Contents

Financial Highlights 01

Letter to Shareholders 02

Company Profile 08

The Organization 16

Business Review 24

Corporate Social Responsibility 38

Financial Review 46

Internal Control Representation 61

Dividend Policy and Earnings Distribution 63

01

In Million, Except Per Share Data 2009 CONSOLIDATED 2008 CONSOLIDATED

ITEM NTD USD(2) NTD USD(2)

FOR THE YEAR

Income before Income Tax 3,756 117 16,362 498

Net Income 2,431 76 14,707 448

AT THE YEAR END

Total Assets 1,760,586 54,967 1,725,505 52,511

Stockholders’ Equity 149,725 4,675 140,191 4,266

PER SHARE

Earnings per share-before income tax 0.29 0.01 1.68 0.05

Earnings per share-after income tax 0.15 0.00 1.51 0.05

Stockholders’ Equity per Share-common stock 12.84 (4) 0.40 12.06 (3) 0.37

Group Capital Adequacy Ratio 131.75% 128.29%

Return on Equity-after income tax 1.21% 12.43%

Return on Assets-after income tax 1.50% 9.10%

2009 Annual Report

Financial Highlights

1. U.S. Dollars amounts are converted at the prevailing exchange rate on Dec. 31, 2008 of NT$ 32.86=US$ 1

2. U.S. Dollars amounts are converted at the prevailing exchange rate on Dec. 31, 2009 of NT$ 32.03=US$ 1

3. (140,191,166-30,000,000-1,050,000)/9,052,079

4. (149,725,207-30,000,000-1,050,000)/9,241,518

This annual report is a simplified version of its full content.

Please refer to the annual report in Chinese or visit our company website

at www.chinatrustgroup.com.tw

for complete discourse required by the regulation.

A year of protecting your wealth and building your finance.

Letter to Shareholders

2009 Annual Report04

Dear Shareholders:

In 2009, the world economy continued to suffer the

impact of the global financial crisis; the financial services

industry was particularly hard hit with a number of

financial institutions around the world going under. In

the second half of the year, there were initial signs that

economic situation was beginning to recover. And,

there was general consensus that the 2010 outlook

was a bit more optimistic. In Asia, specifically, most

observers predict growth and recovery during 2010

– with the region coming out of recession, attracting

capital inflow and pushing ahead of other regions

around the world.

On the domestic front, interest spreads were

constrained in 2009, as monetary policy remained

loose. This situation, however, is expected to

improve in the near future, in line with a gradual

recovery of the general economy. Further, on

November 16th, Taiwan and China signed a number

of memoranda of understanding on financial

supervision, ushering in a new era of cross-straits

financial dealings. Chinatrust Financial Holding Co.

Ltd. (the “Company” or “CFHC”) seeks to become

one of the first financial institutions from Taiwan

permitted to set up operations on the mainland.

The prospective mainland outlets, in combination

with CFHC’s already comprehensive international

network, will provide Taiwanese businesses with

truly global reach and partner support to facilitate

their expansion internationally. And this in turn will

continue to provide strong growth prospects for

CFHC in the years ahead.

Looking ahead, as international competition

intensifies, CFHC will continue to focus on its

banking-centered strategy – seeking to satisfy the

complete range of customers’ banking needs with

a full spectrum of products and services across the

network. CFHC will continue to build on its strong

position of sound asset quality and its institutional

core values - professionalism, trustworthy and

caring. Moreover, CFHC seeks to become the

leading international Chinese bank – a Taiwan

Champion, a Greater China and Asian Leader and a

North American Innovator.

Setting up a Singapore Branch – Building a Presence in an Asian Financial Center

In July 2009, CFHC opened its Singapore branch.

The branch represents CFHC’s 75th overseas

outlet; joining the company’s other Asian branches

and subsidiaries in Indonesia, Hong Kong,

Japan, Vietnam, the Philippines and India to

provide customers with both regional reach and

a comprehensive range of services to meet their

regional expansion requirements.

Equally, CFHC is poised to make significant inroads

into mainland China - linking its China business into

its substantial network throughout Asia and beyond.

Looking forward, CFHC continues to be well placed

to retain its leadership in the broadly defined and

fast growing “Greater China” market – integrating

Taiwan, Hong Kong, China and Vietnam, and,

importantly, providing the footprint to effectively link

Greater China and North America going forward.

Organization Structure

As of December 2009, CFHC had seven subsidiaries;

China Trust Commercial Bank, Chinatrust Securities

Co., Chinatrust Insurance Brokers Co., Chinatrust

Venture Capital Corp., Chinatrust Asset Management

Co., Chinatrust Security Co., and Taiwan Lottery

Co. Ltd. – providing a rich variety of customer

services and scope for continuing leverage and

synergy for CFHC.

