Table of Contents

Financial Highlights 02

Awards and Achievements 04

Message to Shareholders 06

Fubon Life 14

Taipei Fubon Bank 15

Fubon Bank (Hong Kong) 16

Fubon Bank (China) 17

Fubon Insurance 18

Fubon Securities 19

Investment Management Group 20

Corporate Citizenship 22

A Tribute to Fubon Group Founder 26

FUBON PLUSRADIATING POSITIVE ENERGY

Forward-thinking and solid in its approach, Fubon Financial Holdings is

a key generator of positive momentum in the financial services sector.

By offering the best financial services to Chinese communities in Asia

and building a robust organization, we continue to move closer to our

vision of becoming one of Asia’s first-class financial institutions.

2014 Annual Report

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Financial HighlightsFubon Financial Holdings

In NT$ Million 2012 2013 (2) 2014

Total Assets 4,105,866 4,596,972 5,438,361

Total Equity 306,429 341,900 416,147

Equity Attributable to Owners of Parent 306,429 341,678 408,043

Net Income 29,149 38,464 60,483

Net Income Attributable to Owners of Parent 29,149 38,514 60,248

Earings Per Share (NTD) 3.07 3.90 5.89

Book Value Per Share (NTD) 32.17 33.39 39.87

Return on Equity (%) (1) 10.7% 11.5% 16.1%

Return on Assets (%) 0.8% 0.9% 1.2%

The figures above are the consolidated results of Fubon Financial Holding Co. and its subsidiaries.(1) The calculation factor of Return on Equity is the amount attributable to parent company. (2) Restated retrospectively for subsequent measurement of investment properties from the cost model to the fair value model.

Total Assets

2012

2013

2014

4,105,866

4,596,972

5,438,361

Equity Attributable to Owners of Parent

2012

2013

2014

306,429

341,678

408,043

Net Income Attributable to Owners of Parent

2012

2013

2014

29,14938,51460,248

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Fubon Securities

In NT$ Million 2012 2013 (3) 2014

Brokerage Commissions 2,452 2,461 3,008

Net Interest Income 886 832 937

Gain on Trading Securities, Net

153 618 650

Total Revenues 5,013 5,038 5,447

Operating Expenses 4,156 3,971 4,326

Net Income 1,073 1,370 1,356

Fubon Bank (China)

In CNY$ Million 2014

Net Interest Income 967

Commissions and Fee Revenues, Net

101

Other Revenues (4)

Operating Expenses 473

Pre-Provision Profit 591

Provision (reversal) for Bad-Debt Losses

59

Net Income 422

Fubon Insurance

In NT$ Million 2012 2013 (3) 2014

Direct Written Premium 26,600 27,497 29,176

Net Written Premium 20,047 21,477 22,978

Underwriting Profit 1,885 1,727 1,748

Investment Income 1,746 2,087 1,659

Net Income 3,056 3,244 2,816

Net Claim Ratio 57.18% 56.86% 59.40%

Net Expense Ratio 37.30% 36.76% 36.62%

Net Combined Ratio 94.48% 93.62% 96.02%

Retention 72.51% 75.09% 75.34%

Fubon Life

In NT$ Million 2012 2013 (3) 2014

First Year Premium (1) 245,539 204,152 176,116

Investment Income 68,640 86,138 109,740

Operating Revenue 487,777 496,175 516,913

Operating Costs 460,951 458,303 462,305

Net Income 12,895 25,007 35,367

First Year Premium (2) 249,724 212,818 190,974

Interest-Sensitive 32,369 110,066 146,821

Investment-Linked 4,185 8,666 14,858

Traditional 213,170 94,086 29,295

Fubon Bank (Hong Kong) (4)

In HK$ Million 2012 2013 2014

Net Interest Income 657 750 842

Net Fee and Commission Income

218 271 317

Other Operating Income 116 154 147

Operating Expenses 791 842 897

Operating Profit before Gains and Impairment Losses

200 333 409

Charge for / (write back of)Impairment Losses

(35) 11 26

Profit for the Year 306 380 481

Taipei Fubon Bank

In NT$ Million 2012 2013 (3) 2014

Net Interest Income 14,630 15,775 17,329

Commissions and Fee Revenues, Net

8,253 8,431 10,456

Other Revenues 6,351 9,480 11,845

Operating Expenses 14,739 15,578 16,553

Pre-Provision Profit 14,495 18,108 23,077

Provision (reversal) for Bad-Debt Losses

(542) 3,857 1,987

Net Income 12,973 12,153 18,242

(1) Excluding Investment-Linked (2) Including Investment-Linked(3) Restated retrospectively for subsequent measurement of

investment properties from the cost model to the fair value model.

(4) The financial highlights of Fubon Bank (Hong Kong) are from consolidated financial statements. Other subsidiaries are from separate financial statements.

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2014 Awards and Achievements

AsiamoneyTaipei Fubon BankBest Domestic Private Bank in Taiwan/Best Domestic Provider of FX services as voted by corporates in Taiwan—ranked 1st/Best Local Cash Management Bank in Taiwan as voted by large-sized Corporates

Asia Insurance Review and CelentFubon InsuranceAsia Insurance Technology Awards—Innovation Award

Corporate Governance AsiaFubon Financial Chairman Daniel M. TsaiAsia’s Best CEO (Investor Relations)/Asian Corporate Director Recognition AwardsFubon FinancialRecognition Award for Corporate Governance—Taiwan/Best Investor Relations by a Taiwan company/Best CSR/Best Investor Relations Professional

Corporate TreasurerTaipei Fubon BankBeat Cash Management Bank in Taiwan

FinanceAsiaTaipei Fubon BankBest Foreign Exchange Bank in Taiwan

International Finance MagazineFubon InsuranceBest Insurance Company in Taiwan

MILSTETaipei Fubon BankThe Best Private Banking Business in Taiwan/The Best Transactional Bank in Taiwan

Reader's DigestFubon Life2014 Trusted Brand Gold Awards—Insurance

The AssetFubon FinancialCorporate Award—Platinum AwardTaipei Fubon BankBest Private Bank in Taiwan/Best Service Providers (Renminbi Bank)/Best Cash Management Solution/Greater China Awards—Best in Financial Services for large corporate in Taiwan/Top Investment House for Taiwan Dollar Bonds–ranked 1st

Fubon LifeTop Investment House for Taiwan Dollar Bonds—ranked 1st

World FinanceFubon LifeInsurance Company of the Year 2014, Taiwan

La VieFubon Art FundationLa Vie 2014 Culture and Creative Industry Awards—Best Exposition

CommonWealth MagazineFubon FinancialExcellence in Corporate Social Responsibility—among the 10 finalists in the Large Company Category/Most Admired Company—Financial Holdings SectorFubon LifeGolden Service Award—Insurance Sector/Most Admired Company—Insurance Sector, 2nd PlaceTaipei Fubon BankMost Admired Company—Banking Sector, 2nd PlaceFubon SecuritiesMost Admired Company—Securities Sector, 5th Place

Business TodayFubon FinancialComposite Performance Ranking of Financial Holding Companies—1st PlaceTaipei Fubon Bank8th Evaluation for Wealth Management Banks—Best ServiceFubon LifeBrad Appeal among Businesspeople—3rd Place in Life Insurance IndustryFubon SecuritiesBrad Appeal among Businesspeople—3rd Place in Brokerage Industry

Wealth Magazine—the 5th Survey of Financial Service Brands & the Corporate Social Responsibility Award for Financial Holding CompanyFubon FinancialThe Corporate Social Responsibility Award for Financial Holding Company—Silver WinnerTaipei Fubon BankBest Wealth Management Bank—Silver WinnerFubon SecuritiesBest Domestic Equity House—Sliver Winner/Best Brokerage Service—Sliver Winner/Best Local Brokerage Public Image—Sliver WinnerFubon LifeBest Life Insurance Products—Silver Winner

Risk Management, Insurance & FinanceFubon FinancialMost Admired Financial Holding Company—1st PlaceFubon InsuranceMost Admired P&C Company—1st PlaceFubon LifeMost Admired Insurance Company—Best Back Office Group—1st Place/Most Admired Insurance Company—Best Field Group—1st Place/The 3rd Asian Excellence Recognition Awards—Bet Insurance Claim—1st Place/The 3rd Asian Excellence Recognition Awards—High Brand Awareness—2nd Place/The 3rd Asian Excellence Recognition Awards—Best Sales–2nd Place/The 3rd Asian Excellence Recognition Awards—Most Recommended–2nd Place

Smart MonthlyFubon LifeThe 1st Smart Policy Award—Best Family Protection

Manager TodayFubon Life2014 Power Brand Survey—1st place in the insurance category

Global View MonthlyFubon LifeService Sector Survey—Life Insurance–3rd PlaceTaipei Fubon BankService Sector Survey—Banking and Financial Services—2nd Place/Bank Image Survey—Best Image—5th Place/Bank Image Survey—Best Service—5th Place/Bank Image Survey—Product Performance—3rd Place/Bank Image Survey—Client Events–2nd Place/Bank Image Survey—Investment & Personal Finance—6th Place/Wealth Management Survey—Best Image Wealth Management Bank—3rd Place/Wealth Management Survey—Most Recommended Wealth Management Bank—4th Place

