riskor opportunity matrix.05

Major steps and risk management process for identifying climate change risk sand opportunities

TCFD Indicator Disclosure FrameworkIndicatorLevel Corresponding CSR Chapter

Governance

Strategy

Riskmanagement

Indicatorsand Goals

A. Describe supervision of the Board of Directors on climate related risks and opportunities

B. Describe management's functions in assessing and managing climate related risks and opportunities

Green Finance P104

Green Finance P104

Sustainable Development GoalsP38~P43

Sustainable Development GoalsP38~P43

A. Describe the short, medium and long-term climate related risks and opportunities identified by the Group

B. Describe climate related risks and opportunities that would pose major impact on the business, strategies and financial planning of the Group

C. Describe the resilience of the Group's strategy, take different scenarios of climate change into consideration, including situation of 2°C or lower

Green Finance

1-1 Climate change risks

1-2 Climate change opportunities

Green Finance


A. Describe the Group's process of identifying and assessing climate related risks

B. Describe the Group's process of managing climate related risks

A. Disclose the indicators used by the Group to assess climate related risks and opportunities in compliance with strategy and risk management process

B. Disclose emissions and related risks in Scope 1, 2 and 3 (if applicable)

C. Describe the Group's targets in managing climate related risks and opportunities and the performance of those targets

C. Describe the Group's process of identifying, assessing and managing climate related risks and how to incorporate it into the overall risk management

Green Finance3-2 Set clear carbon reduction goals1-1 Climate change risks

107106

FFHC Identify the risks of climate changeType Item Impact on Company Operations Risk Mitigation Management Measures

Tropical

cyclone

Rising sealevels

Uncertaintyofregulations

Voluntaryagreement

Mandatorydeclaration

Internationalconventionsoragreements

Rising sea level exposes some business units toflood risk.

Extremeprecipitationand drought

Extreme drought may lead to lack of electricity.

Extremeclimatechange

In recent years, days of high and low temperatureincreased, the temperature change was severe. Days ofhigh temperature caused substantial increase in electricityused for air conditioning of the Company, which increasedthe energy consumption.


As tropical cyclones may cause damage to the information appliances, the Company appoints professional contrac-tors to conduct inspections and mainte-nance for mechanical and electrical equipment and we set up waterproof gates, sandbags, and other flood-preven-tion measures.We purchase insurance for investment property held by the Company and all-risk home insurance for credit asset to transfer risks and enhance protection of creditor's rights.As to the risks of extreme climates, rising sea levels and tropical cyclones, the Company pays close attention to droughts, severe rainfalls and power supply alerts and establish defense corps for respond-ing to typhoons, flooding, earthquakes, bank runs, epidemics, fires, explosions and other emergencies to manage climate change risks.Avoid waterfront low-lying areas when choosing the locations and purchasing lands and buildings for the operating offices; If any asset held locates at a waterfront low-lying area, we will try to dispose of it or transfer the risk by insurance.

In response to possible legislation in the future that requires any unit with a contract capacity of 800 kW or more to obtain 10% of its electricity from renew-able energy which incur higher costs, the Company shall replace existing equipment with more efficient equipment, reduce contract capacity, formulate plans for power generation and reduce electricity purchased from external sources, and seek cheaper renewable energy. We shall pay close attention to information on new technology and consult suppliers on the availability of new equipment with higher efficiency or carbon reduction technology.As the "Indoor Air Quality Management Act" may be expanded to include all business units, the Company shall initiate autonomous management of air quality for all business units in advance. We shall inspect and monitor CO2 concentration in office environments every six months. For business units with CO2 concentration of higher than 1,000ppm, we shall send personnel to the locations to survey and plan improvement measures.Gather domestic and foreign environmen-tal protection and energy saving and carbon reduction trend and changes in the environmental regulations through news, websites of environmental groups, external consultants, Environmental Protection Administration and environ-mental protection bureau of local governments, information of the industry and international reports; also, confer with the consultants and collect domestic and foreign cases to draw up response policies.

• Damage to the information appliances due to tropical cyclones.

• Tropical cyclone caused harm to the staff for the confirmation of disaster damage.

• Tropical cyclone caused the affected households to be unable to repay loans which led to the loss of principal to the Company.

• Work being called off due to tropical cyclone which resulted in the disruption of operations.

• Tropical cyclone caused decrease in the asset value of the Company's investment real estates.

• Tropical cyclone caused damage to offices or equipment.

• Tropical cyclone caused bodily injury to the insured of the Company which led to the increase of claim amount.

• Regulations on renewable energy certificate or carbon right certificate transactions being unclear.

• The Company plans to raise and manage green energy fund for investment in solar power plants in Taiwan, but the risk of regulatory uncertainty persists.

• The government is expected to mandate users with a contractual capacity of 800 kW or more to obtain 10% of its electricity from renewable energy. This type of energy is expensive and in short supply and may incur more operating cost or penalty risks to the company.

• Regulatory change regarding renewable energy will influence power companies the Company reinvests in.

• Indoor Air Quality Act presently only regulates business department in head offices of the financial industry, such Act may extend to regulates all business departments in the future and thus increases the Company's operating costs.

• If the government requires users with a contractual capacity of 800 kW or more to save 1% of electricity every year, the Group may be subject to government sanctions since it has already reduced carbon emissions since 2012 and encountered bottlenecks. The Group may face difficulties in achieving voluntary carbon emissions reduction goals if no new low-car-bon technology is developed. The Group must reach the goals by trading carbon rights or purchasing renewable energy certificates.

Paris Agreement requires that each country dedicates to maintaining temperature rise within 2℃ compared to the temperature before Industrial Revolution, which will indirectly affect our Company.

• Investors in the stock market may reduce their holding of stocks lacking corporate sustainability, if securities underwriting departments and dealing departments invested using the Company's own funds continue to underwrite or invest, the Company's operation may be impacted.

• All loan customers of the Company are required to sign the CSR Declaration, which could lead to the loss of business.

When loan customers of the Company involve in environmental pollution which leads to negative reports of the media, reputation of the Company will be indirectly affected.

The Company faces mounting difficulties in achieving medium and long-term carbon emissions reduction targets (reduce carbon emission in 2050 by 50% less from levels in 2005) due to continuous temperature rise in Taiwan and the MOEA's significant increase of the emission coefficient for electricity use in recent years.

When renting rental cars of the subsidiaries, mandatory declaration of carbon emission in compliance with the environmental policies and regulations of the govern-ment must be made, thus increases the Company's operating costs.

Badreputation

When there is bad reputation, we will investigate the truthfulness of the incident, collect evidence, evaluate its impact, draw up response measures and explain to the public by press release.Avoid investment in stocks of companies with disputed performance in environmen-tal conservation, human rights, and social issues.

As environmental protection awareness increases, an increasing number of industries and companies have been identified as companies that pollute the environment. It would reduce the stock price of such companies and indirectly affect the returns on the Company's investments.

Increasedomestic andinternationalenvironmentalprotectionawareness

Pay close attention to the current state of the industries and future trends while gradually reducing the amount of shares it holds in companies that may be identified as polluting the environment.

Climate change leads to the change in socioeconom-ic conditions, including education, illness, welfare system, the gap between the rich and the poor and public construction, which pose a certain degree of impact on the financial product and service provision.

Change insocioeconomiccondition

Pay close attention to change in socioeco-nomic conditions due to climate change and properly design differentiated products and services.

Implement responsible investment and stewardship principles and invest Company's own funds and loans in sustainable companies.Thoroughly execute the ESG review policies and adopt the "Green Financing Review Principles" for all investment and financing cases. Evaluate risk factors and communicate with customers.The fund and insurance companies that sell products through First Bank's channels have signed the compliance statement for the "Stewardship Principles" and signed the "CSR Declaration".Educate and encourage loan customers to sign the CSR Declaration for them to understand the importance of ESG values.Formulate the CSR Report each year to disclose the Company's ESG operations.

Sustainabletrends of thefinancialindustry

Phys

ical

Trans

form

atio

n

Type Item Impact on Company Operations Risk Mitigation Management Measures

Trans

form

atio

nO

ther

109108

Climate change risk matrix identified by FFHC

Occurrence frequency

High

Med

ium

Low

• Regulations on renewable energy certificate or carbon right certificate transactions being unclear

• Medium and long-term carbon reduction goals of the Company

(Carbon emission in 2050 to be 50% less than the emission in 2005) due to continuous temperature rise, the difficulty to reach the goal increases

• All loan customers of the Company are required to sign the CSR Declaration, which could lead to the loss of business

• Tropical cyclone caused decrease in the asset value of the Compa-ny's investment real estates

• International conventions or agreements

• The Ministry of Economic Affairs has significantly increased the carbon emissions coefficient in recent years and the increase had made carbon emissions reduction targets more difficult to achieve

• Work being called off due to tropical cyclone which resulted in the disruption of operations

• Extreme temperature led to the increase of electricity used

• Regulatory change regarding renewable energy will influence electric companies the Company reinvests in

• The Company has come to a dead end regarding the energy saving and carbon reduction and will be unable to reach the voluntary carbon reduction goals without new low-carbon technology

• Make mandatory declaration for rental cars in compliance with the policies and regulations

• Increase environmental protection awareness

• Tropical cyclone caused damage to offices or equipment

• Tropical cyclone caused bodily injury to the insured of the Company which led to the increase of claim amount

• The Company plans to raise green energy fund to invest in solar power plants in Taiwan, but the risk of regulatory uncertainty persists

• The government is expected to mandate users with a contract capacity of 800kW or more to use 10% of renewable energy and it may incur more operating cost or penalty risks to the Company

• Impact of Indoor Air Quality Act on the operating offices

• Change in socioeconomic condition

• Sustainable trends of the financial industry

• Tropical cyclone caused harms to the staff end route for the confirmation of disaster damage

• Tropical cyclone caused the affected households unable to repay loans of the First Bank which led to the loss of principal

• Bad reputation: When loan customers of the Company involve in environmental pollution, reputation of the Company will be indirectly affected

• Extreme drought may lead to lack of electricity

• Rising sea level exposes some business units to flood risk

Unlikely Likely Very likely

Climate change opportunity possibility matrix identified by FFHC

High

Low

• Green Finance Committee plans green financing and investment policies and guidelines to improve the scope and level of our green finance products

• Promote urban renewal financing projects, transform old buildings into energy saving, carbon reducing and Eco friendly communities

• Launch credit cards with green environmental protection concept

• Increase the proportion of investments in green bonds

• Raise green energy fund to invest in solar power plants in Taiwan

• Promote electronic account opening, electronic trading and account processing services

• Use low-carbon energy and increase energy efficiency

• Obtain government cooperation, pay attention to latest regulations at all times and actively participate in energy saving competitions held by the government

• Set up water saving equipments and disseminate reduction of water consumption

• Include green buildings and energy saving buildings as key purchasing items in real estate investment.

• Increase the volume of green financing and green consumption loans

• Help customer issue green bonds

• Host environmental protection competitions and present awards to outstanding departments and employees

• Listing products related to topics like environmental protection, climate change and green energy

• Collaborate with property and casualty insurance companies to package and present natural disaster insurance products with advantages

• Raise new funds to provide investors with ESG product choices

＊：Short-term risks: Estimated to occur within 1 year (in red); Medium -term risks: Estimated to occur within 1 to 6 years (in green);

Long-term risks: Estimated to occur after 6 years (in black);

Occurrence frequency

Maybe Likely Very likely

＊：Short-term opportunities: Estimated to occur within 1 year (in red); Medium-term opportunities: Estimated to occur within 1 to6 years (in green); Long-term opportunities: Estimated to occur after 6 years (in black);

FFHC combines core functions to facilitate the transformation of the industry and uses the results of opportunity matrix analysis to develop and provide energy saving products and services. FFHC also hosts energy-conservation sympo-siums, Corporate Gold Workshop, and environmental education to facilitate exchanges with customers, suppliers, and various stakeholders through related promotion events and communicate the Group's green finance products, policies, or ideals. The opinions of stakeholders are used for the development or improvement of related products for green financing and inclusive finance. We also developed 4 green public welfare credit cards and donate a certain amount of credit card payments to local government or social welfare group in use of environmental protection and social welfare that we could together with our customers develop sustainable finance.

Corporate finance - Related businesses in green finance and inclusive finance (ESG)and their respective proportions

2018Item Year Product content description

ESG special loan balance

Corporate loan financing balance

Percentage

Unit: NT$100 million/%

• Energy service company (ESCO) industries, renewable energy creation loans, and other preferential green enterprise and green industry loans

• Preferential loans for key innovative industries• Preferential loans for financing urban renewal and reconstruc-

tion of dangerous and old buildings• Preferential loans for small and medium enterprises and micro

loans for small and micro enterprises

8,469

90.93

7,701

1-2 Climate change opportunities

• Damage to the information appliances due to tropical cyclones

Impact

Med

ium

Impact

111110

2018 Product content description

ESG-based fixed-income product issuance amount

Total fixed-income product issuance amount

Percentage

Underwriting of green bonds17

56

30.36



ESG infrastructure constructionloan balance

• Taiwan HSR loans• Taoyuan Airport MRT loans• Agricultural biotechnology park special loan• Wan-Da line and San-Yin line MRT loans

331.38

372.12

89.05


Infrastructure construction loan balance

Percentage


ESG-based entrepreneurshipinvestment consulting serviceinvestment balance

7.77

16.77

46.33


Entrepreneurship investmentconsulting service investmentbalance

Consumer finance - Related businesses in green finance and inclusive finance (ESG)and their respective proportions


ESG consumer loan financingbalance

Consumer loan financing balance

Percentage


• 4 types of credit cards including Leezen Cards, Living Green Cards, Yilan Cards, and World Cards

• Comfort Loan, green consumption loans, First Time Home Buyer Mortgage, e-speed loans

6,109.38

14.41

880.23


Total assets under management(AuM) in sustainable investments

Total assets under management (AuM)

Percentage


• 5 sustainability investment funds raised by First Securities Investment Trust: FSITC Global Utilities and Infrastructure Fund, AI Global Precision Medicine Fund, FSITC Innovation Fund, FSITC Global AI Robotics and Smart Auto Fund, and FSITC Global FinTech Fund

• First Life Insurance launched insurance products such as health insurance, annuity insurance, and injury insurance

992.28

33.53

332.71

• We cooperated with the government's "Financial Support for Physical Economy - Five Plus Two Key Startup Industries" policy and invested in green energy, biotech and medicine, and circular economy companies that are not listed on the exchange

• We helped small and medium enterprises obtain working capital and regularly follow up on their operations and provide recom-mendations to promote growth of small and medium enterprises

1-2-1 Urban renewalTo fulfill our social responsibility in the financial industry, we make use of our core capabilities to advance the cause of

environmental sustainability and provide comprehensive one-stop financial services for urban renewal projects. We are

fully committed to supporting the government's urban renewal efforts and helping residents rebuild their homes as well

as creating green buildings, especially in terms of providing financing. In addition to offering financing programs for

general construction projects, we heavily encourage construction companies to apply for the Green Building mark and

seek to provide financing guarantees for green building projects to accommodate the government's goal of achieving

an eco-friendly, low carbon footprint city.

After urban renewals, the renewed buildings must meet the greening indicators; lower the emission of waste heat,

carbon dioxide, methane and waste water as much as possible; transform into communities of energy saving, carbon

emissions reduction, and eco-friendliness; and establish all-win situation for the environment, residents and the Group.

First Bank has processed 6 new urban renewal financing cases in 2018 that approval amount totaled NT$8,538 million.

First Bank has completed a total of 38 urban renewal financing cases since 2009 and assisted 31 urban renewal

projects in obtaining silver green building marks or above. A total of 6,000 households benefited from the projects. In

the cases of the "Phase 4 and 5 of the Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City"

and "Urban Renewal of Four Sub-sections in Yongji Section, Xinyi District, Taipei City", the 7 green indicators including

CO2 emissions reduction have improved significantly from periods before the urban renewal. Based on the 60-year life

cycle of the buildings, the total carbon emissions reduction amounts to 16,291 tons CO2e. The "Phase 4 and 5 of the

Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City" was originally a disadvantaged commu-

nity with living conditions in dire need of improvements. Integration began in 2006 and construction began in July 2015

after nine years. A total of 125 suitable residences with 20 to 30 pings in internal area was planned and the building

design met requirements for the silver class green building mark. Based on the value of NT$0.5 million/ping for the

renewed housing, FFHC will create a real estate value of NT$15 million for each low-income household. Residents have

begun moving into the new units in early 2019. This not only represents a milestone in Taiwan's push for expanded

urban renewal initiatives, but is also an example of a successful state-run project.


ESG-based project trust assetbalance

Project trust asset balance

Percentage


• Retirement care for senior citizens and care for disabled people trust• Urban renewal trust• Employee welfare trust

832

19.98

166.27

Phase 4 and 5 of the Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City

Percentage

Item Year

Item Year

Item Year

Item Year

Item Year

Item Year

113112

2016

Approvedamount

CreditBalance

Approvedamount

CreditBalance

Approvedamount

CreditBalance

Approvedamount

CreditBalance

Greenloan

Unit: NT$ million

Urban Renewal of Four Sub-sections in Yongji Section, Xinyi District, Taipei City

2015

Self-managed urbanrenewal project

Developer-consolidatedurban renewal projects

Landowners benefited

NT$4.278billion/5 cases


1,137

2016



1,280

2017



1,722

2018



1,913

2016

Credit Balance NT$396.7 billion

2017

NT$428.8 billion

2018

NT$446.2 billion

2018 Target

NT$ 395 billion

1-2-2 Green FinanceFirst Bank combined the ideal of sustainable environment development with core competencies to help green industry operators obtain the funds needed for business development. We have not only launched the "No.1 Promoter in the Energy Industry" financial plans since 2010, supporting the development of Energy Service Companies (or "ESCO Industry"), but also used the "Renewable Energy Creation Loan" in line with the "Million Solar Roof" policy by Bureau of Energy, Ministry of Economic Affairs (MOEA) and the power purchase guarantee from Taiwan Power Company to achieve three wins for the equipment user, supplier, and the Bank. To implement Green Renewable Finance policies and to coordinate with the "Productivity 4.0 Industry Transformation Loan" policy of government, First Bank issued "Loans for Green Sustainability-based Industry Transformation", helping Taiwanese corporations transform, and catch up with the global market trend of low-carbon production. Furthermore, FFHC organized "Green Finance Committee in March 2017," with our President as the chairman. The committee is responsible for setting up policy goals and reviewing the results. Combining with the green industry financing projects mentioned above, the committee redefined Green Finance into "Green Industries" and "Green Corporations," and expand the applicable scope to overseas branches in order to implement conservation of the local environment and assist local enterprises in transformation in 2018.

FFHC supports the "5 Plus 2" key development projects of the government's "Digital Nation & Innovative Economic Devel-

opment Program" as the core of next-generation industrial growth in Taiwan. First Bank organized the "Industrial Innova-

tion Plan Loan" which helps industries involved in key development projects such as green energy technologies, the Asia

Silicon Valley plan, biomedical technology, defense industries, and smart machinery, as well as agricultural moderniza-

tion, and circular economy obtain financing for business operations. New credit limits totaling NT$62.32 billion was

approved in 2018. First Bank was awarded Rank A in the "Incentive Policy for Loans from Domestic Banks to Innovative

Key Industries (Phase 1)" promulgated by the Financial Supervisory Commission, showing our determination to support

the continual development of the real economy.

2017 2018 2018 Target

33,469 15,220 99,549 51,009 108,247 57,908 100,000 55,000

＊：In 2018, the overseas branch has approved a total of US$330 million in green loans, and the loan balance is US$210 million.

Applicable to

Greentechnology

• PV• LED• hydrogen energy, fuel cells• energy telecommuni-

cations• bio-fuels• wind power• electric vehicles

AaiaSilicon Vallet

• Innovation & R&D in IoT industry• Strengthen-

ing and innovation in business startup ecology

(sensor components, internet transfer, information collection, application

in service)

biopharma-ceuticals

Defenseindustries

Smartmachinery

Circulareconomy

• Biotech• Pharmaceuti-

cals• Medical Equipment• Health Promotion• Health & Welfare

• Aerospace• Shipbuilding• Information Security

• Integrates smart-tech elements• Robotics• IoT• Big data• Virtual-physi-

cal integration• Lean management• 3D Printing• Sensors

• Integration and supply

of energy resources industry• Waste recycling and reuse

industry

Modernagriculture

• Agriculture, Forestry, Fishery and its process-

ing and

manufactur-ing industries

• Service industry• Manufactur-

ing of mechanical

equipment and leasing industry• Wholesale

ESCO industryLoans for power, water and fuel-saving projects and equipment

Renewable Energy Help business owners to purchase renewable energy equipment

Green Energy Industry transformation and upgrade program

Green enterpriseand green industry

Green industry: Provide 15 industries, including the "solar power generator," "wind power generator," "LED,“ and "bio-fuel" with discounted loansGreen enterprise: Provide all industries with discounted loans for reducing pollution or resources

Greenloan

Item Year

115114

To provide domestic renewable energy industries with long-term development funds, First Bank organized, as the lead arranger, the syndicated bank loan of NT$10.13 billion for United Renewable Energy Co., Ltd. in 2018, the largest solar cell manufacturer in Taiwan. United Renewable Energy is a vertical integration manufacturer capable of producing solar wafers, cells, modules, and systems. First Bank helps the Taiwanese company create a flagship solar company with international competitiveness, meet the government's target

of 20GW of solar power installed capacity by 2025, and expand the development of solar systems in the country.

1-2-3 Green Consumer FinanceTo implement the ideal of "green finance," First Bank launched "green consumption loan" project, to provide customers with funding for the purchase of green energy or energy-efficient products, such as green buildings, HEVs, electric vehicles, energy-efficient appliances, etc. Increasing customers' incentive to purchase green energy or energy-efficient products by offering fundings with discounted interest rate, First Bank has approved 46 cases since end of December, 2018, which amounts for 550 million dollars.

FFHC founded the "Organic Agriculture Assistance Project" and launched the first charity co-branded card combining the concepts "organic and health" and "land & environmental protection." Out of the amounts spent with Leezen cards, 6‰ will be reserved for charitable purposes, and donated to the Tze-Xin Organic Agriculture Foundation and the Bliss and Wisdom Foundation of Culture and Education in order to promote the idea of organic, pesticide-free vegetables, assist organic agriculture, and restore land. For example, the donation was used to promote the "6-star organic agricul-ture upgrade" project, the "clean source" project, which encourages organic farming to clean up Reservoirs in water supply regions. Other actions financed by the donation included assisting organic farming in National Parks, tree planting in Taisi Coast, promoting tree planting in campus, and coast forestation, etc. Furthermore, the fund is used to promote projects in different aspects, such as promoting the "Green Conservation" mark and assisting tribal economic development. Through the card, First Bank partners with customers to help small organic farmers that lack manpower and money in order to protect the land of Taiwan.

1-2-4 Sustainability InvestmentFFHC is committed to the implementation of a sustainable development philosophy. In addition to promoting various

green finance and inclusive finance projects, FFHC also uses long-term equity investment, stocks, and bonds to continue

to invest in industries and small and medium enterprises related to environmental protection, green energy, aging

population, and low-birth rate. We seek to help the development of related industries and help customers issue green

bonds to obtain the funding required for transformation. In addition, First Consulting raised and managed a green

energy fund of NT$330 million for investment and construction of solar power plants with total installed capacity of

approximately 27MW. First Venture Capital also invested NT$150 million (with 45% shareholding ratio). Once the power

plants are completed, they are expected to reduce 27,000 tons CO2e each year.

Number of Leezen cards in circulation and donation amount2016Item Year

Number of cards in circulation

Accumulated donation amount

Unit: NT$1,000

40,383

62,939

2017

41,332

75,371

2018

49,581

87,387

As a response to the UN's great attention to global warming, in 2017/6/8, First Bank launched the "Green Credit Card

- Living Green Card" that provides five major benefits including 0 interest rate for repayment for green consumption in

multiple installations and 5% cash rebates for green public transportation to integrate consumption with the green

low-carbon economy. In the meantime, First Bank reserved 0.2% of the amounts spent with credit card domestically to

support activities pursuing environmental sustainability, so that customers can help protect the environment while

purchasing goods. By the end of December 2018, the number of "Green Credit Card - Living Green Card" issued was

29,843, with accumulated amount reserved reaching NT$ 1.21 million.

First Bank issued the "Yilan Affinity Card" in collaboration with Yilan County Govern-

ment in November 2018 and allocates 0.3% of regular consumption payments to

Yilan County Government for use in social welfare, tree planting, and tree protection

activities in the County to provide care for disadvantaged groups in the County. As

of the end of 2018, a total of NT$85,000 was donated and First Bank received the

"2018 Best Affinity Card of the Year" award from MasterCard International.

The Renewable Energy Creation Loan balance was NT$914 million in 2018. It provided 59,283.62kwp in solar PV equipment which generated 66.39 million kWh of electricity, reduced energy consumption by approximately 575,062.14GJ, and reduced carbon emissions by approximately 36,780 tons CO2e, which is equivalent to the carbon absorption rate of 94.55 Da'an Forest Parks in one year.

Note: The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters compiled by the Bureau ofEnergy, Ministry of Economic Affairs in the Energy Audit Annual Report for Productive Industries 2012

117116

Responsible investment, credit due diligence and supplier managementMaterial TopicGRI 308: Supplier environmental assessmentGRI 414: Supplier Social AssessmentFS1: Policies with specific environmental and social components applied to business linesFS2: Procedures for assessing and screening environmental and social risks in business lines.FS3: Processes for monitoring clients’ implementation of and compliance with environmental and social requirements included in agreements or transactions.

Management guidelinesPolicies• First Securities Investment Consulting prepares a "List of

non-investees that violate social responsibility" every two weeks for the review reference of the six compa-nies of the FFHC, First Bank, First Securities, First Securities Investment Trust, First Life Insurance and First Investment Consulting through the Group's securities investment platform.

• The “Green Financing Review Principles” shall be adopted for credit investigation and review for corporate credit extension and investments to assess the impact of the borrower and investee on environ-mental and social sustainability.

• The insurance or fund company that will list their products in the channels of our subsidiaries shall prepare a CSR Report or sign a CSR Declaration.

• FFHC established the "Supplier Management Guide-lines" as the policy and guiding principles for the management of suppliers of the Group. We require suppliers to abide by the International Bill of Human Rights, laws, universally-recognized labor rights principles, related environmental protection regulations, occupational safety and health, ethical corporate management, corporate social responsibilities, and other international initiatives.

Commitment• Fulfill the social responsibility of the financial industry in

the financial supply chain.• Use the environmental, labor practices, human rights,

and social impact guidelines to screen main suppliers. Work with suppliers to jointly implement corporate social responsibilities and avoid transactions with suppliers that cause significant impact on the environ-ment and society.

• Suppliers in areas near business locations shall be prioritized for procurement to reduce carbon emissions in the transportation process and create local job opportunities.

Goals• Adopt the "Green Financing Review Principles" for all

corporate credit investigation and review for corporate credit extension and investments.

• Establish a "Do-Not-Invest List for CSR Violations". The list involves screening current and potential investments based on numerous criteria, including product sustainability, human rights, environmental protection, controversial social issues, and recent investigations involving prosecutorial agencies, and any company that is found to have engaged in conduct which is not in the spirit of corporate social responsibility is added to the do-not-invest list.

• Implement and promote responsible investment and guide customers to fully implement CSR.

• All suppliers shall sign the "Declaration on Human Rights and Environmental Sustainability Clauses" and we shall regularly audit them for any violations of commitments.

Duties• First Bank shall adopt the "Green Financing Review

Principles" to check and review its corporate credit cases and investments to assess the impact of the borrower on environmental and social sustainability, and to avoid providing funds for the borrower to engage in business harmful to the environment or social welfare, so that First Bank may reduce the environmen-tal and social risks caused by its credit loans.

• First Securities Investment Trust will not make any investment in the companies indicated in the "List of non-investees that violate social responsibility" for the equity funds (including domestic equity, foreign equity, and balanced types) under its flag, so as to implement and promote the responsible investment.

• All the insurance companies that sell insurance products in First Bank's channels or all the fund companies which handle new fund custody or are selected to be listed are required to issue CSR Declarations or prepare their CSR Reports in accordance with the regulations of the competent authority.

• Before bidding or purchasing, we shall ensure that all the suppliers are aware of and have not made a breach of law and regulations related to the human rights and environmental protection; when signing a contract, they are required to sign the “Declaration on Human Rights and Environmental Sustainability Clauses”, and we shall regularly audit them for any violations of law and regulations related to environ-mental protection, occupational safety, labor, etc., and include qualified suppliers in the database for the reference of procurement colleagues in all units.

• We shall introduce the suppliers to our CSR policy, and require suppliers to commit to abiding by law and regulations relevant to environmental protection, labor, and human rights, properly protect the natural environment, emphasize international human rights, and protect the rights of laborers.

Results• In 2018, we reviewed 37,565 financing projects

according to the Green Financing Review Principles; these projects accounted for 100% of the corporation's financing projects. 34,538 projects passed the review process. In terms of cases in which a borrower was implicated in environmental pollution, harm to society, human rights violations, disparity between profit and risk, or other factors, a total of 3,729 cases passed the review process with qualifications and 199 cases resulted in loan rejections.

• As of the end of December 2018, 55.8% of the domestic stocks invested by First Securities Investment Trust through six equity funds had prepared and filed their CSR Reports; based on the “List of non-investees that violate social responsibility", three individual stocks had been excluded for any investment.

• As of the end of December 2018, there were a total of 13 insurance companies selling products in First Bank's channels, of which two had signed the CSR Declaration, and the remaining 11 had prepared and filed their CSR Reports. Additionally, four insurance companies had signed the compliance statement for the "Corporate Investors Stewardship Principles".

• As of the end of December 2018, there were 42 trust fund companies that sell products through First Bank's channels and have all signed the "CSR Declara-tion".Additionally, 34 fund companies had signed the compliance statement for the "Corporate Investors Stewardship Principles" as of the end of December 2018. The two fund companies that sell products through First Securities' channels have signed the compliance statement for the "Corporate Investors Stewardship Principles" and signed the "CSR Declaration".

• Subsidiaries including First Bank, First Securities, First Securities Investment Trust and First Life Insurance have signed the compliance statement for the "Stewardship Principles". Attendance rate of each subsidiaries in shareholders' meetings of listed investee companies in 2018 are as follows: First Bank 62.2%, First Securities 100%, First Securities Investment Trust 99.1% and First Life Insurance 94.4%.

• As of the end of 2018, the Group and suppliers have signed 1,443 "Declaration on Human Rights and Environmental Sustainability Clauses". Overseas offices have conducted 522 reviews on local suppliers in accordance with the Declaration on Human Rights and Environmental Sustainability Clauses as of the end of December 2018.

Specific management practices• The “Green Financing Review Principles” shall be

adopted for credit investigation and review for corporate credit extension and investments to assess the impact of the borrower and investee on environ-mental and social sustainability. Domestic business units shall obtain the “CSR Declaration” issued by borrowers in credit extension cases. With the exception of participation in a syndicated loan, our overseas branches are required to fill in a "CSR Assessment Form" to assess the environmental and social risks and guide customers to the full implementation of CSR. In addition, the relevant contents of the International Bill of Human Rights are included in the “CSR Assessment Form", and the relevant contents of the compliance with the International Bill of Human Rights are incorporated into the “CSR Declaration and “CSR Assessment Form” in order to strengthen the implementation of human rights protection required by the UN sustainable development goals.

• We included the disclosure of whether the corporate borrower has engaged in the green industry develop-ment or environmental or social protection practices in the Credit Report and the Credit Application Letter as a matter of consideration for preferred credit conditions and interest rates.

• We will not make any investment in the companies indicated in the "List of non-investees that violate social responsibility" for our equity funds (including domestic equity, foreign equity and balanced types), and we will inspect the domestic equity fund investment on a quarterly basis to verify that at least 32% of the investee companies have prepared and filed their CSR reports.

• We require all insurance companies with products listed in our bank's channels to fulfill their CSR and issue the CSR Declarations or prepare their CSR Reports in accordance with the regulations of the Competent Authority and issue a compliance statement for the "Stewardship Principles".

• All of our suppliers shall sign the "Declaration on Human Rights and Environmental Sustainability Clauses", and we will introduce them to our CSR policy and share with them our electronic version of CSR Report.

• We regularly inquire whether the suppliers whose partnerships are still in existence have been punished due to violations of laws and regulations related to environmental protection and labor. The supplier who has been punished shall submit an improvement plan and its result; otherwise, the supplier shall not be eligible for business transactions with the Group.

Resources• Utilize and play properly the role of a fund provider

and financial product channel to influence customers or partners to fulfill CSR.

• Our CSR Committee's group meeting is held each quarter to track and review the implementations of relevant objectives.

Complaints mechanism• For transparency of tender information, we publish such

information, if any, on our website.• We regularly hold meetings for suppliers sharing, so

that they and we may jointly pay attention to environ-mental, labor and human rights issues and learn from benchmarking and sharing.

• We set up the "Stakeholder Communications" section on the official website to disclose complaint or whistleblowing channels and set up the "whistleblowing section" on the company website to process reports.

Assessment mechanisms• We implement the "Green Financing Review Principles"

for all the credit investigation and review of all corporate credit application and investment cases.

• We examine domestic exchange-traded stock pools each quarter and at least 32% of the included stocks have submitted CSR reports.

• We use the "List of non-investees that violate CSR" to screen out the do-not-invest individual stocks based on the following standards: non-conformity with product sustainability, non-conformity with human rights, non-conformity with environmental protection, major social controversy, and recent investigation by prosecutors.

• We require all the insurance companies with listed products and all the fund companies which handle new fund custody or are selected to be listed to fulfill their CSR and issue CSR Declarations, or prepare CSR Reports in accordance with the regulations of the competent authority.

• We set a target to have the eight fund companies that have been listed in First Bank sign a compliance statement for the "Corporate Investors Stewardship Principles". We encourage the insurance companies that sell their products in First Bank's channels to sign such statement to protect the rights and interests of customers and beneficiaries.

• The Group aims to fulfill responsibilities as an asset owner or administrator and increase long-term value for the Group and fund providers. Subsidiaries should sign the compliance statement for the "Stewardship Principles" and shall disclose their performance of due diligence in order to implement responsible investment. We also encourage subsidiaries to attend shareholders' meetings of listed investee companies.

• Suppliers shall sign a "Declaration on Human Rights and Environmental Sustainability Clauses" and we shall audit suppliers for any violations of environmen-tal and human rights regulations.

119118

In order to best fulfill the social responsibility of the financial industry in the financial supply chain, we applied the finance industry's ability to direct cash flow to safeguarding the environment. First Bank adopted the "Green Financing Review Principles" to all corporate loans and bond investments. We carefully execute the customer due diligence (CDD) and know your customer (KYC) procedures and include involvement in environmental pollution in the past, threat to public interests, infringement of human rights, and involvement in risk issues. Through three phases consisting of assess-ment and review of credit limit applications, commitment prior to the draw-down of credit limit and post-loan manage-ment, First Bank guides customers to fully perform the responsibility of environmental protection and social sustainability. With regard to equity investment in listed companies, we review whether the investee based on screening criteria such as product sustainability, human rights, environmental protection, controversial social issues, and recent investigations involving prosecutorial agencies. Investments shall not proceed if any violation is found. In terms of supplier manage-ment, we supervise suppliers' compliance to basic labor rights, corporate social responsibilities, environmental protec-tion, ethical corporate management, and occupational safety and health regulations. Companies of the Group use onsite visits and audits to encourage suppliers to implement the guidelines and guide customers, investees, and suppli-ers to jointly implement environmental protection and social sustainability responsibilities.

2-1 Credit due diligenceFirst Bank also adhered to the spirit of the Equator Principles, incorporated environmental risk assessment and industries that are generally excluded (industries ranging from sex, tobacco, alcohol, weapon to gambling), and includ-ed whether the corporate credit loan borrowers and investees have fulfilled the environmental protection, corporate ethical management and social responsibilities into the essence of financing evaluation. In addition, it also included high pollution/energy consumption industries (electricity supply industry, steal and alumina/cooper refining, petrochemi-cal industry (including man-made fiber), cement, paper making, semi-conductor and LCD panels, printing and dying, leather, metal second-processing, printed circuit board and battery manufacturing) into industries under watch, thereby serving as a basis and reference of risk management by industries. First Bank adopts the "Green Financing Review Principles" for all corporate loans and bond investments. The procedures are as follows:

In 2018, we reviewed 37,565 financing cases (2,490 cases were overseas cases) according to the "Green Financing

Review Principles"; these cases accounted for 100% of the corporation's financing cases. 34,538 cases (2,257 cases

were overseas cases) passed the review process. In terms of cases in which a borrower was implicated in environmen-

tal pollution, prejudicing social welfare, infringement of human rights, inequivalence between gains and risks, or other

factors, a total of 3,729 cases were passed with conditions and 199 cases resulted in loan rejections. Classified as the

table below:

We use the credit investigation report to execute the customer due diligence (CDD) and know your customer (KYC) proce-dures and include ESG factors into the assessment to realistically understand and disclose incidents where a borrower or investee was involved in environmental pollution or prejudicing social welfare, or risks that may result in hazard to the society or environmental pollution over the course of production and after the sales of final products, as well as the correction status or plan. Factors that have been included into assessment include:• Involved in environmental pollution in the past• Threats to social welfare• Infringement of human rights• Risk issues of concern

Divide different credit loan review authorizations based on different credit limits, including the Board of Managing Directors, President, Credit Approval Division at the head office, regional center or business unit managers, etc.

Business unit files a credit limit application

Credit approver makes an assessment of cases.

Approval of credit limit

Make arrangements in accordance with the standards in relation to post-loan management; for instance, the correction status or plan that shall be followed up in the event where a credit loan involves the realm of green finance.

Approve credit terms by granting prime interest rates designated for projects, such as the "Preferential Loans for Key Innovative Projects" (green technology, businesses involved in the circular economy and modern agriculture) and "Project of Preferential Loans for Green Enterprise."

Approve credit terms by granting interest rates designated forgeneral credit oan cases.

Confirm whether the industry and purpose of funds of the corporate loan borrower is attributed to the realm of green finance and the benefits derived from the business activities thereof on environ-mental protection.

Once company verifies that the corporate bond investment does not involve environmental pollution, threats to social welfare, infringement of human rights, or risk issues of concern, the investment shall be approved.