Business NextFubon FinancialTop Green Brand—Financial Sector—Excellence AwardFubon SecuritiesDigital Services—2nd Place in Financial and Investment Sector

West Strait Morning PostFubon Property & Casualty InsuranceWest Strait Exemplary Financial Institution Award

Strait HeraldFubon Property & Casualty InsuranceAnnual Haixi (Xiamen) Top 10 Golden Insurance Companies Survey—Best Service Gold Award

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Xiamen Media GroupFubon Property & Casualty InsuranceMost Attentive Claims Services Team

2014 Faith, Hope, and Love Awards of InsuranceFubon InsuranceDistinguished Contribution Award for Social Responsibility/Distinguished Policy Designer Award for Non-Life Insurance Company/Distinguished Profession Award for Non-Life Insurance Company/Distinguished Contribution Award for Non-Life Insurance Education/Distinguished Leader Award for Insurance Organization/Distinguished Profession Award for Non-Life Insurance/Distinguished Representative Office Award for Non-Life Insurance—1st Business Division/Distinguished Award for Non-Life Insurance Career Achievement—Nominated/Distinguished Representative Office Award for Non-Life Insurance—Nominated, Feng-Shan branch officeFubon LifeDistinguished Contribution Award for Social Responsibility/Distinguished Profession Award for Life Insurance Company/Distinguished Sales Strategy Award for Insurance Marketing/Distinguished Award for Integrated Marketing Communications/Distinguished Representative Office Award for Life Insurance/Distinguished Profession Award for Life Insurance/Distinguished Award for Life Insurance Career Achievement/Distinguished Award for Social Contribution

Factor Chain InternationalTaipei Fubon BankBest Factoring Service Quality in Taiwan

Lipper Fund Award 2014Fubon Asset ManagementBest Three-year/Five-year/Ten-year Fund in the High-Yield Bond US Dollar Category—Loomis Sayles High Income Fund/Best Three-year/Five-year Fund in the Bond US Dollar Category—Loomis Sayles Multisector Income Fund

Morningstar Taiwan Fund Award 2014Fubon Asset ManagementBest High-Yield Bond Fund—Loomis Sayles High Income Fund

Taipei Foundation Of Finance, Best Fund Award 2014Fubon Asset ManagementBest Three-year/Five-year Fund in the Global ex Emerging Markets Fixed Income Fund Category—Loomis Sayles High Income Fund/Best Ten-year Fund in the Domestic Equity Value Fund Category—Fubon Value Fund

Taiwan Stock Exchange Corporation (TWSE)Fubon SecuritiesIPO Fund-raising—1st Place/Warrant Trading Turnover in 2014—2nd Place/New Warrant Issues in 2014—Most Improvement

Gretai Securities MarketFubon SecuritiesGolden Laurel Award—Securities Firm Category for Excellence in Emerging Stock Market Making

Financial Information ServiceTaipei Fubon BankAward for Outstanding Contribution in Electronic Payment Service

MerComm, IncFubon Bank (Hong Kong)“2014 International ARC Awards” Gold Winner—Cover Photo/Design: Banking and Financial Services:Hong Kong/PRC

Employees Retraining BoardFubon Bank (Hong Kong)ERB Manpower Developer Award Scheme—Manpower Developer

Hong Kong Council of Social ServiceFubon Bank (Hong Kong)Caring Company Logo

Tiptop Consultants Ltd.—Tiptop Service AwardFubon Bank (Hong Kong)Outlet of the Quarter/Persistently Outstanding Service Outlet/Persistently Outstanding Service Company

Bank of New York MellonFubon Bank (Hong Kong)Straight Through Processing Award

Ministry of CultureFubon Cultural & Educational Foundation“Let’s Talk about Media” nominated for Best Host in the General Program Category by the Golden Bell Awards/“Young and Vibrant” nominated for Best Youth Program by the Golden Bell Awards

Ministry of EducationFubon Cultural & Educational FoundationSilver Prize

Sports Administration, Ministry of EducationFubon Financial Sports Activists Awards—Sponsorship Gold Medal and Long-Term Sponsorship Award

Ministry of Labor—Work-Life Balance AwardFubon FinancialFamily Friendly Award/Health & Wellness Award

Ministry of Health and WelfareFubon Charity FoundationOutstanding National Social Welfare and Charity FoundationTaipei Fubon Bank Charity FoundationOutstanding National Social Welfare and Charity Foundation

Department of Labor, Taipei City GovernmentTaipei Fubon BankBest Labor Safety Award—Recognition of Excellence in Workplace Wellness Management/2014 Award for Best Companies to Work for—Two StarsFubon Life2014 Award for Best Companies to Work for—Two StarsFubon Securities2014 Award for Best Companies to Work for—Two Stars

Department of Sports, Taipei City GovernmentFubon Financial Athletic Angle Award

Taiwan Corporate Governance AssociationFubon FinancialCorporate Governance System—CG6009 Advanced Assessment CertificationTaipei Fubon BankCorporate Governance System—CG6009 Advanced Assessment CertificationFubon InsuranceCorporate Governance System—CG6009 Advanced Assessment CertificationFubon LifeCorporate Governance System—CG6009 Advanced Assessment Certification

British Standards InstitutionFubon FinancialCorporate Social Responsibility Report verified by both AA1000 and GRI G4 assurance standardsTaipei Fubon BankBS 10012:2009 Personal Information Management SystemFubon Insurance BS 10012:2009 Personal Information Management System

SGS CertificationFubon InsurancePrivacy Compliance Audit

2014 Taiwan Corporate Sustainability AwardsFubon FinancialTaiwan Top 50 Corporate Sustainability Report Awards—Financial Industry—Gold Medal

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Daniel M. TsaiChairmanFubon Financial Holdings

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Dear Shareholders,

The economy in Taiwan showed meaningful recovery in 2014. Key drivers came from higher export demand from the U.S. market, a buoyant local stock market and rising volume of tourist visits. Amid this favorable backdrop, Fubon Financial Holdings and its subsidiaries delivered robust results across the board. Our net income of NT$60.2 billion and EPS of NT$5.89 set another record high for earnings, and led Taiwan’s financial services sector for the sixth consecutive year.

We expand regional platform actively along with our growth in Taiwan. In January 2014, Fubon Financial Holdings and Taipei Fubon Bank acquired an 80% controlling stake in First Sino Bank, which was later renamed Fubon Bank (China) in April of the same year. The transaction marks Fubon Financial Holdings as the only Taiwanese financial institution with banking subsidiaries in Taiwan, Hong Kong and China. It is a critical step forward in the company’s plans to build its presence in the Greater China region.

Fubon Financial Holdings successfully builds a comprehensive financial service platform across Taiwan, Hong Kong and China, which serves a full range of financial needs from banking, insurance to asset management. Looking ahead, our team will continue to work together to explore regional growth opportunity, and move toward the vision of making Fubon Financial Holdings a first-class financial institution in Asia.

Profit, Book Value and Assets All at Record HighsIn spite of slower growth in the eurozone, China and Japan in 2014, and negative impact in the U.S. from snow storms at the beginning of 2014, the U.S. economy showed sequential improvement throughout the year. The U.S. recovery provided a major boost to Taiwan’s exports, in turn bolstering corporate profitability. Corporate activities in making new investments and new hiring increased. Domestic consumption also expanded steadily, along with rising employment, stock-market rallies and a record-level of visitors in Taiwan. Taiwan’s economy grew 3.74% during 2014, up from 2.23% the year before.

Fubon Financial Holdings posted another record year of profit. It was under the backdrop of a balanced and diversified income from major subsidiaries, coupled with stellar performance of Fubon Life and Taipei Fubon Bank, the dual earning engine of the group. Net income of Fubon Financial Holdings was 56% higher than in 2013 at NT$60.2 billion, and EPS was NT$5.89. Both figures were the highest among domestic financial holding companies for the sixth consecutive year.

Return on assets and return on equity were 1.2% and 16.07%, respectively. Book value reached NT$408 billion. The results set another record highs.

Total assets of Fubon Financia l Holdings rose 18% to NT$5.4384 trillion in December 2014. This was mainly driven by the growth of Fubon Life, and the acquisition of Fubon Bank (China). The asset size made Fubon Financial Holdings the second-largest among listed financial holding companies in Taiwan.

Taipei Fubon Bank and Fubon Life: Dual Engines of ProfitabilityFubon Financial Holdings was able to again top the industry in earnings in 2014, owing to robust performances of its major subsidiaries. Taipei Fubon Bank and Fubon Life stood out as key profit engines, which together accounted for 89% of the holding company’s earnings.

Taipei Fubon Bank’s net income rose 50% to NT$18.2 billion in 2014, contributing 30% of Fubon Financial Holdings’ earnings. Net interest income increased 10% due to margin improvement, and fee income surged 24%, driven by the growth in the bank’s wealth management business.

Fubon Life also posted a solid set of results in 2014. Net income jumped 41% to another all-time high of NT$35.4 billion, the best among its domestic peers, accounting for 59% of the holding company’s earnings. The results reflected the insurer’s diversified investment portfolio and excellent track record of investment return. As the investment assets continued to grow, Fubon Life saw its assets come close to NT$2.8 trillion at 2014 year-end.

Fubon Life delivered strong performance in premium income, on the back of flexibility in product design and a multi-channel strategy. First-year premium totaled NT$191 bill ion for a market share of 16.3%. Total premium reached NT$425 billion, representing a 15.3% share of the market. Both first-year and total premium ranked second in the industry.

Fubon Insurance: 33 Years of Leadership Thanks to a prudent underwriting policy and adequate cost control, Fubon Insurance was able to enhance underwriting profit and maintained a strong level of net combined ratio. It reported net income of NT$2.8 billion in 2014. Direct written premium totaled NT$29.18 billion for a market share of 22.1%, extending Fubon Insurance’s leadership in the industry to the 33rd year in a row.

Message to Shareholders

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Fubon Insurance’s subsidiary in China—Fubon Property & Casualty Insurance Co., Ltd.—began operations in Xiamen in October 2010. It is the first Taiwan-invested P&C insurer in China after the Taiwan-China Economic Cooperation Framework Agreement became effective.

Under the expertise built over decades in the Taiwan market, and a focus on service quality addressing the local markets, Fubon Property & Casualty Insurance made meaningful progress in Haixi area and Chongqing city. Meanwhile, the insurer expanded into Liaoning and Dalian in northeast China. Its service network reached 31 locations in China. The direct premium was RMB$690 million in 2014, representing an impressive growth of 80%. The company ranked the sixth-largest company in Xiamen in terms of market share, and ranked the eighth among 22 foreign P&C insurers in China. For 2015 and beyond, Fubon Property & Casuatly Insurance will deepen franchise development in selective locations, including the provinces of Fujian, Sichuan, Liaoning, and the cities of Xiamen, Chongqing and Dalian. It aims to expand the breadth and depth of services in those high-growth markets.

Fubon Securities reported net income of NT$1.4 billion for 2014, reflecting steady progress in its brokerage and margin lending businesses. Its market share of domestic stock brokerage ranked the third in the industry at 5.73%, compared to 5.58% in the prior year. With strong headway made in re-consigned trading of foreign securities, the volume of re-consigned trading rose 36% year-on-year to NT$89.3 billion. A long-time pioneer in mobile trading, Fubon Securities partnered with Taiwan Mobile to launch “m+ VIP”, value-added services availabe on mobile devices, to attract tech-savvy customers. Electronic trading increased to 48.75% of trades executed by the company in 2014, up from 42% in 2013.

Fubon Bank (China): A Milestone in Regional ExpansionFubon Bank (China), which was previously known as First Sino Bank prior to April 2014, highly complements Fubon’s existing banking network that covers Taiwan, Hong Kong and China. The transaction represents a milestone in the company’s regional expansion. It also provides a vital platform to deliver Fubon’s financial services in the China market.

The network of Fubon Bank (China) consists of 3 branches and 11 sub-branches. Its locations include the economically vibrant Yangtze and Pearl River deltas, and the region along the Bohai Rim. There are nine sub-branches in China’s financial hub of Shanghai. Other locations are in Suzhou (1 branch), Shenzhen (1 branch and 1 sub-branch) and Tianjin (1 branch and 1 sub-branch). The bank relocated a sub-branch in Qingpu District of

Shanghai to Lujiazui in 2014. The sub-branch was upgraded into a flagship branch with new concepts of design. Additionally, the bank received approval to open two more sub-branches, in Changning District and in the free trade zone in Shanghai, as well as a new branch license to operate in Nanjing. The bank plans to start operations in these new locations in 2015.

Fubon Bank (China) underwent a comprehensive business restructuring in 2014. The bank reshaped its retail banking business, launched a state-of-the-art branch showcasing its digital and wealth management capabilities, and became the first Taiwanese bank to offer a Union Pay Debit card in China. The bank’s total assets were RMB$61.6 billion in 2014, up 25% from a year earlier, and net income was RMB$422 million, up 52% compared to the prior year, with both figures setting record highs. The bank’s non-performing loan ratio dropped to 0.89% by the end of 2014.

Hong Kong’s economy grew at a modest pace in 2014. The launch of the Shanghai-Hong Kong Stock Connect program in November 2014 further cemented Hong Kong’s dominant position as an offshore RMB center. Fubon Bank (Hong Kong) reported net income of HK$481 million for the year, representing an increase of 27% and reaching its highest post-crisis level in 2008. Net interest income increased 12% to HK$842 million while non-interest income rose 9% to HK$465 million. Operating expenses increased only 7% to HK$897 million. The bank’s disciplined approach to managing assets quality contributed to a low 0.02% impaired loans ratio. With Xiamen Bank continuing its strong growth momentum, Fubon Bank (Hong Kong) saw its share of profit from investment in Xiamen Bank rise 27% to HK$158 million. In the year ahead, the bank plans to launch new branch design and configuration and an enhanced e-banking platform, offering consumers brand-new banking experience that transcends their expectations

Above-peer Asset Quality Enabled by a Strong Tradition of Risk ManagementIn the process of expanding the company’s operations, Fubon Financial Holdings actively manages risk in order to maintain a strong capital position and above-peer asset quality. The holding company’s capital adequacy ratio was 137.36% in 2014, far above the regulatory requirement of 100%.

In 2014, the Financial Supervisory Commission imposed a minimum 1.5% loan loss provision requirement on real estate loans with the aim of addressing local banks’ exposure to the property sector. Taipei Fubon Bank met the requirement in the same year, well ahead of the regulatory deadline by 2016.

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Richard M. TsaiVice ChairmanFubon Financial Holdings

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Taipei Fubon Bank’s BIS ratio was 13.11% as of the end of 2014, an indication of the bank’s strong capital position along with its steady loan growth. The bank’s non-performing loan ratio was 0.17%, well below the industry average of 0.25%. Its coverage ratio was 788.58% as of the end of the year, far higher than the industry average of 516.38%. In a report released on November 19, 2014, Taiwan Ratings Corp. affirmed Fubon Financial Holdings’ long-term rating as twAA and its short-term rating as twA-1+. Moody’s Investors Service, in its latest ratings note dated December 11, 2014, maintained the outlook for the company at Stable. These affirmations reflect the company’s ability to generate profitability above industry average and superior asset quality.

Setting a Benchmark for Corporate Governance In 2014, Fubon Financial Holdings was named the Most Admired Company among financial holding companies by CommonWealth magazine for the fifth time, and was honored for the third year in a row by the magazine as one of Taiwan’s 10 most admired companies across all sectors. The company’s ranking moved up to the sixth place in 2014. CommonWealth magazine recognized Fubon Financial Holdings for its well-balanced business lines in banking, insurance and securities as well as its diverse and growing base of professional talents. During the same year, Fubon Financial Holdings earned the top ranking in Business Today’s composite performance ranking of financial holding companies.

Fubon Financial Holdings aspires to the highest standards of corporate governance. It is not only Taiwan’s first listed company to have established an independent director system, but also the first domestic financial institution to have over one-third of its board members being independent directors. In 2014, Fubon Financial Holdings and its main subsidiaries—Taipei Fubon Bank, Fubon insurance and Fubon Life—all received the corporate governance system CG6009 advanced assessment certification administered by Taiwan Corporate Governance Association, an achievement unmatched by any other financial holding company. These awards illustrate Fubon Financial Holdings’ efforts and determination in its pursuit of progress in corporate governance.

In 2014, Corporate Governance Asia awarded Fubon Financial Holdings with a Recognition Award for corporate governance for the sixth consecutive year. It also honored Fubon Financial Holdings Chairman Daniel M. Tsai with an Asian Corporate Director Recognition Award for the fif th year running, for his contributions to corporate governance, corporate social responsibility and environmental sustainability.

Transparency is an important cornerstone of corporate governance. Fubon Financial Holdings was honored for Best Investor Relations in Taiwan by Corporate Governance Asia for the fourth year in a row, in recognition of the company’s long-term commitment to investor relations and information transparency.

Meanwhile, Fubon Financial Holdings’ citizenship efforts have attained widespread recognition in Taiwan and abroad. The company constantly lists among the top ten for corporate citizenship in the large company category by CommonWealth magazine. It marked the fourth consecutive year in 2014 that Fubon was honored for Best Corporate Social Responsibility by Corporate Governance Asia, and received a Platinum Award for Corporate Award from The Asset. The company also received a Silver Award in Wealth magazine’s Corporate Social Responsibility Award for Financial Holding Company, and was cited for excellence as a Top Green Brand in the financial sector by Business Next.

Awards for Subsidiaries’ Excellence Fubon Financial Holdings’ subsidiaries garnered numerous awards and accolades from financial media companies in Taiwan and globally in 2014.

Taipei Fubon Bank was honored by Asiamoney as Taiwan’s Best Domestic Private Bank, Best Domestic Provider of FX Serv ices and Best Local Cash Management Bank. FinanceAsia recognized the bank as Best Foreign Exchange Bank in Taiwan, and The Asset named the bank Taiwan’s Best Private Bank. Taipei Fubon Bank was granted BS10012:2009 certification, meeting the British Standards Institution’s standard that specifies the requirements for a personal Information management system. Its premium quality of service allowed the bank second spot for banking and financial services in Global Views monthly’s survey of the service sector. It also won the Best Service Award in Business Today’s annual evaluation of wealth management banks.