Attributed to the realmof green finance

Not attributed to the realm ofgreen finance

Commitment prior to the draw-down of credit limit (such as signingthe "Corporate Social Responsibility Agreement" and otheragreements.

Factors ofcontroversial issues

Review resultsTotal

Conditional pass(including reduced approval

and restrictive terms)

Refusal of credit loans(including tabled or

withdrawn applications)

Involvement in environmental pollution(including air pollution, water pollution,waste, and toxic substances) in the past

Threats to social welfare (including foodsafety, product accountability, and publicwelfare benefits)

Infringement of human rights (includingviolations of gender equality, overwork,and failure to pay overtime pay)

Risk issues of concern (including ethicalcorporate management, protection ofcustomer rights and interests, andinformation security risks)

Unit: Case

Total

840

0

45

2,844

71

0

2

126

911

0

47

2,970

3,729 199 3,928

The review process includes an assessment of the customers' operations and financial status as well as related ESG

factors. If a customer has polluted the environment, threatened social welfare, or infringed human rights, we shall

communicate with the customer and specify the improvement status or improvement plans during the credit limit

application. The credit review unit shall approve or reduce the credit limit or add restrictive conditions for passage

based on the severity of the violations. Where a dispute cannot be removed or improved, the loan shall be declined to

fulfill corporate social responsibilities.

Types of casesthat involved

communicationwith customers

Risk Issues

76% Infringement of human rights

1%

Threats to social welfare

0%Involved in environmental

pollution in the past

23%

Asse

ssme

nt an

d rev

iew of

cred

it lim

it app

licati

ons

Comm

itmen

t prio

r to t

hedra

w-do

wn of

cred

it lim

itPo

st-loa

nma

nage

ment

121120

In 2015 FFHC extended the scope of "Green Financing Review Principles" to First Bank's overseas sites, FCB Leasing,

First Financial Leasing (Chengdu), and fund managers and insurance companies which offer products through the bank

channels. Except for syndicated loans, for business loans overseas branches must now explicitly state in the "CSR

Evaluation Form for Overseas Branches" the basic scope of their review and assessment. The loan documents must also

be annotated with text to the effect that "the borrower has been asked to comply with local laws and to conduct self-in-

spection on whether their products and processes fulfill their environmental protection and corporate social responsibili-

ties." In this way, FFHC partnered with the borrowers on protecting the local environment. Of which, First Bank succeed-

ed in soliciting the CSR commitment from 99.68% of its borrowers.

The Group aims to fulfill responsibilities as an asset owner or administrator and increase long-term value for the Group and fund providers. First Bank, First Securities, First Securities Investment Trust and First Life Insurance subsidiaries have signed the compliance statement for the "Stewardship Principles" and shall disclose their performance of due diligence governance on their company websites.In correspondence with the promotion of green finance in 2017, First Bank added the remark columns of "whether the

borrower engages in planning and category of green industry" and "whether the case complies with the purpose and

category of green funds" to the credit loan system and added mandatory fields, such as "disclosure of items related to

green industry" and "purpose of green funds" respectively to the "Credit Investigation Report" and "Credit Loan Applica-

tion" of domestic corporate borrowers. Credit investigation personnel must disclose whether the borrower engages in

planning of green industry; if it does, credit investigation personnel shall further disclose information such as the catego-

ry of industry it belongs to or the weight of green products to its total revenue. Meanwhile, First Bank also announced

the implementation of the "Project of Preferential Loans for Green Enterprise" through letter and requested business

units to increase in the credit loan application the descriptions on the environmental benefits or effectiveness of energy

conservation derived from the borrower's business activities, as well as the practices of environmental or social protec-

tion, which serve as a reference of credit approvers in granting credit terms and preferential interest rates. First Bank

also communicated and explained ideas and relevant information of green finance to credit approvers at risk control

business review meetings in order to carry out the group's idea of assisting in green enterprise development.

2-2 Responsible investmentSince 2015, First Capital Management has worked to ensure that all FFHC subsidiaries undertake responsible invest-ment solutions by carefully inspecting our "Do-Not-Invest List for CSR Violations" twice each month and making revisions when necessary. The list is created by screening current and potential investments using numerous criteria, including product sustainability, human rights, environmental protection, and controversial social issues. Any company that is found to have engaged in conduct which is not in the spirit of corporate social responsibility is added to the do-not-in-vest list. In addition, in the fourth quarter of 2016, we fine-tuned our screening guidelines to better safeguard human rights based on the content and spirit of the "Universal Declaration of Human Rights," with particular emphasis on Articles 6, 7, and 8 of the "International Covenant on Economic, Social and Cultural Rights." The number of companies included in the do-not-invest list from 2016 to 2018 were 26, 31, and 16 companies, respectively. The list was provided to First Financial Holding, First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and First Venture Capital for reference purposes. Thus, the six domestic funds (Small Capital, Innovation, Great China, High-Tech, OTC and Greater China Balanced) of FSITC excluded three individual stocks from the investment pool based on this list in 2018. 55.8% of the individual stocks that the said six funds have invested in have formulated and filed CSR reports.

CSR commitment signed by domestic and foreign borrowers over recent three years2016Item Year

CSR Declaration(No. of borrowers signing the declaration)

CSR Evaluation Form for Overseas Branches(No. of borrowers signingthe Evaluation Form)

16,615

1,430

2017

16,525

2,133

2018

16,659

2,913

Attendance rate in shareholders' meetings of listedinvestee companies in 2018

[Number of (attendance in person + electronic voting)/ number of attendances expected]

First Bank

First Securities



62.2%

100%

99.1%

94.4%

ScreeningStandards

Main Basis No. of individual stocks excluded from theinvestment pool in the past three years

2016 2017 2018Screening criteriafor productsustainability

Excluding enterprises involving animal welfare, climate change, ozone layer destruction, betting games, genetic engineering, nuclear energy, the sex industry, tobacco, and weapons systems.

ScreeningCriteria forHuman Rights

• It is determined whether a major labor dispute, employee strike, or other similar incident has occurred and whether union negotiations have not yet been concluded.

• The company has laid off employees without warning.• Screening guidelines for safeguarding human rights were adjusted based on the

content and spirit of the "Universal Declaration of Human Rights," with particular emphasis on Articles 6, 7, and 8 of the "International Covenant on Economic, Social and Cultural Rights."

ScreeningCriteria forEnvironmentalProtection

• List of Sanctioned Entities announced by the Environmental Protection Adminis-tration, Executive Yuan (Environmental Protection Administration, Executive Yuan / Public Administrative Announcements / List of Entities Sanctioned by the EPA); sanctioned entities which have not made improvements.

• Those which have legal actions taken against them by the prosecutor are entered on the watchlist.

Controversial SocialIssues/Entities HavingBeen Investigatedby the LawEnforcement AgencyRecently.

Incidents involving corporate embezzlement, food safety violations, accounting fraud and market manipulation, and other controversial social issues in the most recent six months, leading to being investigated by the law enforcement agency.

Total

5

2

2

17

26

6

0

0

25

31

7

0

1

8

16

Currently 42 fund managers that sell products through First Bank's channels have all signed the "CSR Commitment," 34 of which have completed the signing of the statement of compliance with the "Institutional Investor Stewardship Code"; 13 out of the 11 insurance companies have provided their CSR reports, 2 have signed the "CSR Commitment," and 4 have completed the signing of the statement of compliance with the "Institutional Investor Stewardship Code." First Bank teamed up with its partners to make efforts to develop sustainable environment and safeguard customers' rights and interests.

Percentage of ESG engagement with investee companies

Among credit loans that have been rejected, the following are the top three borrowers that have been involved in

controversial issues in the past, such as environmental pollution, prejudicing social welfare and infringement of human

rights based on the amount:

Assessment factor involvedName of borrower Amount of credit loans rejected

XXXCommunications, Co., Ltd.

XXX R&D Co., Ltd.

XXX Construction Co., Ltd.

Involved in environmental pollution-Pollution source as announced by theEnvironmental Protection Administration,Executive Yuan - Waste

Unit: NTD thousands

1,900,000

1,000,000

600,000

3,500,000Total

11% 11%

100%

Environment(E) Society(S) Governance(G)

123122

2-3 Establish the Supplier Management Guidelines and the 3-Step Supply Chain Management Process - Preliminary screening, concurrent declaration, post hoc managementFFHC established the "Supplier Management Guidelines" as the policy and guiding principles for the management of

suppliers of the Group. We require suppliers to comply with the Guidelines when signing contracts and we require

suppliers to sign the "Human Rights and Environmental Sustainability Clauses". We also require subsidiaries to use site

visits and audits to encourage suppliers to implement the Guidelines. The contents include basic labor rights for suppli-

ers, corporate social responsibilities, environmental protection, sustainable management, and occupational safety and

health regulations. With regard to compliance with basic labor rights, we require suppliers to comply with the Interna-

tional Bill of Human Rights, universally-recognized labor rights principles, and related labor regulations. Suppliers shall

implement zero discrimination in their human resources policies and they may not deprive laborers of their freedom of

association and right to collective bargaining. They shall also eliminate all forms of forced labor and may not hire child

labor under the age of 16. In addition, they also may not cause laborers less than 18 years of age to perform danger-

ous work items as recognized in laws. In addition, they shall protect the right to work and employment of people with

disabilities. With regard to environmental protection, we require suppliers to follow relevant environmental laws and

regulations and international standards and establish concrete environmental protection and energy conservation

management systems. They should avoid polluting water, air, and land in their operations and adopt the most feasible

pollution prevention measures. With regard to occupational safety and health, we require suppliers to abide by related

occupational safety and health regulations and identify potential hazardous factors in the work environment before

conducting engineering operations in business locations to prevent occupational hazards from affecting laborers. They

shall also implement maternity health protection measures and adopt risk assessment, control, and classification

management measures for work that may endanger maternal health.

FFHC set up a 3-step supply chain management process in 2013 and identified potential risks to the environment,

occupational safety and health, child labor and forced labor in the supply chain. Supplier management is used to select

vendors that satisfy the spirit of sustainable development as long-term partners, including: purchasing of energy-saving

equipment, purchasing and maintenance of IT equipment, construction and interior design, purchasing of business-relat-

ed OA equipment and consumables, and building maintenance. As a principle, the main procurement regions include

suppliers of the place country of operations and those close to business locations. In 2018, 99% of all purchasing came

from local (Note) suppliers to ensure the stability and localization of the supply chain as well as reduce carbon

emissions in the transportation process and create local job opportunities.

As of the end of 2018, FFHC has evaluated 425 suppliers with negative impact on the environment. They include

printing, cleaning, maintenance, repairs, HVAC, and other industries with more significant impact on the environment.

Among the Company's past suppliers, a total of 11 suppliers were penalized due to violations of environmental protec-

tion regulations before the contract is signed or during the cooperation projects. Nine suppliers proposed improve-

ments and the effects thereof and they accounted for 2.11% (9 suppliers/425 suppliers) of the suppliers with negative

impact on the environment. Two suppliers did not propose explanation of improvement measures and the Company

has terminated transactions with these companies. They accounted for 0.47% (2 suppliers/425 suppliers).

Note: Local suppliers are suppliers in the country where FFHC conducts operations.

Please refer to the Company's website for the Company's Supplier Management Guidelines

Assessed whether vendors have violated issues related to human rights and percentage of mitigation measures thathave been implemented.

2016

(a) Percentage of no. of current vendors based on assessments over past three years (%)

(b) Ratio of identified risks to items (a) that have been assessed over past three years (%)

(c) Ratio of mitigation procedures that have been implemented to items with identifiedrisks among (b) (%)

100

31＊1

100

2017

100

45＊2

100

2018

100

42＊2

100

＊1: In the 2016 statistics based on the classification of vendors, 9 out of 29 categories were identified as risks in violation of human rights.

＊2: In the 2017 statistics based on the no. of vendors, 278 out of 618 suppliers were identified as risks in violation of human rights;In the 2018 statistics based on the no. of vendors, 247 out of 593 suppliers were identified as risks in violation of human rights.

＊3: There were no cases where suppliers of the Company received penalties for violation of labor laws before signing contracts or within the contract duration and failed to make improvements. Therefore, there were no records of termination of partnerships with suppliers.

Tangible Actions TakenManagementStrategy Implementation Results

PreliminaryScreening

Concurrentdeclaration

Post hocmanagement

3-step Supply Chain Management Process

• Active Inquiries: Before a vendor may participate in the bidding process, we first check to determine whether they have been implicated in any infractions relating to environmental pollution, contravention of labor laws and regulations, or societal harm, in which case an explana-tion is required, or the company is excluded as a potential partner.

• Overseas locations: Before a procurement is made, the "Human Rights and Environmental Sustainability Evalua-tion" must be completed to check whether the vendor has been implicated in any infractions relating to environmen-tal pollution, damages to labor or human rights protec-tions, or harm to society.

• Providing guidance to vendors: The Company's CSR report is provided in electronic format and vendors are asked to observe the Company's CSR policies.

• Education and Compliance Declaration: When entering into an agreement, we request vendors to sign a "Declaration on Human Rights and Environmental Sustainability Clauses." We advocate to suppliers and request them to pledge to comply with fundamental labor and human rights protections stipulated in the Universal Declaration of Human Rights, promise to implement human resources policies which are fair and equitable, protect the environment, and seek to achieve environmen-tal sustainability.

• Declaration to Use Green Materials: When entering into a real estate agreement, the prospective tenant must sign a declaration to use green building materials.

• Negotiated Procurement: During negotiated procurement with vendors of equipment requiring large amounts of electricity, energy efficiency (using Chinese National Standards as a standard reference for compliance) is listed as a required criterion.

• Employee Qualifications: FFHC has certain qualifications in place for third-party maintenance personnel involved in the operation, maintenance, repair, or management of facilities, equipment, or systems involving high electricity consumption, and we also provide energy management awareness training.

• Regular Audits: Audits of qualified suppliers are regularly conducted to check for environmental issues, occupational hazards, and labor rights violations. In the event that a compliance violation is identified, the supplier is requested to provide an improvement plan, otherwise their contract is terminated and the supplier is added to the monitoring list.

• Database Creation and Inquiry: Established a database of qualified vendors which is provided to our business units for conducting inquiries and selecting preferred vendors.

• Completed 1,443 vendor inquiries. (accounting for 100% of all vendors) FFHC's overseas locations completed

"Human Rights and Environmental• Sustainability Evaluations" for 522

vendors.• 1,489 vendors made an effort to observe

the Company's CSR policy.

• "Declaration on Human Rights and Environmental Sustainability Clauses" was signed with 1,443 vendors, and we have advocated ideas of human rights protection and implementation of environmental sustainability to them.

• 100% of new vendors signed the declaration.

• 100% tenants pledged to use green building materials.

• 22 pieces of high-energy consumption equipment were purchased with high coefficient of performance (COP) A/C systems.

• Held 1 sessions of energy management awareness training to train a total of 20 employees.

• Spot checks are conducted every quarter and records are kept; in addition, each year we make a random selection to conduct an on-site inspection.

FFHC conducted onsite inspections on 5 suppliers in 2018 and found no violations of environmental protection or labor regulations.

• Established 30 categories of information for qualified vendors; revise the list on a regular basis including making additions or subtractions as needed.

Item Year

125124

SpecificationsItem

FFHC Purchasing Policy for Vendors

• Desktop computers, display devices, and laptops shall conform to Energy Star (U.S.A.) specifications, and such products and the processes used to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol.

• Toner cartridges, including final products and the processes used to produce them, may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol.

• Environmental agents must be approved for use by the Environmental Protection Administration, Executive Yuan and may not contain any banned toxic chemicals announced by the Environmental Protection Administration, Executive Yuan.

• Cleaning agents may not contain optical brightening agents (OBAs), chlorine-based bleaches, formalde-hyde (HCHO), triclosan (5-Chloro-2-(2,4-dichlorophenoxy)phenol), or chlorine additives (excluding sodium chloride).

• Skincare cleaning products may not contain optical brightening agents (OBAs), butylated hydroxytoluene (BHT), butylated hydroxyanisole (BHA), formaldehyde (HCHO), triclosan(5-Chloro-2-(2,4-dichlorophenoxy)phe-nol), chlorine additives (excluding sodium chloride), benzophenone UV absorber, or microplastics.

• The coefficient of performance (COP) or energy efficiency ratio (EER) for the energy efficiency of chillers used in HVAC systems may not be less than 4.

• The specifications of wall-mounted AC units shall conform to certain Chinese National Standards (CNS) including CNS 3615 and CNS 14464, and the energy efficiency of such units shall conform to the regulations stipulated by the Bureau of Energy, MOEA in the "Energy Efficiency Standards and Labeling Methods for Non-Ducted Air Conditioners", and the energy efficiency ratio (EER) may not be less than 2.6.

• The energy efficiency of refrigerators shall conform to the regulations stipulated by the Bureau of Energy, MOEA in the "Energy Efficiency Standards and Labeling Methods for Refrigerators", and paint coatings must be free of cadmium, lead, hexavalent chromium, or mercury.

• Refrigerants may not contain any substances controlled under the Montreal Protocol.• Electrical transformers shall conform to CNS 598 specifications, and such products and the processes used

to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol.

• Hot and cold water dispensers shall conform to CNS 13516 specifications.

Paperproducts Thermal paper used for take-a-number ticket dispensers and ATM receipts may not contain Bisphenol A (BPA).

Lighting LED light bulbs shall conform to CNS 15630 specifications and regulations stipulated by the Bureau of Energy, MOEA in the "Efficiency Standards and Labeling Requirements for LED Light Bulbs".

• Building materials may not contain asbestos.• Green building materials shall conform to MOI Architecture & Building Research Institute (ABRI) specifica-

tions and include Green Building mark certification.• Fire prevention devices, tools, peripherals, and equipment shall by licensed and approved for use by the

Chinese Fire Protection Safety Center (CFPSC) or the Taiwan Fire Technology Foundation (TFTF), including issuance of relevant permit labels, and may not contain halon.

• All carpets, window curtains, curtain fabrics, and other similar items must be certified to have been made from fire-retardant materials.

• Electric wires and cables shall have passed inspection by Ministry of Economic Affairs Bureau of Standards.

• The energy efficiency of small passenger vehicles shall comply with the regulations stipulated by the Ministry of Economic Affairs Bureau of Energy Affairs in the "Efficiency Standards and Labeling Require-ments for the Vehicle Energy Conservation Mark". The motor vehicle air conditioner (MVAC) of such vehicles shall utilize Ozone Depletion Prevention (ODP) shall be 0, and such products and the processes used to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol, and paint coatings must be free of contain cadmium, lead, hexavalent chromium, mercury, arsenic, antimony, triphenyltin compounds, and tributyltin (TBT).

• Electric scooters shall conform to CNS 14386 specifications, and electric scooters, charging systems, lithium ion battery packs, and other relevant functions and safety requirements shall conform to CNS and Ministry of Economic Affairs specifications for electric scooter functionality and safety.

IT E

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127126

Low-carbon operations and circular economyMaterial TopicGRI 302: EnergyGRI 303: Water and effluentGRI 305: Emissions

Management guidelinesPoliciesTo ensure the sustainability of the environment, the Group upholds its responsibility for the sustainable development of the environment and cooperates with all low-carbon operation initiatives to reduce greenhouse gas emissions and reduce waste. The Group is fully committed to developing a sustain-able, renewable, and circular homeland.

Commitment• FFHC is committed to reducing greenhouse gas

emissions and emissions intensity. It formulates operation strategies, sets carbon emissions reduction targets, and implements measures to improve energy efficiency to achieve the goal of reducing greenhouse gas emissions.

• Green and environmentally-friendly building materials with minimum negative impact on the environment and health are prioritized for the construction or refurbishment of office buildings or work areas.

• FFHC introduces high-performance electrical equipment, power generation systems, ISO verification guidelines, and products that adopt the cradle-to-cradle design to integrate opera-tions with the circular economy and reduce energy resource consumption.

Goals• Reduce the Group's carbon emissions in 2030 by

20% from emissions in 2005.• Reduce the Group's carbon emissions in 2050 by

50% from emissions in 2005.• Improve energy efficiency and obtain Green

Building Mark for 5 of the company's existing commercial buildings.

• Adopt different ISO Environmental or Energy Management Systems and obtain certification.

• Set up at least 2 rooftop solar power generation systems to increase the use of renewable energy.

Complaints mechanismFFHC published environmental management policies on the company website and set up free phone line for environmental pollution report: 0800-031-111#6.

Duties• Assist branch offices to replace old, energy-con-

suming equipment and introduce system equipment with circular economy and low-carbon operations. Improve energy efficiency in real estates owned by the FFHC and apply for Green Building Marks.

• Check for abnormal energy usage of company locations, offer repairs or assistance for improve-ment.

• Hold Environmental Protection and Energy Conservation Competition in company locations to encourage employees to save energy in daily operations.

• Promote energy saving, waste reduction, plastic and waste reduction, organize training programs, and assist units to adopt different ISO Environ-mental or Energy Management Systems and obtain certification.

Resources• FFHC cooperates with domestic and foreign

stakeholders and business units and strives to reduce all GHG emissions in daily operations.

• FFHC upgrades IT equipment and actively introduces digital paperless services in sectors such as "marketing", "transactions", "payment", and "account services" to reduce the carbon footprint in operations.

Specific management practices• FFHC formed the "Green Building Certification

Program" team to transform old buildings into green buildings and obtain Green Building Mark.

• FFHC continues to construct ecological hydroponic green rooftop from solar power generation, rainwater harvesting systems, intermediary water recycling systems, and other circular economy facilities.

• New buildings are designed following Green Building standard. Business Units are required to select products with Green Mark while replacing equipment.

• Employees working in company locations perform regular checks before leaving to make sure that all office equipment is turned off.

• Carpooling or public transportation are adopted for business travel. FFHC also purchased Gogoro electric scooters for employees to visit customers and deliver official documents.

• FFHC implements paperless training, paperless meetings, paperless administrative affairs, paperless services, and paperless credit checks.

• FFHC organizes environmental protection and energy conservation contests for all company locations. Four scores including compliance for environmental protection and energy conservation, promotion of environmental protection and energy conservation tasks, promotion of environmental protection and energy conservation education, and green finance innovation are used to select units with outstanding performance in environmen-tal protection and energy conservation. FFHC encourages employees in all company locations to participate in the events and fulfill environmen-tal sustainability policies.

• FFHC performs annual ISO 14064-1 Greenhouse Gas Inventory and sets carbon-reduction goals for subsidiaries.

• FFHC continues to adopt systems such as ISO 50001 Energy Management System and ISO 14001 Environmental Management System.

• FFHC continues to promote green procurement policy in numerous ways, including giving priority to environmentally-friendly products when selecting office paper, IT equipment and consumables, A/C and other electronic applianc-es, lighting fixtures, and eco-friendly cleaning products which feature government-approved environmental labels such as the Green Mark, Energy Label, and Water Conservation Mark.

Assessment mechanisms• A reduction in the Group’s overall carbon emissions from electricity, water, fuel and gas consumption in 2018

compared to 2017 including carbon reductions from paperless operations. The target is to match the annual carbon absorption of 30 Da'an Forest Parks.

• FFHC chose 5 of the company's existing commercial buildings to obtain Green Building Mark. • FFHC responded to the green procurement policies of government authorities and prioritize the purchase of

products with green mark, energy label, or water conservation mark and green building materials.• FFHC built 2 solar power generating systems, installed solar-powered digital billboards and green roof combining

solar power with rain collector to generate and use renewable energy.• FFHC formulated the "Guidelines for Incentivizing Employee Proposals" to encourage employees to submit proposals

concerning environmental protection and energy conservation and hold Environmental Protection and Energy Conservation Competition to meet annual carbon emissions reduction goals.

• FFHC continues to implement certification for different ISO Environmental or Energy Management Systems.• FFHC aims to reduce total carbon emissions from business travel (point-to-point journeys to and from foreign

airports) to 420 tons CO2e.• FFHC shall add one "ISO 14064-1Other Indirect Emission Inventory" item.

Results• In 2018, savings in fuel, electricity and gas reduced carbon emissions by 405 tons of CO2e from levels in 2017.

Paperless operations reduced carbon emissions by 14,035 tons of CO2e. Total carbon reductions therefore amounted to 14,440 tons of CO2e, equal to the annual amount of carbon absorption by 37.12 Da'an Parks.

• FFHC obtained the "Diamond-class" Green Building Mark for 5 of the company's existing commercial buildings in 2018. By the end of 2018, we refurbished a total 22 of the company's existing commercial buildings and obtained Diamond-class Green Building Mark.

• In 2018, NT$115.13 million was spent on green purchasing in response to government appeals and led to recogni-tion for "Excellence in green Procurement" from the Taipei City Government for 4 consecutive years.

• FFCH installed 4 rooftop solar power generation systems. The Group has installed rooftop solar power generation systems at 8 business locations as of the end of 2018. the annual carbon emissions reduction is 44.41 tons CO2e.

• In 2018, 57 environmental protection and energy conservation proposals were submitted by employees, 19 of which were approved as a reference for following environmental protection and energy conservation practices and the employees received NT$6,500 as reward. We also selected 11 of the most outstanding units for their achievements in environmental protection and energy conservation and provided 17 commendations.

• Environment Management or Energy Management inventories and certification obtained by FFHC by the end of 2018

• Total carbon emissions from business travel (point-to-point journeys to and from foreign airports) was 418 tons CO2e.• We added "ISO 14064-1 Indirect greenhouse gas emissions from other sources - Inventory of waste disposal in

operations" in 2018. The inventory volume was 109 tons CO2e.

Item Incorporated at Company Locations in 2018





ISO 14064-1 Other Indirect Emissions Inventory (Indirect GreenhouseGas Emissions in Transportation - Business Travel) Verification

ISO 14064-1 Other Indirect Emissions Inventory (Waste disposalin operations) Verification

Headquarters building and IT building

Bank, Securities, Securities InvestmentTrust, Life Insurance, AMC

All domestic and foreign company locations

188

192

8

FFHC set up the first action year 2005 as the base year. By means of different projects, the long-term goal is to reduce 50% of the carbon emission in 2050 compared to the year 2005. FFHC has embraced a policy of environmental sustain-ability. In 2018, savings in fuel, electricity and gas reduced carbon emissions by 405 tons of CO2e. Paperless operations reduced carbon emissions by 14,035 tons of CO2e. Total carbon reductions therefore amounted to 14,440 tons of CO2e, equal to the annual amount of carbon absorption by 37.12 Daan Parks (＊). Related measures and outcomes are described below:

＊: According to the standard rate released by Bureau of Energy in 2011, MOEA, Daan Park can absorb 389 tons of CO2 per year.

Changtai Branch building

• Replacement with more efficient inverter air-conditioning unit• Replacement with more efficient chilled water and cooling water pumps• Replacement of T8 with LED lamps• Implement self-management in electricity usage

5191,175

Diamond-class

Diamond-class

Diamond-class

Diamond-class

Diamond-class

Diamond-class

Diamond-class

Guangfu Branch building

• Replacement with more efficient inverter air-conditioning unit• Replacement of T8 with LED lamps• Implement self-management in electricity usage

3155,307

Wanhua Branch building

• Replacement with more efficient multi-split inverter air-conditioning• Replacement of T8 with LED lamps• Implement self-management in electricity usage

2239,221

Gangshan Branchbuilding


2545,749

Luodong Branch building


2443,685

129128

3-1 Reduce GHG emissions The FFHC headquarters building was completed in 1982, which means it is over 35 years old. To alleviate the heat island effect of office buildings, the "Green Building Certification Program" team was formed in 2010 to begin converting the 74 old buildings owned by FFHC into green buildings. As of 2018, 22 existing buildings have been certified by the Ministry of Interior as Diamond-class green buildings. We established a goal for obtaining the Diamond-class green building certificate for 37 buildings by the end of 2024. In 2017 the company had all of the company locations in and out of the country be regulated "ISO 14064-1 GHG Inventory" in order to handle the carbon emission of the company locations in the Group, dedicated to achieve the goal of reduction of GHG emissions.

FFHC’s Steps to reduce carbon emissions

Organization-wide

Inventory

Energy-saving

buildings

Solar-poweredbranches

Expandinventory

scope

Systematizevarious energy-saving practices

ISO 14064-1 ISO 50001 GreenBuildingMark

Install solarsystems onthe roof of

branchbuildings

ISO 14064-1Scopes 1, 2,

and 3

ISO 14001 Purchase renewableenergy certificates

Carbon reduction resultGreenBuilding

Mark grade Total (kWh/yr)＊1Carbon reduction areaUnit

Headquarters building

• Enthalpy control• Replacement with more efficient chilled water and cooling water pumps• Addition of variable speed drive to chilled water pump• Addition of variable speed drive to air conditioning unit• Addition of variable speed drive to cooling tower• Replacement of T8 with LED lamps• Implement self-management in electricity usage

7061,274,553Diamond-class

Transactions

FFHC GHG Reduction Steps Carbon Reduction Results in 22 Green Building Company Locations

Taichung Branch building

• Replacement with more efficient inverter air-conditioning unit• Replacement with more efficient chilled water and cooling water pumps• Replacement of T8 with LED lamps• Implement self-management in electricity usage

293529,675

Daxi Branch building


1933,568

Establishenergy

managementprocess

Continue toreduce GHGreduction

tons CO2e in total ＊2




Zhongxiao RoadBranch building


96173,186Diamond-class

IT building

• Addition of variable-flow system to cooling water pump• Addition of variable-flow system to regional pump• Addition of variable-flow system to discharging pump and heat exchange chilled water pump• Replacement of T8 with LED lamps• Implement self-management in electricity usage


Longtan Branch building



Diamond-class

Diamond-class

Diamond-class

Diamond-class

First Financial OfficeBuilding

• Replacement with more efficient inverter air-conditioning unit• Replacement of chilled and cooling water pump and addition of variable speed drive • Replacement of Closed Loop Water Pump and addition of variable speed drive• Replacement of T8 with LED lamps • Implement Energy Management System• Implement self-management in electricity usage

252455,080

Donggang Branchbuilding

• Replacement with more efficient inverter air-conditioning unit • Replacement with more efficient chilled water and cooling water pumps • Replacement of T8 with LED lamps• Implement self-management in electricity usage

4784,230

Zhunan Branch building

• Replacement with more efficient inverter air-conditioning unit• Replacement with more efficient chilled water and cooling water pumps• Implement total heat exchanger system• Replacement of T8 with LED lamps• Implement self-management in electricity usage

3257,162

Zhuxi Branch building

• Replacement with more efficient multi-split inverter air-conditioning• Implement total heat exchanger system• Replacement of T8 with LED lamps• Implement self-management in electricity usage

4885,902

131130

Diamond-class

Hsinchu Branch Building

• Replacement with more efficient inverter air-conditioning unit• Replacement with more efficient chilled water and cooling water pumps • Installation of additional air-conditioning units and small ventilators• Implement total heat exchanger system• Replacement of T8 with LED lamps• Implement self-management in electricity usage

82147,072

Xinyhua Branch Building



Yilan Branch building


2545,168

Douliu Branch building


1629,644

2,4324,390,346Total 15,805 GJ (1kWh=0.0036GJ)

Diamond-class

Diamond-class







Luzhu Branch Building

• Replacement with more efficient inverter air-conditioning unit • Replacement of chilled and cooling water pump and addition of variable speed drive• Installation of additional air-conditioning units and small ventilators• Replacement of cooling water tower and addition of variable speed drive• Implement total heat exchanger system• Replacement of T8 with LED lamps• Installation of additional solar power generating systems• Implement self-management in electricity usage


Taoyuan Branch building

• Replacement with more efficient inverter air-conditioning unit • Replacement of chilled and cooling water pump and addition of variable speed drive• Replacement of cooling water tower and addition of variable speed drive• Implement total heat exchanger system• Implement Energy Management System• Replacement of T8 with LED lamps• Implement self-management in electricity usage


Lugang Branch building

• Replacement with more efficient multi-split inverter air-conditioning• Implement total heat exchanger system• Replacement of T8 with LED lamps• Implement self-governance in electricity usage


＊1: The difference in performance between improved air-conditioning and lighting equipment and the usage time are used as main factors to estimate the carbon emissions reduction.＊2: An "electricity emission factor" of 0.554 as published in 2018 was used.

133132

3-2 Set Clear Carbon Reduction TargetsIn 2012, FFHC set a target to reduce the headquarters building's GHG emissions by 12% by 2015 compared to 2011, and the goal was achieved ahead of schedule in 2013. We did not rest on our laurels, however, and began setting annual electricity, water, petrol, and natural gas reduction targets for each FFHC subsidiary in 2013. In 2016, in response to the implementation of the "Greenhouse Gas Reduction and Management Act ", reduction targets for electricity, water, petrol, and natural gas consumption were converted into carbon emissions, allowing us to formulate explicit annual carbon reduction targets and gain a clearer insight into the quantity of carbon emissions produced by each of our subsidiaries. In 2017, to encourage paper-saving, we increase the carbon consumption target of the Group's electricity, water, oil and gas in 2018 compared to 2017, FFHC also incorporated the results of the paperless policy aspect of our carbon reduction targets into our management. To this end, we have set a group-wide manage-ment policy and paperless carbon reduction target of reducing the company's total carbon emissions by the equivalent of the annual carbon sequestration of 30 Da'an Forest Parks. Comply with the national voluntary carbon emissions reduction commitment and set goals to reduce the Group's carbon emissions in 2030 by 20% from emissions in 2005 and reduce the Group's carbon emissions in 2050 by 50% from emissions in 2005.

Environment Management certifications received by FFHCItem

"Diamond-class" Green Building





Air Quality Self-Management

Office CO2 level measurement

Implement Real-time Indoor Air Quality Monitoring System

Certified sites in 2018

22

All domestic and foreign company locations

188

192

8

188

235

35

Environmental educator certification.

ISO 14064-1Other Indirect Emission Inventory (Indirect greenhousegas emissions in transportation - Business travel) Verification

Headquarters building and IT building

Bank, Securities, Securities Investment Trust,Life Insurance, AMC

FFHC is taking the impact of climate change seriously and boosting our risk awareness. We signed on with the Carbon Disclosure Project (CDP) in 2013 and was among the first group of finance companies in Taiwan to express their support for the CDP. FFHC also received the Climate Change A List rating and Water Resources B List rating from the Carbon Disclosure Project (CDP) in 2018 and became the first Company in Taiwan's financial industry to attain Leadership A List.

In the 2018 CDP evaluations, FFHC became the firstCompany in Taiwan's financial industry to attainLeadership A List.

Total Carbon Reduction Result and Goal for FFHC Group

Scope 1 Carbon reduction volume

Scope 2 Carbon reduction volume

26 tons of CO2e

201 tons of CO2e

2018Carbon Reduction Goal

284 tons of CO2e

121 tons of CO2e

2018Total carbon reductions

24 tons of CO2e

104 tons of CO2e

2019 Goals

Total 227tons ofCO2e 405tons ofCO2e 128tons ofCO2e/39,657(MWh)(＊3)

FFHC Overall Carbon Emissions

Scope 1Emissions(tons CO2e)＊1

Scope 2Emissions(tons CO2e)＊1

ISO 14064-1Other IndirectEmissionInventory(tons CO2e)

Total Emissions (Scope 1 + Scope 2)(tons CO2e)

Scope 1 and Scope 2 inventoryRatio of business locations (%)

221

1,243

1,464

2015

-

2,725

2,725

2016

-

2,670

2,670

2017

-

2,386

2,386

2018

-

2,644

2,644

2018Goals＊5

-

-11

-114,102

13,585

17,687

-

22,812

22,812

-

20,978

20,978

-

20,857

20,857＊6

-

20,777

20,777

-

-1

-119,151

39

418

-

25,53796

347

-

23,648100

318

-

23,243100

418

109

23,421-

420

-

-2-

31

-

313,926

36,238.85

37.54

7.69

0.47

399,331

46,084.76

47.78

8.86

0.57

366,471

42,289.52

40.68

7.21

0.47

345,508

39,869.80

37.45

5.73

0.39

362,953

41,883.54

-

-

-

-6

-6

-8

-21

-17

2018 comparedto 2017 (%)

Self-Reported CarbonEmissionsCarbon Emissions UnderISO -14064 Inventory

Sub-Total

Self-Reported CarbonEmissionsCarbon Emissions UnderISO -14064 Inventory

Sub-Total

Indirect greenhouse gasemissions in transportation- Business travel

Waste disposal in operations

Total energy consumption(GJ)＊2

Total energy consumption(MWh)＊3

Energy Consumption Per Capita(GJ/person)＊4

Energy intensity(GJ/Net Profit in million NTD)

Greenhouse gas (GHG)emissions intensity(Tons CO2e/Net Profit in million NTD)

＊1：Scope 1 emissions consist mainly of fuel used by company cars, generator diesel and natural gas. Scope 2 emissions consist mainly of electricity consumption, The emission factors used are based on the EPA's published greenhouse gas emission coefficient management table version 6.0.3; this inventory refers to the GWP adopted by the EPA's national login platform, using the 2007 IPCC 4th assessment report. If the IPCC 4th assessment report in 2007 did not have a reference number, it refers to the warming potential of the IPCC 5th assessment report in 2013; the method used to consolidate greenhouse gas volume is Operat-ed Control Method; the inventory standard is based on ISO 14064-1.

＊2：The scope of total energy consumption (GJ) mainly includes diesel used for the generators, gas, natural gas, diesel used for official vehicles,gasoline used for official vehicles, and electricity. The statistics are filed by each unit in accordance with related forms, compiled by the Sustainable Environment Work Group of the CSR Committee, and verified by SGS. The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters in the Heat Content of Energy Products in the Energy Statistics Handbook 2013 and Energy Audit Annual Report for Productive Industries 2012 compiled by the Bureau of Energy, Ministry of Economic Affairs.

＊3：MWh (Megawatt Hour)＊4：The number of employees investigated was 8,362 in 2015, 8,357 in 2016, 9,008 in 2017 and 9,227 in 2018. ＊5：First Bank shall set goals for reducing carbon emissions in Scope 1, Scope 2, GJ, and MWh in 2018 by 1% from 2017 while First

Securities, First Securities Investment Trust, First Life Insurance, First Financial Asset Management, and First Financial AMC shall reduce emissions by 0.5%. The weighted average shall be 0.96%.