In 2014, Fubon Life was named Insurance Company of the Year by World Finance for the third time. The insurer was rated as the second most admired insurer and awarded the top honor at the Golden Service Award in the insurance category by CommonWealth magazine. It took home eight awards, including the Distinguished Profession Award for life insurance companies, at the prestigious Faith, Hope and Love Awards of Insurance, and received six honors at the Dragon and Phoenix Insurance Awards organized by the Risk Management, Insurance & Finance magazine.

Rating Type Rating AgencyCredit Rating

Outlook Effective DateLong-term Short-term

InternationalStandard & Poor’s BBB+ A-2 Stable 2014 / 11 / 18

Moody’s Baa1 Stable 2014 / 12/ 11

Domestic Taiwan Ratings Corp. twAA twA-1+ Stable 2014 / 11 / 19

The ratings of various rating agencies in 2014:

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Fubon Insurance puts a premium on personal information security. The company successfully built a personal information management system that was the first in Taiwan’s financial sector to be BS10012:2009 certified and passed a Privacy Compliance Audit guided by SGS Taiwan. The insurer in 2014 received an Innovation Award at the Asia Insurance Technology Awards co-organized by Asia Insurance Review and Celent. It also garnered seven awards at the Faith, Hope and Love Awards, including the Distinguished Profession Award for Non-Life Insurance Companies.

In 2014, Fubon Securities received the IPO of the Year and Most Improved Brokerage (in terms of the number of warrants issued) awards from the Taiwan Stock Exchange Corp. for its outstanding contribution to the development of Taiwan’s capital market and the economy at large. Wealth magazine awarded the securities firm honors including Best Domestic Equity House, Best Brokerage Service and Best Local Brokerage Public Image in its yearly survey of financial service brands.

Four Foundations Serving as Catalysts for ChangeWan-Tsai Tsai, the late founder of the Fubon Group, was a champion of the spirit of “giving back to society what is reaped from society” throughout his life, whose charitable efforts continue through Fubon’s four major foundations. These foundations have worked together for years to support a diverse range of social services as part of their long-term corporate social responsibility goals. Moreover, with the establishment of Fubon Volunteer Association, employees are offered incentives such as paid leave to encourage their involvement in community projects. Subsidiaries of the group also work collaboratively in order to maximize resources, build synergies and create impact in their shared vision of doing good to society.

Through the Making Friends with Love campaign, the Fubon Charity Foundation has helped many disadvantaged students stay in school by providing them with emergency relief in times of crisis. The campaign raised more than NT$115 million in 2014, benefiting 15,974 students. The Fubon Cultural & Educational Foundation has drawn on Fubon’s core competencies to make financial literary one of its causes since 2012 with its Future Tycoon Outreach Program. During the past year, it enlisted Vivien Hsu, President of Fubon Financial Holdings, and other Fubon executives as instructors to lead financial education sessions at 54 schools. At the sessions, animated videos were played and booklets circulated as tools to impart important messages on managing money. More than 7,000 schoolchildren participated in the program.

The Fubon Art Foundation devotes itself to bringing arts experiences to the everyday life. For nine years, “Very Fun Park: Contemporary Art Exhibition in Taipei’s East District” has embraced the idea of a wall-less museum, providing opportunities for interaction and making arts accessible to everyone. Heading into its 14th year, the Fubon Forum invited 685 speakers and attracted over 95,000 members, with more than 170,000 individuals attending 1,700 classes on life aesthetics. The Taipei Fubon Bank Charity Foundation, meanwhile, is committed to caring for the elderly, enabling people with disabilities to fully realize their talent, and helping the economically disadvantaged create savings.

Further Penetration in Taiwan and Growth in the Region We expect the global economy to expand at a moderate pace in 2015. Weakening demand combined with declining commodities prices could lead to deflationary pressure in certain areas. Central banks in certain markets could take further monetary easing measures. Divergence in economic performance and monetary policy would intensify among the world’s major economies, thus increasing market volatilities and casting uncertainty over global growth. Taiwan, however, should see a pick-up in economic activity as it benefits from a sustained U.S. recovery, signs of China’s economy stabilizing, and falling oil prices that boost domestic consumption. We expect a more promising economic growth outlook in 2015 than in 2014.

Our initiatives and development directions in 2015 for each of the subsidiaries are as follows:

1. Fubon Life: Regarding the product offering, we focus on retirement products to help customers with their retirement planning and risk protection. Products are such as regular-paid policy, medical insurance and long-term care plans. We will also offer customers with more diversified choices for insurance products, such as investment-linked policy tracking bond fund portfolio, discretionary investment accounts, and investment-linked insurance products with monthly distributions. Regarding the channel development, we are implementing a nation-wide development strategy. We aim to transform from an urban-centric business network into a more balanced geographic coverage nationwide. Meanwhile, cloud service, and service through various e-channels, will continue to expand along with further deregulation.

In overseas market, the Vietnam subsidiary will promote new products and continue to enhance the service quality to its clients. In China, applications for subsidiary license are ongoing.

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We are also in the process of setting up a subsidiary in Hong Kong upon regulator’s approval.

2. Taipei Fubon Bank: The bank will set up new branches in overseas, expand the scope of business beyond Taiwan, and build sector and geographic matrixes that support its growth. In institutional banking, Taipei Fubon Bank plans to broaden its customer base of small- and medium-sized enterprises (SME).Asset contribution from these clients would increase. In terms of product offering, we will keep promoting trade-finance products, RMB-denominated products, and bond trading in various currencies, with the goal of balancing sources of revenue from various businesses. In response to the government’s digitalization initiative, the so-called “Bank 3.0”, we will improve the features and functions of the online and mobile banking offerings. Meanwhile, we aim to integrate digital channels with brick-and-mortar branches. By doing so, we can create a seamless multi-channel banking experience for our customers, and optimize the value of bank branches.

3. Fubon Bank (Hong Kong): Key actions for 2015 involve strengthening the bank’s sales force, providing premium financial services tailored to client needs, cultivating new customers and expanding relationships with existing ones. In addition, the bank seeks to identify high-quality loan syndication opportunities and to expand the range of its RMB-denominated investment products and services. The establishment of a dedicated service center for personal loans will enable the bank to further build its personal loan portfolio. More emphasis will be placed on cross selling to increase the bank’s overall sales.

4. Fubon Bank (China): The bank will serve Taiwanese businesses and to develop Chinese clientele. Product offerings focus on cross-border financial services, treasury marketing unit (TMU) service, trade financing, syndicated loans and interbank financing to capture opportunities in strategically important sectors supported by the Chinese government. Another area of focus will be liquidity management and risk control. The bank will also continue building its franchise and applying for new business licenses. Through the work of the Fubon Bank (China) Charity Foundation, the bank is committed to serving the disadvantaged community through the platform, and to bring in positive ripple effects in China.

5. Fubon Insurance: We aim to gain a competitive edge through digital innovation. Initiatives include online applications, online claims processing, and new products for sales through internet channels. For commercial lines, we will focus on stabilizing premium rates, utilize reinsurance to limit the insurer’s

loss from catastrophe risk, and introduce property restoration services to facilitate rapid and effective solutions for clients. Its Chinese subsidiary, Fubon Property & Casualty Insurance, will implement prudent underwriting criteria to ensure overall portfolio quality. The Vietnam subsidiary will increase its exposure to personal insurance while reducing reliance on commercial insurance to achieve a more balanced risk profile.

6. Fubon Securities: Our brokerage sales team will develop skill sets and migrate toward the role of financial planners. This is to support the growth of wealth management and OSU businesses. Meanwhile, the upgrade of online trading platform will be ongoing. We aim to increase the size of online trading transaction continuously. Regarding capital market business, we aim to offer clients with integrated solutions that meet their needs and forge our long-term relationships. Looking beyond Taiwan, Fubon Securities plans to expand its Greater China presence through investment in Huishang Futures, and set up a securities joint venture with a China partner upon regulatory relaxation. These actions mark a major step forward in Fubon Securities’ aspiration to become the best-in-class securities firm in Greater China.

Fubon Financial Holdings and its subsidiaries will continue to leverage synergies and integrate resources across the group in 2015. We will continue to enhance franchise value through comprehensive product offerings and premium-quality services. Meanwhile, we will actively expand our regional presence. All endeavors will bring us closer to our vision: Making Fubon Financial Holdings a first-class financial institution in Asia.

Daniel M. Tsai

Chairman, Fubon Financial Holdings

Richard M. Tsai

Vice Chairman, Fubon Financial Holdings

2014 Annual Report

12

2. Victor Kung Chairman Fubon Insurance

3. Pen-Yuan Cheng Chairman Fubon Life

1. Vivien Hsu President Fubon Financial Holdings

5. Samuel Hsu Chairman Fubon Securities

4. Jerry Harn President Taipei Fubon Bank

6. Howard Lin Vice Chairman Fubon Life

1

6

2

4

7

3

5

8 7. Raymond Lee Chief Executive Officer Fubon Bank (Hong Kong)

8. Dennis Chan President Fubon Bank (China)

2014 Annual Report

13

Fubon Life

Setting New Benchmark for Excellence

2014 was an exceptional year for Fubon Life. Net income

rose 41% to a fresh record of NT$35.367 billion, or NT$8.04

per share, the highest among peers for the sixth year in a

row. First-year and total premiums reached NT$190.97 billion

and NT$425.04 billion, respectively. The company was able

to expand its asset base rapidly with total assets exceeding

NT$2.79 tril l ion at year-end 2014. Moreover, Fubon Life

garnered several awards for its commitment to performance,

professionalism, quality of service and social engagement. The

company was honored with World Finance’s Award for Best

Insurance Company in Taiwan, making it the only Taiwanese

insurer to have received the prestigious award three times. For

the fourth time Fubon Life ranked among the finalists in the life

insurance sector of CommonWealth Magazine’s Golden Service

Awards, and was named the sector leader for its third time.