＊6：FFHC did not reach its target for carbon emissions reduction in Scope 2 mainly because the Ministry of Economic Affairs significantly increased the electricity carbon emission factor of 0.530 in 2017 to 0.554 in 2018. Based on the 2017 electricity carbon emission factor, Scope 2 carbon emissions would total approximately 19,953 tons CO2e, which would be a reduction of 1,025 tons CO2e from 2017. The reduction would be 4.9% and it would exceed the carbon emissions reduction target of 201 tons CO2e set for 2018.

＊7：In 2018 we received no complaints over environmental impact or penalties for environmental violations.＊8：New and replacement air-conditioning systems all used the new eco-friendly R134a or R410a refrigerant. There was no use of

Ozone Depleting Substances (ODS)

ISO 14064-1 Other Indirect Emissions Inventory (Waste disposalin operations) Verification

First Bank

Carbonreduction

Unit: %

First SecuritiesFirst Securities

Investment Trust First Life InsuranceFirst Financial

Assets Management

1 0.24 0.5 15,31 0.5 0.08 0.5 -3.73 0.5 16.91

The energy conservation and carbon reduction performance of FFHC Group companies in 2018:

Company

Com

pare

d to

201

7re

duc

tion

targ

et

Act

ual R

esul

tsEf

fect

iven

ess

Com

pare

d to

201

7re

duc

tion

targ

et

Act

ual R

esul

tsEf

fect

iven

ess

Com

pare

d to

201

7re

duc

tion

targ

et

Act

ual R

esul

tsEf

fect

iven

ess

Com

pare

d to

201

7re

duc

tion

targ

et

Act

ual R

esul

tsEf

fect

iven

ess

Com

pare

d to

201

7re

duc

tion

targ

et

Act

ual R

esul

tsEf

fect

iven

ess

4 people

135134

3-3 Green transportationTo help reduce the FFHC's carbon emissions caused by business travel, we have taken steps to gradually replace old or outdated vehicles in our company fleet. As a principle, official vehicles shall be used for carpooling. FFHC replaced 83 traditional gasoline scooters which were set for retirement with environmentally friendly Gogoro electric scooters to make employees' visits to customers and delivery of official documents more convenient while protecting the environment and saving energy in 2018. In addition, a system for sharing company-issued EasyCards is in place to encourage employees to utilize mass transportation when traveling on business. When company cars needs replacement, we will evaluate the possibility of change for electric vehicles, hybrid vehicles or vehicles with high energy conversion efficiency. In addition, we have set up 13 employees dormitories at company sites located in high population density areas as well as rural regions, such as Taipei City, New Taipei City, Hsinchu City, Taichung City, Tainan City, Kaohsiung City, Yilan County, Hualien County, Pingtung County, Taitung County, and Penghu County, which help reduce carbon emissions of employees commuting to and from work. In addition, in order to understand employees’ carbon emissions from business travel by plane, First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and First Financial AMC all obtained ISO 14064-1 certification on the other indirect emissions inventory (Indirect greenhouse gas emissions in transportation - Business travel) from 2017. So,our overseas travels in 2018 were verified to total 4,452,649 kilometers, total energy consumption was 3,907GJ (＊)，which emitted a total of 418 metric tons of CO2e.

FFHC replaced 83 traditional gasoline scooters withenvironmentally friendly Gogoro electric scooters.

＊：According to the National Chiao Tung University thesis titled "Aircraft Fuel Consumption analysis and Fuel Saving Strategy" (2013), flights consume 4,112 kilograms (assume an average density of 0.701g/ml for jet fuel, totaling approximately 5,866 liters) of fuel for a 1,074-km flight. The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters in the Heat Content of Energy Products in the Energy Statistics Handbook 2013 compiled by the Bureau of Energy, Ministry of Economic Affairs and the assumption that a flight carries on average 250 passengers.

2018 Greenhouse gas emissions

Emissions(t-CO2e/year)

Proportion of total emissions

Greenhouse Gas

23,243100%

Totalemissions of

7 Greenhouse gas

Note: The Company does not emit NOx, SOx, and other significant air emissions

22,385

96.31%

CO2

347

1.49%

CH4

48

0.21%

N2O

463

1.99%

HFCs

0

0%

PFCs

0

0%

SF6

0

0%

NF3

The distance of business travels and CO2e Emissions made by the FFHC in the past years

Total distance of business travels(point-to-point journeys to and fromforeign airports) (Unit:Km)

ISO 14064-1 Other indirect emissioninventory (Indirect greenhouse gasemissions in transportation- Business travel) (Unit:ton CO2e)

Item Year2018

Less than

6,500,000

2019 Goals

5,416,418

2015

3,873,960

2016

5,399,652

2017

4,452,649

Actual number

4,474,000

Less than

500＊2418 347 318 418

99 100 100 100

420

-100

Goals

Percentage of coverage (%)

3-4 Green Procurement: Selecting Eco-Friendly Products to Save EnergyThe FFHC is continuing to promote our green procurement policy in numerous ways, including giving priority to environ-ment-friendly products when selecting office paper, bathroom tissue, IT equipment and consumables, A/C and other electronic appliances, lighting fixtures, and environmental cleaning products which feature government-approved environmental labels such as the Green Mark, Energy Label, and Water Conservation Mark. In addition, when carrying out installations, maintenance, and renovations at company locations, green building materials must account for at least 45% of procured materials, and we also take the initiative to procure products that have been certified by the EPA for recycling, recycled materials, low-pollution or energy-saving in order to help achieve environmental sustainability. In addition, we cooperated with Fuji Xerox Taiwan Corporation in 2016 to consolidate and reduce the quantity of office equipment in our headquarters building by replacing copiers and fax machines with multipurpose energy-saving devices which reduce our energy consumption and result in a smaller carbon footprint. In 2018, NT$115.13 million was spent on green purchasing in response to government appeals, which made possible for us to receive the award of "Benchmark Private Businesses and Groups in Green Purchasing" from the Taipei City Government for four years solid.

3-5 Use of Renewed EnergyA.Installation of Rooftop Solar Power Generation SystemsTo respond to the green energy policy, the FFHC has used the renewable energy. In 2018, it reduced 47.54 metric tons of CO2e. It has bought a total of 1.2 million kWh of green power for solid four years from 2015 to 2018. In addition, after assessing the sunshine conditions of the operating sites, rooftop solar power generation systems were built from 2016. FFHC added solar power generation systems for Zhuxi, Madou, Luzhu, and Taoyuan Branches in 2018. As of the end of 2018, 8 rooftop solar generation systems have been completed and the total annual carbon reduction amounted to 44.41 metric tons CO2e. FFHC set goals for producing and using 50 MWh of renewable energy for 2019 and will contin-ue to increase the proportion of the Group's use of renewable energy, so that we may implement environmental sustain-ability policies.

Pie chart ofgreen purchasing

50%

48%

2%Purchasing of energy-saving equipment

Purchasing of certified eco-friendlyproducts (including green paper)

Purchasing of green building materials

Green Procurement Standards

• Priority is given to the procurement of eco-friendly products which feature government-approved environmen-tal labels including the Green Mark, Energy Label, Water Conservation Mark, and Green Building Material Label.

• When making purchases, we actively seek out EPA-approved products made from recycled materials which are recyclable, generate low amounts of pollution, and offer energy savings benefits.

• When making purchases, we do not select products which have excessive packaging, cause environmental damage, or are non-biodegradable, and we do not purchase machinery which consumes large quantities of energy.

• Our purchasing policy emphasizes cross-compatibility, ensuring that items procured for remodeling company locations, such as mechanical equipment and other products, can be re-used alongside existing hardware.

＊1：The lower mileage in 2016 was mainly due to the punishment by local authorities in our overseas branches during the same year. As a result, our overseas colleagues stayed most of the time in offices to strengthen legal compliance operations, which lead to a decrease in the total business travel mileage.

＊2：As FFHC plans to add at least 7 overseas operations from 2019 to 2024, the total carbon emissions goals set for business travel are higher than levels in 2018.

137136

Renewable energy consumption & carbon reduction Carbon Emissions Reduction of Rooftop Solar Power Generation Systems

Energy consumed (MWh)

Emission factor from the use of power (＊)

Carbon reduction result (MT of CO2e)

17.46

0.530

9.25

2017

80.16

0.554

44.41

2018

B.Installation of decorative solar-powered billboardsIn light of the fact that solar-powered digital billboards are able to store additional energy on sunny days which allows them to operate at night, they offer the benefit of providing advertisements while simultaneously reducing both energy use and carbon emissions. The FFHC has installed these solar-powered digital billboards at six operating sites located in central and southern Taiwan, resulting in annual decrease of the external power purchase of 4,987 kWh or annual reduction of 2.76 MT of CO2e.

C.Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systemsIn order to achieve a low-carbon urban vision, the FFHC is committed to promoting the greening policy for buildings. In 2017, our Wanhua Branch set up a “Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems" which combined the solar power generation, rainwater harvesting, and aquaponic systems. The rainwater harvesting system is to complement water supply for the aquaponic system. We use solar panels to generate electricity for use in the systemic circulation to decontaminate, filter and purify the water. The aquaponic system grows vegetables on the water and raise fish in the water. Fish excrement is used as a nutrient source for plants to form a self-sufficient circular mode, which creates a “zero-carbon farm”. FFHC was awarded the “Pastoral City Construction Achievement Competition and Pastoral Experts (Enterprise Category) Award” of the Taipei City Government in 2018, the only awardee from the financial industry. In 2018, the solar power system in Wanhua Branch generated 662 kWh of electricity and reduced 0.37 MT of CO2e.

Energy consumed (MWh)


Total energy consumption (GJ)＊2

Emission factor from the use of power＊1

Item Year2018

50-

-

-

2019 Goals

4.99

0.521

43.18

2.60

2015

4.99

0.525

43.18

2.62

2016

22.76

0.530

197.08

12.06

2017

85.81

0.554

743.20

47.54

Actual Result

45

-

-

-

Goal

＊1： The "Emission factor from the use of power" is announced every year by Bureau of Energy, MOEA. ＊2：The conversion of the energy consumption (GJ) coefficient is mainly based on the number of kWh used in the electricity meters

and the parameters compiled by the Bureau of Energy, Ministry of Economic Affairs in the Energy Audit Annual Report for Produc-tive Industries 2012.

Green power purchases in the past four years

kWh purchased


Emission factor from the use of power＊1

2018

400,000-

-

2019 Goals

10,000

0.521

5.21

2015

160,000

0.528

84.48

2016

240,000

0.529

126.96

2017

790,000＊3

0.554

437.66

Actual Result

300,000

-

-

Goal

＊1：The "Emission factor from the use of power" is announced every year by Bureau of Energy, MOEA. ＊2：The number of kWh purchased from 2015 to 2017 refers to green electricity purchased from Taiwan Power Company.＊3：In 2018, FFHC purchased 440 tons of carbon right certificates which equals approximately 790,000 kWh of renewable energy.

8 Rooftop Solar Power Generation Systems in Taiwan

Taoyuan Branch

Sanmin Branch

Xinxing Branch

Hengchun Branch

Madou Branch

Luzhu Branch

Donggang Branch

＊：The "Emission factor from the use of power" is announced every yearby Bureau of Energy, MOEA.

Benefits Data of Installing Solar-powered Digital Billboards at 6 Locations to Reduce Carbon Emissions

Solar power 4,987 (kWh)

Clean fuel type Annual substitution

To replace externalpower purchase

• Annual external power purchase reduction of 4,987 kWh • Annual reduction of 2.76MT of CO2e emissions

Purpose Benefits

Photos of Caotun Branch's Solar-powered Digital Billboard

In the daytime In the nighttime

Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems

The "ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems" receivedthe “Pastoral City Construction Achievement Competition and Pastoral Experts (Enterprise Category) Award” of theTaipei City Government in 2018.

Item Year

Zhuxi Branch

Item Year

139138

3-6 Reducing Water Use and Conserving Water ResourcesIn 2012, the FFHC installed a 1.3 million liters rainwater reclamation tank in the basement of the Headquarters building

to supply water for watering the gardens and toilets. In 2018, the Group's total water consumption was 220.69 million

liters. Tap water therefore made up 88.12% of the water consumption and 11.88% came from the Headquarters building

basement's overflow and rainwater. FFHC investigated water consumption at each company including operating sites.

As of the end of 2018, the FFHC had the "ISO 14046 Water Footprint Inventory" introduced to eight of its operating sites,

which obtained the relevant certification.

Water consumption at each operating site was regularly investigated to see if there was any leakage in the piping and

facilities. Speedy repair was a must in case of leakage. Certified green water-saving devices such as water-saving tap

fittings, 2-stage flushing toilets, and sensor-controlled urinals were also installed to reduce water usage.In addition, to

protect water resource, we have installed an oil trap in the headquarters' on-site kitchen, utilized eco-friendly cleaning

agents, and used warm water to clean dishes, which will reduce the quantity of cleaning agents used. In addition, we

have engaged contractors to carry out septic tank pumping on a regular basis and conducted wastewater testing to

determine the directional flow of contaminants, thereby improving overall water quality and reducing pollution.

3-7 Upgrading IT Equipment: Paperless OperationsThrough the building of a green data center, the FFHC upgraded its information equipment, replaced the old servers, and implemented paperless teaching, meetings, services, and administration. The core business system development has also been oriented towards the concept of energy saving and carbon reduction. Since 2008, the review system has been continuously optimized, and the credit checking/giving operation process has been changed from manual/paper operations to full implementation on the system. And the automatic import of the data from Joint Credit Information Center, the group-based operations for accounts of groups at home and abroad, etc. have been introduced one after another, thereby saving much paper printing. Furthermore, FFHC upgrades IT equipment and actively incorporates digital services in "marketing", "transactions", "payment", and "account services" and it has encouraged customers to use online banking, electronic ordering, and mobile payment services, and also issued the billing and statements by e-mail, which have replaced the use of traditional paper bills and mailing.

The FFHC's Consumption of Municipal Water Supplies

Total water consumption


2018

202.5-

2019 Goals

201.14

99

2015

193.50

99

2016

199.35

99

2017

194.46

99

Actual Results

197.44

-

Goals

A gray water reclamation system was installed and a 1.3million liters, rainwater reclamation tank was built in theheadquarters basement to supply water for landscaping and toilets. In 2018, the gray water reclamation systemhelped conserve 26.23 million liters of tap water, accounting for 11.88% of the FFHC's total water consumption.

Unit: million liters

Note: FFHC's water consumption statistics are mainly filed by each unit in accordance with water bills and compiled by theSustainable Environment Work Group of the CSR Committee.

Paperless learningThe development of the "First e-Academy" online learning system, collaborative system cloud and data cloud have effectively reduced electricity consumption.

Paperless ServicesThe process of providing services, including "marketing", "transaction", "payment" and "accounting", is introduced into digital services to reduce paper usage.

Paperless administration• Employees' pay slip are in

electronic form, and both sides of a paper are used where possible.

• Internal documents are now in electronic form. Recycled envelopes are used for sending printed documents.

• Use of Internet bulletin board for announcements.

• Reduced the use of paper cups and meal boxes.

• Recycled paper packaging for bills; eco-friendly ink used for printing envelopes and annual reports.

Paperless meeting• Printed materials no longer

provided at most meetings. They are instead compiled into electronic files and transmitted to the meeting server.

• All business announcements, and sales reviews are conduct-ed through video conferencing where possible to reduce fuel consumption and carbon emissions from business travel. This improved administrative efficiency and reduced carbon emissions.

Paperless credit review• Implemented the "New Enterprise

e-Loan System" and "Consumer e-Loan System" for credit checks and reviews, resulting in a computerized system that reduces paper consumption.

• Joint credit information are now automatically imported. Borrow-er/policy-holder credit informa-tion can be queried online making printed paperwork unnecessary.

• Implemented an account-keeping database for the group to automatically import domestic and overseas group data.

Carbon reduction at FFHC from paperless initiative

Number of officialdocuments issuedelectronically/carbonquantity reduced

Number of electronicbills and DM/carbonquantity reduced

Hours of onlineteaching/carbonquantity reduced

Number of electronicautomated transactions/carbon quantity reduced

Total carbon reductionsfrom paperless initiative

130,489

/10,009 MT CO2e

2015

143,108

/11,067 MT CO2e

2016

288,101

/11,738 MT CO2e

2017

278,257

/11,474.72MT CO2e-2

17

107

7

1

149,840,717

/1,348.57 MT CO2e

152,618,012

/1,373.56 MT CO2e

209,614,034

/1,886.53 MT CO2e

244,623,499

/2,201.61 MT CO2e

299,118 hours

/33.50 MT CO2e

330,031 hours

/36.96 MT CO2e

244,676 hours

/27.40 MT CO2e

505,480 hours

/56.61 MT CO2e

48,149,462

/269.64 MT CO2e

47,050,208

/263.48 MT CO2e

50,248,204

/281.39 MT CO2e

53,998,931

/302.39 MT CO2e

11,661 MT CO2e 12,741 MT CO2e 13,933 MT CO2e 14,035.33 MT CO2e

2018Growth in 2018

comparedwith 2017 in

carbon reduction(%)

Note: The carbon quantity reduced from electronic billing and DM was calculated based on the Taiwan Products Footprints Information Network on the official website of EPA, Executive Yuan: one sheet of B4-sized paper meant 0.009 kg of CO2e emissions; the carbon quantity reduced from electronic automated transactions was based on the same source: one sheet of A4-sized paper meant 0.0056 kg of CO2e emission.

Item Year

Item Year

141140

Carbon quantity reduced from official documents issued electronically in 2018

3-8 Held the Environmental Protection Competition and Presented Awards to Outstanding Departments and Employees Since 2015, the FFHC has held an annual Environmental Protection and Energy Conservation Competition for all operating sites, which encourages employees to actively participate in the implementation of our environmental sustainability development policies to meet annual energy conservation and carbon reduction targets. "Green finance innovation" was added as an assessment item in 2018 to encourage employees to innovate and achieve annual energy conservation and carbon emissions reduction targets. In 2018, we selected 11 of the most outstanding units for their achievements in environmental protection and energy conservation and provided 17 commendations.

3-9 Established an Employees Proposal System for Energy Conservation Measures Benchmarks To heighten awareness of the topics of environmental protection, energy conservation, and reducing carbon emissions, we formulated the "Guidelines for Incentivizing Employees Proposals" in 2014 to encourage employees to submit proposals concerning environmental protection and energy conservation. If an employee proposal demonstrates positive results and has a wide impact, the proposal will be reviewed by related business units and bonuses are issued to the employee. In 2018, a total of 57 proposals related to environmental protection and energy conservation were submitted, wherein 19 were approved for implementation. A reward of NT$6,500 was provided as a way to inspire the advancement of environmental protection and energy conservation measures.

First Bank

First Securities

CompanyCarbon reduction result

(Unit: MT of CO2e)No. ofUsers Calculation Method:

11,439.71

27.12

3.22

4.57

0.10

＊：The carbon quantity reduced from electronic official documents was calculated based on the Taiwan Products Footprints Informa-tion Network on the official website of EPA, Executive Yuan: one sheet of A4-sized paper meant 0.0056 kg of CO2e emission.

265,024

6,545

3,710

2,729

249

7,708

740

155

299

72

265,024*7,708*0.0056/1,000

6,545*740*0.0056/1,000

3,710*155*0.0056/1,000

2,729*299*0.0056/1,000

249*72*0.0056/1,000

Quantity Utilized

278,257 8,974 11,474.72Total

Carbon quantity reduced from online teaching in 2018

First Bank

First Securities



First Financial AMC

Company Carbon reduction result

(Unit: MT of CO2e)Calculation Method

52.99

3.13

0.14

0.25

0.11

473,151

27,939

1,207

2,209

974

473,151*20*0.0056/1,000

27,939*20*0.0056/1,000

1,207*20*0.0056/1,000

2,209*20*0.0056/1,000

974*20*0.0056/1,000

Hours of online teaching

505,480 56.62Total

＊：Let's assume that one hour of online teaching saves 20 sheets of paper.

Assessment Criteria for the FFHC EnvironmentalProtection and Energy Conservation Competition

1

2

3

4

ItemNo. Points Assigned

Environmental protection andenergy conservation compliancePromotion of environmental protectionand energy conservation measuresPromotion of environmentaleducation and awareness

Green finance innovation

24 points

56 points

14 points

6 points

Area Assessed

100pointsTotal

Ecological and environmental sustainabilityMaterial TopicGRI 306: Effluents and WasteGRI 307: Environmental Compliance

Management guidelinesPoliciesUse energy-saving and green products, reduce the use of disposable products, properly dispose of wastes, regularly organize internal/external environmental courses and activities, and promote and implement ecological and environmental sustainability ideals.

Commitment• Endeavor to protect the natural environment through

volunteering services and charitable activities to achieve the goal of environmental sustainability.

• Select and use green-label or recyclable materials in operating activities and commit to resource recycling and domestic waste reduction.

Goals• Promote ecological and environmental sustainability

through comprehensive range of environmental conservation and green volunteer activities.

• Continue to cooperate with external units such as government agencies, non-profit organizations, suppliers, and customers to promote ideals for energy conservation and carbon emissions reduction and expand our influence.

Duties• Raise the awareness of employees and the general

public on the importance of ecological and environmental conservation.

• Encourage employees to obtain certification on environmental education, take charge of the planning and execution of environmental education classes within the Company as well as the compila-tion of course content, and serve as instructors for environmental education courses.

• Raise the awareness of employees on waste and plastic reduction, and introduce reusable eating utensils and office suppliers.

Resources• A total of 48 Green Volunteer events were held in

2018, attracting 1,601 volunteers. The total investment was NT$1,678,604.

• FFHC collaborated with NGOs such as "Taiwan Indigo Dye Association" to strengthen environmental education and life exploration for young students.

• FFHC introduced a new procurement platform for purchasing green products and social enterprise merchandise. In 2018, employees purchased eco-friendly products, organic vegetables, and other items amounting to a total of NT$372,890 in spending.

• We continued the Green Light Sustainability Program, joining forces with our customers and suppliers to realize cross-industry charitable events such as assisting disadvantaged groups with installing LED lights to build a low-carbon sustain-able homeland.

Specific management practices• Green Volunteers participated in beach clean-up activities at

Zhunan Qiding Beach and picked up a total of 5,000kg of fishery waste and general waste, using actions to demon-strate their resolve for protecting the environment.

• FFHC organized the "Love FUN First Green Living Carnival" to encourage people to protect the earth in their daily lives and contribute to environmental sustainability.

• We invited financial industry peers to discuss and develop product category rules (PCR) for Counter Service Carbon Footprint Calculation. These rules have been reviewed and approved by the EPA and are provided to financial industry peers as standards for calculating counter service carbon footprint.

• Since 2014, our company locations located throughout Taiwan have shut off their lights for one hour on the evenings of Earth Hour and Earth Day, demonstrating our joint commitment to doing our part for energy conservation and reducing carbon emissions.

• FFHC implemented the zero waste basket policy in the office to raise employees' awareness on waste classification and achieve the goals of domestic waste reduction.

• We raised employees' awareness on plastic and waste reduction, encouraged employees to bring their own lunch boxes, eating utensils, stainless steel straw, and reusable grocery bags.

Assessment mechanisms• We continued the "Green Volunteer Sustainability Program" to

support organic farms, protect coastlines, plant trees for carbon reduction, adopt contract growers, implement the Green Light Sustainability Program and other Green Volunteer activities.

• We organized environmental education courses and employees participated in an average of 2 hours of courses each year.

• We implemented controls for domestic waste produced by company headquarters and set a cap of 64.2 tons on the amount of the entire Group.

• We sent personnel for environmental educator training and design education materials to promote environmental educa-tion.

• We donated 133 recycled personal computers and laptop computers to remote areas or disadvantaged groups, thereby helping to bridge the urban–rural gap.

• We implemented waste control and resource recycling at the company headquarters and the IT building and set a cap of 23.18 tons on the amount of the entire Group.

Complaints mechanism• The “Stakeholder Communications” zone set up on

our official website discloses communication channels such as the complaints hotline number or e-mail box, etc. for our employees, investors and customers to file their complaints.

• We have used online questionnaires on our official website to establish the sustainability issues of concern to each kind of stakeholders.



First Financial AMC

Results• A total of 48 Green Volunteer events were held in 2018,

attracting 1,601 volunteers and benefiting 4,635 people.• In 2018, 35 sessions of environmental protection-related

training were held by the companies and attended by 9,061 people. Each person on average received at least 2 hours of training.

• The total amount of domestic waste of all company headquar-ters and the IT building was 59.9 metric tons, attaining the reduction target.

• Four employees received certification as environmental educators and they have completed three lesson plans and organized seven sessions of environmental education promotion activities for external parties.

• We donated 141 recycled personal computers and laptop computers to social welfare groups in remote areas, hence enriching the educational resources for students living in rural areas.

• The total amount of recycled resources of all company headquarters and the IT building was 42.33 metric

tons, attaining the reduction target.

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4-1 Recycled WastesTo maximize resource recycling, annual recycling targets have been set by FFHC for all group companies to implement waste sorting practices. A zero waste basket policy is also rigorously enforced with no personal waste baskets placed in the office. This policy encourages employees to take their trash to the recycling bins to be sorted. In 2018, the amount of waste recycled was 20% higher than 2017. In 2018, we established the target for maintaining domestic waste volume produced by First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and AMC HQ buildings to less than 64.2 tons. The domestic waste produced by the head offices of the subsidiaries totaled 59.9 tons in 2018. We also organized the "ISO 14064-1 Indirect greenhouse gas emissions from other sources - Inventory of waste processing from operations" to inventory the CO2 emissions of the Company's headquarters building and IT building. The inventory volume was 109 tons CO2e.

4-2 Earth Hour – Turning Off Lights to Save Energy Since 2014, FFHC has ramped up our efforts to further conserve energy, reduce carbon emissions, and adopt policies that help protect our planet. In this vein, we coordinated with 235 of our company locations located throughout Taiwan to shut off the lights for one hour on the evenings of Earth Hour (which was held worldwide on 3/24 in 2018, but normally falls on the last Saturday of March each year) and Earth Day (4/22). Through both events, we reduced 0.334 metric tonnes CO2e, demonstrating our joint commitment to doing our part for energy conservation and reducing carbon emissions.

4-3 First Financial Green Living Fun — Advocating Green Living FFHC held the First Financial Green Living Fun carnival event in the Da'an Forest Park in an effort to deliver messages regarding environmental sustainability and caring for our land. FFHC invited the popular new-generation female vocalist Kimberley Chen, "iron-lung" Jess Lee, "soulful singing queen" Jia Jia, and popular singer William Wei to perform and encourage people to protect the earth in their daily lives and contribute to environmental sustainability. We organized the first "First Bank creative Coser Contest" to let young people use their imagination and design unique coser styles with comic book and environmental protection elements. We also organized the "renewable DIY" activities and invited handicraft instructors to teach the people how to produce leather keyrings from environmen-tally friendly materials, print on environmentally friendly bags, produce, natural mosquito repellents, and paint wooden chairs.

FFHC recycles all kitchen scraps and leftovers after each meal and promotes numerous recycling programs.Recycling bins are placed on each floor level — all waste must go through the recycling process. We alsocommission qualified refuse collection companies to provide regular trash removal services and collect datarecords, allowing us to keep tabs on how much garbage is produced and where it ends up. There were nobreaches of contracts by trash removal contractors in 2018.

Comparison of Trash and Recycling Amounts of Subsidiary HQ Buildings and First Bank IT Building in 2018

Paper and paper containers

Plastic and PET bottles

Aluminum, other metals, glass

Batteries and electronic devices

Cooking oils

Item Year

11

16

-19

6,922＊

-4

Magnitude of changefrom previous year (%)

20,195

935

1,972

1,176

547

2015

25,003

1,515

1,864

788

900

2016

29,228

2,535

2,580

58

774

2017

32,485

2,940

2,085

4,073＊

743

2024,825 30,070 35,175 42,326

2018

Unit: kg

＊：First Bank IT building replaced multiple servers and various electronic equipment in 2018 and contributed to a significantincrease of the recycled resource volume from 2017.

Total

Total Waste, Recycled Waste, and Domestic Waste Amount of Subsidiary HQ Buildings and First Bank IT Building in 2018

Total waste (a)

Recycled waste(b) ＊1

Domestic waste (a-b)＊2


Item Year

61.30

24.83

36.47

60

2015

66.18

30.07

36.11

60

2016

95.86

35.16

60.70

80

2017

102.22

42.33

59.89

80

2018

-

-

Less than 64.20

-

2018 Goals

-

-

Less than 64.20

-

2019 Goals

Unit: Tons

＊1：The scope of coverage includes the subsidiaries' HQ buildings and First Bank IT Building.

＊2：Statistics for 2015–2016 included First Bank HQ Building and First Bank IT Building, and apart from these buildings, First

Securities, First Securities Investment Trust, First Life Insurance, and AMC HQ Building were also included in the statistics for

2017-2018.

4-4 Outward Environmental Education Internal FFHC has introduced environmental education at the grassroots level in keeping with the philosophy that "education is crucial to fostering a better environment." Apart from arranging a new employee training class to be included in morning community service events to strengthen and implement environmental conservation concepts, general adminis-tration personnel have been designated as the energy-saving and carbon reduction promotion cadre as each unit. At the end of each working day, they must fill out the energy-saving assessment forms to ensure that energy-saving and carbon reduction measures are being followed. The cadre also changes over time as they rotate through different positions. Using this system, every employee is rotated through the energy-saving and carbon reduction promotion role. The Company also continued to review environment-related laws and regulations and communicate environmental information through internal systems, thereby ensuring compliance with environmental laws and regulations.

We also used our core competencies and organized the digital finance experience and fun environmental protection games which attracted more than ten thousand participants. We use the three approaches including life, community, and technology to implement a green life through actual operations.

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4-5 Green Volunteering and Environmental Sustainability As a strong proponent of environmental sustainability and ecological conservation, FFHC launched the "Green Volunteer Recruiting Program" in 2018 to support organic farms, protect coastlines, plant trees for carbon reduction, adopt contract growers, Local Care for Green Light to Spread Love and Green Finance Camp. We have held 48 green volunteering events involving 1,601 volunteers, 4,635 beneficiaries, and a total NT$1,678,604 in investments.

First FreshOrganic agriculture requires a significant amount of manpower and financial resources in order to sustain its business. For this end, FFHC has located organic farms throughout Taiwan currently undergoing the organic certification process or with an urgent need for additional labor. Numerous farms, including the Linkou Journey to the West Organic Farm in Taipei, LadyBird Organic Farm in Taichung, Tenha Organic Farm in Rende, Tainan, and Kaohsiung An Hsin Home Organic Education Farm were chosen to receive assistance for planting, picking, harvesting, packaging, and other related activities from employees who were asked to act as Green Volunteers and work with children from disadvan-taged families to protect the land. In 2018, 2,220 kg of organic produce was sold using our mobile payment system, thereby laying down stronger foundation for organic practices.

Protect the CoastlinesTo implement environmental sustainability, Green Volun-teers participated in beach clean-up activities at Zhunan Qiding Beach and picked up a total of 5,000kg of fishery waste, general waste, and drift wood, using actions to demonstrate their resolve for protecting the environment.

FFHC believes that a better environment starts with education, which is why we arrange for personnel to attend profes-sional environmental education training courses. 4 employees have obtained certification and qualifications as environ-mental educators. Such personnel are now responsible for the planning and compiling the content of FFHC's environ-mental education courses. In 2015, we began organizing online environmental education courses for employees to enhance their understanding of environmental sustainability. In 2018, 35 sessions of environmental protection-related training were held by the companies and attended by 9,061 people. Employees in each company on average received at least 2 hours of training.

FFHC Wanhua Branch organized the first "Green Finance Camp" which provided three major courses including "environ-mental protection organic DIY activities", "environmental education", and "financial primary schools". To provide care for local disadvantaged schoolchildren, FFHC opened the courses to schoolchildren from 3rd to 6th grade and invited children of the Nanjichang Association in Zhongzheng District, Taipei City to participate in the events. We used educa-tional games and interactions to establish wealth management and savings habits and teach the children to start protecting the environment from an early age.

FFHC launched the low-carbon vegetarian "1 Movement" in 2013, where employees are asked to not eat red meat one day a week. Red meat is not served at the employee cafeteria on this day. As of 2017, the number of red meat-free days was increased to two days a week. This movement purports to promote the eco-friendly concept of "eat more vegetables for health and consume less red meat" thereby achieving the benefit of promoting healthy eating while simultaneously reducing carbon emissions.

FFHC introduced a new procurement platform for purchasing green products and social enterprise merchandise. In 2018, employees purchased eco-friendly cleaning products, re-usable table ware, and other items amounting to a total of NT$59,150 in spending. A total of NT$313,740 was spent on the purchase of 11,205 packages of organic vegetables and 2,800 kg of organic produce. The employee cafeteria also serves organic vegetables every week which are sourced by personnel who visit the organic farms in person to verify farming practices. Each piece of produce can be traced back to its source, giving employees greater peace of mind. To promote the concept of environmental sustain-ability, the annual mountain hike for First Bank employees was combined with environmental awareness activities. Employees are encouraged to bring their own water bottle and donate batteries and compact discs. These efforts not only received positive feedback but also reduced the use of mineral water bottles, thus reducing plastic use. Moreover, 150.5kg of batteries and 17 kg of optical disks were also recycled. These activities enabled employees and their families to take concrete actions in protecting the environment.

Environmental protection booths were set up on the anniversary of First Bank to encourage employees to bring theirown water bottles, donate waste batteries or CD-ROM. Employees actively participated in the event.

No. Course Content Course Duration

1

2

ISO14001 Certification of Environmental Management System


70 minutes

51 minutes

Total 2hours and1minute

External FFHC invited employees to serve as seed instructors for wetland education in 2018 to allow the concept of environmen-tal sustainability to take root at a young age. They shared the importance of the conservation of wetlands with 251 students of Erchong Elementary School in New Taipei City. FFHC also cooperated with "Taiwan Indigo Dye Association" in introducing the beauty of national parks in Taiwan to 250 students of Zhongzheng Elementary School to strengthen environmental education and life exploration for young students. In addition, Wanhua Branch was renovated to meet the criteria of an environmental education facility, and academic institutions were invited to assist with evaluations for certifying environmental education facilities and venues. External consulting companies were appointed to assist in training talents for drafting environmental education programs for adults, students in 5th to 6th grade in elementary school, and parents and children. We also organized 7 sessions of promotion activities.

picked up a total of 5,000 kg of fishery waste

Outcomes ofFirst Fresh

2,220Kg

4,164beneficiaries

1,388volunteers

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Planting Trees to Curb Carbon EmissionsTo rekindle people's environmental protection awareness for the forests and recovery of green lands, FFHC organized three sessions of "Planting Tree for Love" events in 2018 and planted 2,600 trees in "Zhuzaikeng Ecological Park, Taichung City", "Oil Field Ecological Farm and Fishery Park, Baoshan Township", and "Heping Section, Gangshan District, Kaohsiung City". We planted a total of 5,385 trees from 2016 to 2018, which equaled a reduction of approximately 53.85 metric tons of CO2e each year.

Teaming Up with Farmers through Community Supported AgricultureTo facilitate farmers' transition into organic farming, FFHC has adopted organic sweet potato farms for the third consec-utive year since 2016 as part of its Family Day activity and cooperated with local small farmers to harvest almost 9,60 kg of the TNG66 organic sweet potatoes and support their use of environmentally friendly farming methods. All of the harvests are donated to the Genesis Social Welfare Foundation to help single mothers to become self-sufficient and advocate a virtuous cycle that embraces charity philosophies. Over 30 families had benefited from these donations.

Social Welfare OrganizationsOver the past eight years, FFHC has worked to ensure that reusable items are distributed more efficiently by calling on volunteers to gather up old PCs and laptops which are still in good working order to be donated to rural communities and disadvantaged groups. In 2018, a total of 141 computers were donated to social welfare organizations including Christian Methodism Church, Taipei City Bethany Children’s Home, National Tsing Hua University International Volunteers Group, and Chi Hsiang Chen Social Welfare Foundation. Accumulated donations totaled 1,054 units. Our efforts enable disadvantaged schoolchildren to participate in distance learning programs, thereby broadening their access to educational resources and helping to bridge the urban–rural gap.

Note:According to estimates of the Forestry Bureau, the CO2 fixation of each tree is approximately 5-10kg. The Forestry Research Institute estimates that each tree can absorb 11-18kg of CO2 each year. FFHC based calculations on 10kg.

4-6 Green CooperationTo promote the concept of energy conservation and reducing carbon emissions among our various stakeholders, FFHC is continuing to work with external groups including government agencies, non-profit organizations, suppliers, and customers to promote green living and increase the impact of our efforts.

Government UnitsThe Company has promoted the EPA “Green Point" event through the electronic media to inform the public that they can earn green points by traveling on public transport, buying green products and participating in environmental charity events. The green points earned can be redeemed to receive discounts or green products or enjoy special offers and promotions offered by green service sectors, recreational areas, and environmental education facilities. First Bank launched the Green Point rebate program for binding EasyCard or iPASS to First Bank Living Green Card in 2018. As at the end of 2018, the Company has assisted and recom-mended 3,799 people to become Green Point members.

FFHC invited industry peers to discuss and establish the "Counter Service Carbon Footprint Calculation". First Bank Headquarters and Wanhua Branch obtained EPA Service Carbon Footprint Label Certifi-cates.

We partnered with a supplier in 2018 to replace 83 official gasoline scooters with electric scooters and leased vacant land to suppliers to set up battery exchange stations to jointly promote low-pollution scooters and help protect urban air quality.

We leased vacant land to suppliers to set up batteryexchange stations to jointly promote low-pollutionscooters and help protect urban air quality.

Non-Profit OrganizationsTo teach the general public about organic green life, FFHC partnered with the small farmers of the “Tze-Xin Organic Agriculture Foundation” in the "Organic Farmers' Market" to promote organic and healthy local foods to employees. Sales totaled approximately NT$112,000 over three days and we helped support organic farmers.

Based on calculations for using the lighting equipment 8 hours a day, these actions are expected to save roughly 30,000 kWh of electricity per year, cut electricity bills by approximately NT$120,000, and simultaneously reduce 16.62 metric tons of CO2e. We have reduced 80.1tons of CO2e emissions from 2017 to 2018 and we aim to build a low-carbon sustainable homeland, thereby achieving the three long-term benefits of "improved lighting, lower electricity bills, and carbon reduction".