2014 also marked the fifth consecutive year that it had placed in

the top two spots on the magazine’s Most Admired Companies

list in the insurance category, and it topped the list for its fourth

time. Fubon Life led all its peers with eight awards at the “Faith,

Hope and Love Awards of Insurance.” Apart from industry-wide

recognition, the company attained two-star status in Taipei City

Government’s employee wellness ranking, and was selected

for the fourth straight year as the best company to work for by

finance and insurance graduates.

Insurance 3.0: Better, Faster, Smarter

By leveraging the parent group’s resources and distribution

network, Fubon Life delivers a diverse range of banking,

insurance and investment solutions through agents, banks

and alternative channels. The company’s product offerings

are not only aligned with the changing economic trend, but

also tailored to meet different needs for different stages of life.

Among its most popular products are annuities, long-term

care plans and investment-linked insurance plans with a wide

selection of sub-funds. Considering the health care needs of

an aging population, Fubon Life allows its policyholders to port

the sum insured under their old policies to long-term care plans

or hospital indemnity insurance.

By drawing on the latest technology, Fubon Life has delivered

the promise of Insurance 3.0, allowing customers to apply

for insurance coverage or make changes to their policies

through a mobile app or at the website. Electronic files enable

policyholders to access policy information from their mobile

device at anytime and anywhere. Fubon Life has also pioneered

with its creative combination of personal connection and mobile

technology, where tablet-equipped customer service agents come

out from behind the counter to serve customers waiting in queue.

A Champion of Good Corporate Responsibility

Fubon Life’s operations are underpinned by a commitment

to empowering staff, improving customer experience and

expanding access to distribution channels while providing

security for society. With support from the Fubon Group’s

foundations, the company will continue to champion causes

of education, sports and the disadvantaged in order to

demonstrate exemplary corporate citizenship.

▲ In its 11th year, the Taipei Fubon Marathon has become one of the most spectacular running events in Taiwan with over 100,000 runners participating in 2014. More than NT$22 million has been raised since its inception for charitable causes.

▲ Fubon Life's basketball camps help aboriginal children realize their basketball dreams, with over 70 employees volunteering in the camps.

▼ In 2014, Fubon Life held “Walk for a Cause” speed-walking races and raised over NT$2 million to support those with vision loss.

2014 Annual Report

14

Evolving with Fresh Thinking, Innovative Technologies

In 2014, Taipei Fubon Bank continued to align its organizational

structure, product development, business processes and

information technology systems with changes in market conditions

to ensure that greater operating efficiencies would be achieved.

Thanks to a dedicated staff, the bank delivered strong performance

across its main businesses. Net revenue was NT$39.63 billion, an

18% increase year-over-year. This included net interest income of

NT$17.33 billion and net fee income of NT$10.46 billion, up 10%

and 24% year-over-year, respectively. Net profit after provisions

grew 50% to NT$18.24 billion.

Achieving a Well-Balanced Business Portfolio, Enabling

Sustained Growth

Apart from driving growth across its businesses, Taipei Fubon

Bank expanded its foreign branch network beyond the United

States, Hong Kong and Vietnam with the acquisition of First Sino

Bank, which became its subsidiary and was renamed Fubon

Bank (China). The deal marks the first time a Taiwan bank buys

into a mainland counterpart, further facilitating the delivery of

Taipei Fubon Bank’s service platform for Taiwan corporations

and expanding the variety of its China-related financial services.

The bank topped its private-sector peers in syndicated loans

with a 9.2% market share, according to International Financing

Review. Taipei Fubon Bank continued to be the second-largest

trader of forex derivatives in nominal outstanding value, and it

ranked third in terms of domestic bond-trading volume with a

6.0% market share as of December 2014.

In the retail banking segment, the bank’s sales of structured

products and mutual funds increased 26% and 15% compared

to the prior year, separately. Residential mortgage balances grew

10% despite the sentiment within the housing market tempered

by government’s efforts to hold down property prices. Credit

card spending rose 11% to NT$156.8 billion, with average

monthly spending per active card nearing NT$8,000, the highest

among Taiwan’s top 6 card issuers.

The success of Taipei Fubon Bank’s business has led to

numerous recognitions and accolades by the financial industry’s

leading trade publications, including Asiamoney, Finance Asia

and the Asset.

Being Customer-Oriented, Adding Value to Services

Looking at the year ahead, Taipei Fubon Bank will employ

rigorous risk controls in response to the volatile economic and

market environments. Key priorities for the corporate segment

will include driving asset growth, enhancing return on assets and

developing innovative products to meet client demand arising

from a possible interest rate hike. On the retail banking side, the

bank will introduce a number of information system projects,

broadening its set of online and mobile banking capabilities

so as to integrate digital channels and branch networks into

a seamless service. Furthermore, Taipei Fubon Bank will drive

greater integration and partnership between its units in Taiwan

and China, with its strengthened regional presence supporting

its aspiration to be one of the leading banks in Asia.

Taipei Fubon Bank

▲ The Bank teaches children about budgeting and managing money through its Budding Millionaire Money Management Camp.

▲ The relocation and reopening of Huajiang branch in its new location was celebrated in 2014.

▲

Taipei Fubon Bank lead-managed a US$135-million syndicated term loan for China Lesso Group Holdings Limited in 2014.

2014 Annual Report

15

Fubon Bank (Hong Kong)

Prudent Business Direction delivers Strong PerformanceFubon Bank (Hong Kong) Limited (“the Bank”) registered a net profit of HK$481 million for the year ended 31 December 2014, representing an increase of 27% as compared with 2013.

Net interest income increased by 12% to HK$842 million in 2014. We made good progress in optimizing the loan portfolio mix and delivered solid growth in corporate and commercial lending businesses. This mitigated the significantly higher deposit costs during the first half of the year. Non-interest income rose by 9% to HK$465 million, in which credit related and trade finance fee income surged by 34%. Operating income rose by 11% year-on-year to HK$1,306 million while operating expenses increased by only 7% to HK$897 million. Cost-to-income ratio declined to 68.70%.

The Bank continued to exercise prudent controls on asset quality. As a result, the impaired loans ratio remained at a very low level of 0.02%. There was a net charge of HK$16 million for impairment losses on advances to customers in 2014, other impairment charges remained low at HK$10 million. Xiamen Bank continued its strong performance and delivered good results in 2014. The Bank’s share of profits from Xiamen Bank reached a record high of HK$158 million, representing a 27% growth from 2013.

Total assets rose by HK$12 billion to HK$84 billion as of 31 December 2014. We managed to achieve a 16% increase in the Bank’s loan portfolio in 2014 and customer deposits also increased by 8%. Loan to deposit ratio remained at a very comfortable level of 75.09%.

To further strengthen Tier 1 capital and to allow greater flexibility in business development, Fubon Financial injected a further HK$1.5 billion in the form of common equity into the Bank in June 2014. Our total capital ratio and Tier 1 capital ratio increased to 17.96% and 12.65% respectively as at 31 December 2014. Return on average assets edged up to 0.62% and return on average equity also rose to 5.18% in 2014.

Creating New Banking Experience 2014 marked the 10th anniversary of the Bank as a member of Fubon Financial. During the year, a series of celebratory activities and promotional campaigns were launched under the theme of “Serving You with Heart”. To strategically redeploy our marketing resources and realign our business focuses, we restructured our corporate and institutional banking units to heighten our focus on local corporate. In retail banking, we have upgraded our Tsuen Wan Branch to a flagship branch with the opening of the Bank’s first Personal Loan Centre and a new Securities Services Centre.

Looking ahead, we will continue to play an important role in the Fubon Group’s Greater China development strategy by providing critical cross-border services to the Group’s Mainland and Taiwanese customers. At the same time, we will continue to focus on expanding our local franchise by improving our service delivery capabilities. This year, we will reinforce our service proposition for affluent retail customers with the launch of new branch design and configuration and an enhanced e-banking platform. We will continue our service-oriented approach and will provide our customers with safe and high quality financial service. We are committed to create a new banking experience for our customers.

▲ Fubon Bank (Hong Kong) launched a series of celebratory anniversary activities and promotional campaign carrying the theme “Serving You with Heart”, including a new corporate advertising campaign.

▲ The series highlight was Fubon Bank (Hong Kong)’s 10th Anniversary Cocktail Reception which was well attended by business partners and customers.

▲ Opening of Fubon Bank Personal Loan Centre and Tsuen Wan Securities Services Centre at Tsuen Wan Branch.