Suppliers and CustomersAs the number one brand in green finance, FFHC is fully aware that disad-vantaged groups typically use affordable lighting instruments which are energy-consuming and cause glares. Considering these problems, FFHC joined forces with its supplier and customer Energyled Corporation and Central Technology Engineering Corporation to implement cross-industry charitable programs such as the continuation of the "Local Care for Green Light to Spread Love" in 2018, assisting the Dann Center for Individuals with Developmental Disabilities in Nantou County replace their old lighting system with 265 sets of LED lighting equipment to build a brighter living space. We took actions to realize environmental sustainability.

Financial InstitutionsFFHC has launched and invited industry peers to discuss and establish the "Counter Service Carbon Footprint Calcula-tion" product category rules (PCR), which were approved by the Environmental Protection Administration in June 2017 and announced on the Carbon Footprint Labeling website, providing financial industry peers with a set of regulations for calculating counter service carbon footprint. In July 2017 we obtained the SGS-certified Carbon Footprint Verification Statement and received the EPA Service Carbon Footprint Label Certificate in September 2017. According to our research, the First Bank HQ Sales Department and Wanhua Branch produce 2 kg and 800 g of CO2e when providing counter service to a single person. In 2018, the Company's counter service carbon footprint continues to be disclosed on the Carbon Footprint Label website of the Environmental Protection Administration. The disclosed information is used as the standards for calculating counter service carbon footprint for financial institutions and it allows us to monitor the carbon emissions in the service process to establish effective carbon emissions reduction measures.

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5-1 Optimizing Online Banking ServicesSince 2016, First Bank has been continually working on developing the next generation of an online banking system for

corporate customers which will provide an authorization center, receipts and payments for NTD and foreign currencies,

import/export trade services, overseas online banking, and global asset management. First Bank also integrated online

credit extension, securities transactions, and corporate credit card services. In addition, based on the type of organiza-

tion of the customer and their use requirements, we provided diverse and easier ways to make secure account transac-

tions. Meanwhile, we have also expanded compatibility to support a more diverse range of operating systems and

browsers including the latest versions of Microsoft Edge, Google Chrome and Firefox. As of the end of 2018, the first

batch of online operations have been completed and they included adjustments to the "branch end" function menu in

domestic and foreign branches and the update of the structure of the database that supports "customer end" authoriza-

tion and management functions. First Bank shall arrange customer transfer schedule based on prior operations.

In response to global FinTech development trends, FFHC spared no efforts in cultivating digital finance. We introduced

improvements to procedures with digital technologies and strengthened applications in virtual channels including

"optimization of online banking service procedures", "establishment of digital accounts", "mobile payment services",

"smart customer services", and "FinTech patent applications". First Bank replaced hardware equipment and greeting

systems in 136 branches in 2018 and introduced the "pre-filled out form and reservation tickets", "customer identification

and greeting separation", and "precision beacon marketing applications" functions to integrate physical channels,

improve service efficiency, and create more valuable smart financial service models and momentum for growth. In

addition, First Bank has created 20 “digital branches” and set up “digital banking experience areas” at 49 branches

throughout Taiwan. First Bank also set up the "walking sales business platform" to effectively reduce paper use and

provide customized wealth management services.

Digital finance innovation and inclusivenessMaterial TopicFS8: Products and services designed to deliver environmental benefits

Management guidelinesPoliciesIn response to development trends in digital finance FFHC shall continue to deploy integrated virtual and actual technologies and use the transformation of the core information system to strengthen product modularization and synergy across organizations, improve internal management performance, and refine customized smart services.

CommitmentFFHC shall actively integrate virtual and actual channels and enter the new payment, digital experi-ence, FinTech, big data analytics, and other applica-tion sectors to create smart customer services and improve the convenience of mobile and network financial services.

GoalsUse "smart services, channel transformation, cross-sec-tor collaboration, and digital platforms" to develop diverse smart services, improve channel value, innovate FinTech applications, and strengthen infrastructure to improve the digital operations platform.

Duties• ntegrate big data applications, focus on managing

new and old customer groups, satisfy all customer requirements, introduce improvements to procedures with digital technologies, strengthen applications in virtual channels, integrate physical channels to improve service performance, and create more valuable smart finance service models and momen-tum for growth.

• Make use of the influence of the finance services industry and help least developed countries launch high-tech banks and improve their use of Internet technologies.

Resources• Use the big data analytics system to create a big

data platform and collect information from customers' clicks and interactions on the official website. Integrate and analyze customers' prefer-ences and applicability for personalized marketing advertisements.

• Introduce beacon technologies and incorporate the core ideas of new retail to integrate online and offline services.

• Launch 24-hour "smart customer services" in separate phases on the company website, online bank, mobile app, and LINE accounts.

• Actively pursue FinTech patents, commit to improv-ing the efficiency of information services, and strengthen information operation security to achieve balance between risk management and business operations.

Assessment mechanisms• Encourage customers to use electronic channels and

achieve a utilization rate of 78% for electronic channels.• Set a target for reaching 80,000 users in "smart customer

services".• Actively apply for invention and new utility model patents

for finance technologies and set a goal for acquiring 36 patents.

• Complete 10 precision marketing projects for target customer groups; complete 10 interactive digital marketing projects.

• Accumulate 5,000 applications for "e-speed loan"; Set a target for binding mobile payment to 45,000 First Bank credit cards.

Results• As of the end of 2018, the use rate of electronic channels

reached 78.07% and resulted in a 7.82% growth over in the last 5 years.

• As of the end of 2018, users have used the "smart customer services" 122,986 times.

• As of the end of 2018, FFHC has acquired 49 patents for finance technologies.

• FFHC executed 17 precision marketing projects for target customer groups in 2018. FFHC also established personal-ized marketing triggering mechanisms for digital channels and used digital channels for interactive marketing. A total of 31 digital interaction marketing projects were executed.

• As of the end of 2018, 6,295 applications for "e-speed loan" have been filed online. 132,646 credit cards have been bound to mobile payment.

• First Bank received the Best Cloud Application in Taiwan Award from the Asian Banker

Specific management practices• Encourage customers to use electronic channels through

electronic marketing and advertising.• Launch the "iLEO Digital Account" which allows customers

to download the app and complete four online account opening procedures to obtain a comprehensive transaction account with deposit, foreign exchange, and trust functions.

• Continue to optimize the "e-speed loan" system functions and provide customers with convenient and safe online consumer loan application services.

• Launch the "Micro Enterprise e-Services" online loan application website for micro enterprises to provide online credit calculation and immediate loan application service to simplify the loan application procedures of small and micro enterprises.

• Optimize the smart customer service system to provide 24-hour responses to customers' questions and provide other financial services.

• Through the customer satisfaction survey, we have understood our customers' demand for digital financial technology, and improved the development of related applications. The "pre-filled out form and reservation tickets", "customer identification and greeting separation", and "precision beacon marketing applications" are included in the greeting system to optimize our overall service quality.

• First Bank has provided account affairs inquiries and fund transfers on Internet banking of the Phnom Penh Branch in Cambodia, thereby providing diverse and convenient Fintech services.

Complaints mechanism • According to the "Customer Complaint and Dispute

Resolution System", customers can communicate with FFHC companies through business units, customer service hotlines, customer complaint mailboxes, and other complaint channels.

• The “Stakeholder Communications” section set up on our official website discloses communication channels such as the complaints hotline number or e-mail box, etc. for our employees, investors and customers to file their complaints.

FTSI Golden, the online order placement system, provides customers with flexible functions and tab notifications,

allowing them to grasp the latest topics and market movements from time to time. To enhance the prevalence and

accessibility of financial services, First Life Insurance constantly promotes the internet insurance application business. As

of late 2018, it has released the Easy Go Travel Insurance and E-Rate Interest Sensitive Annuity Insurance online,

allowing the public to obtain sufficient protection through the simplest and fastest insurance application procedures.

151150

5-2 Digital AccountsFirst Bank launched the "iLEO Digital Account" which allows customers to open accounts without going to the counter. They are only required to download the app and complete four online account opening procedures to obtain a comprehensive transaction account with depos-it, foreign exchange, and trust functions. They are also provided with 120 times of interbank remittances and 60 interbank withdrawals free of service charge each year as well as a 1.2% high interest deposit account for deposits within NT$120,000. Customers may invest in funds with minimum payments of NT$1,000 and it greatly reduced the requirements for young people's wealth management.

Utilization of e-channels has grown by 7.82%in the last five years

72.41%2014

78.07%2018

FFHC strives to work with our customers to protect the environment.Customers are also encouraged and educated to use the electronicchannels in order to reduce the need for over-the-countertransactions. Exceptional progress has been made after 5 years:

5-3 Smart Customer ServicesIn response to the digital transformation in the traditional finance industry, First Bank began launching "smart customer services", smart customer service clerks, and smart robot "tiny-e" in separate phases on the company website, online bank, mobile app, and LINE accounts in January 2017 to jointly provide 24-hour services with customer service person-nel.

"Smart customer service" uses natural language processing and machine learning technologies to integrate bank business knowledge with artificial intelligence platforms. More than 3,000 knowledge points have been created in the smart knowledge database and customers can use the computer or mobile devices to interact directly with smart robot "tiny-e" through text or audio inputs. If customers have questions regarding responses from "tiny-e", they can immediately switch to services provided by people. As of the end of 2018, users have used the "smart customer services" 122,986 times and the accuracy rate of responses was 94.5%.

5-4 Big Data Analytics

A.Taking a Customer-Oriented Approach: In order to better understand the needs of our customers, help customers solve problems more quickly, and interact with

customers more frequently, First Bank used a big data analytics system and completed the establishment of a big data

platform. By collecting data on the click behavior of customers on our official websites and conducting integrated data

analysis, the platform allows us to offer personalized push notifications, demonstrating our smart approach to customer

relationship management and making effective use of different channels. In turn, this enables us to explore all potential

points of contact with customers and provide customers with a better overall service experience, which translates to

higher customer satisfaction and more sales opportunities in the future.

B.Precision marketing:Big data analytics is used to create models including a clustering model and forecast model which are used to produce

a list of marketing activities to perform more precise marketing, thereby resulting in a significant increase in our custom-

er response rate and portfolio size. In 2018, we executed 17 marketing schemes. The response rate of marketing

activities grew at least twofold as compared with that before the application of models, and the total annual portfolio

size was about NT$20.86 billion. In addition, potential new corporate customers are identified through the use of big

data analytics, allowing business units to conduct subsequent solicitation activities. Moreover, data gathered through

sales promotions are continuously employed to further calibrate internal models, resulting in greater efficiency of such

models. We are also making use of big data to interact with customers in real-time.

C.Digital Interactive Marketing:Big data applications are used to establish personalized marketing triggering mechanisms in digital channels to use

digital channels for interactive marketing and real-time interactions with customers. When the customer browses through

corporate platforms they will receive product recommendations tailored to their personal preferences and compatibility

to improve the quality of services and marketing power. A total of 31 interactive marketing projects were executed in

2018 and they resulted in 1,489,717 exposures over digital channels.

D.Smart Applications:FFHC responds to demands from new applications and continues to introduce new technologies and sources of data

to improve big data models such as deep learning (DL), geographic information system (GIS), social network analysis

(SNA), and natural language processing (NLP) technologies. AI applications were used in the following financial

products and services in 2018:

• We First Bank used AI appraisal models on the "e-speed loan" website to calculate the value of the building used as

collateral and calculate the credit limit for the collateral. As of the end of 2018, 6,295 applications have been filed

online.

• First Bank used AI appraisal models on the "Micro Enterprise e-Services" website to provide small and medium

enterprises with online loan limit calculations.

• First Securities continued to optimize the smart stock selection system in the app to improve the flexibility and conve-

nience of the trading system.

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To deeply expand the presence of First Securities Investment Trust, it launched social media

(Line official account and Facebook fanpage) to reach more users, as well as communicated

with fans by providing market movements, fund information, new technology, activity information

and English financial news. The contents are interesting and well received. Currently as many

as 21,000 users clicked thumb-up on First Securities Investment Trust's Facebook fanpage.

5-5 Digital Money TransfersFirst Bank's leading position in corporate banking as well as comprehensive overseas network have been used to set

up the First Bank International e-Banking (including "Financing e-Bank App - Overseas Branch Internet Banking" and "

Financing e-Bank App - Global e-Banking Service"), international business cash flow (e.g. Supply chain financing, sales

chain financing), international consumer cash flow (e.g. international third-party payment) and international clearing

system.

5-6 FinTech InnovationFFHC is committed to research, development, and innovation of

FinTech. It uses the "cross-chain integration" in blockchain patents

along with the customers' identification applications (AI KYC) to plan

the integration of virtual and physical channels for "physical and

digital identification information". The integration mitigates risks of

fraudulent use or altercation of transaction information in the process

of uploading identity certification documents from the customers'

mobile phones. It also helps mitigate information security risks and

improve business procedures.

5-7 Social MediaSocial network management (e.g. Facebook, LINE) is constantly used to increase the channels for customer communica-

tion. It is used to provide customers with information about promotions and daily life and to gage customer identification

with First Bank and their service requirements. Apart from customer relations management, it can also be used to reach

out to younger customers. The First Bank fan page on Facebook, "First Bank Fan Page," now has more than 650,000

fans, making it the third most popular social media fan page managed by a domestic financial institution.

A.The Least Developed CountriesIn order to assist the least developed countries in launching internet

banking and boosting the prevalence of internet technology, First Bank has

provided account affairs inquiries and fund transfers on the internet

banking of the Phnom Penh Branch in Cambodia. It has also planned for

adding a variety of internet banking functions that support and optimize

multiple operating systems, multiple browsers, and multiple languages,

thereby providing diverse and convenient Fintech services.

B.Bar-code scanning payment: First Bank has fully introduced the shared QR Code service of “Taiwan

Pay.” Both its "First e-Mobility" or "Taiwan Pay t wallet +" facilitate mobile

payment, shopping, payment, fund transfer, and tax payment through

scanning QR codes, thereby infinitely extending the convenience of smart

life.

C.Credit Card Mobile PaymentsTo provide credit card customers with convenient payment tools, First Bank credit cards can be used in TSM, HCE,

Google pay, and Apple Pay. Apple Pay was launched in April 2018 and it supports JCB credit cards which expanded

the channels available for mobile payment functions. As of the end of 2018, 132,646 First Bank credit cards have been

bound to mobile payment.

D. Payment Facilitated by Pre-arranged Deposit Account Link: First Bank teamed up with "JKOS" to expand mobile payment applications for deposit accounts. Customers can bind

deposit accounts to the electronic wallet app "JKOPAY" and complete payment in four major convenience stores, restau-

rants, supermarkets, commercial centers and other places where daily spending takes place. First Bank also provides

real-time withdrawal from JKOS accounts to improve the convenience of account connections.

First Bank continues to cooperate with electronic payment operators including O'Pay, Gama Pay, and ezPay to satisfy

customers' demands for day-to-day payments.

First Bank also launched the official LINE account to

provide personalized services for credit card use and

changes in account affairs. The account has accumu-

lated 3.58 million fans and the Facebook fan page

has accumulated 255 marketing projects that reached

3.38 million people. The official LINE account has

issued a total of 61 business promotion posts which

were read 33.83 million times.

155

HAPPYW0RK PLACE

154

Human rights protection and gender equalityMaterial TopicGRI 405: Employment diversity and equal opportunityGRI 406: Non-discriminationGRI 407: Freedom of association and collective bargaining

Management guidelinesPoliciesWe adhere to and ensure that employees enjoy internationally accepted labor rights including the "International Labour Organization Core Labour Standards", "The Ten Principles of the United Nations Global Compact", "ISO 26000 Guidance on Social Responsibility", "Convention on the Elimination of All Forms of Discrimination against Women", and the "International Covenant on Economic, Social and Cultural Rights". We also publish the contents internally. All business sites follow local laws and regulations on human rights. The workplace and remuneration policies shall be legal, just, fair, and reasonable. There is no discrimination on the rights enjoyed by employees on the basis of race, gender, employment type, promotion or other situations. All have the right to equal pay for equal work, freedom from sexual harassment, and job security for female employee during pregnancy.

CommitmentProvide a fair, reasonable, and competitive workplace and remuneration policies, protect employees' rights to participate in union activities, ensure smooth communi-cation channels for employees and employers, and follow the principle of ethical negotiation in collective bargaining agreements.

Goals• Ensure open communications between the

employer and employees for a more efficient labor-management operation.

• Employee Compensation is based on the principles of fairness and rationality, with no discrimination due to gender or other factors.

• Provide an excellent and fair working environ-ment, maintaining good relations with employees and the union, with no forced labor and discrimi-nation.

Duties• Hold labor relation meetings periodically to

improve labor-management relations and promote labor-management cooperation.

• The human resource department of each subsidiary provides a full description of the human rights system on work rules, HR manage-ment rules, employee compensation and benefits during new employee training courses. Union personnel are also invited to speak about employee rights relating to the Occupational Safety and Health Act.

• Continue to implement the "Prevention of Illegal Infringement at Work Plan" and establish complaint case investigation teams to protect employees' rights and interests.

ResourcesReview and amend applicable regulations with reference to the latest laws and international human rights development trend. Use the "Sexual Harass-ment Complaints Committee", human rights protection training, "Employer-Employee Meetings", and "collective bargaining agreements" implement human rights policies and promote labor-manage-ment cooperation.

Complaints mechanism• To facilitate the reporting and handling of sexual harassment

cases, “Sexual harassment prevention complaints and disciplinary regulations” have been formulated and issued at each company along with the telephone, fax and e-mail for filing sexual harassment complaints.

• Telephone, fax and e-mail for whistle blower complaints are published on the corporate website and dedicated personnel are assigned to process any complaints.

• The telephone number and e-mail for employee complaints are posted under the “Stakeholder Communications” section of our corporate website.

• The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee communication.

• To ensure open communications between the employer and employees, employee suggestions from each department are tabled for discussion and communication during the “Employ-er-Employee Meeting” and monthly meetings.

Specific management practices• Establish the Human Rights Policy and organize related human

rights training for all employees every year.• Establish the "HR Management Rules", "Work Rules", "Sexual

Harassment Prevention Complaints and Disciplinary Regula-tions", and other human rights regulations and systems to protect employees' rights and interests at work and provide a workplace environment free of sexual harassment.

• Regularly refer to the report on the market rates for compensa-tion and benefits and provide equal remuneration plans for both genders accordingly.

• Hold regular Employer-Employee Meetings to discuss labor management issues such as improvements to working conditions and benefits that promote labor-management cooperation.

• Implement the "Hazard identification and risk assessment form for prevention of illegal infringement in the workplace" and the "Prevention of Illegal Infringement at Work Plan" to protect employees' safety at work and their physical and mental health.

• The "Sexual Harassment Complaints Committee" objectively and fairly processes and investigates sexual harassment complaints.

Assessment mechanisms• Salary ratio for male and female employees.• Percentage of employees trained on human rights issues.• Number of employees who are covered by the collective

bargaining agreement through their union membership.

Results• In 2018, our employees attended human rights protection

training (both real-world and online) 18,730 times for a total of 20,938 hours of human rights-related training. The employee participation rate was 100%.

• Approximately 84.33% of First Bank employees are covered by the collective bargaining agreement through their union membership. The Ministry of Labor has recognized First Bank for excellence in collective bargaining.

• In terms of annual salary ratio between male and female employees, the ratio of male to female employees in manage-rial positions was 100% : 100% in 2017 and it became 100% : 105% in 2018. For general roles, the salary ratio of male and female employees in 2017 was 100%: 96% and it became 100%: 100% in 2018. The gap between salaries for male and female employees has been gradually reduced.

157156

1-1 Human Rights PolicyAt all group subsidiaries, there is no discrimination employees during recruitment, selection, hiring, assignment, career development, remuneration and benefits, promotions, education & training, and retirement plans on the basis of race, class, language, thought, religious, political affiliation, ancestry, place of birth, gender, sexual preference, age, marital status, appearance, facial features, physical and mental handicap, or union membership. Article 18 of the FFHC CSR Code of Conduct stipulates that subsidiary companies shall abide by the internationally recognized human rights of labor, including the freedom of association, the right of collective bargaining, caring for vulnerable groups, prohibiting the use of child labor, eliminating all forms of forced labor, eliminating recruitment and employment discrimination to create an equal opportunity workplace. There were no human rights violations, infringement of indigenous rights, or incidents of discrimination in 2018. None of the subsidiaries were involved in mergers, acquisitions or major investment agreements. The hiring of those under the age of 16 as regular or atypical employees (including temporary workers and security staff) is explicitly banned in our HR regulations. We also adhere to the Labor Standards Act to prevent forced labor through violence, threats, imprisonment or other illegal methods, The coverage is the supervisors and employees of our group (including overseas operation offices), covering 100% of the operation offices, and we will also implement human rights inspections in the future.

To maintain human dignity and basic human rights, we have set economic, social and environmental balance as well as sustainability as our targets. Our company and our vendors are all committed to following international recognized labor rights such protecting the legal rights of employees, enforcing a non-discriminatory hiring policy, ban on child labor and eliminating all forms of forced labor. Except in the case of business demand or personnel training, the rotation of personnel between roles and units are based on FFHC employee willingness and the five transfer principles defined by the competent labor authority. We not only give employees a full understanding of company operations but also give preference to employees with high performance and potential. This forms a part of our critical personnel career management and successor cultivation plan; employees in central and southern Taiwan are encouraged to work in the north in order to learn about the various core businesses, enrich their business experience, accelerate talent cultivation and enhance the quality of our personnel.

1-2 Gender equality and human rights commitmentWe adhere to and ensure that employees enjoy internationally accepted labor rights, and related information is openly available internally. All business sites follow local laws and regulations on human rights. There is to be no discrimination against employees on the basis of race, gender or other circumstances. All employees have the right to equal pay for equal work, freedom from sexual harassment, and protected employment for female employees during pregnancy. Apart from regular training on sexual harassment prevention, new employee training also explains in full the human rights system on work rules, HR management rules, employee compensation and benefits. Union personnel are also invited to speak about employee rights relating to the Occupational Safety and Health Act. We strive to protect mater-nal rights and build a work system and environment friendly to employees of both genders. We have set up breastfeed-ing rooms, provided maternity leave, prohibited related tasks that pose potential risks for the pregnant employee and the baby, and ensuring equal pay for employees reinstated from maternity leave in accordance with the "Act of Gender Equality in Employment" to protect the rights of female employees. In 2018, managers and employees of domestic and overseas operations attended human rights protection training (both real-world and online) 18,730 times for a total of 20,938 hours of human rights-related training. The training participation rate was 100%. Our company policy on human rights has also been communicated to the security company to ensure that they understand and incorporate our human rights policy into their pre- and on-the-job training for security personnel. The proportion of security personnel who have completed training is 100% and on average, we organize 12 training sessions every year each lasting 0.5 hours.

1-3 Prevention of Illegal Infringement at Work PlanThe senior management signed and issued the "Written Statement for Preventing Illegal Infringement in the Workplace" and established the "Illegal Infringement Complaint Investigation Team". All units fill out the "Hazard identification and risk assessment form for prevention of illegal infringement in the workplace" to implement the project.

1-4 Compensation Structure with Equal Pay for Equal WorkWe follow the principle of fair and reasonable compensation in employee compensation at FFHC and all of our subsid-

iaries. There is no difference based on gender or other factors. The ratio between the starting salary for men and

women is 1: 1 so there is equal pay for equal work. The ratio between the starting salary and the local minimum wage

is 1.88: 1; we also take into account remuneration surveys (including overseas units) conducted by management consult-

ing firms. The remuneration statistics are analyzed and used as a reference for adjusting the remuneration system and

make it more fair, reasonable and competitive.

Taiwan is the main business location for our company and subsidiaries. For the compensation ratio of men and women

in managerial and general roles in 2018, if men's compensation was 100%, then women's compensation would be

105%; For general roles, the salary ratio of male and female employees was 100%.

Remuneration at FFHC in the past three years2016

Managerial Role

General roles

100%

100%

95%

98%

2017

100%

100%

100%

96%

2018

100%

100%

105%

100%

2016

Ratio of employees identified as at risk 7.9%

2017

9.8%

2018

9.3%

159158

1-6 Freedom of AssociationAll companies of Group protect employees' freedom of association in all domestic and foreign business locations. The

Employer-Employee Meeting at the First Bank consists of an equal number of labor and management representatives.

The conference is held every month to discuss employer-employee issues such as improvements to working conditions

and benefits. All effort is made to find a mutually beneficial outcome in order to enhance employer-employee relations

and cooperation.

To promote employer-employee harmony as well as support business development and employee welfare, First Bank

signed the 3rd collective bargaining agreement with the First Bank Union on August 27, 2015. The terms of the agree-

ment covered the general principles, union activity, employment/transfer/dismissal, working hours, routine leave, leave

applications and holidays, compensation, benefits, safety and health, compensation for occupational injury, retirement

and death benefits, Employer-Employee Meetings, collective bargaining, labor disputes, and appendix. The collective

bargaining agreement also specifies that in the event of a merger, reorganization, transfer, demerger, or other material

changes to operations, the process shall be transparent and material decisions must be provided to the union and

employees immediately after the Employer-Employee Meeting. Where necessary, employees shall be given severance

pay and provided with favorable compensation. Employee attendance and breast-feeding time regulations were updat-

ed to reflect amendments to the Gender Equality in Employment Act as well. Employees are now entitled to maternity

leave and breast-feeding breaks that exceed legal requirements. Fifteen articles (28.3%) pertained to employee health

and safety. On April 26, 2016, the Ministry of Labor recognized First Bank for excellence in collective bargaining. Around

84.33% of First Bank employees are covered by the collective bargaining agreement through their union membership.

The employees and employer of First Securities and First Financial AMC completed the signature of the collective

bargaining agreements in April 2019 and they were commended by the Ministry of Labor for promoting cooperation

between employees and the employer and mutual prosperity.

1-5 Sexual Harassment PreventionTo foster a friendly workplace where employees are safe from sexual harassment, we have announced and implement-

ed the "Regulations on sexual harassment prevention, complaints and investigation". Random inspections of posters on

sexual harassment prevention and laws were conducted in northern, central and southern Taiwan as well. The company

website now contains information on sexual harassment prevention, along with a sexual harassment telephone hotline,

fax and e-mail. Complaints are handled by dedicated staff. All FFHC companies have also incorporated sexual harass-

ment prevention and handling procedures into orientation and compliance training. Sexual harassment prevention and

handling knowledge is also regularly emphasized during management training classes. To improve their professional

knowledge and investigative skills, personnel responsible for dealing with sexual harassment complaints are regularly

dispatched to attend related seminars and external training. A "Sexual Harassment Complaints Committee" with 9

committee members has also been established and more than half of the members are female. The committee

members serve for 2 years and their terms may be extended. The members of the committee must possess actual

experience with handling sexual harassment, as well as a background in law, social sciences and human resources. An

investigation must be launched within 7 days of a complaint being received and a report submitted to the committee

for review. The case must be finalized within 2 months.

The Company and subsidiary companies received 2 sexual harassment complaints in 2018 and the "Sexual Harassment

Complaints Committee" was convened in accordance with the "Regulations on sexual harassment prevention,

complaints and investigation". We have initiated investigation procedures through without disclosing information in

accordance with the Regulations. We also protected the parties' privacy and personal legal interests. With regard to

the names of the parties or other information that can be used to identify the parties, except where it is necessary for

investigations or public security, we have requested the members of the Sexual Harassment Complaints Committee and

related personnel to bear confidentiality obligations. To reiterate the importance of the confidentiality obligations, the

Chairman of the Committee recites related provisions before each meeting to inform all personnel in attendance. The

Committee resolved to take immediate and effective corrective and remedial measures for the 2 sexual harassment

complaints. Related procedures are described as follows:

Case 1 (Final results: The sexual harassment case was not substantiated):1. Related surveillance video footage was kept to facilitate future investigations.

2.The complainant was asked if an adjustment of the workplace is required but the complainant in this case was unwill-

ing to change the service location.

3.We strengthened sexual harassment prevention education and training to improve managers and employees' aware-

ness of gender equality.

Case 2: (Final results: The sexual harassment case was substantiated):1.Arrangements were made for the victim to attend sales training courses at the head office during the investigations

to prevent contact with the perpetrator.

2.Arrangements were made for the victim to receive consultation and assistance at a contracted psychological counsel-

ing clinic.

3.We adjusted the victim's service unit based on the victim's preferences.

4.We implemented suitable punishments including administrative penalties and demotion to the perpetrator based on

the recommendations of the Committee and informed the individual of the results.

Statistical table on related human right complaints in the past three years2016

Sexual harassment (number of people)

Labor disputes (number of people)

0

0

2017

0

0

2018

2

0

Statistics on Employer-Employee Meetings2016

No. of meetings

Proposals

11

30

2017

12

27

2018

12

50

Statistical table on number of employees who are members of the union2016

No. of employees who are members of the union

Percentage of employees who are members of the union (%)

6,334

85

2017

6,300

83

2018

6,500

84.33

Item Year

Item Year

161160

Professional development and management reformMaterial TopicGRI 401: EmploymentGRI 402: Labor/Management relationsGRI 404: Training and education


PoliciesWe provide comprehensive training and educa-tion in accordance with the Company's develop-ment goals to train employees on all levels in making full use of their talents and accepting regular performance and career development reviews to effectively improve the professional functions of all employees.

CommitmentAdhering to our philosophy of "employees are the company’s most valuable asset," we accelerate talent development and continue to cultivate employees to ensure that they have access to education on all levels and receive professional training. Employees are also encouraged to realize their full potential and create value.

Goals• Carry out personnel competency and talent

evaluations, in order to strengthen career planning for employees.

• Optimize education and training programs to improve employee competency.

• The system provides employees with the opportunity to fully familiarize themselves with each position. They can then accumulate practical experience and strengthen their professional know-how.

• Provide employee with career development roadmaps and assistance mechanisms to build a healthy succession team.

• Closely monitor employees' work performance to strengthen career planning for employees.

• Provide all employees with unlimited access to learning resources and train them to use the digital learning platform as tools for learning in order to strengthen their professional skills in core businesses and improve their professional know-how.

DutiesThe human resources department of each company is responsible for employee recruitment, training, and employment. They organize various training courses and actively arranges employees to participate in training to facilitate talent transformation and provide them with an environment suitable for their talents.

ResourcesWe provide employees with diverse learning channels. In addition to providing business management personnel with internal training and online courses as instructors, we also assign them to participate in courses provided by external professional training institutions.

Specific management practices• We established the "Digital Banking Talent Transformation

Program", "Overseas Trainee Program", "Securities Salesperson Transformation Program", and "Insurance Professional Talent Training Program".

• Each year, we establish "employee training programs" each year to divide training into "basic training", "professional training", "management training", and "internship" and implement actual training courses for employees of all levels.

• Personnel with high performance and high potential are selected on the basis of the employee competency reports and evaluations for related training courses and business rotation.

• We produced digital learning programs for various businesses to provide employees with access to courses at all times to improve their digital learning and professional know-how.

Assessment mechanisms• Use the Kirkpatrick Model to evaluate various training

programs and review the effectiveness of training.• Follow up on certification and licensing status.• Number of training hours, number of trainees, and training

expenditures.• Organize annual employee commitment surveys. Overall

commitment target exceeded 75%.

Results• As of the end of February 2019, 1,939 employees received the

“Proficiency Test for Digital Banking Processes" and 1,431 employees obtained the Certified Anti-Money Laundering Specialist (CAMS) certificate.

• Total real-world and online training hours amounted to an average of 57.89 hours per person in 2018. Total employee training expenses amounted to NT$126.96 million for an average of NT$13,760 per person, a massive 85% growth from 2017.

• A total of 143 employee recommendations were proposed in 2018 including improving existing businesses, work environ-ment, operation methodology and automated services, improving advertisement effectiveness, building corporate image, and reducing work procedures. All recommendations were studied closely by the relevant departments. 56 of them were eventually accepted and total bonuses amounted to NT$18,200.

• The overall professionalism score for group employees in 2018 was 82.39%, with male employees achieving a score of 84.76% and female employees 80.64%.

• A range of transparent, equal and convenient complaints channels have been established including the “President’s Mailbox”, “Ideas Mailbox”, “Employee Support Hotline”, and “Chief Auditor's Mailbox” on the company intranet, as well as public forums on a diverse range of topics to ensure that complaints are handled properly.

• We ask employees to fill out the course satisfaction survey after training, and encouraging them to suggest improvements to the course.

• We encourage employees to suggest procedural improve-ments through the case proposal system or theme competition.

• We conduct employee commitment surveys as channels for them to express opinions which are used as references for policy making.

Complaints mechanism• The telephone number and e-mail for employee

complaints are posted under the “Stakeholder Communications” section of our corporate website. The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee communication and complaints.

2-1 Human Resource Management Risk MapFirst Financial Holding takes reference from the impact on society, human rights and the environment according to the

annual risk graph before setting up operational bases, developing new business types, investing in trust funds, procur-

ing, planning operational strategies and developing human resources. The human resource management risk graph

drawn up based on the 20 selected evaluated factors, with the vertical axis as incidence probability and horizontal axis

as the impact on company operations, is as follows. The 17 factors designated as medium to high probability incidence

were categorized as those requiring risk management.

Conduct due diligence checks on material issues identified as those with higher risks and impact such as "talent gap",

"high turnover among new employees", and "foreign competitors compete for professional talents" to reduce negative

impact on the Group and implement improvement plans for material issues such as providing new employees with

equal benefits and opportunities for learning, establishing goals for a 70% retention rate of new employees, and

organizing foreign talent selection, cultivation courses, and overseas business seminars each year to expedite the

cultivation of local hires. With regard to the talent gap caused by the retirement wave, we provide managers with

professional and core competency training to improve their management skills and expertise and mitigate related risks.

2018 FFHC Human Resource Management Risk Map

Impact

Prob

abili

ty

Low

High

Med

ium

High

• Freedom of Association• Aging Society• Low Birth Rate

• Talent gap• High turnover among new employees• Foreign competitors compete for professional talents

• Violation of Statutory Work Hours• Maternity Protection• Cultivation of Digital Finance Talent• Privacy Protection

• Corruption, Bribery• Occupational Safety and Health• Economic Crime

• Indigenous People• New Immigrants• Child Labor

• Compulsory Labor

• Gender Equality• Vulnerable Groups• Regulatory Change

Medium

163162

Statistics on the number of atypical employees appointed in 2018Administration

139

65

204

SecurityGender Duty

0

204

204

Driver

0

54

54

2-2 Employee composition and diversityEmployees form the core of the financial service industry. FFHC has not only established a brand image of sound management in the minds of the general public but is also working actively to build a "happy workplace." We have long adhered to our philosophy of "employees are the company’s most valuable asset." We are committed to creating an ethical, transparent, caring and cooperative working environment for employees. Employees are also encouraged to realize their full potential and create value. At the end of 2018, our Group had 9,227 regular employees including 480 foreign nationals. FFHC has 5,506 female employees and 3,721 male employees. The ratio of female to male employ-ees is 6:4. Employees in management roles account for 18% in which female managers account for 53%. There are more women than men in management and general positions, demonstrating gender equality and equal opportunity in our workplace. In 2018, FFHC employed a total of 315 senior executives (based on definition of "managerial officers" estab-lished in Tai-Cai-Zheng-3 No. 920001301 letter dated March 27, 2003), 100% from Taiwan. Female senior executives account for 48.6% and female employees for 47.4% of employees in revenue generating positions.

Our Group employed 462 atypical employees (including temporary workers and security personnel), or 5% of our total workforce. Atypical employees that perform well are offered the opportunity to become regular employees when openings become available. In 2018, a total of 2 atypical employees became regular employees.

Data of Female Executives and Employees

Percentage of female employees (%)

Percentage of female executives (%) (Note 1)

2016Item Year

59

53

2017

59

53

2018

60

53

54.2 53.6 53.6

36.5 41.7 48.6

50.2 49.3 47.4

Percentage of senior female executives (%)

Note 1: Definition of executive: Employees who assume managerial roles and administrative dutiesNote 2: Definition of junior executive: Managers outside the scope of "managerial officers" specified in Tai-Cai-Zheng-3 No. 920001301 letter dated March 27, 2003Note 3: The statistical sample is based on the following ratios of female employees in management roles in the Group that have the potential for salary increase:

Number of female executives in positions withpotential for salary increase

Total number of executives in positions withpotential for salary increase

Total number of employees in 2018 - By role

Unit: person

2018employee

demographics- education

College

4,847JuniorCollege

1,780

High School (VocationalHigh School)

751

Junior High School or below

64

Master'sDegree

1,778

Doctoral Degree7

Total s

enior

exec

utive

s

162 153

Total ju

nior

exec

utive

s

589680

Total e

mploye

es

2,970

4,673

Sub-Total

Total 462

Note: The labor contract region is Taiwan

Age distributionof non-management

personnel in2018

Age distributionof management

personnel in2018

2,22240-50Female: 1384Male: 838

2,68930-39

Female: 1698Male: 991

1,167Less than 30Female: 790

Male: 377

29% 36%60%

36%

4%15%20%

1,00250 and aboveFemale: 616Male: 386

6330-39Female: 37Male: 26

1,48650 and aboveFemale: 748Male: 738

59840-50

Female: 233Male: 365

Regionaldistribution of foreign

employees in2018 Cambodia,100

Japan,9

United Kingdom,12

USA,118Australia,8

China (including Hong Kong and Macao),111

Vietnam,55

Canada,18

Singapore,22

Thailand, Myanmar, Philippines, Laos,27

Unit: person

Percentage of junior female executives (%)(number of junior female executives/total number of junior executives) (Note 2)

Percentage of female employees in management roles that have the potential forsalary increase (e.g. sales; excluding supporting departments such as humanresources, IT, and legal affairs) (Note 3)

165164

To accelerate talent development, cultivate all-rounders and build a solid team for the future, First Bank conducts two competency assessments every year. Evaluations and review opinions are also compiled at different times. Personnel with high performance and high potential are selected on the basis of the competency reports and evaluations for related training courses and business rotation. A total of 9,434 training groups and 56,123 training hours have been accumulated as of 2018. Domestic business units have also implemented a rotation system where processing personnel stay up to 3 years in a single position, assistant supervisors stay for up to 4 years. The system provides employees with the opportunity to familiarize themselves with each position. They can then accumulate practical experience and strengthen their professional know-how.