2014 Annual Report

16

Fubon Bank (China)

In 2014, China’s economy experienced a transition to a “new normalcy,” and Chinese banks faced heightened uncertainty and challenges amid concerns about the sustainability of China’s growth model, the emergence of online banking and reforms of state-owned enterprises.

Reshaping Business to Achieve Breakthrough GrowthFacing the complex and competitive operating environment, Fubon Bank (China) made several major changes to reshape its business. First, it moved toward a customer-focused organization and away from its former structure that comprised a head office and various branch offices. Second, it enhanced risk capabilities, streamlined business processes, upgraded its technology infrastructure and improved efficiency. Third, it restructured the consumer banking business, put into place an electronic platform, launched a flagship branch showcasing the bank’s digital banking and wealth management capabilities, and became the first Taiwan bank to offer a UnionPay Debit Card in China.

The bank’s actions to replace higher-risk assets, diversify sources of funding and improve liquidity management have positively impacted its results. At December 31, 2014, the bank’s total assets were 61.6 billion yuan, 25% higher than a year ago. Net profit increased 52% to 422 million yuan. Both assets and net profit reached their highest levels since the bank’s incorporation. Meanwhile, non-performing loan ratio dropped to 0.89% at year end from 1.45% in the year beginning.

Fubon Bank (China) has 14 offices in economically vibrant markets including the Yangtze River Delta, the Pearl River

Delta and the region around Bo Sea in North China, where large communities of Taiwanese-owned businesses are concentrated. In 2014, the bank relocated a sub-branch in Qingpu District of Shanghai to Lujiazui and upgraded it into a full-service branch. It also received approval to open two sub-branches in Changning District and the free trade zone in Shanghai as well as a branch in Nanjing, all of which are scheduled to start operations in 2015.

Embarking on a Path to TransformationLooking into 2015, Fubon Bank (China) will remain focused on its core business of serving Taiwan corporations. It will also reach out to mainland Chinese clients through its offerings of cross-border financial services, treasury management, trade financing, syndicated loans and interbank financing, capturing opportunities in strategically important sectors supported by Chinese government policies. In staff development, Fubon Bank (China) will accelerate its recruitment and training of local talent in order to build a strong sales team. On the front of infrastructure investment, the bank will optimize mid- and back-of f ice banking processes and upgrade information technology systems to enhance its big data analytics and remote administration capabilities. Risk management will be another area of focus, where the bank plans to strengthen liquidity management and augment risk oversight. While Fubon Bank (China) continues to build its franchise, it will not overlook its responsibility as a corporate citizen; through Fubon Bank (China) Charity Foundation, which provides support to those from disadvantaged backgrounds, the bank aims to become a catalyst for change in the communities it serves.

▲ Fubon Bank (China) accelerates its transition to a more competitive business model, making a major step toward its goal of becoming the best financial service provider across Taiwan, China and Hong Kong.

▲ The flagship branch of Fubon Bank (China) in Lujiazui, Shanghai was launched in November 2014.

2014 Annual Report

17

Fubon Insurance

Enhancing Customer Experience through Innovation, Pursuing Excellence in PerformanceIn 2014, Fubon Insurance wrote direct premiums of NT$29.2 billion, and its 22% market share topped the industry for the 33rd consecutive year. The company’s prudent underwriting practices and strict cost controls resulted in underwriting profit of NT$1.75 billion, net profit of NT$2.8 billion and earnings per share of NT$8.9, in line with investor expectations. The well-rounded performance was a testament to the strength of Fubon Insurance’s business model, upon which it has depended to deliver growth and to protect the interests of its policyholders.

Over the years, Fubon Insurance has won wide acclaim for its commitment to innovative services that anticipate, meet and exceed client expectations. Riding the digital wave, the company has pioneered with a mobile application platform and led the market with “instant assistance” service, with the mobile technology making claims process easier as well as ensuring timely resolutions for policyholders. As a result, it was honored in the innovation category of the Asia Insurance Technology Awards. In November 2014, Fubon Insurance became the first property and casualty insurer to have received approval for providing coverage online. Having gained a key competitive advantage by investing in the Internet, the company aims to continue delivering flexible, diverse and user-friendly online services to policyholders.

Expanding Global Footprint, Making Positive ImpactAbroad, Fubon Property & Casualty Insurance, a mainland subsidiary of Fubon Insurance, has 31 offices that span the cities of Xiamen, Chongqing, Liaoning and Dalian, with Fujian

province serving as a stronghold in its development. The insurer wrote 690 million yuan of direct premiums in 2014, achieving an impressive growth of 80% year-on-year. It claimed the sixth-largest market share in Xiamen, where it is headquartered, and ranked eighth among China’s 22 foreign property and casulty insurers. By drawing on expertise built over decades in Taiwan and with the delivery of service rooted in a deep appreciation of the local communities, Fubon Property & Casualty Insurance garnered widespread acknowledgement from the local authority, customers and partners.

Founded in 2008, Fubon Insurance’s subsidiary in Vietnam—Fubon Insurance (Vietnam) Co. Ltd.—has head office in Ho Chi Minh City and branches in Hanoi, Binh Duong and Danang, forming a service network that covers the northern, central and southern parts of the country. The company wrote 191.1 billion dong of direct premiums in 2014, a 19% increase year-on-year. Fubon Insurance (Vietnam) provides complete personal and property protection to Vietnam’s companies, individuals and workers with the same commitment displayed when servicing the needs of Taiwanese business people and corporations.

Adhering to Principles of Sustainable Development, Fulfilling Social ResponsibilityIn the year ahead, Fubon Insurance will stay true to its core values of integrity, sincerity, professionalism and innovation. It will also reinforce its commitment to sustainability with the upmost comprehensive product offerings, through the delivery of higher-quality, more-comprehensive coverage, and by creating a more satisfactory service experience—as part of its mission to protect individuals, families and businesses against risks and losses.

▲ Chairman Victor Kung gives insight on how to enhance return on investment through outsourcing amid changing global economic conditions at the 2014 EAIC.

▲

Fubon Insurance dominated the 2014 Faith, Hope, and Love Awards of Insurance with seven distinguished awards and three recognitions of excellence. President Steve T.H. Chen was honored with the Best Insurance Leader Award.

▼ A marathon fair promoting micro-insurance policies raises people’s awareness of micro-insurance in a fun, engaging way.

2014 Annual Report

18

Fubon Securities

A Foundation Built upon ProfessionalismFubon Securities delivered strong performances across all of its businesses in 2014, further cementing its leadership pos i t ion. The company was ranked the th i rd la rgest domestic stock brokerage firm with a 5.73% market share. Re-cosigned trading of stocks was NT$89.3 billion, up 36% year-over-year. The number of warrants offered by Fubon Securities increased 50% to 2,099 in the amount of NT$260 billion to represent 9.4% of the market. On the underwriting side, Fubon Securities advised on the IPO for Aerospace Industrial Development Corp., with the deal receiving the IPO of the Year Award from the Taiwan Stock Exchange.

Fubon Asset Management leads Taiwan market to issue the first direct Shanghai A share investment ETF, Fubon SSE 180 ETF, underscoring the company’s commitment to product innovation. An expanded product line-up drove assets of publicly offered funds up 25% to NT$83.8 billion, and total assets under management, which include privately placed funds and discretionary mandates, reached NT$125.5 billion.

Enhanced ServiceFubon Securities moved ahead of its peers with the launches of custody service for foreign institutional investors and OSU business so as to deliver integrated equities trading services in the best one-stop shop style. The company renewed its focus on the bond business with a wider range of fixed income strategies available to investors. In derivatives, more warrants were offered based on securities with attractive r isk /reward prof i les, such as Fubon Shangha i Stock Exchange 180 Leveraged 2X Index ETF. In mobile trading,

Fubon Securities continued to provide investors an easy, convenient way to trade and manage account information through M+ VIP accounts on Taiwan Mobile’s M+ mobile network. In 2014, electronic trades accounted for 42.5% of all trades brokered by company, the highest percentage of any securities firm in Taiwan. At Fubon Futures, a platform for strategic advisory services was in place to facil itate informed decision-making.

Pursuing Leadership in Greater ChinaGoing forward, the development of Fubon Securities will be underpinned by a focus on sustainable growth, structural adjustments and business optimization. It will also make a greater push into the wealth management business, with plans to add bonds and structured products to the range of investable assets for i ts money trusts. Fubon Investment Service will integrate its research capabilities that exist across China, Hong Kong and Taiwan to assist with the trading and broking of China- and Hong Kong-listed stocks, while Fubon Asset Management will offer more China A-share funds to capitalize on growing demand. As for Fubon Securities, after major breakthroughs last year in expanding footprint in the Greater China market, it will seek to form a mainland Chinese joint venture should regulations allow. Developed with the needs of today’s investors in mind and supported by capital market subsidiaries across geographies, Fubon Securities’ comprehensive suite of trading and investment consulting services well-positions the company to achieve its goal of being a recognized leader in the Greater China region.

▲ President Leo Cheng receives a trophy from William Tseng, chairman of the Financial Supervisory Commission, and Hsieh Chin-ho, publisher of Wealth Magazine. Fubon Securities was honored as winner in three categories in Wealth Magazine’s 2014 Survey of Financial Service Brands.