2-3 Complete development systemNew employees immediately enter our training system upon reporting for work. Comprehensive training plans are available from basic, advanced professional, deputy managers, and managers. For employee professional competen-cy development, employees are encouraged to actively participate in training courses, acquire related certificates necessary for their businesses, and propose innovative work plans. Employees receive credit for acquiring related professional certification during annual performance evaluations, and are given bonuses for innovative proposals. Between 2016 and 2018, a total of 142 employee proposals were adopted and NT$51,200 in bonuses issued. Apart from solid on-the-job training as well as practical experience gained through job rotation, we also organize a variety of professional training, online training, internships, language training, internal certification testing and management competency training. To acquire new financial knowledge and the latest industry developments, personnel are frequent-ly sent to attend training courses and overseas development programs organized by professional training bodies.

2-4 Talent Training ProgramsFFHC attaches a high level of importance to the cultivation of people with great potential. Apart from recruiting outside talent, we also use the performance evaluation matrix to identify employees with high performance or potential then tailor "Individual Development Plans" (IDP) to their professional background, language skills, and competency analysis. Overseas talent is also a key component of our global expansion. To enhance both the “quality” and “quantity” of talent at overseas branch organizations, the Sales Personnel for China Program was added since 2009 after the Overseas Management Personnel Program was activated in 2006. Outstanding employees interested in working at overseas branches are selected for management associate training every year. Supplementary specialist training is also conduct-ed based on their individual sales experience and background, including: overseas compliance, internal control and auditing, risk management, overseas IT system, international etiquette, trans-cultural communications, and national politico-economic situations. English training is also organized for continuous improvements to foreign communication and coordination skills. Secondary foreign language courses such as Vietnamese and Burmese are also offered. The cultivation of language, business knowledge and multi-cultural management ability is emphasized. Before employees are assigned to overseas units, a learning program and rotation between headquarters and branches are organized based on their individual experience. These efforts are expected to accelerate the cultivation of essential business skills in overseas talent. As of the end of 2018, 347 overseas management associates have been cultivated.

New employee training Help new employees quickly familiarize themselves with the corporate organization-al structure and culture

Covers corporate knowledge, basic operational skills, financial law education, team-building activities, safety and health course

Specialized training

Other training

On-the-job training Mentoring scheme Job role deputy training Job rotation Professional certificationcounseling

Advanced training•Enhance employees'

advanced specialized skills•Industry analysis, case

discussion, sharing of experience by top marketers

InternshipGo directly to the relevant unit and follow a senior internal instructor around to learn and observe the workflow and key points of each business process

Management training•Enhance the manage-

ment skills of managers•Management issues such

as better communication, motivating subordinates, building team rapport and leadership

Language training•Strengthen the foreign

language skills and promote a language-learning atmosphere for employ-ees

•Provide subsidies to employees attending foreign language courses at language centers

•Set up English courses on online e-learning platform

•Open foreign language courses for Vietnamese, Cambodian and Burmese

External trainingSend to external financial institutions to learn about business-related competen-cy

Basic training•Enhance employees'

knowledge and skills of basic operations

•Introduce important regulations, processes, internal controls and sales techniques for each task

Bonuses awarded for innovative employee proposals within the last 3 years2016Employee proposals

115

42 cases/NTD17,000

2017

106

44 cases/NTD16,000

2018

143

56 cases/NTD18,200

Total

364142 cases/NTD51,200

Total proposals

No. of awardedproposals and bonuses

Key FFHC Training Programs

GoalsSolution BenefitsProportion of full-time

employees (%)

Dig

ital B

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ale

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m Refine employees' competency in digital finance and elevate their expertise in digital finance products and marketing capability.

As of the end of 2018, we organized 131 sessions with 52,269 total training hours and an average of 7.3 hours for each employee. We acquired 50 patents on Fintech inventions and new models and 1,747 employees passed the "digital finance knowledge certification". Transaction fee earnings and interest income in 2018 also increased 3.6% from 2017 due to enhancement of the smart customer service system, digital welcome system and new functions in the mobile sales platform app.

100

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The overseas management associate program was launched in 2006, providing various professional training in accor-dance the different sales experi-ence and background, such as: compliance of overseas law, internal control, risk management, overseas information system, international protocol, cross-cultur-al communication, economics and politics of the respective countries as well as other courses, in order to accelerate the professional training of overseas talent.

As of the end of 2018, we have built a pool of 347 overseas management associates who not only serve as a pool of talent for overseas business operations, but also provide a diverse range of career paths that fulfill employees' career plans. The execution of the program has helped boost the profitability of overseas branches. In 2016, 2017 and 2018, gross profits of overseas branches reached US$168,779,000, US$205,493,000 and US$250,027,000 respectively.

3.8

Strengthen the role of the securities salesperson and respond to requirements for digital development, help salespersons evolve into an all-rounded financial management advisor, and provide them with insurance license plans, incentives, and training.

Strengthen the employees' professional skills in insurance and strengthen channels and employ-ees' professional knowledge of insurance products to improve insurance marketing capabilities.

We organized training for obtaining licenses for foreign currency payments and receipts for non-investment linked insurance products, investment insurance products, and personal insurance account managers for a total of 677 participants totaling 2,550 training hours. A total of 357 securities salespersons acquired insurance-related certificates in 2018 and increased their income from insurance commission by 315% from 2017.

31

To improve the knowledge in insurance products of employees of First Life Insurance, each employee received an average of 2.85 hours of training in 2018, with a total of 10,169 training hours for 3,567 people. We organized 49 insurance wealth management product training sessions for sales channels in 2018 totaling 207 training hours for 8,285 participants. After improving the professional insurance knowledge of channels and employees, net income from insurance businesses in 2018 increased by NT$6.603 billion from 2017 with a growth rate of 128.72%.

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167166

To ensure that the training plan equips employees with the relevant knowhow, the Company adopts the Kirkpatrick

framework to evaluate and control training effectiveness, as well as to verify learning results.

Evaluationmethod

Evaluationlevel

Description

Response level(Level 1)

Learning level(Level 2)

Behavior level(Level 3)

Results level(Level 4)

Returns level (Level 5)

Arranging students to fill out the course satisfaction survey after training, and encouraging them to suggest improvements to the course

Effectiveness of training based on implementation of the Kirkpatrick ModelDigital Banking Talent Transformation Program

Questionnaire

Mock exercise

Projectpresentation

PracticalAssessment

360-degreeevaluation

Evaluation of student's work quality and professional knowhow

Effectivenessevaluation

Return oninvestmentevaluation

Evaluating training effectiveness through operating performance growth.

Use the return on investment (ROI) to evaluate the results of training*ROI: Financial benefits - training cost / training cost

After courseevaluation

Arranging a test immediately after the course to evaluate learning results

Conduct of scenario play, enhancing effectiveness through simulation practice

Arranging students to conduct presentation and analysis of actual cases toenhance their application capabilities

Number of questionnaire submissions (L1)

Number of employees who passed the test (L2)

Retention rate of new employees (L3)

Digital channel utilization rate (L4)

Return on investment (ROI) evaluation (L5)

2015

13,730

2,797

85.84%

74.2%

698.7

2016

21,201

10,066

84.29%

74.48%

567.2

2017

11,039

3,844

92.82%

76.04%

627.2

2018

10,241

3,608

91.47%

78.07%

467.6

Professional Insurance Talent Training Program

After-course satisfaction questionnaire recovery rate (L1)

After-course evaluation rate (L2)

Customer satisfaction survey (L3)

Growth rate of net revenues from insurance (L4)

Return on investment (ROI) evaluation (L5)

2015

95.08%

25.09%

81%

-101.85%

49.68

2016

90.70%

41.28%

70.8%

1016.92%

772.42

2017

91.40%

32.82%

71.5%

279.71%

2069.56

2018

88.96%

36.08%

77.4%

128.72%

4819.70

2-5 Employee Training and DevelopmentEmployees' professional competency is what keeps the company running. FFHC has designed different training courses and learning paths for personnel in each grade. These effectively boost employees' professional competency, market-ing skills and enthusiasm for their work. In response to rapid advancements in FinTech, we actively implement compre-hensive FinTech training and arrange external FinTech training courses and seminars for employees. As of the end of 2018, we had organized 14,768 hours of internal FinTech courses for a total of 9,635 participants. In addition, the “Proficiency Test for Digital Banking Processes” certificate has been included as an employee promotion credit certifica-tion since 2017 and its weight in scores has also been increased. A total of 1,939 people received the “Proficiency Test for Digital Banking Processes” certificate as of the end of February 2019.Professional certificates / licenses and number of licensed FFHC employees (Unit: person)

To enhance the digital learning effectiveness of employees, 82 online learning courses were added in 2018. English online learning courses have also been launched to create a comprehensive learning database. The amount of time and energy spent by employees on commuting can also be greatly reduced. In 2018, management personnel (Note) attended real-world training 15,929 times, or an average of 53.73 hours of training per person; online training was used 24,975 times, or an average of 29.28 hours per person. Non-management personnel attended real-world training 43,136 times, or an average of 25.04 hours of training per person; online training was used 99,065 times, or an average of 27.34 hours per person. Total real-world and online training hours amounted to an average of 57.89 hours per person. Total employee training expenses amounted to NT$126.96 million for an average of NT$13,760 per person, a massive 85% growth from 2017. We improved employees' related knowledge and skills in response to increasingly rigorous domestic and foreign laws and regulations on anti-money laundering and countering terrorism financing. We provided subsidies for the membership, test fees, and incentives to a total amount of NT$73.4 million for the "Certified Anti-Money Laundering Specialist" (CAMS) in 2018 which increased total training fees of employees by 88.1% from 2017.

2018 statistics on employees' real-world trainingTotal number of people

8,670

7,259

Manager

28,146

14,990

Non-managerialrole

Total 15,929 43,136Note: Managers refer to employees who assume managerial roles and administrative duties.

Please refer to page 85 of the Company's Annual Report

Total hours

48,790

40,555

Manager

116,094

73,280

Non-managerialrole

89,345 189,374

Average hours per person

55.07

52.19

Manager

25.13

24.89

Non-managerialrole

53.73 25.04

Gender

2018 statistics on employees' online trainingTotal number of people

13,574

11,401

61,251

37,814

Total 24,975 99,065

Note: Managers refer to employees who assume managerial roles and administrative duties.

Total hours

25,734

22,957

129,540

77,232

48,691 206,772

Average hours per person

29.05

29.55

28.04

26.23

29.28 27.34

Gender

Average employee training hours and training expenses for the past three years2016Item Year

64.85 hours

NTD 8,138

NT$74.13 million

2017

54.95 hours

NTD 7,437

NT$67.49 million

2018

57.89 hours

NTD 13,760

NT$126.96 million

*Average employee training hours =(278,718+255,462)/9,227=57.89

Average employee training hours

Average employee training cost

Total training expenses

Evaluate whether a new employee has applied his knowledge in daily workthrough daily work performance, manager's review, as well as feedback ofcolleagues and customers.

Manager Non-managerialrole Manager Non-managerial

role Manager Non-managerialrole

169168

2-6 Employee Communication and CommitmentTo protect employee rights, important work changes must be notified as soon as possible. Our work rules and HR

management regulations explicitly state in accordance with the Labor Standards Act that the establishment of new

business units or the re-assignment of personnel due to business requirements must be notified in writing one week in

advance. For overseas assignments, employees must first be assigned to the relevant domestic units for training and

given reasonable time to learn about the regulations, culture and lifestyle of the destination country. This will shorten

the amount of preparation time, simplify handover and reduce operating risks. Employment may be terminated in the

event of business shut down, transfer of ownership, losses, reduced business, change in nature of business or where the

employee is clearly unfit for their job. Advance notice must be given in accordance with the following rules:

1. 10 days' notice for employees with more than 3 months and less than 1 year of continuous service.

2. 20 days' notice for employees with 1 – 3 years of continuous service.

3. 30 days for employees who have continuously served for three years or more.

The Group's various companies have conducted anonymous employee commitment surveys since 2017 to understand

employees' perception and views of the Company. The results from the 2018 surveys are as follow:

FFHC subsidiaries provide multiple channels for employee communications and whistle blowing. A positive interactive

relationship is maintained and whistle blowers are protected against improper treatment. Apart from personal

meetings between managers and employees, the employee mailbox and complaints hotline, video conferencing,

intranet pages, the bi-weekly publication and monthly publication all enable employees to keep track of company

developments. Employees can also communicate and report problems to corporate governance executives through a

range of communication channels such as the “President’s Mailbox”, “Ideas Mailbox”, “Employee Support Hotline” on

the company intranet. The employee communication and whistle blower channels are as follow:

2017Item Year

8,275

7,506 (Male: 2,989/ Female: 4,517)

90.71

79.77

82.56

78.07

2018

8,504

8,091 (Male: 3,372/ Female: 4,719)

95.14

82.39

84.76

80.64

Number of questionnaires

Number of returned questionnaires

Recovery rate (%)

Overall commitment (%)

Level of commitment of male employees (%)

Level of commitment of female employees (%)

•Company policy and culture

•Work and healthy lifestyle

•Training and development

•Compensation and benefits

•Leadership and management

•Relationship with colleagues

Main aspects ofthe questionnaire

•Implement mechanisms for job rotation•Improve education and training for professional competencies•Measures to provide tangible benefits•Expand recruitment of new employees and accelerate efforts for filling up the manpower gap caused by the retirement wave•Training to improve communication competency of managers

Improvementmechanisms

•As of the end of 2018, 14 of 73 depository and exchange personnel aged 45 and below and ranked level 10 and below with medium high performance and medium high potential based on the results of competency assessments have been reassigned to core businesses.•Personnel with high performance and high potential are assigned to related training courses. A total of 9,434 training groups and 56,123 training hours have been accumulated as of the end of 2018.•The Group's employee welfare expenditures amounted to approximately NT$1,518,000,000, an increase of 6.1% from 2017.•The Group recruited a total of 989 people in 2017, an increase of 22.4% from 2017.•In 2018, managers attended 138,036 hours of training, an increase of 11% from 2017.

Effectivenessof improvements

• To strengthen the complaint and communication mechanisms of employees and external entities, the Compa-ny and subsidiary companies have established reporting procedures reviewed and passed by the compa-nies' Board of Directors. We also set up hotlines, fax, emails, and other complaint channels and publish them on company websites. The internal audit unit/branch audit manager accept complaints and assign cases to units that have independent power for investigation based on the nature of the cases to effectively process complaints.

• The telephone number and e-mail for employee complaints are posted under the “Stakeholder Communica-tions” section of our corporate website. The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee communication and complaints.

• The compliance system at each company requires “the compliance officer should provide improvement suggestions for violations of the law or regulations. Where the improvement suggestion is not accepted by the management and leads to major losses for the company, a report should be prepared and submitted at once, the supervisors/independent directors and Audit Committee notified, and the competent authority informed as well.” Employees who discover such matters may notify the compliance officer of their unit or headquarters directly. The compliance unit will investigate and deal with the matter accompanied by the risk management and internal audit units.

• A range of transparent, equal and convenient complaints channels have been established including the “President’s Mailbox”, “Ideas Mailbox”, “Employee Support Hotline”, and “Chief Auditor's Mailbox” on the company intranet, as well as public forums on a diverse range of topics to ensure that complaints are handled properly.

• To facilitate the reporting and handling of sexual harassment cases, “Sexual Harassment Prevention Complaints and Disciplinary Regulations” have been formulated and issued at each company along with the telephone, fax and e-mail for filing sexual harassment complaints. The above information is posted promi-nently on the corporate website and in the workplace. All employees also undergo training on sexual harass-ment prevention every 6 months.

• A proposal system and themed competitions are used to encourage employee to make suggestions on process improvements. A total of 143 employee recommendations were proposed in 2018 including improv-ing existing businesses, work environment, operation methodology and automated services, improving adver-tisement effectiveness, building corporate image, and reducing work procedures. All recommendations were studied closely by the relevant departments and 56 of them were eventually accepted.

• To ensure open communications between the employer and employees, employee suggestions from each department are proposed for discussion and communication during the regular “Employer-Employee Meeting” and monthly meetings.

• Surveys on employee commitment, office environment (hardware facilities) and quality of service (software services) are conducted to provide employees with channels for expressing their opinions and references for decision-making.

Communication Channels

171170

3-1 Human Capital and RecruitmentThe annual recruitment drives at FFHC all strive for innovations and breakthroughs. Apart from having top executives

take an active role in "Campus Recruitment Events" and describe the corporate vision of FFHC, outstanding alumni who

are now management associates also share their experience to boost interactions with students, and stimulate interest

from students of all academic backgrounds in the finance industry. The year 2018 marked the 14th year of the MA

program. To catalyze the development of innovative financial products and services and inspire more FinTech applica-

tions, we recruit top professionals with a background in business management, information science, law or psychology,

focusing specifically on top students who have participated in digital banking studies or innovative industry–academia

cooperation projects, as well as finance specialists with experience in digital finance. Those with outstanding language

skills were also invited to join the management team to sustain our strategy of cultivating diversified talent.

In view of the developing trend of digital finance, the Group has, since 2015, engaged external professional headhunt-

ers and used cloud based social platforms in conjunction with traditional avenues to recruit middle to senior level

managers, in addition to professional talents in Big Data Analysis, Internet Management, Information Safety Manage-

ment, Fintech Research and Development as well as Digital Banking Business Planning recruited through internal and

external processes. This allows for enhancing employee competency and competitiveness, adapting to the evolutions

in digital finance and responding to human resource requirements in information safety.

FFHC embraces tolerance and multiculturalism in our recruiting policy every year. There are no restrictions based on

school, major, age, background or gender. We have also taken a long-term interest in the welfare of minority groups

such as the handicapped and indigenous peoples. In 2018, we employed 99 employees with disabilities and 4 indige-

nous employees on the same remuneration and benefits as regular employees. The "National e-Job Network" of Taipei

City Employment Services office publishes job openings for handicapped people. Handicapped employees made up

of 1.07% of our workforce in 2018 and exceeded the government quota. FFHC hired 41 summer interns in response to

the Ministry of Education - Youth Development Council's "Internship Plan for Youth from Economically Disadvantaged

Families", and provided 10 internship opportunities in conjunction with the 2018 summer "University Students' Banking

Internship" activity organized by the China Youth Corps, so as to provide opportunities for financial education, reducing

the number of youths that are unemployed and without access to education or training.

Investing in, nurturing and employing local talent is one of the principles of First Financial Holding in its overseas opera-

tions. As of 2018 year end, First Financial Holding has employed 480 local employees and continued to localize its

operations. In addition, employees with outstanding performances are promoted annually, with some holding manage-

rial positions, emphasizing the diversity and inclusiveness of the Group while benefiting business expansion.

Talent recruitment and retentionMaterial TopicGRI 401: EmploymentGRI 402: Labor/Management relationsGRI 404: Training and education


PoliciesEmployees are the core of the financial service industry. From recruiting, cultivation, retention through to protection, we are committed to building up a compre-hensive compensation system and welfare measures to retain quality talent and reduce loss of key talent.

CommitmentBy creating a positive work environment, we are committed to assisting employees to maintain work–life balance, providing competitive compensation system and useful benefits, realizing employee care, optimizing human resource management mechanism, and actively attracting and retaining quality talent.

Goals• Adopt a fair and just recruitment process to recruit

talented people with diverse background.• Provide a complete diversified welfare system and

create a friendly workplace.• Promote interpersonal interactions for employees, to

achieve a balance between work and life.• Refine remuneration system to raise our competitive-

ness and incentives.

DutiesWe provide fair and open recruitment channels and selection processes, regularly examine changes in the financial market and amendments to labor laws, create an environment in which employees can develop the practical skills and mindset needed for their work, and build a friendly, healthy, and happy workplace.

ResourcesWe provide a wide range of employee health manage-ment mechanisms and benefits, a fair and reasonable evaluation system with clear avenues of promotion, and career development road maps and counseling.

Specific management practices• Regularly refer to the report on the market rates

for compensation and, accordingly, provide competitive remuneration plans.

• Respond to the aging population and low birth rate and protect the interest and benefits of employees on unpaid parental leave.

• First Bank processes Employee Savings and Stock Ownership Trust to retain quality talent and encourage employees to start saving for retirement.

• Provide a work–life balance for employees by organizing family gatherings while raising environmental and health awareness, organizing physical and arts activities as well as forming employee clubs such as sports-related or recreational clubs.

• Establish incentive schemes to encourage employees to focus on performance.

Assessment mechanisms• New recruitment rate and resignation rate• Retention rate of new employees• Rate of reinstatement and retention after

maternal/parental leave• No. of employees receiving and amount of

subsidies for marriage and parenting• Retention rate of new employees at First Bank

reaches 70% and above.• Percentage of employees with disabilities

Results• First Bank’s total salary adjustment in the past 2

years was 8%, out-performing the average market salary adjustment of 6.0%.

• A total of 989 employees were recruited in 2018. We were chosen for inclusion in the "Taiwan Employment Creation Index 99 " for the ninth consecutive year.

• In 2018, 115 employees applied for unpaid maternity leave and the reinstatement rate reached 93.62%; the retention rate one year after reinstatement for employees who went on unpaid child care leave was 93.27%.

• To encourage employees to have children, child birth subsidy of NT$14.815 million was disbursed in 2018, contributing to the birth of 521 babies. A total of 4.185 million in marriage subsidy was provided to 137 applicants.

• Chosen for inclusion in the "Taiwan High Compensation 100 Index" for the fourth consecu-tive year.

• In 2018, the retention rate of new employees at First Bank reached 91.47%.

• Handicapped employees make up 1.07% of our workforce and satisfied the government quota.

Complaints mechanism• The telephone number and e-mail for employee

complaints are posted under the “Stakeholder Communications” section of our corporate website. The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee communications.

• A range of transparent, equal and convenient complaints channels have been established including the “President’s Mailbox”, “Ideas Mailbox”, “Employ-ee Support Hotline”, and “Chief Auditor Mailbox” on the company intranet, as well as public forums on a diverse range of topics to ensure that complaints are handled properly.

• To ensure open communications between the employer and employees, employee suggestions from each department are tabled for discussion and communication during the “Employer-Employee Conference” and monthly meetings.

173172

3-2 Employee TurnoverWe are working to create a happy workplace environment with diversified benefits and comprehensive compensation/-bonus scheme to reduce our turnover rate. The higher turnover rate among women in recent years was due to the high proportion of tellers and financial planning personnel. Female employees tend to leave the workplace due to marriage and childbirth. The main reason new employees resign was a change in career. However, factors such as the labor market demand in the financial industry as well as changes in the number of retirees resulted in a group turnover rate of 9.81% at the end of 2018. If those applying for retirement at the age of 65 in accordance with the Labor Standards Act are excluded then the turnover rate was 7.82%.

In recent years, First Financial Holding has repeatedly increased the starting salary of new employees with an increment percentage of 7.3%, an above average increment when compared to industry peers. This is in addition to a fair and transparent promotion mechanism and performance evaluation method in order to prevent seniority being the main consideration for promotion, as well as a differentiated bonus system. Together, this provides for a fair, transpar-ent and hopeful future for the younger generation. In order to build an excellent workplace environment and create work life balance for employees, we provide several benefits and leave regulations that exceed the minimum bench-mark set by the labor law, in the hope of retaining our younger employees as well as providing support for them and their families. Pension for retired employees is provided in accordance with the Employee Pension Rules and severance pay and pay in lieu of notice are paid in accordance with work rules, so as to cover employees’ living costs after retirement or while they seek employment.

Overview of employee diversity for the past 3 yearsPersons with physical and

mental disabilities

90

99

99

Indigenous People

5

5

4

No. of Nationalities

14

14

14

2016

2017

2018

Unit: Persons

Overview of employee separation rate and recruitment cost over the past 4 years2015Item Year

8.67

7.84

7.09

24,742

9,201

2016

10.24

8.78

6.98

30,811

9,108

2017

8.44

6.79

6.62

36,838

9,075

2018

9.81

7.82

7.54

35,486

9,227

Resignation rate (%)

Resignation rate (%)–Excluding retirees

Voluntary separation rate (%)

Average recruitment cost (NT$)

Total no. of employees

Statistics of new recruits and total number of employees

Lessthan 30

254

2.75

72

0.78

326

3.53

30–39years old

106

1.15

23

0.25

129

1.4

40–49years

80

0.87

13

0.14

93

1.01

50 andabove

15

0.16

7

0.08

22

0.24

8,747

94.8

480

5.2

9,227

100

No. ofEmployees inTaiwan

No. ofEmployeesOverseas

Percentage (%)

Percentage (%)

Total

Percentage (%)

End of2018

Total no.of

employeesLess

than 30

202

2.19

17

0.18

219

2.37

30–39years old

132

1.43

7

0.08

139

1.51

40–49years

51

0.55

0

0.00

51

0.55

50 andabove

7

0.08

3

0.03

10

0.11

455

4.93

115

1.25

570

6.18

392

4.25

27

0.29

419

4.54

Total

New employee ratios in the last four years

Employee Resignations

Lessthan 30

77

0.83

44

0.48

121

1.31

30–39years old

76

0.82

26

0.28

102

1.10

40–49years

113

1.22

6

0.07

119

1.29

50–64years

68

0.74

11

0.12

79

0.86

76

0.82

6

0.07

82

0.89

8,747

94.8

480

5.2

9,227

100

End of2018

Total no.of

employeesLess

than 30

57

0.62

19

0.20

76

0.82

30–39years old

103

1.12

13

0.14

116

1.26

40–49years

67

0.73

0

0.00

67

0.73

50–64years

Retirementat 65 years

Retirementat 65 years

40

0.44

2

0.01

42

0.45

100

1.08

1

0.01

101

1.09

410

4.44

93

1.01

503

5.45

367

3.98

35

0.38

402

4.36

Total

Employee resignation rates in the last four years

4.85

3.82

2015

5.65

4.59

2016

4.75

3.69

2017

5.454.36

2018

FFHC has 15 operating locations in Southeast Asia. To identify students with high potential in Southeast Asia, First Bank

began planning the "Southeast Asia Talent Industry–Academia Cooperation" programs, with the hope of fostering

talented Southeast Asian students into overseas professionals. We also reached out to current students or pending

graduates interested in the banking industry to join our summer internship program, add them to our overseas local

recruitment database and refer them to overseas units for consideration. Such experience camps and internship

programs will continue to be held in the future to discover more talented people in Southeast Asia. A total of 989 new

employees were recruited in 2018 with a women:men ratio of 58: 42. All of our offices also give preference to local

residents to ensure their employment opportunities. A total of 142 new foreign employees were recruited in 2018.

No. ofEmployees inTaiwan

No. ofEmployeesOverseas

Percentage (%)

Percentage (%)

Total

Percentage (%)

6.51

4.26

2015

6.21

3.68

2016

5.35

3.55

2017

6.18

4.54

2018

Year Item

175174

3-3 Refined Compensation SystemTo fulfill our care of duty to employees, we have defined retirement rules in accordance with the "Labor Standards Act" and "Labor Pension Act". Apart from making mandatory pension contributions we also refer regularly to salary surveys conducted by professional organizations. Our annual salary is in the P65 range of the market (P65 means our standard of compensation is superior to 65% of our competitors). By providing employees with competitive remuneration plans and comprehensive benefits packages, we build up employee loyalty and maximize their potential. This translates into shareholder returns and a mutually beneficial outcome for customers, employer and employees.

First Financial Holding achieved record profits in 2018, and raised salaries at 2.3% in order to share the company's excellent results with employees. The company raised salaries by 3% as of January 1, 2018. The combined salary increase of 8% is higher than the market benchmark of 6%. Total employee welfare costs in 2018 amounted to NT$14.886 billion, up 8.2% from 2017.

For employee compensation at overseas units, we take into account the remuneration survey results of international management consultants as well as local economic data, compensation trend forecasts and information exchanged with local competitors. The pay grade principle was used to gradually adjust the remuneration standards of local employees overseas. We are also focusing on global human resources issues to better look after the livelihoods of local employees and compliance with labor laws. On living subsidies and accommodation for expatriate First Bank person-nel, we not only routinely adjust subsidies based on local cost of living and rents, but also regularly send staff overseas to check on local economic conditions and the needs of expatriate personnel. This ensures our employees are properly looked after.

3-4 Performance Evaluation and Career DevelopmentFFHC provides employees with career development road maps and counseling. Apart from a transparent and fair evaluation system, regular performance and career development assessment is conducted on all employees. Evalua-tions in the first and second halves of the year are used as a way for managers to communicate performance targets and provide employees with the necessary assistance at appropriate times. This builds up employee consensus on individual targets set by the company. At the end of the year, results of mid-year evaluations are used to summarize the overall performance of the employee for the year.

First Financial Holding emphasizes the long-term performance of employees and implements the "Employees Stock Options Purchase Plan” in order to boost morale and reward employees who contributed significantly to the company. During application for capital increase, employees can purchase their respective amount of stock options at a favorable price based on their position, seniority and performance. The amount of stock options issued is higher than the market standard to effectively enhance employee loyalty.

To incentivize employees to raise their performances, First Financial Holding set the "Retention and Promotion of Employees" regulation, which stipulates that employees above grade 5, upon accumulating 3 years of seniority, would be promoted according to number of years in service, performances, sales capability, management capability, leader-ship qualities and business requirements. In addition, employees' salaries and bonuses are highly correlated to annual evaluations and promotion levels, directly impacting their bonuses and salaries for that year, as well as salary increment percentage and promotion likelihood for the next year; promoted employees, other than receiving a higher pay rise for the year of promotion, would also enjoy higher pay, bonus and compensation increments as of the next year; in particular, award of the special incentive bonus is based on the employee's long term performance and special contribution, accounting for 35% of employees’ annual bonus.

The calculation of employees' compensation is based on weightage on evaluation as well as seniority and position. Promotion of employees takes into consideration the current position, as well as evaluation scores for the last 1–9 years; the selection of assistant supervisor associates take into account their evaluation scores at the current grade for the past 1–5 years as well. Each weightage is correlated to the employees’ long term performance, that is, employees’ long term service performance will influence the position they assume; as a means to persuade employees to stay for the long run and improve workforce stability at the company, employees' number of years in service are tied to their Prefer-ential Saving Deposits post retirement.

First Financial Investment Trust has implemented a long term incentive plan for fund managers that exceeds 1 year. In

accordance to the "Investment Researcher's Compensation and Penalty Plan", long term performance bonuses would

be awarded after 2 to 3 years of fund management. The bonus would be given in stages to prevent any loss on the

company's end after the award of bonuses.

To enhance employee loyalty, attract and retain quality talents by offering benefits, and encourage employees to start

saving for their retirement, First Bank processes Employee Savings and Stock Ownership Trust and sets up an Employee

Savings and Stock Ownership Trust Committee. Full-time employees who have worked for the company for more than 6

months are free to choose either the Employee Savings Trust plan or the Employee Stock Ownership Trust plan. When

they resign, employees could withdraw the entire amount invested in their voluntary pension account; whereas the

amount that can be withdrawn from the mandatory pension account is dependent on employees’ number of years in

the trust plan:

We have established clear avenues of promotion and incentive schemes to encourage employees to focus on perfor-

mance. The selection, evaluation, training and promotion of future management associates and overseas management

personnel are held at regular intervals as well. Employee attributes, experience and specialties are compiled into a

database then analyzed to provide a reference for planning the employee's career development. Apart from new

employees who are recruited as replacements for dismissed and resigned employees, experts and management

professionals are cultivated internally. However, the recent trends in digital banking have prompted us to expedite the

digital transformation by outsourcing digital banking experts, which caused a reduction in the internal training ratio of

non-managerial personnel. At the same time, we encourage employees to attend external courses in their spare time.

Subsidies are provided based on their grade and the course. Employees studying finance-related graduate or higher

degrees in Taiwan and overseas may also apply for up to 3 years of unpaid leave. We endeavor to enhance corporate

sustainability by promoting lifelong employability among employees.

Number of years in trust plan Percentage (%) of amount that can be withdrawn from the mandatorypension account

< 3 years

3–6 years

6 years or more

0

50 (Plus cumulative profit or loss from this)

100 (Plus cumulative profit or loss from this)

Analysis of internally fostered talent in the past 3 years2016

83.92

99.07

37.14

2017

72.16

99.28

40.17

2018

79.62

98.93

33.33

Positions available for internal candidates (%)

Positions available for internal candidates: Management (%)

Positions available for internal candidates: Non-management (%)

Category Year

Remarks:Positions available at the Company for internal candidates include management openings, overseas positions, and non-man-agement openings, which however do not include new recruits that serve as replacement for dismissed and resigned employees.

• Marriage, childbirth subsidies• Subsidy for continuing education at university• Subsidy for learning foreign language• Subsidy for professional exam entrance fees• Subsidy for birthday celebrations, annual parties and holiday travel• Subsidy for funerals• Subsidy for recreational courses and events• Subsidy for hire of sporting venues

177176

Support for Retirement1・Our Group's companies have each defined their own retirement regulations based on the "Labor Standards Act"

and "Labor Pension Act". Appropriate retirement programs have also been drawn up.

2・Defined contribution plans (new labor pension system)

Since 1st July 2005, the Group has complied with the "Labor Pension Regulations" and formulated a clear retirement

scheme. Employees who choose the new "Labor Pension Regulations" would receive a monthly pension payment (6%

of their monthly salary) into their personal pension account. Employees aged 60 can choose to retrieve their pension in

one lump sum including principal and interest, or apply for monthly retrieval. The Group paid out a total of

NT$218,426,000 in pension funds for 2017, and NT$247,787,000 for 2018.

3・Defined Benefit Plans (Old Pension System)

Pension payment for employees who opt for the old pension system and who are eligible to retire is be based on their

work tenure and average salary for six months before retirement. With respect to work tenure within 15 years or less,

two points are given for each full year of employment served, and for work tenure that exceeds 15 years, one point is

given for each full year served. The maximum limit is 45 points. The Group's various companies, based upon the old

scheme of 2%–10% of total employee salaries, pay out monthly pension funds and deposit them at the Bank Of Taiwan's

Trust Fund Department under the respective companies' labor pension fund supervisory committee account. In addition,

the pension reserve fund balance of employees will be computed before the end of each financial year. In the event

that, for employees that meet retirement criteria, the balance is insufficient for retirement according to the aforemen-

tioned computation method, the company will make up the balance in one lump sum before the end of March of the

following year The cost to the Group for 2017 and 2018 pertaining to the aforementioned pension funds is

NT$377,978,000 and NT$357,919,000 respectively, both recognized as employee welfare expenses. The amount for

2017 and 2018 deposited in the Bank Of Taiwan's Pension Reserve Fund is NT$7,065,736,000 and NT$7,530,178,000

respectively.

4・Overseas employees are subject to the local governmental laws and regulations. Their pension is recognized as

pension expense for the current period in accordance with retirement regulations for defined contributions. The pension

expense for the current period was NT$16.175 million in 2017 and NT$15.969 million in 2018.

3-5 Friendly, Healthy, Happy WorkplaceTo realize the goal of becoming a happiness enterprise, create a positive work environment, maintain the physical and mental well-being of employees as well as build up the loyalty of employees and their dependents, FFHC provides a wide range of employee health management mechanisms and benefits:

FFHC offers a comprehensive and wide-ranging benefits scheme in response to the trend of aging population and low birth rate. Apart from protecting the promotion prospects, performance evaluation and benefits of employees on unpaid leave, we also offer diversified care and support for employees who need pregnancy leave, family leave, or furthering their education locally or overseas. In 2018, a total of 324 people applied for unpaid maternity leave and the reinstatement rate reached 93.62%; the retention rate one year after reinstatement in 2018 for employees who went on unpaid child care leave was 93.27%.

Remarks: Employees refer to full-time employees.

FFHC Pension Contribution Plans2017

218,426

377,978

16,175

2018

247,787

357,919

15,969

New Pension System

Old Pension System

Overseas

Category Year

Unit: NT$1,000

5・To thank our personnel for their years of contributions, the Company presents each retiree with a commemorative

medal and a pure gold bank ID badge and organizes a range of activities that cater to the living needs of retired

personnel. Retirees are also invited to take part in sports and recreational activities as well as arts and craft classes

organized by the bank. The annual retiree New Year banquet was held on Friday, February 23, 2018 and attended by

518 retiring personnel. A total of 1,682 retired personnel and their spouses living in Taiwan participated in the annual

mountain hike on Saturday, December 08, 2018. Consolation and care payments for the three major holidays to the

value of NT$7,150,000 were paid in 2018, and monthly bank newsletters are posted to retirees. Retired personnel are

also entitled to benefits of using guest houses and group insurances at the same discounted rate as that of in-house

employees.

HappyWork Place

• Heal thexam for employees and their families• Health workshops and nutrition management• Medical clinics and full-time nutritionist• Abnormal Workload-triggered Diseases Prevention Plan• Human-factor Hazard Prevention Plan• Materna lEmployee Health Protection Plan• Tobacco-free Workplace, Air Quality Testingand Maintenance• Weight loss class• Flu vaccinations and cancer screening• Low-dose lung CT scanVarious

subsidies

• Subsidies for employee self-improvement trips and distribution of gift boxes onthe three major holidays• Employee birthdays• Souvenirs for retired personnel• Compensation for hospitalization of family members and funerals• Scholarships for employees' children

Healthmanagement

Employeedormitoriesand guesthouses

Consolationpayments

• Consolation payment for serious illness or injury• Consolation payment for major disasters• Consolation payment on the three major holidays for retired employees• Consolation payment for the family of employees who passed away

• 14 days of paid special leave and 30 days of paid sick leave (except for employees on the irfirst year)• Number of leave days for wedding, funeral, and miscarriage exceeds statutory requirement

• Employee guest houses in Beitou, Penghu and Hualien• Employee dormitories in Taipei City, New Taipei City, Hsinchu, Taichung, Tainan, Kaohsiung and Hengchun

2018Total no. of

employees onparental leave

196

128

324

2018No. of

applicantsfor unpaid

childcare leave

105

10

115

2018No. of

returningemployees

expected (A)

83

11

94

2018 No. ofactual

returningemployees

(B)

79

9

88

2017 No. ofactual

returningemployees

(C)

93

11

104

95.18

81.82

93.62

93.55

90.91

93.27

2017 No. ofemployees whoreturned from

unpaid child careleave and stayedfor at least 1 year

(D)

87

10

97

Total

Total

Grand Total

Reinstate-ment

rate (%) (B/A)

Retention rate (%) (D/C)

Leaveregulations

that surpassthe legal

requirement

Establishmentof EmployeeWelfareCommittee

179178

3-6 Balance between Work and LifeWorkers of the new generation emphasize the importance of striking a balance between work and life, whereas we

focus on ensuring a workplace that makes employees feel happy and energized. For the purpose of helping employees

to achieve a balance between work and family, FFHC implements a friendly family policy that provides the following

care and support for employees and their families:

1・emale employees may apply for paid menstrual leave. In 2018 this was applied for by 166 people and average

duration was 6.1 hours. If a pregnant employee feels unwell and is diagnosed by a doctor as requiring rest, the employ-

ee may apply for up to 44 days of sick, special or extended sick leave. This type of leave was applied for by 334

employees in 2018, with each person applying for 4.78 days of leave on average.

2・FFHC Headquarters building's breastfeeding room was certified for excellence by the Taipei City Department of

Health. In 2018, the breastfeeding room was used on average 473 times a month. First Bank IT building, Credit Card

Division Zhongshan building, and Bade building have also set up breastfeeding rooms in June 2018, which were also

certified for excellence by the Taipei City Department of Health in September.

3・If an employee must take care of a family member personally due to vaccination, serious illness or other major

events, they may apply for paid family care leave. This is limited to 7 days per year. In 2018 this type of leave was

applied for by 995 employees, averaged 5.08 hours per person.

4・In light of the declining birth rate, FFHC has raised the child birth subsidy and offers NT$50,000 for the first child,

NT$80,000 for the second child, and NT$100,000 for the third child and every child thereafter. Child birth subsidy of

NT$14.815 million was disbursed in 2018, contributing to the birth of 521 babies. We also offer an employee marriage

subsidy to the value of NT$30,000. In 2018, a total of NT$4.185 million in subsidies was provided for marriage to 137

applicants. FFHC has signed an agreement with a well-known national chain to provide all employees in Taiwan with

discounted daycare service. Education subsidies are also provided for employees' children. A total of NT$15.48 million

was disbursed in 2018.

5・The Bank implemented the "Extended Consecutive Leave" scheme, which allows employees who take 7 days of

leave to receive NT$3,000 in travel subsidy, NT$6,000 if they take 10 days off, and NT$9,600 if they take 14 days off. A

total of NT$37.29 million in subsidies were provided in 2018.

6・First Bank has implemented the "Guidelines for Unpaid Leave to Care for Sick or Injured Employee Dependents" to

provide employee care and help employees to fulfill their responsibilities at work and home.

7・Various employee clubs have been established including sports-related clubs for golf, yoga, and marathon running.

There are also recreational clubs such as bridge, Go and photography. Subsidies were also provided for employees

for the hire of local basketball, badminton, softball and table tennis venues. A total of NT$8,327,000 was subsidized in

2018.

8・Various sports and recreation activities (including table tennis tournament, singing competition, badminton/softball

competition, mountain-climbing and hiking, family days) were organized for employees and their dependents to

promote a healthy, motivated and optimistic workforce. Up to 15,743 people took part in these events in 2018.

9・In 2018, NT$126.81 million were spent on employee self-improvement trips and NT$20.82 million in subsidies were

provided for annual year-end parties.

Headquarters building’s breastfeeding room

IT building’s breastfeeding room

Table tennis tournament for employeesand their dependents

Annual year-end parties Singing competition

Singing competition Softball competition

Hiking

181180

Occupational Safety and HealthMaterial TopicGRI 403: Occupational safety and health


PoliciesWe prevent occupational injuries, ensure the safety

and health of employees, comply with laws and

regulations, engage in consultation and communica-

tion, and implement risk control to enhance our

performance in occupational safety and health.

CommitmentWe are committed to creating a healthy workplace,

promoting physical and mental health in the

workplace, and improve the health of our

workforce.

Goals• Every year, recognize health risk issues based on

the Occupational Safety Management Risk Map,

review the various risk prevention plans each

year, and implement risk mitigation measures.

Continue to encourage occupational safety and

health practice to implement a culture of

occupational safety and health management.

• Introduce the ISO 45001 Safety and Health

Management System to create a safe and

healthy workplace for employees and reduce the

occurrence of occupational safety and health

hazards.

DutiesContinue to improve the workplace, strengthen

employee health management measures and

health-promoting activities, and enhance the quality

of on-site health service.

Resources• Each company provides regular medical

check-ups better than required by law for

employees aged 65 and below. Managers

receive two days of official leave each year to

undergo medical check-ups at the hospital.

Employees stationed overseas below the grade

of assistant manager have one day of official

leave each year to undergo medical check-ups

locally or back in Taiwan. A total of

NT$21,010,000 in medical check-up subsidy was

provided to 6,689 people in 2018.

• The bank has established a serious illness or

injury support and counseling mechanism. In

2018, 42 people applied for consolation award.

In addition to NT$10,000 as consolation for

serious illness or injuries, support and counseling

service was also provided for seriously ill or

injured employees and employees who work

night shifts.

• Keep abreast of safety and health concerns at

home and abroad, and comply with domestic

and foreign safety and health laws and standard.

• Target high risk health issues and implement

measures such as health education, hygiene

guide, safeguarding and promotion of physical

and mental health in order to reduce the risk of

illness.

• Collaborate with or employ doctors and nurses

(hereafter referred to as health professionals) to

offer on-site health service.

• Form the "Occupational Safety and Hygiene

Committee" to review and manage various health

issues, illness prevention and health promotion

matters.

• Assign an Occupational Safety and Hygiene

Manager, Emergency Rescue and Fire Hazard

Safety Personnel in order to ensure employees'

occupational safety and hygiene and to build a

safe workplace environment.

Specific management practices• Established Safety and Health Work Rules to

improve employees' awareness of safety and

health and to forge an accident-free workplace.

• Incorporated ISO 45001 - Safety and Health

Management System guidelines at the FFHC

Headquarters building and received certification.

• Continued implementing the "Human Factor

Hazard Prevention Plan" and "Abnormal

Workload-Triggered Diseases Prevention Plan".

Compile statistics on employees suspected of

health risks through the "Self Musculoskeletal

symptoms" questionnaire and provide them with

appropriate recommendations to track and

improve their health status,

• Implement the "Maternal Employee Health

Protection Plan" and "Night Shift Safety Plan for

Female Employees" to ensure a safe working

environment for female employees.

• Organize walking competitions and weight loss

class to encourage employees to control their

weight by exercising regularly.

Assessment mechanisms• Occupational injury rate

• Disabling injury frequency rate

• Severity of disabling injuries

• Monitoring and management of environmental

indicators at each business location

Complaints mechanism• Make safety and hygiene recommendations

through the "occupational safety and hygiene

committee".

• Conduct Employee Commitment Survey, include

health risk issues in the survey, and use survey

results as basis for implementation planning.

• Implement a mechanism for psychological

counseling and care for major illnesses and

injuries, form the "Care for Families Fellowship",

encourage employees who are ill to provide

mutual support and share their medical treatment

experiences, and provide professional medical

and health information to the employee through

health professionals.

Results• 3,717 employees received low-dose lung CT scan

examinations, and 12 employees were diagnosed

as having lung cancer and received treatment

immediately.

• Implemented the Maternal Employee Health

Protection Plan. In 2018, 145 pregnant employees

participated in the Maternal Employee Health

Protection Plan; 100 pregnant employees

completed the Health Risk Assessment Form for

Pregnant Employees and 11 who were returned to

work after child birth completed the Health Risk

Assessment Form for Postpartum Employees. The

completed forms were provided to health

professionals who then made phone calls to

assess and confirm the identified risks.

• Received the Healthy Workplace Certification by

the Health Promotion Administration, Ministry of

Health and Welfare in 2018; specifically, our

headquarters building received the Health

Promotion mark and the Credit Card Division

Zhongshan building, Bade building and IT

building received the Health Initiation mark.

• Completed indoor air quality self-management for

188 branches.

• Implemented the "Abnormal Workload-Triggered

Diseases Prevention Plan". Workers exposed to

high, medium and low risks, based on their

medical check-up results, self assessment and

overall OT hours, were provided with counseling

from health professionals to explore changes in

their working style and provide health counseling.

• In 2018, 42 people applied for 883.75 days of

occupational injury leave. The occupational injury

rate was 0.90% and there were no fatalities due to

occupational injury in 2018.

4-2 Workplace SafetyWe continue to promote the following workplace improvement and safety protection initiatives in an effort to provide employees and clients with a safe and healthy environment:

1・Implementation of OSH-related Activities and TrainingTo prevent occupational injuries as well as protect the safety and health of employees, the Company has established an "Occupational Safety and Health Committee" (OSH Committee) in accordance with the "Occupational Safety and Health Act", "Enforcement Rules of the Occupational Safety and Health Act", and the "Management Guidelines for Occupational Safety and Health". The committee will have 7 members comprising of the employer, labor representative and department manager, with 3 members, or 43% coming from the labor union. Conduct quarterly meetings to review various health related issues, prevention of illness and health promotion matters, occupational hazards reports and others. Pay attention to employee health and workplace safety issues, in addition to the regular tracking of the progress of implementing items agreed upon in the meeting such as: safeguarding public safety in the workplace, tracking and management of employee health, supervision of safety and hygiene, and other measures beneficial to improving workplace safety and hygiene management.

183182

4-1 Occupational Safety Risk Management MapThe Company identifies common health

risks according to job type, working

environment, age, and gender. Regular

health examinations are provided, and

periodic risk assessment of various risk

prevention plans is performed to

compile a risk map of health issues for

2018 as follows.

Recognize high, medium and low health risks based on selected health matters, their probability of incidence and impact on company operations. Plan for and review the health risks with medium to high probability of incidence or degree of impact. the 2018 Risk Prevention Plan is as follow:

1・Health Check: General employees undergo medical check-ups once every two years; nighttime shift employees, staff members of employee canteens, employees stationed overseas, and department heads once a year. The Examine Health System is used to manage employee health.2・Abnormal Workload-triggered Diseases Prevention Plan: Evaluation is performed once a month by complet-ing the table of abnormal workload risk identification and evaluation.3・Human-factor Hazard Prevention Plan: Conduct an annual assessment for employees suspected of musculo-skeletal symptoms and draw up a tracking table.4・Maternal Employee Health Protection Plan: Employees, upon learning of their pregnancy, will jointly fill out the "Maternal Health Risk Assessment Form" with their manager to assess any impact on maternal health due to work.

FFHC 2018 Health Issue Risk Map

High

Medium

Low Medium High

• Vision• Cardiovascular disease

• Cancer• Respiratory disease

• Mental stress

• Maternity Protection

• Food Safety

• Obesity• Gastrointestinal disease

• Infectious disease

• Overwork• Physical fitness

Risk mitigation measures for health risks with medium to high probability of incidence or degree of impact and effectivenessof these measures in 2018:

Individual guidanceby healthprofessionals

Healthrisk

Mitigation/Prevention Measures Effectiveness

A total of 215 employees were diagnosed with a >15% risk of contracting cardiovascular disease within 10 years according to health screening results. Phone interviews with health professionals were provided, in addition to health measures and tracking such as regular medical counseling through email. The company has also set up a health page on its website to provide health care information.

Phone calls were made by health professionals as needed to check up on seriously ill or injured employees; 560 expressions of support were conducted during 2018. Health information based on the disease conditions of individual employees was also provided.

Installation ofautomated externaldefibrillator (AED)

Provided regularmedical check-upssuperior to thoserequired by the law foremployees of all agegroups, and notifiedpersonnel with anomaliesto receive further check-ups.

We continued to install automated external defibrillator (AED). By the end of 2018, a total of 29 AED devices have been installed in the Headquarters buildings and business units.

Organized workplacehealth talks


Health lectures on breast cancer prevention were attended by a total of43 people.

Gas

troin

test

inal

dise

ase

Obes

it


Infe

ctio

us d

isea

se

Issued e-newsletter toprovide health careinformation

In 2018, e-newsletters were issued to deliver health information on the preven-tion and treatment of infectious diseases such as herpes zoster and hepatitis and on seasonal infectious diseases such as influenza and flu-like illnesses.

On-site service bynursing personnel

Based on the health examination results, if the workplace has employees who contracted infectious disease, dedicated nursing professionals were invited to provide disease health education at the workplace to improve employees’ understanding of the disease and prevention methods.

Provided free fluvaccinations

The Taipei City Zhongzheng District and Datong District Health Centers were invited to provide a free flu vaccinations on company premises. A total of 106 employees received flu vaccinations in 2018.

Organized weight lossclasses and health walkcompetition

Statistics on Occupational Safety and Health Committee meetings in the past 3 years2017

4

10

2016

4

8

2018

4

15

No. of meetings

Proposals

Item Year

Card

iova

scul

ar

dis

ease

Canc

er

Health lectures on the prevention of high blood pressure, cholesterol, andblood sugar levels were attended by a total of 118 people.

Healthrisk

Mitigation/Prevention Measures Effectiveness

Resp

irato

rydis

ease

A total of 3,717 employees completed the examination in 2017 and 2018, 12 of whom were diagnosed as having lung cancer. Hospital health examination center was asked to contact employees whose examination results revealed lung nodules or anomalies to return for further check-ups.

Promoted the"Low-dose RadiationTomography LungScan" to provide earlydetection and treatmentfor lung cancer.

One session was conducted in 2018, with 41 participants and shredding a totalweight of 32.5 kg. Health walk competition was participated by 942 people,with each person walking 7,396 steps on average per day.

Health lectures on healthy eating were attended by a total of 108 people.

Prob

abili

ty

Impact on Company Operations

185184

All business units have appointed an OSH supervisor, first-aid personnel and fire-prevention manager to protect the

safety and health of business units. Certified personnel are also dispatched to receive on-the-job training every 2 to 3

years to keep their OSH knowledge up to date. A continuous workplace safety and health inspection plan is also

practiced to build an accident-free workplace.

Statistical Compilations of Occupational Safety and Hygiene Related Training for the last 4 years

Number of Traineesand Training Hoursfor Workplace Safetyand Hygiene Managers

Item Year 2015

2415,781 hours

2016

1445,040 hours

2017

7148,315 hours

2018

712,405 hours

Number of Traineesand Training Hours forFire Hazard PreventionManagement

1531,836 hours

1501,800 hours

6503,930 hours

69828 hours

Number of Traineesand Training Hours forEmergency Rescue

46828 hours

5562,268 hours

31558 hours

41738 hours

Number of Trainees andTraining Hours forISO 54001 Management Systems

- - - 99706.5 hours

General employee

Health Lecture

3 hours of OSH in-service training over 3 years

• A total of 61 people attended the Health Lecture on "Threats to Health - The 3 Highs of Chronic Diseases"

• The "DIY Stress Relief and Enhanced Immunity", "Who Robbed us of Our Health? Prevention and Care of Common Illness-es!" Health Lectures were attended by a total of 371 people.

• The "Health and Tobacco, Air Pollution", "Care for Your Heart" Health Lectures were attended by a total of 219 people.

• The "Self Check and Prevention of Liver and Kidney Disease", "Lung Gland Cancer and Dementia" Health Lectures were attended by a total of 893 people.

• The Health Lecture on "Intestinal Care and Health, Proper Eating, Tips on Reducing Cholesterol and Protecting your Liver" was attended by a total of 295 people.

• The Health Lectures on "Link between Stress and Diseases", "Link between the Food Safety Crisis and Cancer" and "The Threat of Environmental Hormones" were attended by 826 people.

• Health lectures on breast cancer prevention, prevention of high blood pressure, cholesterol, and blood sugar levels, and healthy eating were attended by a total of 269 people.

• Health lectures on eye care and common lung diseases were attended by a total of 782 people.

Weight loss class 2 sessions of weight loss class were with a total of 65 participants, shredding a total of 49.6kg

1 session of weight control class was conducted with a total of 43 partici-pants, shredding a total of 35.8 kg

2 sessions of weight control class was conducted with a total of 66 partici-pants, shredding a total of 66.1 kg

1 session of weight control class was conducted with a total of 41 partici-pants, shredding a total of 32.5 kg

3・Safety ProtectionIn accordance with the "Safety Maintenance Enforcement Rules" issued by the competent authority and the internal "Enforcement Rules fop Employee Self-Defense Organization", each First Bank business unit is required to conduct an employee self-defense organization drill once every 6 months. These are divided into a demonstration and a self-re-hearsal. Twenty-two business units were chosen by region to conduct the demonstration drill so that other units can send representatives to learn from their example and conduct assessments. After the demonstration drill, each business unit then selects a date and time within one month for conducting a drill. They may also perform the drill in their assigned month according to the annual plan. At the end of the year, the top 6 designated demonstration units with the best ratings are singled out for rewards.

FFHC received the Healthy Workplace Certification by the Health Promotion Administration, Ministry of Health and

Welfare in 2018; specifically, our headquarters building 2018 received the Health Promotion mark and the Credit Card

Division Zhongshan building, Bade building and IT building received the Health Initiation mark.

2・Introducing ISO 45001 Safety and Health Management SystemTo ensure the safety and health of employees, First Bank has established the Occupational Safety and Health Manage-

ment Plan, which contains OSH policies, goals, and specific safety and health management practices. A set of Safety

and Health Work Rules has been established and approved by competent authority. Employees are required to comply

with these rules in order to prevent accidents. In 2018, we incorporated ISO 45001 - Safety and Health Management

System guidelines at the FFHC Headquarters building and followed the PDCA principles to strengthen management

measures. BSI certification was also received in November 2018. The Bank’s Occupational safety and Health Manage-

ment System applies to all employees who work in the headquarters building, including 1,313 full-time employees, 8

part-time employees, 70 maintenance workers, 41

security guards and janitors, excluding OBU employees,

for a total of 1,432 employees (100%). (Total number of

employees at headquarters building minus number of

OBU employees at the end of December 2018)

187186

The FFHC Headquarters building has a defense corps and emergency SOP in place. A vice president serves as the

corps commander while the heads of the Human Resource Division and General Administration serve as deputy

commanders. There is also one chief director and one director, who oversee the Control Center (1 control officer, 8

controllers) and five teams, these being the Engineering Team, Protection Team, Supply Team, Medical Team and

Firefighting Team. Each team has a team captain, a deputy captain and several team members (assigned as neces-

sary). In the event of an emergency, they can take the necessary response measures at any time to protect the safety

of employees and property in the FFHC headquarters building.

Defense Mission Task Force Command System Table

Commander,Deputy Commander

Executive Director,Director

Management of all civildefense corps affairs

Coordination of all civildefense corps affairs

Control Center

Alarm trigger-ing, coordina-tion of mission teams

Firefight team

Fire prevention and emergen-cy rescue

Engineering team

Emergency repairs to buildings and equipment

Defense team

Security and support for fire, medical and engineer-ing teams during disaster response

Supply team

Supply materials, equipment anddrinking water as well as provide emergency assistance

Medical team

4・Medical Check-upsEach company provides regular medical check-ups better than required by law for employees aged 65 and below.

Managers receive two days of official leave each year to undergo medical check-ups at the hospital. Employees

stationed overseas below the grade of assistant manager have one day of official leave each year to undergo medical

check-ups locally or back in Taiwan. Catering and night shift personnel receive one health exam every year. For all other

personnel, partner hospitals visit each unit to conduct a health exam every two years. Personnel with anomalies are

also notified for further check-ups. Employee dependents may also participate at their own expense. Dependents enjoy

the discounted group pricing and the same check-up items. A total of NT$21,010,000 in health exam subsidy was provid-

ed to 6,689 people in 2018.

5・Provision of Health Service by Medical SpecialistsMedical specialists are retained to provide health service for employees at the company every Monday or Wednesday. In 2018, 82 on-site clinic sessions were provided. Employees were allowed to seek professional medical advice during office hours to learn about their health and alerts. The results of the 2018 employee health exam were analyzed, identifying 215 employees (135 less compared to 2017) with more than 15% risk of contracting cardiovascular disease within 10 years, 9 with cancer and 632 with serious anomalies (175 less compared to 2017). The doctors then contacted these employees by phone for follow-up and to provide medical guidance and other health improvement measures. The Headquarters buildings and business units began installing automated external defibrillator (AED) in 2013. By the end of 2018 a total of 29 AED devices have been installed at 28 units.

6・In-House NursesA health section has been set up on the Bank intranet and there are full-time nursing personnel on staff. For employees with serious illnesses and the top 10 anomalies detected during health exams, we organize health information and health consultations on an ad hoc basis. A professional clinic and blood pressure monitors are available to provide employees with a place for emergency medical treatment and rest. When the (executive) Board meetings are convened, a nurse is on-hand to provide blood pressure measurements and remind the top management to look after their personal health.

7・Weight Management and Health TalksIn 2018, we organized Weight Control Class to educate employees on healthy eating, correct exercise knowledge, and healthy aerobic exercise. Forty-one people attended the class, shredding a total of 32.5 kg. Health walk competition was participated by 942 people, with each person walking 7,396 steps on average per day. Health lectures on breast cancer prevention, prevention of high blood pressure, cholesterol, and blood sugar levels, and healthy eating were attended by a total of 269 people. To keep our employees healthy and protect them against flu virus, the Taipei City Zhongzheng and Datong District Health Centers were invited to provide free cancer screening and flu vaccination service at the company.

Unit Vaccination Date

Headquarters building

IT building

2018/10/25

2018/10/29

Number of People

82

24

Number of employees who received flu vaccinations:

Bandaging, transportation, first-aid and evacuation of injured people

189188

8・Nutrition ManagementOur Company operates an employee cafeteria with professional nutritionists retained to design a menu low in salt and fat. We also have arrangements with organic vegetable farmers to supply fresh and healthy cuisine. The main dish plus three side-dishes cost only NT$40. Each dish is also labeled with its calorie count and the total calorie count of each meal is kept between 600–800 Kcal so employees can choose what they want based on their personal preferences and physical condition. The scheme has proved very popular with employees. In addition, all of the vegetables used by the cafeteria are supplied by contract growers and every vegetable can be traced to its supplier to ensure the health of employee catering. In 2018 the cafeteria was used by an average of 1,265 people a day.

10・Abnormal Workload-triggered Diseases Prevention PlanFFHC has implemented the "Prevention Plan for Illness due to Abnormal Workload" since November 2015 to prevent high risk workers from falling ill due to night shift rotation and long working hours. Workers exposed to high, medium and low risks, based on their self assessment and overall OT hours, were provided with counseling from health profes-sionals to explore changes in their working style. Measures or activities related to health education, hygiene guidance, mental and physical health protection and promotion are implemented every year in order to mitigate the risk of disease development.

14・Comprehensive Insurance PlanIn addition to labor insurance and national health insurance as required by law, the Bank also provides group policy at discounted rates to employees for accident, injury, hospital stay and cancer. The insurance plan is open to employ-ees, their dependents and retired personnel. A total of 14,550 people were enrolled in 2018; First Securities, First Life Insurance, First Financial AMC, and First Securities Investment Trust also provide group insurance for employees. A total of 1,219 employees were insured at a cost of NT$ 4,420,000.

First Bank personnel stationed overseas are not only covered by local group medical insurance but can also enroll in the International SOS for emergency medical assistance. Half of the cost is borne by the company to meet emergency medical needs.

11・Human-factor Hazard Prevention PlanThe Human-factor Hazard Prevention Plan involves emailing the “Employee Musculoskeletal Symptom Self-Assessment” questionnaire survey for employees to complete. In 2018, a total of 66 employees with suspected health risks were identified, and a list of employees who require follow-ups was compiled. Health professionals were then asked to contact these employees by phone to determine the cause of their symptoms and recommend improvement plans. As of the end of 2018, improvements were observed in 64 people and follow-ups are conducted on 2 employees to track their improvement status and outcomes.

12・"Maternal Employee Health Protection Plan" and "Female Night Shift Rotation Worker Safety Plan"We implemented the Maternal Employee Health Protection Plan. In 2018, 145 pregnant employees participated in the Maternal Employee Health Protection Plan; 100 pregnant employees completed the Health Risk Assessment Form for Pregnant Employees and 11 who were returned to work after child birth completed the Health Risk Assessment Form for Postpartum Employees. The completed forms were provided to health professionals who then made phone calls to assess and confirm the identified risks. Every month, each unit provides a list of pregnant employees. Telephone calls to these employees are made by nurses to express support, provide health education and precautions during pregnan-cy and after birth, and simultaneously them about childbirth subsidies and related information. In 2018, 209 telephone calls were made in accordance with the Maternal Employee Health Protection Plan, and one on-site visit was conducted by an Occupational Safety and Hygiene Manager and nurse.

Night Shift Rotation Safety Plan for Female Employees was implemented. For female employees who need to work night shifts, the Human Resource Department oversees that each implementing unit complies with regulations and ensures that department heads regularly conduct self-inspection by using the checklist. The Human Resource Department conducts at least one onsite inspection and produces inspection report. Non-conforming units are asked to make correc-tions, and punishment is imposed for serious violations.

13・Support and Counseling for Seriously Ill or Injured EmployeesThe bank has established a serious illness or injury support and counseling mechanism. In addition to giving employees NT$10,000 as consolation for serious illness or injuries (42 applicants in 2018), we have also set up a "Family Associa-tion" and distributed the book "From Critically Ill to Running Marathons" as gifts to employees. These efforts are aimed at encouraging employees to support and share their healthcare experiences with each other. Phone calls were made by health professionals as needed to check up on seriously ill or injured employees; 287 expressions of support were conducted during 2018. Health information based on the disease conditions of individual employees was also provid-ed. Support and counseling service was also provided for seriously ill or injured employees and employees who work night shifts to maintain their physical and mental health. Four employees received counseling service in 2018.

9・Tobacco-free Workplace, Air Quality Testing and MaintenanceAir pollution has become an increasingly serious problem in Taiwan over the past few years. PM 2.5 (fine particulates suspended in the air) levels have frequently exceeded safe limits. These fine particulates are able to pass through the lung and enter the blood stream via the respiratory system, causing cardiovascular disease, autonomic imbalance, lung cancer, stroke and senility. Smoking is banned on the business premises of financial institutions under the Tobacco Hazard Prevention and Control Act. The EPA has also included “Bank Headquarters” in the second group of proscribed venues under the “Indoor Air Quality Management Act.”

To protect the health of employees and customers, all FFHC units are required to enforce the rule of “displaying no-smoking signs at all entrances.” Voluntary management of indoor air quality was also implemented at 188 branches by the government deadline; 35 business locations have installed an indoor air quality real-time monitoring system. In accordance with the Occupational Safety and Health Act, the "Industrial Safety and Health Association of the R.O.C. (ISHA)" is contracted to measure the CO2 concentration and illumination at 235 offices every 6 months. To prevent "Sick Building Syndrome", every unit regularly cleans their air-conditioners, water towers, air vents, ventilation shafts, filters, as well as the evaporator or condenser inside their air-conditioners. Drinking water from the headquarters building is submitted to the Taipei City Government Environmental Protection Bureau every 3 months for water quality testing. The test results all complied with regulations.

Number of high, medium, low risk employees from 2016–2018 as per below:

Category Year

High Risk

Medium, Low Risk

2016

9

178

2017

10

213

2018

8

163

191190

15・Occupational InjuriesFor employees injured at work, the Company gives occupational injury leave as required by law and in accordance with the actual situation. Employees receive assistance on Labor Insurance claims so they can receive the help they need as soon as possible to minimize the harm done. The number of employees who applied for injury leave was 42 in 2018, compared to 43 employees in 2017. The disabling injury frequency rate of 2.30% was lower than 2017 (2.39%), mainly due to the lower incidence of disabling injury. The number of deaths due to injury at work and number of employees who fell ill due to work related causes in 2018 were both 0. The number of employees who were injured on the job was 7, 4 of whom fell and 3 were struck by or against an object/equipment. The occupational injury statistics for employees in Taiwan in 2018 are shown in the table below:

Reason for higher absenteeism rate in 2018 compared to 2017:• There were 230 new recruits in 2018. According to the Labor Standard Act, employees must work for more than six

months to get three days of leave. New employees were not well enough to work and most of them therefore applied for sick leave.

• To support the government’s receive policy for encouraging child birth, we implemented the child birth subsidy scheme and significantly raised the marriage and child birth subsidies. We allow pregnant employees to apply for up to 44 days of sick or special sick leave. In 2018, 14 employees became pregnant, causing a slight increase in the number of applications for special sick leave.

• We provided "low-dose lung CT scan" and medical check-ups examinations. In 2018, there were 42 seriously ill or injured employees.

• All in all, 630 days of sick leave and 1,357 days of extended sick leave were granted in 2018, resulting in higher absenteeism rate in 2018 compared to 2017.

Note:1. Occupational injury rate: Number of people on occupational injury leave2. Lost day rate: Days of occupational injury leave/ Work hours * 200,0003. Disabling Injury Frequency Rate (FR): Based on the total number of disabling injuries during the period in question. Disabling Injury

Frequency Rate is calculated as the total number of disabling injuries for every million work hours (to two decimal places). The formula is as follows:

4. Disabling Injury Severity Rate (SR): Based on the total number of days lost due to disabling injuries during the period in question. Disabling Injury Severity Rate is calculated as on the total number of days lost due to disabling injury for every million work hours (to nearest integer). The formula is as follows:

5. Absence Rate Days of leave (Occupational injury + sick leave and menstrual leave)/Total work days6. Atypical employees (including temporary workers and security staff) are excluded because the nature of their work is different from

that of full-time employees.

Total

26.00

16.00

42.00

523.75

360.00

883.75

0.47%

0.43%

0.90%

Lost day rate(Note 2)

5.74

3.94

9.68

Number ofdays absent(excluding

leave)

11,109.31

2,764.62

13,873.93

Absenteeismrate

(Note 5)

0.82%

0.30%

0.61%

Disablinginjury

frequency rate(FR, Note 3)

1.42

0.88

2.30

Severity ofdisablinginjuries

(SR, Note 4)

28

20

48

Gender

Disabling Injury Frequency Rate (FR) = Frequency of disabling injuries (persons) x 106

Total hours

Disabling Injury Severity Rate (SR) =Total number of days lost x 106

Total hours worked

Number ofpeople on

occupationalinjury leave

Number ofdays of

occupationalinjury leave

Occupationalinjury rate(Note 1)

193

Implementation of inclusive financeMaterial TopicGRI: guidelines and financial services sector disclosure standardsFS14: Initiatives to improve access to financial services for disadvantaged peopleFS15: Policies for the fair design and sale of financial products and services

Management guidelinesPoliciesTo provide financial friendly services to all social strata and groups to alleviate the lack of financial services in rural areas, and at the same time help people establish the correct concepts of consumption and financial manage-ment and fulfill the corporate social responsibility of promoting inclusive finance.

CommitmentTo invest resources such as equity investment and business activities in organizations that solve social issues through business models, so as to facilitate sustainable social development.

GoalsTo increase the quality of life and expand the diversified business opportunities with the aid of inclusive financial products and services by increasing for the disadvantaged people in remote areas the financing channels, insurance protection, etc.

DutiesTo combine the core functions of the financial industry to provide financially disadvantaged groups with equal access to financial services is a financial institution’s due responsibility.

Resources• To cooperate with social welfare

groups or government agencies to hold lectures on trusts for senior citizens and disabled people in order to assist them in planning their elderly retirement for living without economic worries.

• To combine core functions such as low-interest rate bank loans to provide funding for smaller corporate clients. To provide small-sum insurance products for disadvantaged groups.

Complaints mechanismAccording to the "Customer Complaint and Dispute Resolution System", customers can communicate and file complaints to all companies of First Financial Holding Group through business units, customer service hotlines, and other complaint channels.

Specific management practices• To continue promoting the diversified financial managements and

easy-care products for the elderly, providing funds and channels for SME operations, and youth's and women's start-ups, and launching protective products for aging population with fewer children, small-sum lifetime insurance products, and other various financial friendly services.

• To respond to government policies for promoting preferential financing loans for "dangerous and old buildings" to expedite the refurbishing and rebuilding of dangerous and old buildings.

• To organize "natural disaster relief funds", "loans for assisting refurbishment of residences in disaster-struck areas", and "Comfort Loan” reverse mortgage loans and provide loans for visually impaired and hearing-impaired people and those subject to assistance declarations to establish related friendly finance measures.

• To assist debtors in resolving debt issues and restore regular life.• To actively prevent financial frauds in order to avoid loss of property

for customers.• To promote the micro-insurance assistance program by letting the First

Bank Culture & Education Foundation fully subsidize eligible disadvan-taged people for their insurance premiums and providing basic insurance coverage at lower premiums for disadvantaged groups so as to fill gaps in the government's social insurance or social assistance mechanism.

Assessment mechanisms• The promotions of the elderly care and support.• The assistance for small and medium enterprises in obtaining

operation and development funding.• The achievements in various financial friendly services.• The implementation status of loans for refurbishing dangerous and

old buildings.• Setting up new wheelchair-accessible ATMs.

Results• In 2018, a total of 526 cases of care trust for elderly retirement and

care and the disabled were concluded in the amount of NT$1,664.11 million with the trust asset balance of NT$4.451 billion. Strengthened the promotion of related industries such as medical biotechnology or long-term care loans in response to the aging society and the growing number of cancer patients. Added 21 new loan accounts and approved NT$2.29 billion in loans.

• First Bank provided a total of NT$672.3 billion in loans to SMEs in 2018. First Bank was the leading lender to SMEs by market share in the banking industry for the 9th consecutive year.

• Processed 85 accounts of “Comfort Loan” or reverse mortgage loan and the approved amount was NT$685 million.

• As of the end of 2018, First Bank approved 4 loans for refurbishing dangerous and old building totaling NT$1.386 billion.

• First Bank Culture & Education Foundation provided basic coverage for specific risks of economically disadvantaged individuals and fully subsidized 214 cases of micro-insurance premiums, with a total insurance amount of NT$106.7 million.

• Provided companies struck by the Hualien earthquake with funding required for operations and organized natural disaster relief loans. Nine companies applied for the loans and were granted NT$85.3 million. We also assisted households struck by the Hualien earthquake with low-interest rate loans to rebuild their family or extend their original debts. The debts of two customers were given extensions and the amount was NT$16.54 million.

• Setting up 18 new wheelchair-accessible ATMs. We have already set up 415 wheelchair-accessible ATMs throughout Taiwan, offer 6 voice-operated ATMs for visually-impaired customers in 2018.

192

SOCIALHARMONY

195194

1-1 Watch & care for senior citizensIn response to the rapid aging population in Taiwan, it has become a pressing task to provide senior citizens with watch and care services. In order to provide diversified financial managements and introduction of easy-care product service to senior citizens, the FFHC, hosted seminars on trusts for seniors and the handicapped with social welfare groups and government agencies (e.g. Zhonghe District Beishan Community Development Association, Luzhou Farmers' Association, etc.). Through sharing of the practical cases concluded, the lectures aimed to promote easy-care trusts or any trust products that suited senior citizens or disabled people, so as to assist them in planning for an old-age retired life.

1-2 Friendly serviceIn order to cooperate with the United Nations to promote inclusive finance, and provide disadvantaged groups and

people in remote areas with convenient financial services, the FFHC has adopted inclusive financial facilities with

effectiveness as follows:

Assisting in urban renewal and rebuilding dangerous and old residencesTo provide full support for the government's implementation of

urban renewal and rebuilding dangerous and old residences, we

launched the "preferential financing loans for accelerating the

reconstruction of dangerous and old buildings" in 2017. Old

buildings that meet the criteria in the "Statute for Expediting

Reconstruction of Urban Unsafe and Old Buildings" or "New

Taipei City Simple Urban Renewal or Disaster Prevention Renew-

al" are eligible for loan applications with business units of First

Bank. Applicants may receive full loans for the reconstruction and

related fees with a maximum period of five years to help the

people reduce their burden and rebuild old residences. As of the end of 2018, First Bank approved 4 loans totaling

NT$1.386 billion.

Providing assistance to SMEs, and youth's & women's start-upsThe FFHC has achieved synergy of its CSR and financial business by incorporating the concepts of environmental

protection, giving back to the community, and promoting charitable endeavors into its core operations. In terms of how

FFHC is helping to boost financing for business development of the emerging industries and SMEs, which tend to lack

the scale or steady revenue needed to qualify for loans, First Bank has reflected its commitment to financing local

industries by extensively working with the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (SMEG) to

expand its loan services to domestic SMEs, thereby helping them grow and expand. These actions also stimulate

domestic economic growth and spur job creation. We also provided assistance and funding for youth and female

entrepreneurs for starting a business. We accepted 153 applications for the "Loans for Young Entrepreneurs and

Start-ups" and "Loans for Minor Entrepreneurs" in 2018 that the loan amount totaled NT$243.79 million. We provided the

"Micro Loans for Female Entrepreneurs" and provided NT$27.24 million in 40 cases for female entrepreneurs to start

their businesses. Our "Small and Medium Enterprise Credit Guarantee Fund" services processed NT$145.6 billion in

loans and we received our 10th "SME Credit Guarantee Funds Awards" from the Ministry of Economic Affairs. First Bank

has remained the number one bank in Taiwan in terms of SME lending market share for 9 years in a row. We also

The FFHC attached importance to the property safety of senior citizens and disabled people, and launched the "Easy-care Trust to Treasure a Retired Life" by dedicating the trust funds to the needs of the silver-haired people for living, medicine, and easy care. The "Guardian Angel Trust" is to strengthen the protection of trust funds and to earmark special funds for special payments, so that the they may reserve funds for future dementia or long-term care, and prevent the risk of misappropriation of their assets caused by dementia-induced cognitive deterioration. In 2018, a total of 526 cases of senior citizens' retired easy-care trust were concluded in a total amount of NT$1,664.11 million with trust asset balance of $4.451 billion. FFHC received second place in the "Asset Trust Evaluation of Trust Businesses for the Senior and the Disabled".

First Bank strengthened loan projects for related industries in response to the aging population. To help elderly citizens utilize real estate in their possession, First Bank created a reverse mortgage loan product "Comfort Loan" in March 2016 which enables retirees to receive fixed monthly income from the Bank to cover their daily living expenses. As of the end of 2018, a total of 85 Comfort Loans were made to seniors amounting to a cumulative total of NT$658 million. We strengthened the promotion of related industries such as medical biotechnology or long-term care loans in response to the aging society and the growing number of cancer patients and added 21 new loan accounts and approved NT$2.29 billion in loans.

Furthermore, in response to the increasing need for long-term care among elderly citizens in Taiwan, First Bank teamed up with First Life Insurance to launch the "Long Term Care Life Insurance". In the event of a sudden medical emergency or burdensome healthcare expenditures, this long-term policy ensures that elderly customers and their families can continue to maintain a stable and comfortable lifestyle. There were 363 valid contracts with an insurance coverage of NT$9.63 million in 2018. First Life Insurance launched the "Loving Small-sum Lifetime Insurance" and processed 4,411 effective contracts as of the end of 2018 with NT$1,262.14 million in insurance amount to help customers respond to emergencies through insurance mechanisms and stabilize their family life. In addition, in 2018, 3 pieces of products related to the trend of aging and declining children were introduced. The number of valid contracts was 555, and the amount of insurance was $500 million 1,860.