▲ A pioneer in mobile trading, Fubon Securities launched valued-added mobile services for its “M+” VIP account holders.

▲

Known for its charitable giving, Fubon Securities in 2014 treated children from Haiduan Township to a fun-filled tour of Taipei City.

2014 Annual Report

19

Investment Management Group

Fubon Life & Fubon Insurance

Navigating Market Volatility

Market volatility was high at certain times in 2014 amid the end

of the U.S. Fed’s quantitative easing, geopolitical tensions and

the uneven pace of economic recovery in major economies.

Nonetheless, the global markets began a path to greater

stability as the U.S. recovery gained ground, the Fed provided

more clarity about its policy, and ECB and BOJ stepped up

monetary easing, thereby creating favorable liquidity conditions

for growth. Navigating the fast-changing tides of the markets,

investment teams of Fubon Life and Fubon Insurance identified

opportunities and delivered robust performance by investing in

a wide variety of financial instruments. Fubon Life saw its year-

end balance of usable capital increase 15% to NT$2.57 trillion,

and return on investment in the year reached an all-time high of

NT$109.9 billion. At Fubon Insurance, usable capital grew at a

steady rate, with year-end balance arriving at NT$68.5 billion.

On the policy front, the world should shift into a multi-track

trajectory in fiscal and monetary policy heading into 2015, given

increasingly diverging trends in economic growth of developed

countries and emerging economies. The flow of hot money will

be under spotlight as both geopolitical situations and the U.S.

Fed’s monetary policy propel money flow in and out of financial

markets in search for safety, leading to heightened volatility in

equity, foreign currency markets and fixed-income securities.

Weaker oil prices are expected to impact petroleum exporting

countries and related industries while also putting down

inflation prospects around the world, thus adding uncertainty to

the global growth outlook with far-reaching implications.

In 2015, the global economy should continue to grow at a

moderate pace. The investment teams of Fubon Life and Fubon

Insurance, whose balance sheets are supported by sufficient

and strong cash flows, look to invest in high yield stocks, blue

chips and fixed-income securities with higher ratings both

domestically and abroad while strengthening the function of

asset-liability management. They will also seek high-quality real

estate assets to take advantage of the easing of restrictions

for investing in overseas properties and to sustain long-term

returns for the companies.

Direct Investment

Unearthing Value

The Group’s direct investment division continues to explore

the possibility of establishing new businesses through joint

ventures or investing in high-potential unlisted companies in

the healthcare, information technology, cultural and creative,

renewable energy, infrastructure and financial industries. It

is aiming to capture opportunities that arise from Taiwan’s

ongoing economic transformation.

The group finished the year 2014 with direct investment valued

at NT$8.863 billion, including NT$3.391 billion in infrastructure;

NT$962 million in cultural and creative industries and media

channels; NT$1.386 billion in healthcare; NT$660 million in

energy and environmental engineering; NT$236 million in IT

and e-commerce; NT$1.399 billion in financials; NT$501 million

in venture capital; NT$305 million in food & beverage; and

NT$23 million in sports and entertainment.

▲

Final beam is raised at a topping-out ceremony for a new hotel in prime location of Taipei City.

▲ The signing of a superficies rights agreement for the A25 land plot in Xinyi District of Taipei City.

2014 Annual Report

20

Board of Directors

Chairman

Daniel M. Tsai

Fubon Financial Holdings

Vice Chairman

Richard M. Tsai

Fubon Financial Holdings

Independent Directors

Louis Cheung

Managing Partner

Boyu Capital

Ming-Je Tang

Professor

Department and Graduate Institute

of International Business,

National Taiwan University

Directors

Jain-Rong Su

Commissioner

Department of Finance,

Taipei City Government

Fang-Ling Yang

Commissioner

Department of Legal Affairs,

Taipei City Government

Hsiu-Chu Liang

Commissioner

Department of Budget,

Accounting and Statistics

Taipei City Government

Victor Kung

Chairman

Fubon Insurance

Peng-Yuan Cheng

Chairman

Fubon Life

Samuel Hsu

Chairman

Fubon Securities

Jerry Harn

President

Taipei Fubon Bank

Management Committee

Daniel M. Tsai

Chairman

Fubon Financial Holdings

Richard M. Tsai

Vice Chairman

Fubon Financial Holdings

Vivien Hsu

President

Fubon Financial Holdings

Victor Kung

Chairman

Fubon Insurance

Pen-Yuan Cheng

Chairman

Fubon Life

Jerry Harn

President

Taipei Fubon Bank

Samuel Hsu

Chairman

Fubon Securities

Howard Lin

Vice Chairman

Fubon Life

Raymond Lee

Chief Executive Officer

Fubon Bank (Hong Kong)

Dennis Chan

President

Fubon Bank (China)

(Information above as of end of February 2015)

2014 Annual Report

21

Dynamic Fubon, Creating a Common GoodSpreading Love—One Step at a Time

Fubon Financial Holdings acts as a “social catalyst,” embracing corporate social responsibility. Through ethical management practices and forward thinking, we have emerged as a positive force in the financial sector, committed to creating a common good.

2014 Annual Report

22

Fubon Charity FoundationFubon Cultural and Educational FoundationFubon Art FoundationTaipei Fubon Bank Charity Foundation

2014 Annual Report

23

▲ The “Sending Knowledge to Tribes – Mobile Library” initiative, fosters a love of reading in children.

▲ The Annual Fubon Volunteer Day concludes with great success.

Fubon Charity Foundation Fubon Cultural & Educational Foundation

As the Fubon Group’s first philanthropic arm, the Fubon Charity

Foundation serves as one of the group’s important platforms

through which to fulfill its corporate social responsibility.

At the Forefront of Corporate Citizenship

Highlights of the foundation’s work in 2014 include:

“Making Fr iends with Love”: The campa ign ra ised

NT$115,013,400 during the year, helping more than 15,974

students continue their studies.

“Exchanging Points for Love”: The campaign raised

NT$1,939,250 in funds that were donated to 13 social charities.

“Emergency Relief Fund”: The fund lent support to 5,752

individuals and families with grants of NT$18,255,506.

“The Annual Fubon Volunteer Day”: The Fubon Group held

its first-ever annual day of volunteer service, mobilizing 965

employees as volunteers escorting disadvantaged children in

two Fubon-sponsored field trips.

“Give Blood Now!”: The week-long event resulted in donation

of 4,397 units of blood, or 1.1 million c.c., at 26 group locations

in 17 cities and counties; the foundation was honored for

the sixth consecutive year by the Taiwan Blood Services

Foundation for its outstanding contribution.

“Fubon Volunteer Association”: 2,461 members contributed

15,564 hours of service.

The Fubon Charity Foundation is committed to exploring ways

to make a meaningful and lasting impact on the communities

it serves. In 2014, the Ministry of Health and Welfare awarded

the foundation an “excellent” rating in recognition of its work for

social change. Going forward, the foundation will remain at the

forefront of philanthropy, spreading love and care to wherever

they are needed.

The Fubon Cultural & Educational Foundation has guided teenagers on their journey of life for many years, helping them harness their potential and develop a global mindset. In 2014, the foundation’s four areas of focus were the “Young Voice” workshops, parental-child communication, financial literacy education and aboriginal education initiative.

The “Young Voice” workshops empower young people to find their voice and express their opinion on public matters through creative work. In 2014, screenings of short films and exhibitions of photography were held in Taipei and Kaohsiung to showcase the talent of young workshop participants, collectively attracting 36,000 visitors.

“Let’s Talk about Media,” a radio show co-produced by the foundation and the Taipei-based Broadcasting Corporation of China, serves as a vital platform for dialogue between parents and children. The show garnered two Golden Bell Broadcasting Award nominations for 2014. A video channel that turns the program’s radio broadcasts into Internet programming has consistently averaged daily viewers of 10,000.

In addition, the “Future Tycoon Outreach Program” again enlisted Fubon executives including Vivian Hsu, president of Fubon Financial Holdings, and Morris Huang, executive vice president of Taipei Fubon Bank, as instructors to lead financial education sessions at 54 schools. At the sessions, animated videos were played and booklets circulated as tools to impart important messages on managing money. Almost 7,000 schoolchildren participated in the program during the year.

As part of the foundation’s “Sending Knowledge to Tribes—Mobile Library” initiative to help children in remote aboriginal communities develop an appreciation for reading, book buses crisscrossed the country, with volunteers holding story-reading sessions in a vibrant, engaging way. To date, more than 170 elementary schools have benefited from the mobile library service.

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▲ Japanese architect Kengo Kuma at the Fubon Forum in 2014.

▲ The three-year “Poverty-busting Savings Plans” have concluded with encouraging results.

Fubon Art Foundation Taipei Fubon BankCharity Foundation

Since it was established in 1997, Fubon Art Foundation has

focused on the importance of “sharing” art.

For 9 years, “Very Fun Park” has supported the concept of

the “museum without walls”, using it to bring together a wide

range of contemporary art forms and display works of art on

the streets of Taipei City. In 2014, the foundation identified the

word “Embrace” as key to living a positive life and showed

pieces at 20 locations in the Songshan Cultural and Creative

Park. A total of 28 artists/groups from around the world took

part, showcasing the possibilities created when art and space

engage in dialogue.

Over the past 14 years the Fubon Forum has invited 685

speakers from Taiwan and overseas and attracted more

than 95,000 members, with 170,000 individuals attending

1,700 life aesthetics classes. In 2014, 26 free lectures and

46 fee-charging classes were held, highlighting the growing

international reputation of the lectures.

Over the next year, as “Very Fun Park” moves into its 10th

year, the Fubon Art Foundation will work to establish a digital

plat form and digitize the Fubon lectures through cloud

technology. We will also continue our work with Eastern

District “Mapper” magazine, “Fun Art Radio” show and the

development of artist authorized gifts presented by the Fubon

Group, as we strive to make art an integral part of daily and we

also believed art is commitment to life.

Since its inception, the Taipei Fubon Bank Charity Foundation

has been dedicated to the cause and care of the elderly,

the physically challenged and economically disadvantaged.

The foundation has been rated as “excel lent” for four

consecutive years in the government’s evaluation of charitable

organizations.

In 2014, as part of its continued support for less-resourceful

elderly people, the foundation offered health visits and home-

delivered meals to seniors living alone on Orchid Island on the

weekend and holidays. It also lent assistance to those who care

full-time for family members with dementia. A total of 178 “Giving

Family Caregivers a Breather” excursions were organized

during the year, giving the participating 3,730 caregivers an

opportunity to get together to share support and information.

In addition, two “Poverty-busting Savings Plans,” programs

that match savings made by students from low-income families

dollar-for-dollar, were concluded in Chiayi City and Taitung

County. To date, close to 300 students have achieved greater

self-reliance through regular savings.

The “All Love Orchestra,” composed of past winners of

the Taipei Fubon Bank Artistic Award for Disabled Talents,

continued to perform around the country, with two large

concerts held at National Concert Hall and the Chung Shan

Hall, in particular, stirring the audience to rousing applause.

The ensemble also shared inspiring stories about how they had

overcome physical disabilities with courage and determination.

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Creating Wealth for the Nation, Bringing Prosperity to the People

A Tribute to Fubon Group Founder WAN-TSAI TSAI.

The Honorable Mr. Wan-Tsai Tsai, the founder of the Fubon

Group, passed away peacefully with his family by his side on

October 5, 2014. He was 86.

Mr. Tsa i ep i tom ized the down-to-ea r th ha rdwork ing

businessman. Starting with a nascent 10-staff property and

casualty insurance operation, he built a peerless financial

empire with the most comprehensive service and product

por t fol io in Taiwan, and cultivated diversif ied business

interests ranging from real-estate investments to holdings in

the telecommunications, multi-media, and cultural and arts

industries. Mr. Tsai personally selected the name “Fubon” for

the company he had built, which in Chinese reflects his vision

of a prosperous nation and harmonious society.

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Mr. Tsai was a champion of public service and an enthusiastic

philanthropist. He was a three-term legislator, advisor to the

Executive Yuan and senior advisor to the president, and held

leadership roles in numerous civic groups, such as the Friends

of Police Association of R.O.C (Taiwan), Taipei Municipal

Athletics Federation, and Taipei Chamber of Commerce. Mr. Tsai

envisioned Fubon as an engine of social change, and charged

the group’s six philanthropic foundations with a long-term

mandate to support worthwhile social and charitable causes.

At home as well as in business, Mr. Tsai was a gentle humble

man who personified the virtues of “Integrity, Diligence and

Modesty” and treated others with due fairness and consideration.

Under his leadership, Mr. Tsai and his two heirs, Daniel M. Tsai

and Richard M. Tsai, complemented and supported each other

and forged an indelible father-and-son kinship that not only grew

deeper and stronger in time but also anchored the phenomenal

growth of the conglomerate they nurtured together. The public’s

regard of Mr. Tsai as the foremost authority in home governance

as well as corporate governance.

A wise man is gone, but his spirit and legacy remain. Mr. Tsai

will be long remembered as a man of grace and compassion

as well as one of the great forces behind Taiwan’s economic

progress. His legacy will inspire and guide the Fubon Group

in its ongoing quest to be a leading financial institution in Asia

and a positive force in the promotion of worthwhile civic and

philanthropic causes.

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Fubon Financial Holding Co., Ltd.Year of Founding: Dec. 2001Chairman: Daniel M. TsaiPresident: Vivien HsuCapital: NT$102.34 Billion237 Section 1 Jianguo S RoadTaipei TaiwanTe l : (8862) 6636-6636Fax: (8862) 6636-0111www.fubon.com

Fubon Life Insurance Co., Ltd.Year of Founding: July 1987Chairman: Pen-Yuan ChengPresident: Benson ChenCapital: NT$43.98 Billion108 Section 1 Dunhua S RoadTaipei TaiwanTe l : (8862) 8771-6699Fax: (8862) 8809-8889www.fubon.com

* Aetna Life Insurance Company of America,Taiwan Branch was established in 1987 and then bought by ING Group in 2000 and renamed ING Life Taiwan. The branch became an ING Life subsidiary in 2006, which was later bought by the Fubon Group. Fubon Life was launched in 1993. The two insurers formally merged in 2009.

Taipei Fubon Commercial BankCo., Ltd.Year of Founding: April 1969Chairman: Daniel M. TsaiPresident: Jerry HarnCapital: NT$89.18 Billion169 Section 4 Ren Ai RoadTaipei TaiwanTe l : (8862) 2771-6699Fax: (8862) 6606-9398www.fubon.com

Fubon Bank (Hong Kong) LimitedYear of Founding: Jan. 1970Chairman: Richard M. TsaiChief Executive Officer: Raymond LeeCapital: NT$19.76 Billion38 Des Voeux Road Central, Hong KongTe l : (852) 2842-6222Fax: (852) 2810-1483www.fubonbank.com.hk

Fubon Bank (China) Co., Ltd.Year of Founding: March 1997Chairman: Pei Li HongPresident: Dennis ChanCapital: 2.1 Billion (RMB)1-3F, 5F, 18-20F, Oriental Financial Plaza Tower A, 1168 Century Avenue, Pudong, ShanghaiTe l : 86-21-2061 9888Fax: 86-21-5840 9900www.fubonchina.com

Fubon Insurance Co., Ltd.Year of Founding: April 1961Chairman: Victor Kung President: Steve T.H. ChenCapital: NT$3.18 Billion237 Section 1 Jianguo S RoadTaipei TaiwanTe l : (8862) 2706-7890Fax: (8862) 2325-4723www.fubon.com

Fubon Securities Co., Ltd.Year of Founding: July 1988Chairman: Samuel HsuPresident: Leo ChengCapital: NT$16.6 Billion169 Section 4 Ren Ai RoadTaipei TaiwanTe l : (8862) 8771-6888Fax: (8862) 8771-6636www.fubon.com

Fubon Securities InvestmentServices Co., Ltd.Year of Founding: May 1987Chairman: Philip HuPresident: Charles HsiaoCapital: NT$300 Million108 Section 1 Dunhua S RoadTaipei TaiwanTe l : (8862) 2781-5995Fax: (8862) 2773-5601www.fubon.com

Fubon Futures Co., Ltd.Year of Founding: May 1998Chairman: Raymond YangPresident: Phoebe ChangCapital: NT$1 Billion9 Xiangyang Road Taipei TaiwanTe l : (8862) 2388-2626Fax: (8862) 2370-1110www.fubon.com

Fubon Asset Management Co., Ltd.Year of Founding: Sep. 1992Chairman: Gang ShyyPresident: Henry LinCapital: NT$1.92 Billion108 Section 1 Dunhua S RoadTaipei TaiwanTe l : (8862) 8771-6688Fax: (8862) 8771-6788www.fubon.com

Fubon Direct Marketing Co., Ltd.Year of Founding: Aug. 1997Chairman: Thomas LiangPresident: Alex YehCapital: NT$145 Million9 Xiangyang Road Taipei TaiwanTe l : (8862) 2370-5199Fax: (8862) 2370-5100www.fubon.com

Fubon Financial Holding Venture Capital Corp.Year of Founding: Oct. 2003Chairman: Richard M. TsaiPresident: Chu-Hsin LeeCapital: NT$2.73 Billion108 Section 1 Dunhua S RoadTaipei TaiwanTe l : (8862) 6606-9088Fax: (8862) 8771-4697www.fubon.com

Fubon Sports & Entertainment Co., Ltd.Year of Founding: Sep. 2007Chairman: Richard M. TsaiPresident: Chris TsaiCapital: NT$20 Million108 Section 1 Dunhua S Road Taipei TaiwanTel: (8862)6606-9088Fax: (8862)8771-4697www.fubon.com

Fubon AMC Co., Ltd.Year of Founding: Aug. 2004Chairman: Jerry Harn President: Philip ChaoCapital: NT$2.5 Billion50 Section 2 Zhongshan N RoadTaipei TaiwanTe l : (8862) 6618-0588Fax: (8862) 6608-0166www.fubon.com

(Information above as of end of February 2015)

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(Information above as of end of February 2015)Fubon annual report is printed on heavy-metal-free paper and with eco-friendly soybean-based ink.

Copyright © 2015 Fubon Financial Holding Co., Ltd. All Rights Reserved. Printed in Taiwan 3/2015.