Trust lectures for senior citizens and disabled people held in 2018Activity name/venue

"Elderly Property Planning and Trust System" seminar of New Taipei City Songnian University organizedin collaboration with the Trust Association and New Taipei City Government (Zhonghe District BeishanCommunity Development Association)

2018.5.3

"Elderly Property Planning and Trust System" seminar of New Taipei City Songnian University organized incollaboration with the Trust Association and New Taipei City Government (Luzhou Farmers' Association)2018.11.14

integrated gender equality awareness and core business-

es and actively assisted female entrepreneurs start

businesses or obtain loans. Forty percent of female

applicants obtained personal loans in 2018 and the loan

award rate for credit cards reached 55.46%. First Bank has

become the first choice as a partner for domestic SMEs,

youths, and female entrepreneurs.

2016Type

New Loans through SMEG

SMEG Loan Amount

SME Loan Amount

1,253

659

6,478

2017

1,356

643

6,578

2018

1,456

648

6,723

Unit: NT$100 million

Type Year

No. of senior citizens' retired easy-care trust concluded

Amount of senior citizens' retired easy-care trust

2016

2,632

1,842.77

2017

3,560

2,435.18

2018

526

1,664.11

Unit: No. of cases/NT$ Million

Type

No. of Loving Small-sum Lifetime Insurance effective contracts

Cumulative amount of Loving Small-sum Lifetime Insurance

2016

N/A

N/A

2017

3,377

967.4

2018

4,411

1262.14


Type

No. of Comfort Loan being processed

Comfort Loan approval amount

2016

34

181

2017

25

317

2018

26

187


Year

Year

Year

197

To assist micro and small enterprises with smaller operations obtain funding and encourage youths to work hard and develop innovative businesses to accumulate their first pot of gold, First Bank launched the "Micro Enterprise e-Services" online loan application website for micro enterprises in September 2018. The website provides online credit calculation and immediate loan application service to simplify the loan application procedures of small and micro enterprises.

Providing basic insurance protection for disadvantaged groupsTo provide a basic level of personal insurance protection for the economically disadvantaged people to fill gaps in the government’s social insurance or social assistance mechanism, First Life Insurance has introduced to them and people with specific status a convenient, physical checkup-free micro-insurance product with a generalized premium regardless of occupation category, gender, or age. It has also cooperated with First Bank Culture & Education Foundation to provide all those who meet the Foundation's criteria for assistance with micro-insurance with premiums fully subsidized by the Foundation. In the end of 2018, a total of 214 cases of such insurance were concluded with the insurance amount totaling NT$106.7 million.

Assisting reconstruction after disastersA severe earthquake shook Hualien on February 6, 2018. First Bank's Hualien Branch actively provided companies struck by the Hualien earthquake with funding required for operations. It organized "natural disaster relief loans" to help companies obtain loan interest subsidies provided by competent authorities and the local government so that they can recover as quickly as possible with the full support of the government and banks. Nine companies applied for the loans and were granted NT$85.3 million. We also assisted households struck by the Hualien earthquake with extensions of their original debts. The debts of two customers were given extensions and the amount was NT$16.54 million. First Bank received the "Love Hualien Assistance Award" for providing financing guarantee special loans for the 2018 Hualien earthquake.

Creating a friendly financial environmentIn response to aging society, First Bank has built six “Senior Citizens' Experience Branches” by 2018. They provide related old-age friendly facilities and services such as optical magnifiers, reading magnifiers, courtesy glasses, audio amplifiers, AEDs, health measurement stations and vehicle hailing. Moreover, to better accommodate the needs of disabled people, we have already set up 415 wheelchair-accessible ATMs throughout Taiwan. At present, we also offer six voice-operated ATMs for visually-impaired customers and have upcoming plans to retrofit more ATMs with this functionality soon. In the future, upon establishing new bank branches or moving or remodeling existing branches, we will prioritize the installation of equipment and ATMs which meet the needs of disabled people in order to provide more friendly and considerate services. Furthermore, in Taipei, New Taipei, Taoyuan, Taichung, Kaohsiung, Yilan and Hualien, we have established wheelchair-accessible service counters to provide friendly financial services for disabled people (including the elderly, the infirm, pregnant women and customers with children). Each of First Bank's 188 business units has set up loving service bells and wheelchair ramps. They have also dispatched service specialists to the business halls, helping the disabled people to deal with various financial services. Such people at the counter will be fully informed of the data required, and be helped with the filling out of relevant application documents. And the exchange rate board has been set up and the latest version of charging standards has been updated on the bulletin board.

To provide disabled people with basic, equal, reasonable and convenient financial services, First Bank has constructed

an accessible website (https://freebank.firstbank.com.tw/ANB/index.jsp) to provide links to friendly financial service

networks in the "List of Accessible Service Facilities (Measures) in First Bank Branches". To strengthen the implementa-

tion of First Bank's inclusive finance policy, accessible online bank, eATM, and official portal websites, we obtained the

"AA" rating for [Web Content Accessibility Guidelines 2.0] in 2018. First Securities has also set up a "Friendly Financial

Services Section", providing such accessible investment services as online orders and mobile winner APP platforms, and

continuing to offer phone voice quotations and transactions so that people with hearing and mobility problems can also

participate in investment transactions by Internet access. Meanwhile, First Securities Investment Trust has created a

dedicated page on its website to provide customers with information concerning its friendly financial services. In

addition, it offers text-to-speech functionality for transactions, and the Mutual e-Bank mobile application, allowing

customers to complete mutual fund subscriptions or redemptions online using a PC or mobile phone.

First Bank provides 7x24 uninterrupted access to its accessible web bank services for hearing-impaired or disadvan-

taged people. The features include: the financial information inquiry function, account overview function, transaction

details function, agreed transfer function, user code/password change, SSL password change, website navigation

function, and information announcement function.

First Bank's depositors who provide proof or identification confirming their disabilities may submit an application at any

of its business units to receive a service fee waiver for interbank ATM withdrawals. Applications may be filed via mail,

over the counter, or through the Bank's friendly financial service network. They are limited to one account for one person;

once approved, the customer may have up to 3 service fees waived per month.

1-3 Assisting debtors in resolving debtsFor debtors applying for preliminary negotiation/arbitration/rehabilitation under the Statute for Consumer Debt Reform,

or individual customers who applied for debt negotiation, the Bank conducts a comprehensive evaluation of their

properties, income, and capacity for work and encourage them to actively resolve their debts to regain a normal life

and for the Bank to recover creditor rights. First Bank approved 635 accounts in preliminary negotiation in 2018 and

accumulated NT$41,933 thousand in total contracts signed. The Bank waived NT$61,624 thousand in debts. We estab-

lished 84 preliminary mediation accounts. The Bank settled NT$12,377 thousand in debts and waived NT$5,210

thousand in debts. We established 125 rehabilitation accounts and the total rehabilitation debts amounted to

NT$46,477 thousand while NT$35,092 thousand was waived.

196

Type Objects and approaches AmountNumber of cases concluded

Micro

Loans

Unit: NT$ Million

Female: Launched "Micro Loans for FemaleEntrepreneurs" to provide funds needed for women tostart their business and help them with start-upoperation

Youth: Launched "Loans for Young Entrepreneurs andStart-ups" and "Loans for Minor Entrepreneurs" toprovide funds needed for youth to start their businessand help them with business growth and development

32.18

26.08

27.24

373.32

249.87

243.79

42

43

40

283

202

153

Year

2016

2017

2018

2016

2017

2018

Type

No. of micro-insurance effective contracts

Cumulative amount of micro-insurance

2016

N/A

N/A

2017

89

44.2

2018

214

106.7


Item 2016

The number of senior citizens' branches

The number of wheelchair-accessible ATMs

＊：The reduction in the number of friendlily designed units was due to the abolition of business units by First Bank.

0

303

34

189

2017

6

361

37

188

2018

6

415

37

188

The number of branches that offer wheelchair-accessible counters

The number of branches with friendly design＊

Type

No. of preliminary negotiation approval accounts

Amount of preliminary negotiation contracts signed

2016

712

46

2017

652

40

2018

635

42


Year

Year

Year

199198

Charitable activities and performance evaluationMaterial TopicGRI guidelines and financial services sector disclosure standards: Local communitiesFS14: Initiatives to improve access to financial services for disadvantaged peopleFS16: Initiatives to enhance financial literacy by type of beneficiary

Management guidelinesPoliciesTo actively integrate corporate resources and focus on the children, disadvantaged groups, elderly, and people with disabilities. Adopt the four major charita-ble strategies of the "Green Care", "Social Care", "Sports Competition" and "Artistic Cultural Creation" to invest in social care activities and encourage employ-ees to participate in volunteer activities.

• In addition to the purpose of making profits, the company has to adopt measures to promote public welfare. Shareholders may propose to the sharehold-ers' meeting to urge us to promote public interest or fulfill social responsibilities.

For information regarding dangerous and old buildings, please refer to the Social Harmony - "Implementation of inclusive finance" chapter

Resolved social and environmental issues• The wealth gap between urban and rural areas

makes it difficult for disadvantaged groups to obtain education resources

• Climate change causes unstable food production and severe price fluctuations and they severely affect the lives and income of farmers

• Paperless unified invoices make it increasingly difficult for social welfare organizations to raise funds

• Youth drug abuse and drug issues have become increasingly severe

• Taiwan's aging society has made the lack of resources for long-term care of the elderly increasing-ly severe

Solution• We continued to conduct the “Easy Schooling Relief

Program”, and sponsor the "Financial Service Industry Education Scholarship/Financial Aid" and "Disadvan-taged Students Adoption Plan" in order to assist disadvantaged schoolchildren.

• We allocated and donated 0.1% of the general payments made with Glory+ World Cards to assist such easy schooling items as education, school lunches, classes after school, etc. for schoolchildren in outlying villages.

• We held the "Loving Care Concert to Light up Life on the First Dream Stage", "First Bank Free Clinics to Spread Love", "Red Strawberries Say No to Drugs Campus Tour Events", "Slow-flying Angels Care Events", "Equal Rights & Blood Donation to Disabled People", "Children's Safety Education Series", etc. to provide care for the public.

• Our employees formed the "Volunteer Service Teams" to provide care in children's homes and old folks' homes throughout Taiwan, and upgrade the quality of life for disadvantaged people through inclusive financial products and services.

• We held charitable lunar year-end dinner parties in which we organized performances by disadvantaged groups and bought social welfare institutions' products as year-end dishes or gifts.

Commercial benefits (2018)• There were 2,126 GLORY+World Cards in circulation

and the proceeds amounted to approximately NT$17.67 million.

• The senior citizens' easy-care trust and disabled people's care trust were contracted to a total amount of NT$1.664 billion and related proceeds amounted to approximately NT$372,000.

• Two financing loans were provided for "dangerous and old buildings" in 2018 and related proceeds amounted to approximately NT$137 million.

• We processed NT$685 million in the reverse mortgage "Comfort Loan” as of the end of 2018 and related income amounted to approximately NT$835,000.

• Loans for small and medium enterprises in 2018 amounted to NT$672.3 billion and related income was approximately NT$12.4 billion.

• Premium income from micro insurance products in 2018 was approximately NT$50,000.

Specific management practices• Art to the Countryside, First Dream Stage, Protecting

Disadvantaged School Children, Wealth Manage-ment and Retirement Trust Seminars, Financiers on Campus, Volunteer Services, Children's Safety Education Series, Campus Anti-Drug Education, Cooperation with Small Farmers, Tennis and Table Tennis Players Training & Competitions, Unified Invoice Cup for Road Running, Free Clinics in Outlying Villages, Music Fests, and art to cultivate promising talent, and art space exhibitions.

• To reach out to communities and outlying villages, seek out any corner in Taiwan that needs our care, and direct resources to areas they are needed to fulfill corporate social responsibilities.

Assessment mechanismsThe community investment assessment model of London Benchmarking Group (LBG) is adopted for projects in the four major charitable strategies to analyze the cost of cash, volunteer manpower, resource donations, and management costs as well as the direct benefits on the business and social levels and indirect impact.

Results• Three schools were adopted to help 452 disadvan-

taged children to attend school.• First Bank allocated and donated 0.1% of the general

payments made with the World Card to assist 237 disadvantaged schoolchildren in their education, school lunches, classes after school, etc.

• We organized 69 events in schools and communities including elementary schools, junior high schools, colleges, social welfare groups, women's groups, and correctional institutions to spread financial knowledge to a total of 6,036 participants.

• We organized six Dream Come True concerts in NTU Hospital and three major concerts in Northern, Central, and Southern Taiwan. The events attracted approximately 10,000 people.

• There were 12 Art & Culture Exhibitions for a total of 12,000 visitors.

• We have supported the development of domestic sports for 24 consecutive years. In addition to establishing a table tennis team, we also sponsored the table tennis teams of 8 colleges, middle schools, and elementary schools in 2018. Four players were selected for the national team and they won 3 gold medals, 5 silver medals, and 9 bronze medals.

• We organized large-scale national tennis matches and table tennis championships. Approximately 1,085 players participated in the national tennis tourna-ments while approximately 833 players from 105 teams participated in the table tennis championships.

• We organized the "Unified Invoice Cup for Road Running (Taitung)" and received 350,897 unified invoices. The total reward money of NT$362,800 was donated to 5 social welfare organizations in Taitung.

• NT$84.7 million was invested in social and enriron-mental participation in 2018.

CommitmentTo uphold the spirit of "Local Cares for Local Businesses", we are committed to environmental sustainability, social care, and expand our influence.

DutiesTo respond to the United Nations' 17 "Sustainable Development Goals" (SDGs), integrate core strategies to fulfill "green finance" business ideals, execute social care activities, and transform them into positive forces for the society and the environment.

ResourcesGroup subsidiaries, First Bank Culture & Education Foundation and First Bank Volunteer Service Team.

Goals• Green care: To create environmental education

venues in the Group, commit to promoting environ-mental education-related knowledge, assist disadvantaged groups and social welfare institutions in switching to LED lighting, work together to support small farmers-friendly farming, and integrate multilateral forces to jointly invest in environmental sustainability.

• Social care: To focus on the impact of social changes and actively create a friendlier living environment for disadvantaged schoolchildren and the elderly, organize various wealth management and health seminars to provide the elderly with a healthy life in retirement, assist schoolchildren and families that suffer from changes in their lives, and use children's safety education and campus anti-drug education to protect the health and safety of the next generation.

• Sports competition: To organize tournaments of tennis and table tennis, continue the table tennis team training program, support the development of domestic sports activities, implement long-term programs to train elite players/teams, and encourage citizens' participation in healthy sports.

• Artistic Cultural Creation: To commit to cultural heritage preservation and passage, organize large-scale concerts which provide new musicians with a stage to perform, organize diverse art exhibitions which provide domestic artists with creative publishing platforms, invite artists to spread artistic and cultural creation as well as knowledge to rural areas to give back to communities, and improve cultural qualities in the society.

2-1 Charitable strategySocial benefits (2018)• First Bank donated 0.1% of domestic payments

made with the World Card to the First Bank Culture & Education Foundation. As of the end of 2018, we have donated approximately NT$1,109,300 and NT$302,600 was allocated to the "School Education Savings Account" platform of the Ministry of Education, which in turn helped 237 disadvantaged schoolchildren with education and school lunches.

• The two financing loans provided for "dangerous and old buildings" are expected to generate NT$21,944 thousand for each homeowner.

• We promoted the long-term "Disadvantaged Students Adoption Plan" and assisted a total of 452 disadvantaged schoolchildren in Ankeng, Zhongzheng, and Erchong Elementary Schools. We also used our "Financial Service Industry Education Scholarship/Financial Aid" to distribute NT$10 million in cumulative scholarship donations to support more than 7,000 students from economically-challenged families.

• We organized 69 financial seminars on campus and in remote areas and provided accurate and comprehensive consumer finance and wealth management information for a total of 6,036 participants.

• We provided 9 social welfare groups with advertisement on First Bank eDM, credit card websites, or credit card bills to help them raise donations. We helped charity organizations save approximately NT$5,423,940 in advertising fees and total donations amounted to NT$433 million.

• We organized 66 loving volunteers activities. In addition to donating supplies and assistance in cleaning the environment, we also accompanied old people who live alone and disadvantaged groups. We also organized 136 public welfare year-end parties in which we invited disadvan-taged groups to perform and purchased gifts with public welfare and environmentally friendly philosophy. The total amount of performance fees and purchase of gifts was NT$1,377,595.

• We donated NT$750,000 to Andrew Food Bank to help 375 disadvantaged families in Taitung and Keelung purchase Lunar New Year's dishes.

• To help reduce the pressure of falling prices on farmers' overproduction of agricultural products, First Bank purchased 100 tons of cabbage, 36 tons of bananas, and 0.6 tons of pineapples while First Life Insurance purchased 1.81 tons of pitayas as gifts for customers and employees. The total procurement amount was NT$2,606,120.

• We headed to Laos with NT$88,000 worth of supplies to distribute them to homes for people with mental disabilities and elementary schools and remote areas. We helped them grow vegetables and provided health education to more than 200 disadvantaged schoolchildren.

• We organized the "Red Strawberries Say No to Drugs" campus tour events with the Grace Hsiao Dance Troupe to teach youths to say no to drugs. Approximately 1,044 students participated in the events.

• First Life Insurance assisted Jing Chuan Child Safety Foundation in the "Traffic Safety Awareness - Crossing the Road Together" event and executed the "Little Yellow Cap Project". We raised NT$170,000 for the Foundation for use in research and development of transportation safety education programs and assist the promotion of children safety education.

Complaints mechanism• Please refer to the "CSR" on the FFHC's official

website for the contact mailbox http: //csr.firsthold-ing.com.tw/c/csr_report_contact.php

• For details, please refer to the official website of First Bank Culture & Education Foundation https: //www.-firstbank.com.tw/servlet/fbweb/CultrEduFoundation

Social care

201200

Resolved social and environmental issuesAthletes face difficulties in finding jobs and Taiwan lacks large-scale sporting events to support them. Athletes often suffer from insufficient funding and cannot accumulate experience in international competitions. These deficiencies have affected citizens' performance in the international sports world and their participation in sports.

SolutionWe held care loving events such as Table Tennis Championships, Table Tennis Summer Camps, First Holding Maxxis Tennis Tournaments, and MOF's Unified Invoice Cup for Road Running, as well as nurtured the players of the First Bank Men's Table Tennis Team to be new star athletes.

Commercial benefits (2018)We hired 8 table tennis and weightlifting athletes as official employees to provide them with fixed income and allow them to focus on their training. The 8 employees have contributed to NT$17.95 million in the Bank's profits in 2018.

Social benefits (2018)• We have supported the development of domestic

sports for 24 consecutive years. We sponsor the First Bank Men's Table Tennis Team in collaboration projects with 8 schools. Four players were selected for the national team and they won 3 gold medals, 5 silver medals, and 9 bronze medals. Our investment in training fees amounted to NT$10.58 million in 2018 and First Bank Table Tennis won a total of NT$2.336 million in rewards in domestic and foreign contests.

• We organized the tennis championship for 1,085 players and table tennis championship for 833 players in 105 teams from around the country. We invested approximately NT$2.005 million in the events.

• We organized the "Unified Invoice Cup for Road Running (Taitung)" in collaboration with the Ministry of Finance and received 350,897 unified invoices. The total reward money of NT$362,800 was donated to 5 charity and social welfare organizations in Taitung.

• We provided NT$200,000 in sponsorship and 18 brand new uniforms for the "Taoyuan Lingyun Junior High School Hockey team" and helped the team compete in the United States and win 5th place.

Resolved social and environmental issuesNew singers, musicians, and disadvantaged groups lack a platform for performance. The small scale of the domestic video entertainment industry also makes resources difficult to obtain.

SolutionWe have organized events such as “Northern-Cen-tral-Southern Charitable Concerts” and “First Art Spaces” to create music and arts performance stages, processed loans for cultural creative industries, and sponsored Taiwan Lantern Festival to help support the development of local arts and culture in Taiwan.

Commercial benefits (2018)The loan balance of cultural creative industries in 2018 reached NT$20.927 billion, and related income was approximately NT$377 million.

Social benefits (2018)• We sponsored two lantern festivals including the

Chiayi Lantern Festival and Taipei Lantern Festival which attracted 13.568 million visitors. Economic benefits created by First Bank amounted to approximately NT$258 million.

• We provided free platforms for the artists to publish their works. We helped 11 domestic artists save approximately NT$7.56 million in exhibition venue lease fees in 2018 and the total value of art works sold amounted to NT$6.265 million in 2018.

• We organized 6 loving care concerts which provided 6 groups of disadvantaged performers with a stage for performance. Performers earned NT$122,000 in the performances and attracted approximately 1,200 visitors. We organized three large-scale concerts to provide indigenous singers and visually impaired pianists with a stage to perform. We also invited social welfare groups and the events were attended by approximately 8,800 visitors.

• We invited the artist Yu-Hui Lu to teach 60 disadvantaged schoolchildren in Zhongzheng Elementary School in Xindian District to add colors to their creation on environmentally friendly bags and learn environmentally friendly craftsmanship with aesthetics qualities.

Resolved social and environmental issues• Forests land has decreased significantly and they are

transferred to growing vegetables or crops for food. In addition, concentrated industrial and commercial activities emit large quantities of greenhouse gases and increased the frequency of extreme weather that threaten the lives and properties of humans.

• The reserves of natural resources such as crude oil and natural gas are limited and humans will face energy depletion and insufficient sustainable energy sources in the future.

• Green industrial investment risks are high and it takes a longer time to recover the cost and leads to financing difficulties.

• The general public lack knowledge of environmental protection and conservation and environmental education sites. Overall environmental education in Taiwan requires additional improvement.

Social benefits (2018)• We have planted a total of 5,385 trees, which

equal a reduction of 40 metric tons of CO2e each year, to create a sustainable environment.

• We donated 0.6% from regular domestic transactions paid using the Leezen Card, equaling NT$12.02 million, to the “Tze-Xin Organic Agriculture Foundation” and the “Bliss and Wisdom Foundation of Culture and Educa-tion". We have accumulated NT$87.387 million in donations to support the foundations’ efforts to provide guidance on organic certification of agricultural products, promotion of organic vegetarian school meals, and cleansing of water resources.

• First Bank Educational Foundation allocated 0.2% of transactions with the Living Green Card totaling NT$370,000 to assist the Dann Center for Individuals with Developmental Disabilities in Nantou County replace their old lighting system with 265 sets of LED lighting equipment. We estimate that the replacement would reduce 30,000kWh of electricity, reduce electricity costs by approximately NT$120,000, and reduce 16.62 metric tons CO2e each year.

• First Bank donated 0.3% of regular purchase payments from Yilan Card totaling NT$85,000 to Yilan County Government for use in social welfare, tree planting, and tree protection activities.

• Solar PV equipment built with "Renewable Energy Creation Loan" generate 66.39 million kWh of electricity and reduced 36,780 MT of CO2e this year.

• We organized 48 Green Volunteer activities with 1,601 volunteers and 4,635 beneficiaries.

• Employees purchased 11,205 packs of vegetables form organic farms in 2018 and the procurement amount totaled NT$3.137 million. Green Volunteers went to organic farms to assist in the harvest and they effectively reduced the farms' expenditures on manpower.

• We completed three sets of environmental education programs for the general public, students in 5th to 6th grade in elementary school, and parents and children. We also organized 7 sessions of promotion activities. We organized the "Green Finance Camp" and courses on "environmental education" and "financial primary schools" and invited 54 elementary school students and disadvantaged schoolchildren from Nanjichang in Zhongzheng District, Taipei City to participate in the events.

Solution• We organized the "Love FUN First Green Living

Carnival"• We promoted the “Living Green Card”, “Leezen

Card”, "Yilan Card", and “Small Contracted Organic Farming for Sweet Potatoes” to support environmen-tal sustainability and the development of organic agriculture.

• We carried out the “Local Care for Green Light to Spread Love" program to assist social welfare institutions in installing energy-saving lamps for replacement.

• We implemented the policy of "One-stop Service for Urban Renewal" to help old residential buildings to be renewed or rebuilt into green buildings.

• We launched special financing loans to support the green energy industry obtain funding required for business operations and support the development of the energy technology service industry.

• We organized multiple green financing projects to respond to the government's five plus two industrial development strategy. In addition to traditional "green energy technologies", we also provide special financing plans for "organic agriculture", "circular economy", and other industries with sustainable environment ideals.

• Green volunteers helped organic farms harvest vegetables and regular purchases to provide strong support for the development of organic agriculture.

• We refurbished Wanhua Branch as an environmental education site and trained environmental education program talents and environmental education lecturers to promote environmental education.

Commercial benefits (2018)• A total of 102,553 "Leezen Cards", "Yilan Cards", and

"Living Green Cards" are in circulation and proceeds amounted to NT$48.68 million.

• Thirty-eight urban renewal financing cases have been processed and the approved line of credit was NT$39.568 billion. In 2018, the income from interest, trust fees, and construction management fees was approximately NT$290 million.

Please refer to the "Climate change risks and opportuni-ties" and "Ecological and environmental sustainability" chapters for related contents.

• The loan balance of green financing loans provided in 2018 was approximately NT$57.9 billion while related proceeds amounted to approximately NT$1.04 billion.

• We cooperated with the government's "Financial Support for Physical Economy - Five Plus Two Industries" policy (green energy technologies, Asia Silicon Valley, biomedical technologies, defense, smart machinery, new agriculture, and circular economy) and approved NT$62.32 billion in loans in 2018. Related proceeds amounted to approximately NT$1.12 billion.

• The loan balance of Renewable Energy Creation Loans amounted to NT$914 million as of the end of 2018 while related proceeds amounted to approximately NT$16.448 million.

Sports competition Artistic Cultural Creation Green care

203202

2-2 Benefit evaluationFFHC upholds the spirit of "Local Cares for Local Businesses" and we actively participate in social welfare through

multiple methods. We continued the four major charitable strategies of "Green Care", "Social Care", "Sports Competi-

tion" and "Artistic Cultural Creation" in 2018 and integrated subsidiaries of the Group, First Bank Culture & Education

Foundation and First Bank Volunteer Service Team to use our core financial competencies and environmental sustain-

ability philosophy to expand our influence and give back to society.

To verify whether the charity projects of the four major charitable strategies are provided with the most effective alloca-

tion of resources, FFHC adopted the community investment assessment model of London Benchmarking Group (LBG) to

record in detail the expenditures in terms of cash, volunteer manpower, resource donations, and management costs

and analyze the direct benefits on the business and social levels and indirect impact. We hope that every ounce of

corporate resources we invest in can be used to maximize social impact.

The community investment assessment model of London Benchmarking Group (LBG) is adopted for assessment :

2-3 VolunteeringFFHC established a volunteer service team in 2011 and it has actively participated in social and charitable events in

multiple methods to actively engage communities and play the role of a good neighbor. We integrated resources of

subsidiary companies and the First Bank Culture & Education Foundation to expand our care across the country and

beyond borders. Employees have also participated in volunteering through charitable events and helped fill the society

with love cycles and positive energy. There were no business activities with significant or potential negative impact on

local communities in 2018.

The proportion of investment in the four major charitable strategies of the Group in 2018

Commercial initiatives

Investment in community

Charitable events

2017 20182016

2,881

3,362

2,877

595

2,870

4,1954,287

3,459

724

Unit: NT$10,000

31.55％

54.80％50.61％

37.50％ 40.84％

36,85％

31.60％7.70％ 8.55％

＊：The donations from Leezen Card in 2016 and 2017 were added and the donations and total investments in 2016 and 2017were adjusted

＊：The donations from Leezen Card in 2016 and 2017 were added and the donations and total investments in 2016 and 2017were adjusted

Volunteer manpower

Supplies donation

Cash donation

2017 20182016

5,410

428354

1,584

5,978

195

1,134353

7,195

323203

749

Management cost

Unit: NT$10,000

4.60％14.80％ 3.81％

8.84％

2.60％

2.40％

69.57％

5.50％4.56％20.37％

78.00％84.95％

The FFHC's volunteer team members are spread all over Taiwan. We divide the volunteer service into two major teams

including the "Green Volunteers" who promote environmental sustainability and the “Loving Volunteers” who care for

the disadvantaged people. Green volunteers visit organic farms to provide assistance in farming, picking vegetables,

packing, etc., protect the coast by cleaning the beach, reduce carbon emissions by planting trees, conduct contractual

farming by adoption, organize green finance camps, and assist disadvantaged groups in changing for LED lamps.

Loving volunteers' services include anti-drug education, accompanying the elderly, bringing artists to the countryside,

organizing financial primary schools on campus or social welfare institutions, inviting disadvantaged children to table

tennis summer camps, and providing medical care in remote areas. We use a multitude of diverse charitable activities

to accompany children, the elderly, and disadvantaged groups. A total of 165 volunteer activities were conducted in

2018 including 66 volunteer activities (64 in Taiwan and 2 in Laos), 48 green volunteer activities, and 51 campus and

community financial knowledge activities, covering 2,888 volunteers, 15,446 beneficiaries, and 11,749 hours of service.

From 2011 to 2018, the number of our group's volunteer services reached 17,797, totaling more than 58,984 beneficia-

ries, and the number of their total service period reached 73,001 hours. The services allowed colleagues to learn and

grow from the services and consolidated their coherence and vibrancy. The employees also found a sense of belonging

in the activities and happily devoted themselves to charitable events.

Service Hours Rendered by the Green Volunteers and the Loving Volunteers in Recent YearsHours

2,140 hours

2,484 hours

6,804 hours

11,464 hours

12,024 hours

12,896 hours

13,440 hours

11,749 hours

Participants

535 people

621 people

1,701 people

2,866 people

3,006 people

3,052 people

3,128 people

2,888 people

Beneficiaries

1,148 people

2,001 people

4,073 people

6,556 people

6,774 people

10,565 people

12,421 people

15,446 people

January 2011 – December 2011








Cumulative total 73,001 hours 17,797 people 58,984 people

205204

Loving nteers: 66 events(include Overseas - 2 charity events in Vientiane, Laos)

Green Volunteers: 48 eventsFinancial education activities in schools: 51 sessions

Total of 165 Charitable Activities

Loving Volunteers : 35 events

84NorthernRegion


Financial education activities inschools : 4 sessionsGreen Volunteers : 6 events•Tenha Organic Farm, Tainan (6 sessions)

17


Financial education activities inschools : 12 sessionsGreen Volunteers : 2 events

•Zhunan Qiding beach clean-up•Oil Field Ecological Farm and Fishery Park, Baoshan Township


•Kaohsiung An Hsin Home Organic Education Farm (6 sessions)•I Plant for Life Association, Kaohsiung

Social Care2-4 Support Disadvantaged Groups at Year-End Charitable banquetFFHC pays close attention to social welfare and never forgets to provide love in the year-end parties for employ-ees. We organized charity year-end parties in more than 136 business locations across Taiwan in 2018 and purchased desserts made by social welfare institutions as snacks or gifts. We also provided people with disabilities with a stage to perform and invited multiple groups such as the Color Sound Band (visually impaired), "Winged Angel (physically disabled)", "Woodpeckers Music Band (visually impaired)", and "Real-Life Fighters - Bollywood Goddess (physically disabled) to perform. The total amount of performance fees and purchases of gifts for the disadvantaged groups was NT$1,377,595, which gave them solid help.

2-5 Food Bank Subsidy Program for Poor Children to Enjoy Lunar New Year's DishesFirst Bank extended its loving trains to remote rural areas and donated NT$750,000 to the Andrew Food Bank Subsidy Program for Poor Children to Enjoy Lunar New Year's Dishes to purchase food packages including chicken soup, cured meat, and sausages to 375 disadvantaged families in Taitung and Keelung and help them enjoy a happy Lunar New Year with a great meal. FFHC volunteers also helped package food at Andrew Food Bank. Employees worked closely and completed the packaging of 360 food boxes very efficiently while maintaining high quality. We also organized a donation event and raised approximately NT$100,000 within a short period of two weeks to donate to the Andrew Food Bank.

2-6 Spreading love across a thousand miles - Spreading warmth to remote areas in Laos to provide health educationAs First Bank expanded overseas, First Bank's charitable activities also extended from Taiwan to overseas areas. The volunteer team flew more than 2,000km and organized the first overseas charitable activities in Laos for the first time in 2018. We visited Intellectual Disable Union, a local home for people with mental disabilities, and the Xaysomboun Elementary School which was located in a remote area to distribute charity supplies. We helped institutions for disad-vantaged people grow vegetables to earn income for improving their lives and taught children to use paint and screen printing to experience the fun of handicrafts. We also provided basic health education such as brushing their teeth and washing their hands to more than 200 disadvantaged schoolchildren.

•The elderly of Shunde Village in Sanchong District•Taipei City Trend Education Foundation•Yu-Cheng Social Welfare Foundation - Love Education Center•Bitou Elementary School, New Taipei City•Yilan County Private Catholic Hondao Senior Citizen's Home•Table Tennis Summer Camp - Reindeer Children's Home, White Children's Home•Zhongzheng Elementary School, Xindian District, New Taipei City•Bali Happy Mount Home•St. Anne's Home, Taipei City•Bethany Children's Home•Papid's House•Autism Society of Taiwan•Jen Ji Shiang Social Service Institute•Eden Foundation•Datong Children's Home, MustardSeed Home•Ti-Hwei Children's Home•Yuemei Elementary School, Keelung City•Investment primary school•NTU Dream Come True Concerts (6 sessions)•Andrew Food Bank•Children safety education•Slow-flying Angels Caring activities (2 sessions)•Rural health clinics in Hualien and Penghu (3 sessions)•Campus financier internship•Warm-motion mobilization (3 sessions)


•Linkou Journey to the West Organic Farm (20 sessions)•Organic Farmers' Market (3 sessions)•Green Finance Camp•Keelung River Clean-up•Helping small farmers to harvest 960 kg of sweet potatoes

20

Taoyuan-Hsinchu-Miaoli

Region•Holy Family for Special Education, Miaoli County•Shih-Guang Juvenile Center•People aged 80 and above and low-income households living in Jianshi Township •Yu An Children's Home•Baseball team of Fuji Elementary School, Miaoli•Hockey team of Lingyun Junior High School, Taoyuan

19

Taichung-Changhua-

Nantou RegionLoving Volunteers : 8 events

•Bankers on Campus (2 sessions)•Sweet Home•Maria Social Welfare Foundation - Wufeng Home•Central Region Children's Home, Ministry of Health and Welfare•Enhuei Children and Juvenile Center, Changhua County•Cisheng Home for the Elderly Foundation, Changhua County•Concern with Love Organization, Nantou County


•Ladybug Organic Farm (5 sessions)•Dann Center for Individuals with Developmental Disabilities (Green Light for Spreading Love)•Planting trees in Zhuzaikeng Ecological Park

•Anren Home, Chiayi County•Mindao Home, Chiayi County•Zhongpu Private Institutional Care Center•Elderly living alone in and low-income families in Shangding Village, Yongkang District, Tainan•Tainan City Privately Established Wujia Education and Nursing Institute•Xinyi Children's Home, Yunlin County•Yi-Xin Children's Home

Loving Volunteers : 8 events•Tse-De Children's Home, Kaohsiung City•Baseball team of Jintan Elementary School•Volleyball team of SaiJia Elementary School, Pingtung•Tzu-Hui Academy•Chi Hsiang Chen Social Welfare Foundation•House of the Little Angels•Taiwu Indigenous Tribe Service Station, GWG Social Charity Foundation•Table Tennis Summer Camp - Disadvantaged Schoolchildren of Tzu-Hui Academy

23Kaohsiung-

PingtungRegion

Yunlin-Chiayi-

Tainan Region

207206

2-7 Accompanying Slow-flying Angels for autistic children to gain self-affirmationFirst Securities has supported the Taipei Autism Children Social Welfare Foundation for four consecutive years since 2015 to promote equitable work rights to people with physical disabilities. To help autistic children with improve coordi-nation of their hands and eyes and strengthen interactions with the external world, we worked with the Foundation to organize an eight-week "Autistic Children Physical Fitness Class" to encourage them to interact with the external world and improve their capacity for taking care of themselves in 2018. We also held a “Singing Contest for Shining Stars” at Plaza 12 of the Taipei Underground Street by inviting the Foundation to facilitate the participation of family members and encourage autistic children to affirm themselves by singing.

The First Bank Culture & Education Foundation also promoted the “First Cultural Education Train” by inviting physically disabled persons to share with schoolchildren how to face life optimistically. By experiencing the inconvenience of life encountered by people with physical disabilities, the schoolchildren would cherish themselves and be inspired to help others in need. Together with the environmental protection pioneers and other relevant courses, the Train helped children establish the concept of caring for the earth. We organized 5 life education seminars in 2018 and

Going to campus and communities to spread financial knowledge in the recent three years2016

48

7,084

2017

39

4,422

2018

51

5,373

Sessions

Participants

The social welfare institutions where our group's volunteers provided financial education in the recent three years2016

4

2017

6

2018

14Number of children's homes and social welfare institutions

2-8 Protecting disadvantaged schoolchildren - Bringing art to the countryside to enrich lifeThe First Bank Culture & Education Foundation and Planet Technology Corp. have jointly promoted programs for disad-vantaged schoolchildren for 8 consecutive years, and adopted such schoolchildren in New Taipei City Ankeng Elemen-tary School, Zhongzheng Elementary School, and Erchong Elementary School by providing financial aid for them and integrating such cross-industry resources as those schools' hardware facilities, teaching manpower, social educators, community volunteers and corporate volunteers to provide children with remedial teaching. We also invited the artist Yu-Hui Lu to teach 60 disadvantaged schoolchildren in Zhongzheng Elementary School in Xindian District to add colors to their creation on environmentally friendly bags. Schoolchildren were taught to print plants from materials found on campus and learn about the simple aesthetics in life.

2-9 Financial aid to needy students for schoolingFirst Bank Culture & Education Foundation donated 0.1% of payments made with the First Bank World Card to the "School Education Savings Account" platform of the Ministry of Education. The platform sponsors education, school lunches, and after-school classes for disadvantaged schoolchildren in remote areas to help their schooling. We helped 237 economically disadvantaged schoolchildren and those suffering from drastic changes in their families in their education. In addition, we also sponsored the “Financial Service Industry Education Foundation Scholarship” with NT$2.5 million to provide actual assistance to students from poor and disadvantaged families. Approximately 1,600 students benefited from the program in 2018. We have donated NT$10 million over four years and

2-11 Promoting anti-drug education on campusIn response to the severe drug problems of youths, First Bank organized the "Red Strawberries Say No to Drugs" campus tour events with the Grace Hsiao Dance Troupe in 2018. The Dance Troupe gave the "Red Strawberry" anti-drug perfor-mances in Ming Chuan and Jian De Junior High School in Keelung City. By addressing issues such as drugs, dropouts, gangs, and campus bullying in the show, it used the artistic performance to teach youth to say no to the temptation of drugs and enhance their self-protection awareness. We also arranged professional instructors from First Bank to join the performance and organized the "financial primary schools on campus" to make use of our core competencies and help youths establish correct financial consumption and wealth management concept.

2-12 Children's safety education promotion seriesTo promote children’s safety education and awaken the public to the importance of early prevention, First Life Insurance has worked with Jing Chuan Child Safety Foundation in conducting child safety education campaigns since 2007. We participated in the "Traffic Safety Awareness - Crossing the Road Together" organized by the Foundation in October 2018 and explained to parents and children the importance of establishing road safety concepts early in life as we joined forces in promoting children's safety education. In addition, First Life Insurance assisted Jing Chuan Child Safety Foundation in the execution of the "Little Yellow Cap Project" and organized an internal donation campaign. We raised NT$170,000 for the Jing Chuan Children Safety Foundation for use in research and development of transportation safety education programs, preparing education courses, and training transportation safety seed instructors. We assisted in the implementation of children safety education to ensure healthy growth of children in a safe and secure environment.

2-10 Bankers on CampusIn order to establish the correct concept of consumption and financial management for the people and students, First Bank went to the campus, the rural area and the social welfare organization to hold a total of 69 financial promotion activities, with a total of 6,036 participants. First Commercial Bank responded to the FSC's policy by conducting 51 sessions of “Going to the Campus and Community to Spread Financial Knowledge” at schools in Taipei, New Taipei, Keelung, Taoyuan, Hsinchu, Taichung, Tainan, Kaohsiung and Pingtung. First Bank has received from the FSC the "Enthu-siastic Participation Award for Going to the Campus and Community to Spread Financial Knowledge" for 8 consecutive years. Through financial education taking root, we were striving to popularize the financial knowledge, which attracted

a total of 5,373 participants. In addition, we also worked with volunteer service teams and used holiday time to visit Children's Homes, rural schools, or other social welfare institutions in Taipei, Keelung, Miaoli, Yunlin, and Changhua to promote financial education and help disadvantaged people enjoy financial basic rights. In 2018, a total of 14 events were held to enhance the financial literacy of rural and disadvantaged groups. First Securities also worked with Nation-al Changhua University of Education on a special lecture on the “Bond and Warrant Market in Taiwan" and "Financial Operations Forum - Understanding the Basic Concepts of the Securities Investment Industry" for 256 participants. We also invited 26 college students who were excellent in finance subjects from National Taiwan University, Soochow University, National Changhua University of Education, Ming Chuan University, and Fu Jen Catholic University to attend financial practice seminars and internship courses held in First Securities. We also organized the "Investment Primary School - Wealth Management Number One" charity event in August. We invited Taipei Family Helper Center and TCWC Children Home to facilitate the participation of 29 schoolchildren and parents. We visited the Stock Museum and used board games to provide education with fun and promote equal access to finance. In response to the FSC's "Incentive

Plan for Securities Investment Trust Enterprises", FSITC also collaborated with National Taiwan University of Science and Technology to train asset management talents and enhance investment and research capabilities.

assisted7,032 students from needy families.

Approximately1,044 students participated in the events.

approximately1,131children took part in such events.

209208

2-14 Charitable donationsOn February 6, an earthquake rated 6.0 on the Richter magnitude scale struck Hualien in the middle of a cold night just before Chinese New Year. It caused causalities and the collapse of multiple houses. FFHC donated NT$3.5 million to the reconstruction in the wake of the Hualien earthquake to provide care and resources that help victims rebuild their homes as quickly as possible. Extreme climate conditions in recent years have led to disasters such as the tropical depression that struck southern Taiwan on August 23. The sudden torrential rain caused massive floods in Yunlin, Chiayi, Tainan, Kaohsiung, and Pingtung, devastated agricultural, fishery, and animal produce, and damaged people's homes. We embraced the spirit of solidarity among people and FFHC and subsidiaries jointly donated NT$3.5 million to southern Taiwan to help with the reconstruction.

2-15 Four procurement projects for supporting domestic agricultureFFHC has supported domestic agricultural development for a long time and we completed four procurement projects for domestic vegetables and fruits to help resolve the imbalance of supply and sales. Domestic pineapples faced overproduction issues in May and First Bank purchased 600kg of toxic-free pineapples from the social welfare associa-tion "Tzu-Hui Academy" in Pingtung for employees. We also assigned volunteers to help with the packaging and helped raise funds for the schoolchildren's tuition fund. During the banana harvest season in June, First Bank purchased 36 tons of bananas from the banana farmers in Qishan and Meinong, Kaohsiung for customers and employees. We also organized the "Support Banana Farmers Together" press conference and offered 12 creative dishes with bananas to call to the people to consume more bananas.

During pitaya harvest season in August, First Life Insurance purchased 1,800kg of pitayas from fruit farmers through the "Taiwan Agricultural Industry Association" to help fruit farmers resolve the pressures of overproduction and obtain reasonable income. During the cabbage harvest season in December, First Bank purchased 100 tons of cabbage through the "Fruits & Vegetables Marketing Cooperatives" to help resolve the oversupply on the market In addition to supporting farmers, we donated the cabbage to 72 social welfare units across the country and we also gifted fresh vegetables to customers and employees to use actions to support domestic agriculture.

We also work with large-scale hospitals in remote areas. We worked with Mennonite Christian Hospital and Taipei Medical University Hospital Feng Hsin Medical Youth Service Group to organize three free clinics in Wanrong Township in Hualien and Huxi Township in Penghu in 2018. The clinics provided liver disease screening, dentistry, ophthalmology, and physiotherapy services and provided correct health education concepts. The free clinics in Hualien were also provided with household refurbishment and repairs services in which volunteers from the Bank and professional repairs teams jointly helped the elderly that live alone recreate a bright and comfortable living environment. We added family visits for the free clinics in Penghu and went into the homes of locals to care for their life and drug habits. In addition to sponsoring three free clinics in 2018, we also sponsored the medical expenses for the 20 free clinics provided by Mennonite Christian Hospital and 27 free clinics provided by Taipei Medical University Hospital Feng Hsin Medical Youth Service Group. Free clinics were

2-13 Health lectures & free clinics in remote areasFirst Bank Culture & Education Foundation has held Medical Care & Health Lectures since 2006 to take care of the physical and mental health of customers and employees. We organized 3 "Lohas Life - Healthy Spine for Healthy Life" wealth management and health seminars in Taipei, Taichung, and Kaohsiung in 2018. We invited Mr. Yun-Lung Cheng, an expert on spinal health, Chairman I-Kuang Chen of First Capital Management, and Assistant Vice President Tzu-Yin Tang of FSITC to share how they remained healthy as well as investment and wealth management tips. The events attracted the participation of approximately 1,000 customers and employees. In addition, First Bank and First Life Insurance also joined forces with Franklin Templeton Investments and organized three "Type C Life - Full Health Cover-age" wealth management and health seminar in Taipei, Taichung, and Kaohsiung. In addition to sharing our methods for investment, we also arranged the physical therapist Dr. Wen-Jen Chien of Cathay General Hospital to explain the key points to health. The seminar drew the participation of

Overview of the 2018 free clinics in outlying villagesRegionMonth

Working with MennoniteChristian HospitalOrganizing free clinics inWanrong, Hualien tospread love

Working with TaipeiMedical UniversityProviding Free Clinics inHuxi, Penghu to spreadlove

Description of Programs and Events

Conducted blood tests, liver cancer screening, abdominal ultrasonic screening,etc. to strengthen education on liver cancer prevention and liver diseasescreening, help the local elderly people who live alone refurbish and repairtheir houses, and jointly care for the health of people living in remote mountainareas.

Services included the eye examination, dental treatment, physiotherapy, andWestern and traditional Chinese medical clinics. We also teamed up with thewell-known chain salons to provide free hair-cutting services, and conductedhome visits, caring for residents' lives and needs, and passing on the correctconcept of health education.

5

7

8

We invested NT$2,606,120 in procurement of domestic agricultural products in Taiwan in 2018.

provided to1,200 people.

more than 400 people.

211210

2-18 Unified Invoice Cup for Road RunningTo respond to the Ministry of Finance's promotion of a national sports climate and help the social welfare groups by collecting unified invoices, since 2011 the FFHC has co-organized the "Ministry of Finance Unified Invoice Cup for Road Running" across Taiwan with the regional National Taxation Bureaus every year. The road running train returned to Taitung in 2018 and it seems to have become one of the most anticipated road running activities in Taiwan. In addition to initiating invoices donation within our group, we have also asked the customers and road runners to jointly respond to the movement of “Donating Invoices out of Love". We donated the 350,897 invoices (the winning amount is $362,800) we collected to five social welfare groups in Taitung County including the "Taitung Autism Association", "Association for Parents with Intellectually Disabled Children, Taitung County", "Taitung Dementia Association", "Taitung Spinal Cord Injury Association", and "Taitung Sunflower Support Association" to encourage the people to support public welfare with love and make people happier and healthier.

2-19 2018 World Cup Final NightTo increase the people's knowledge of football and promote sports activities, First Bank participated in the "2018 World Cup Final Night" on the Ketagalan Boulevard. A 450-inch giant screen was set up onsite to broadcast the exciting Final game. It sparked the people's passion for sports activities and attracted more than 5,000 people to the event. It was also the first large-scale international sports broadcast event ever held on Ketagalan Boulevard.

Sports competition

2-16 Table tennis trainingTo support the development of sports in Taiwan and train national athletes, First Bank established a table tennis team and provided long-term sponsorship for table tennis teams in colleges, middle school, and elementary schools. We provide instructors with national athlete qualifications and arranged for players to conduct remote training in foreign countries or participate in domestic and foreign competitions. The table tennis player Cheng-Ting Liao performed well and won the bronze medal for both the men's doubles, mixed doubles, and team award in the "2017 Summer Universiade in Taipei as well as the bronze medal for the men's team in the "2018 Asia Games" in Jakarta in August 2018.

He later won the championship in the Swedish Open in November and gained fame in the international table tennis world. In 2018, First Bank continued to cooperate with the eight schools including Xiude Elementary School in Sanzhong District of New Taipei City, Nancheng Elementary School in Fengshan District of Kaohsiung City, Kaohsiung Municipal Fu Cheng Senior High School, New Taipei Municipal Hai-Shan High School, National Taiwan Sport University, Taoyuan Municipal Junior High School and Taoyuan Zhongpu Elementary School, and National Taiwan University of Sport. Approx-imately 345 athletes benefited from the sponsorships and we provided approximately 10.58 million in training fees.

In addition to holding national table tennis championships for ten consecutive years, First Bank has long supported the table tennis sport with systematic and continuous plans in separate phases. Since 2016, it has held the “First Bank Table Tennis Summer Camp” for three consecutive years in Kaohsiung to train young table tennis players. The Bank added a Summer Camp in Taoyuan in 2018 and provided 320 children who love table tennis with opportunities for playing against each other, scouting more new promising stars, and contributing to more outstanding performance of the table tennis sport in Taiwan.

2-17 The First Holding Maxxis Tennis TournamentTo nurture and encourage the participation of all citizens in tennis sport, the FFHC has worked together with its customer Cheng Shin Group to organize the “First Holding Maxxis Cup National Tennis Team Tournament” for nine consecutive years. It has become the largest and most indicative tennis competition in Taiwan with the highest total amount of prizes. Over a thousand tennis players gathered together. We also invited Yu-Hsiu Hsu, a young athlete from Changhua who won the championship for the Grand Slam Boys' Doubles for the third time in 2018, as the spokesperson to expand the popularity of the event. The contestants have crossed various age groups, including elementary schoolchildren group, college students group B, open group, and the prime-aged group, etc. By the competition platform, we have helped contestants to make friends and learn from ball playing, and have tapped more new promising tennis players.

2-20 Support sports in outlying villages - Hockey team of Lingyun Junior High SchoolMore than half of the players of the "Taoyuan Lingyun Junior High School Hockey team" were from indigenous families or mid to low-income households. Due to the lack of sufficient funds for training, players often use equipment discarded by other schools and the effectiveness of their training remained restricted. First Bank provided NT$200,000 in sponsorship and 18 brand new uniforms to help them participate in games abroad and do their best to win glory for the country and won the 5th place. The sponsorship allowed children in remote areas to fully dedicate themselves to training and competitions and pass on the prowess in sports to extend the cycle of love.

213212

LocationName

Golden EraSymphony -Songs ofSpring

Taipei InternationalConference Center

Yi-Chih Lu, Shennio Lin,Johnny YinEvergreen Symphon Orchestra

Taiwan Foundation for the Blind,Sunshine Social Welfare FoundationTaipei Parents' Association for theVisually Impaired

Golden EraSymphony -Song ofSummer

Hui-Sun Auditorium,National Chung HsingUniversity

Visually-impaired pianistsYen-Cheng Chang andChia ChiaJohnny Yin, EvergreenSymphony Orchestra

Huei Ming School and Home for BlindChildren, Tsu-Hsin Children's HomeChildren and Youth Homes of theMinistry of Health and Welfare, Joyce'sHome for Disabled Children

Golden EraSymphony -Songsof Winter

E-DA - Royal TheatreVisually-impaired pianistChe-Cheng Hsu, WanfangShih-Hsien Wang, EvergreenSymphony Orchestra

Kaohsiung City Visual Impairment Careand Development AssociationKaohsiung City Cerebral PalsyAssociation

Performers Groups invited

2-23 Light up Life on the First Dream StageFirst Bank Culture & Education Foundation has organized the Loving Care Concerts in cooperation with the National Taiwan University Hospital since 2011 to create a “Light up Life on the First Dream Stage” to let talented people with disabilities display their talents and confidence and make their performing dreams come true. We have organized 47 concerts over the past 8 years and invited 51 groups of people with visual impairment, hearing impairment, mental disabilities, and children from remote regions to bring diverse performances such as songs, dances, percussion music, jazz music, cheerleading, and lion dances. More than 9,400 attendees enjoyed the performances and we used the lively and relaxing music festival to pay tribute to the hard-working medical staff and encourage patients and family members to face life with a positive and active attitude.

To support exchanges between domestic and Japanese musicians, First Bank sponsored the "Yomiuri Nippon Symphony Orchestra - Tchaikovsky Violin's Night" to inject new vigor into the music world in Taiwan. In addition, First Bank Culture & Education Foundation sponsored the "Supporting the Depressed Charity Concert" organized by the Taipei Kuanyin Line Psychological and Social Service Association to help people suffering from spiritual fatigue and depression reduce their physical and mental pressure and make the society more harmonious.

2-24 2018 Dance in MetroTo promote street dance events much loved by the youth, First Bank Culture & Education Foundation organized the "2018 Dance in Metro" carnival in Taipei Arena to provide people that love street dancing with a stage to perform. We invited famous artists, international world-class street dance troupes, famous domestic dance troupes, schools, and champion teams from the 2018 Metro Street Dance Competition to perform in Taipei Arena and experience the charms of street dance. The event was

Activity nameDate

"Happy Year of the Dog - Welcomingspring with the Bird and Water Dance

Performer

Bird and Water Dance Ensemble (physically disabled orvisually impaired)

"Beautiful Voice of Fushan - IndigenousTribal Children's Songs"

Atayal Traditional Choir, Fushan Elementary School,Wulai, New Taipei City

"Winged Angel Dances - StarlitDragonboat Festival"

Winged Angel Performance Troupe (physically disabledor hearing impaired)

"PowerAngel Gratitude - BoundlessEnergy and Unlimited Love" PowerAngel (physically disabled)

"Mid-Autumn Festival with the Blind -The Light through the Music Notes" Blind Orchestra (visually impaired)

"Warm Christmas Carols - ReindeerMusic and Joyful Dance" Li-Cheng Chang, Yi-Ting Liao, Ya-En Chang (visually impaired)

2/8

3/28

6/13

8/8

9/19

12/19

Artistic Cultural Creation2-21 Care for cultural creative industriesIn order to assist the development of the domestic cultural creative industries, First Bank has actively processed loans for the said industries. The total credit balance at the end of 2018 reached NT$20.927 billion, wherein there were 66 companies in the film and television related industries and their credit balance amounted to NT$4.017 billion, account-ing for 19.2% of the total credit loan balance for the cultural creative industries. First Bank has taken practical actions to support the film and television industry and provided funds required by the said industry. In contrast to the circumstances involved in issuing regular loans, First Bank has developed specialized financing plans tailored to the creative industry and consults with knowledgeable insiders in the film industry in order to review and approve loans for the creation of domestic films. This includes closely analyzing the content of the project plan and taking into consideration the genre of the film, cast, selection of available directors, production studios, and other factors in order to determine the final conditions for making the loan. This stringent process is further backed by a 60% to 80% credit guarantee by the SMEG, and interest rates generally fall between 2.5% to 3.5%, thereby presenting the domestic film industry with favorable financing solutions and rates which allow necessary funds to be raised in order to smoothly complete the film produc-tion process. We also supported the production of TV dramas in DaAi TV, Tzu Chi Communication, Ministry of Culture’s Mobile Broadband Drama, Public TV Life Story, Hakka TV, SET Taiwan and other television drama series, and strove to support the development of Taiwan’s cultural creative enterprises.

2-22 Music festivals nurture new domestic talentsFirst Bank Culture & Education Foundation has long supported local arts and cultural activities. In 2018, it held three large-scale concerts in Taipei, Taichung, and Kaohsiung, providing stages for promising singers, well-known musicians, and visually-impaired pianists to perform on. In association with Evergreen Symphony Orchestra, the performances were a combination of symphonies, Taiwanese folk songs, classical music, and modern music, and well acclaimed by our customers and employees. We also invited disadvantaged groups and disabled people from social welfare institu-tions to each concert to enjoy the music festival together with the other attendees. Thirty-seven such concerts have been held since 2006, attracting more than 100,000 visitors.

attended by approximately 8,500 people.

More than 9,400 attendees.

214

2-26 Sponsoring lantern festival events - promote tourism developmentFirst Bank sponsored the "2018 Taiwan Lantern Festival" organized by Chiayi County Government and the "2018 Taipei

City Lantern Festival" organized by Taipei City Government. The Taiwan Lantern Festival incorporated local characteris-

tics, history, and culture of Chiayi, attracting 10.068 million tourists, the over all economic benefit was $14.58 billion,

while Taipei Lantern Festival included lighting and parade events, which successfully attracted about 3.5 million people

and created a tourism benefit of about $ 5.07 billion. The events not only passed down the heritage of traditional folk

art but also attracted domestic and foreign tourists with the bustling Chinese New Year festivities.

2-25 Supporting local art and cultural traditionsFirst Bank Culture & Education Foundation designed and built the 1st and 2nd floors of the headquarters building into

the “First Art Space” in 2011. Ever since, it has provided a free platform for domestic artists to create and publish on a

monthly basis. By the end of 2018, 93 art exhibitions had been held there, attracting more than 93,000 viewers In 2018,

a total of 12 art exhibitions were held. In addition to the staff photography exhibition, a total of 11 artists' exhibition

space was provided. The total sales amount.

Overview of exhibitions in 2018Exhibition date Exhibition theme

1/3-1/24

2/6-2/27

3/7-3/28

4/3-4/30

5/8-5/29

6/5-6/26

7/3-7/24

8/7-8/29

9/4-9/25

10/2-10/23

Exploring Shapes and Colors - Exhibition of Creative Works by A-Shui Chan

Master Artist Chen Yang-Chun and the Hwa-Yang Award - Exhibition of award-winning works

Graceful Culture in Paintings - Exhibition of Creative Works by Kai Wang

Tsay's Painting Masterpiece by Sheve-Jen Tsay

Journey Across Time in Ink - Exhibition of Color Ink Paintings by Hung-Hsueh Cheng

Love of Taiwan - Personal Exhibition Works by Nian-Fa Yang

Dazzling Colors - Exhibition of Abstract Art by Wen-Xiong Tsai

Relaxing at Peace - Exhibition of Creative Works by Yu-Hui Lu

Art of Strength and Simplicity - Exhibition of Creative Works by Chu Hsu

2-27 Spring Couplet GiveawayTo usher in the Lunar New Year, First Bank coordinated with the First Bank Culture & Education Foundation in the "Year

of the Dog Spring Couplet Calligraphy Event" by inviting 11 famous calligraphers and painters such as Guo Xiangling,

Gong Zhaoyang, Luo Shunlong, Song Liangming (Chairman of the Taoyuan Calligraphy Association), etc. to nine of our

branches in Taiwan to brush-write on-site the spring couplets as gifts to the people present. First Bank also distributed

red envelopes and "mother money" which has been blessed in Jinshan Temple of Wealth Gods.

Green Care※For green care, please refer to the section on Green Finance - " Climate change risks and opportunities" and "Ecologi-

cal and environmental sustainability"

215

Way to the Heart Drawn by Water Colors - Chronological Exhibition on Water Colors Createdby Nai-Chieh Fan

First Bank's 120th Anniversary" - First Bank Employees' Photography Exhibition

The Ease of Light - Mu-Chen Su's Water Color Exhibition

11/6-11/27

12/4-12/25

Economic benefits totaled NT$258 million.

The events attracted1,350 people.

of the works was about NT$6.265 million.

217216

218 219

221220

222 223

2018 Global Reporting Initiative( GRI) Standards Content Index

SustainableGovernance

P51

P50

P51

P51

P58

P51

P51P162~163

P50~51P122~123

P70~76

P54~55

P54~55

P6~7

P162~163

P122~124

102-1

102-2

102-3

102-4

102-5

102-6

102-7

Name of the organization

Activities, brands, products, and services

Location of headquarters

Location of operations

Ownership and legal form

Markets served

Scale of the organization

＊：The disclosed indicators have been verified by external third parties as indicated in the statement.

GRI 102: General Disclosures 2016 Chapter/Description Page

Disclosure Description

Sustainable GovernanceHappy Workplace

102-8

102-9

Information on employees and other workers

Supply chain

Happy Workplace

Green Finance

Letter to Shareholders





Stakeholder EngagementSustainable Governance


StakeholderEngagement

CSR Operation

102-10

102-11

102-12

102-13

102-14

Significant changes to the organization and its supply chain

Precautionary Principle or approach

External initiatives

Membership of associations

Statement from senior decision-maker

P78~79

P78~80

P57

102-16

102-17

102-18

102-19

Values, principles, standards, and norms of behavior

Mechanisms for advice and concerns about ethics

Governance structure

Delegating authority

Sustainable GovernanceGreen Finance

P22~32P104~115

-

P16

P58~63

P12、P14

P12、P14

P15~31P58~62

102-15 Key impacts, risks, and opportunities

102-23 Chair of the highest governance body

Collective knowledge of highest governance body

Evaluating the highest governance body’s performance

102-29 Identifying and managing economic, environmental,and social impacts

P58~59

P62

P12

P63

P57

102-24

102-25

Nominating and selecting the highest governance body

Conflicts of interest

Stakeholder EngagementGreen Finance

102-26Role of highest governance body in setting purpose,values, and strategy CSR Operation

Our corporate Chairmanis Mr. Tsan-Chang,Liao/

President is Mr.Chien-Hao Lin

Executive-level responsibility for economic, environmental, andsocial topics

Consulting stakeholders on economic, environmental, and social topics

Composition of the highest governance body and its committees102-22

102-21

102-20

102-27

102-28

Various Certifications

224


GRI 103: Management Approach 2016

103-1 Explanation of the material topic and its Boundary


Green FinanceHappy Workplace

Social Harmony

P49、P56、P68~69、P77P82~83、P91P94~95、P101、P116~117、P126~127、P141、P148、P155、P160、P170、P180~181、P193、P198

103-2 The management approach and its components

103-3 Evaluation of the management approach





Stakeholder Engagement



Reportinformation

Report Information

Happy Workplace

P15

P64

P64

P159

P15

P15~17

P18~21

P18~21

P22~32

P22~32

P22~31

P202

P32

P2

P2

P2

P3

P3

P223~230

P3

P52~53、P66~67

102-33

102-35

102-36

Communicating critical concerns

Remuneration policies

Process for determining remuneration

GRI 102: General Disclosures 2016 Chapter/Description Page

Disclosure Description

P14、P72~73

P62~63

P15

102-30

102-31

102-32

Effectiveness of risk management processes

Review of economic, environmental, and social topics

Highest governance body’s role in sustainability reporting

CSR Operation

Sustainable Governance

102-46

102-47

102-48

102-49

102-50

102-51

102-52

102-53

102-54

102-55

102-56

102-45 Entities included in the consolidated financial statements

Defining report content and topic Boundaries

List of material topics

Restatements of information

Changes in reporting

Reporting period

Date of most recent report

Reporting cycle

Contact point for questions regarding the report

Claims of reporting in accordance with the GRI Standards

GRI content index

External assurance

102-41

102-42

102-43

102-44

Collective bargaining agreements

Identifying and selecting stakeholders

Approach to stakeholder engagement

Key topics and concerns raised

List of stakeholder groups102-40

GRI 305：Emissions

Green Finance

Green Finance

Green Finance

HappyWorkplace

Green Finance

Green Finance

Green Finance/Social Harmony

Sustainable GovernanceSocial Harmony

Green Finance

Happy Workplace

None

P133

P134

P133

P114、P139~140

P128~132、P134~137

P133~134

P138

P138

P52~54、P66~67P199~201

P104~115

P176~177

P157

P122

P70~78

P63、P79

P79~80

P109~115

P109~115、P145P195~196

P157、P162~163

-

302-1

302-2

302-3

302-4

302-5

Energy consumption within the organization

Energy consumption outside of the organization

Energy intensity

Reduction of energy consumption

Reductions in energy requirements of products and services

201-1 Direct economic value generated and distributed

Defined benefit plan obligations and other retirement plans

Financial assistance received from government

Proportion of senior management hired from the local community

202-1

202-2

Ratios of standard entry level wage by gender compared tolocal minimum wage

203-1 Infrastructure investments and services supported

Significant indirect economic impacts

impacts

303-3

303-5

Water withdawal

Water consumption

Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions

P133

P133

P133

P133~134

P134

305-1

305-2

305-3

305-4

305-5

305-7

Direct (Scope 1) GHG emissions

Energy indirect (Scope 2) GHG emissions

Other indirect (Scope 3) GHG emissions

GHG emissions intensity

Reduction of GHG emissions

GRI 200: Economic Series 2016

GRI 300: Environmental Series 2016(With the exception of GRI 303 which is the 2018 version, the other GRI standards are based on the 2016 version)

Chapter/Description Page

Series

GRI 302：Energy

GRI 205：Anti-corruption

GRI 204：Procurement Practices

GRI 202：Market Presence

GRI 203：Indirect Economic Impacts

GRI 201：Economic Performance

GRI 303：Water and Effluents

Specific Standard Disclosures

201-2 Financial implications and other risks and opportunities dueto climate change.

203-2

Proportion of spending on local suppliers204-1


Operations assessed for risks related to corruption

Confirmed incidents of corruption and actions taken

Communication and training about anti-corruption policies and procedures

205-1

205-2

205-3

225

201-3

201-4

GRI 404：Training and Education

GRI 405：Diversity and Equal Opportunity

GRI 406：Non-discrimination

HappyWorkplace

P185

P182

P186~189

P182~183

P122~123

P185

P190

P182~183

P183~184

P186~189403-6

403-7Prevention and mitigation of occupational health and safety impactsdirectly linked by business relationships

Workers covered by an occupational health and safety management system

Happy Workplace


P167

P173

P64

404-1

404-2

404-3

Average hours of training per year per employee

Percentage of employees receiving regular performance andcareer development reviews

Programs for upgrading employee skills and transition assistance programs

Sustainable GovernanceHappy Workplace

P58~59P171~172

405-1 Diversity of governance bodies and employees

Ratio of basic salary and remuneration of women to men P157405-2

Happy Workplace P156、P158406-1 Incidents of discrimination and corrective actions taken

P172~173

P176~177

P176

HappyWorkplace

401-1

401-2

New employee hires and employee turnover

Parental leave

Benefits provided to full-time employees that are not provided totemporary or part-time employees

P168Happy Workplace

HappyWorkplace

HappyWorkplace

Green Finance

402-1 Minimum notice periods regarding operational changes

403-1

403-2

403-3

Occupational health and safety management system

Hazard identification, risk assessment, and incident investigation

Occupational health services

Worker training on occupational health and safety

Promotion of worker health

Worker participation, consultation, and communication onoccupational health and safety

Happy Workplace(Restatements of information for

2017 have been explainedin related chapters)

401-3

GRI 400: Social Series 2016(With the exception of GRI 403 which is the 2018 version, the other GRI standards are based on the 2016 version)

GRI 401：Employment

GRI 402：Labor/ Management Relations

GRI 403：Occupational Health and Safety

P133Green Finance

Green Finance

307-1 Non-compliance with environmental laws and regulations

P122~123

P122~123

308-1

308-2

New suppliers that were screened using environmental criteria

Negative environmental impacts in the supply chain and actions taken

GRI 307：Environmental Compliance

GRI 308：Supplier Environmental Assessment

Page

Green Finance P142306-2 Waste by type and disposal method

GRI 306：Effluents and Waste

226 227

GRI 414：Supplier Social Assessment

GRI 415：Public Policy

P122~123

P122~123

414-1

414-2

New suppliers that were screened using social criteria

Negative social impacts in the supply chain and actions taken

None -0

415-1 Political contributions

GRI 413：Local Communities





P52

P52

413-1

413-2

Operations with local community engagement, impactassessments, and development programs

Operations with significant actual and potential negativeimpacts on local communities

GRI 412：Human Rights Assessment

412-2

412-3

Employee training on human rights policies or procedures

GRI 411：Rights of Indigenous Peoples

P156

P156

P122~123

P156~157

411-1 Incidents of violations involving rights of indigenous peoples

Operations that have been subject to human rights reviewsor impact assessments

Significant investment agreements and contracts that include humanrights clauses or that underwent human rights screening

GRI 410：Security Practices

GRI 409：Forced or Compulsory Labor

409-1Operations and suppliers at significant risk for incidents offorced or compulsory labor

410-1 Security personnel trained in human rights policies or procedures

GRI 407：Freedom of Association and Collective Bargaining

Happy WorkplaceP122~123、

P159

P122~123、P161

407-1 Operations and suppliers in which the right to freedom ofassociation and collective bargaining may be at risk

GRI 408：Child Labor

Happy Workplace

Happy Workplace

Happy Workplace

Happy Workplace

HappyWorkplace

Green Finance

GreenFinance

P122~123、P156

P156

408-1 Operations and suppliers at significant risk for incidents of child labor

419-1Non-compliance with laws and regulations in the socialand economic area

GRI 419：Socioeconomic Compliance

P84~86

P84~86

P84~86

417-1

417-2

Requirements for product and service information and labeling

P85

P70、P72

418-1Substantiated complaints concerning breaches of customerprivacy and losses of customer data

GRI 417：Marketing and Labeling

GRI 418：Customer Privacy

Chapter/Description

403-4

403-5

403-8

403-9

403-10

Work-related injuries

Work-related ill health

PageChapter/

Description

412-1

Incidents of non-compliance concerning product and serviceinformation and labeling

Incidents of non-compliance concerning marketing communications417-3

228 229

Aspect: Local Communities


Initiatives to improve access to financial services fordisadvantaged people.

Policies for the fair design and sale of financial products and services.

Initiatives to enhance financial literacy by type of beneficiary

FS14

FS15/DMA

FS16/DMA

P118、P122、P124、P156、P199~201

FS1/DMAPolicies with specific environmental and social componentsapplied to business lines.

Chapter/DescriptionDescriptionIndex Page

Aspect: Product Portfolio

Aspect: Active Ownership

Green FinanceSocial Harmony


Happy Workplace

P104、P108~109

FS2/DMAProcedures for assessing and screening environmentaland social risks in business lines.

Process(es) for improving staff competency to implement theenvironmental and social policies and procedures as applied tobusiness lines.

Green Finance


Green Finance

Social Harmony

P140、P156、P158、

P199~204

P109~115

P118~120

P135

P84~86

P89~90、P194

P194~197

FS3/DMA

FS4/DMA

Processes for monitoring clients’ implementation of and compliancewith environmental and social requirements included in agreementsor transactions.

Percentage of assets subject to positive and negativeenvironmental or social screening.

P89~90、P194~197、P199~215

FS7

FS8

FS11

Monetary value of products and services designed to deliver aspecific social benefit for each business line broken downby purpose.

Monetary value of products and services designed to deliver aspecific environmental benefit for each business line brokendown by purpose.

GRI Financial Services Sector Supplement


P91~93Informationsecurityimprovement

Enhance information security measures for the finance industryand improve response and processing capabilities forinformation security attacks


Aspect: Corporate Sustainable Development Requirements

P68~76Riskmanagement

Strengthen risk awareness and assessment capacity andmaintain appropriate and effective internal control

The Company's Set Topic

Happy Workplace

Happy Workplace

Green Finance

P156

P159

P156

P156

P156~157、P162~163

P126~140

P118~123、P126~140

P109~115、P148~153

P118~123HumanRights

ChapterThe Ten Principles Page

United Nations Global Compact Principles

Principle 1: Businesses should support and respect the protectionof internationally proclaimed human rights.

Principle 5: The effective abolition of child labor

Principle 6: The elimination of discrimination in respect ofemployment and occupation

Principle 2: Make sure that they are not complicit in human rights abuses.

Principle 3: Businesses should uphold the freedom of associationand the effective recognition of the right to collective bargaining.

HappyWorkplace

Labor

Principle 4: The elimination of all forms of forced and compulsory labor

GreenFinance

P78~80

Environ-ment


Principle 8: Undertake initiatives to promote greaterenvironmental responsibility.

Principle 7: Businesses should support a precautionary approachto environmental challenges.

Principle 9: Encourage the development and diffusion ofenvironmentally friendly technologies.

Principle 10: Businesses should work against corruption in all itsforms, including extortion and bribery.

CSR Corporation P14

P156、P158

P156

P155、P159

P155~159、P168~169

P162~167

P78~79

P168~169

P156、158

P156~157

P162~163

P180~190

P155~159、P168~169、P176~179、P180~190

Organizationalgovernance

LaborPractices

Humanrights

Issue

ISO 26000 Index Content Index

Decision-making process and structures

Due diligence for preventing human rights risk

Human rights risk situations

Avoidance of complicity

Resolving grievances

Discrimination and vulnerable groups

Civil and political rights

Economic, social and cultural rights

Employment and employment relationships


HappyWorkplace

HappyWorkplace

HappyWorkplace

Classifi-cation

Disclo-sure

Chapter PageDisclo-sure

Anti-Corrup-tion

Social communication

Health and safety at work

Human development and training in the workplace

Working environment and social protection

Fundamental principles and rights at work

P173~179、P199~215

Issue Chapter PageDisclo-sure

230 231

P78

P78

P78

P15~21

P78

P84~86

P198~215

P203~215

P171~175

P148~153

P208

P114

P87~88

P84~86

P89~90

P89~90、P194~197、P203~215

P89~90、P195~196

P176~189、P208、P210~211

P84~86、P89~93、P148~153、P194~197

Fair OperatingPractices

ConsumerIssues

CommunityInvolvementandDevelopment

Anti-corruption

Responsible political involvement

Fair competition

Promoting social responsibility in the value chain

Fair marketing, factual and unbiased information and faircontractual practices






Social Harmony

Green Finance


Social Harmony

Social Harmony


Happy Workplace

Green Finance


Sustainable GovernanceGreen FinanceSocial Harmony

Educational and awareness

Happy WorkplaceSocial Harmony


Health

Social investment

Community involvement

Education and culture

Employment creation and skills development

Technology development and access

Access to essential services

FinancialInstitutions

Finance and insurance companies shall disclose their managementapproaches, disclosure items, and reporting requirements. Thereports shall include at least products and services designed todeliver a specific social benefit for each business line



PublicCompanie

Public companies shall disclose the number of full-timenon-management employees, the average and median salary offull-time non-management employees, and the difference of thethree statistics compared to the previous year.

Taiwan Stock Exchange Corporation "Rules Governing the Preparation and Filing of CorporateSocial Responsibility Reports by TWSE Listed Companies"

P126~140

P135~138

P126~140

P145~146

Environment

Prevention of pollution

Sustainable resource use

Climate change mitigation and adaptation Green Finance

Protection of the environment, biodiversity and restorationof natural habitats

Respect for property rights

Consumer service, support, and complaint and dispute resolution

Consumer data protection and privacy

Protecting consumers’ Health and safety

Sustainable consumption

P101~124、P139~140、P148~153、P193~197

P54

First Financial Holding Corporate Social Responsibility Report 2018Publish Institution : First Financial Holding Co., Ltd.

ADD : No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City

TEL : +886-2-2311-1111

FAX : +886-2-2311-9691

Website : https://www.firstholding.com.tw/sites/firstholding/en/home

Publish Date : 2019.7

Contact InformationAdministration Management Dept., First Financial Holding Co., Ltd.Corporate Governance Section

Tel : +886-2-2348-5366

Fax : +886-2-2311-9691

Address : No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City

E-mail : [email protected]

This Report was printed using recycled paper and ecologically friendly toner.

Wealth and income creation

Publish Date：2019.7Printed in Taiwan 2018

This report uses eco-friendly paper thatdoes not contain heavy metals andenvironmentally friendly inks that improvethe earth's ecological environment.

First Financial Holding Co.,Ltd.

ADD : 18F,No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City

TEL : +886-2-2311-1111

FAX : +886-2-2311-9691

https://www.firstholding.com.tw/sites/firstholding/en/home

http://csr.firstholding.com.tw/en/

responsibility corporatesocial CSR Report · financial institution in Asia,” but also utilized precision marketing with big data and AI in order to drive innova-tive capabilities

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