05

Business Plan and Accomplishments in 2009

CFHC remains committed to driving resilient long

term shareholder value growth, consistent with our

enduring customer brand promise - “we are family” -

and our heritage of stringent risk control and

management procedures.

Equally, CFHC remains committed to broadening

and deepening its international presence –

developing its comprehensive global structure,

footprint and capabilities. Through its world class

cross-border platforms, CFHC expects to provide

ethnic Chinese customers around the world with

a comprehensive range of financial services

and support to partner their own growth and

internationalization ambitions. Through its continuing

commitment to product innovation and process

improvement, the Company will continue to enhance

its competitive edge in the markets in which it

serves and, as a result, continue to grow shareholder

returns overtime.

In its entirety, CFHC, the holding company, draws

its earnings from investments in banking, securities,

insurance broking, venture capital, asset management,

security, and lottery businesses. In 2009, CFHC

decided to earmark NT$ 12.4 billion in provisions

for bad loans to ensure that it is well-prepared for

further risks that may emerge in the days ahead. While

net income fell to NT$ 2.439 billion for the year, the

Company was thus able to greatly improve the quality

of its assets. Thanks to a still solid client base, CFHC is

confident that it will return to a growth track and restore

its former earnings capacity as the economy gradually

picks up.

Business Plan for 2010

The global financial crisis of 2008 has driven home

the importance of managing risks. With sound

management as its guiding principle, CFHC is set

to pursue sustainable growth in the days ahead by

diversifying its earnings sources and strengthening

the quality of its assets. A summary of its business

plan for 2010 is as follows:

A. Guidelines

1. Assist customers in planning their financial

future and managing their wealth based on their

specific needs; improve CFHC’s product and

service offerings consistently so as to provide

customers with premium, differentiated services

that reflect the Company’s reputation of

professionalism in the field.

2. Devise a more refined business model for

deepening and enhancing customer relationships;

to better satisfy their different wealth management

needs during the different phases in their lives.

3. Nurture long-term partnerships with customers

by staying true to the core values of “caring,

professional and trustworthy”; transplant CFHC’s

successful experience in Taiwan to overseas

markets so as to boost its earnings capacity

over the long haul.

4. Implement a well-rounded system designed

specifically for overseas transactions so as

to provide customers with rapid and low-cost

remittance services; build the capacity for

tracking account information on a real-time

basis to meet demand for overseas account

management and cross-border transactions.

5. Expand overseas outlets to enhance CFHC’s

capacity for conducting cross-border business

and to increase international weighting in its

overall operations.

B. Objectives

1. Identify customer needs and create value for them.

2. Channel more resources toward growing

Letter toShareholders

2009 Annual Report06 07

Chinatrust as a premium brand name.

3. Refine how the Company caters to different

market segments and thus bolster its status as

a leading brand in the market.

4. Remain a responsible corporate citizen by

serving the community as best the Company can.

5. Integrate domestic and overseas trading

platforms to make CFHC a top-notch trader of

financial products across the Greater China market.

C. Key Policies

1. Enforce effective risk control processes in

order to manage risks rigorously.

2. Strengthen corporate governance practices

and enhance information transparency.

3. Improve corporate processes on all fronts so

as to upgrade the quality of services.

4. Uphold the quality of assets and keep up

growth momentum to ensure sustainable

growth going forward.

5. Act as a responsible corporate citizen by doing

its due share to help with caring for the community.

Impact of Competitive Conditions, Legal

Framework, Macro Environment

Financial markets around the world have been

put to unprecedented test over the past couple

years. Even as the aftermath of the U.S. subprime

mortgage crisis has yet to fully wear off, the latest

global financial tsunami has led to further tightening

of the financial supervision system. In a Taiwanese

financial services industry that is already extremely

competitive, this tightening means that competition

can only intensify even further. But signs that things

may actually turn for the better became visible in

the third quarter of 2009. Foreign capital rushed

into Taiwan and helped the local bourse set new

highs. Investors were obviously placing bets on a

rosy outlook for both Taiwan itself and the rest of

Asia. Moreover, the aggressive opening up of cross-

strait relations by the administration that assumed

power in May 2008 reached a new milestone when

the two sides of the Taiwan Strait signed a number

of memorandums-of-understanding on financial

supervision late last year. This event was certainly

a major turning point for the immensely challenging

financial services market. Building on its solid

partnership with numerous Taiwanese companies

and a well-rounded trading platform across the

broadly defined Greater China market (Taiwan, Hong

Kong, China, Vietnam and the U.S.), CFHC is set to

grasp the myriad possibilities emerging in the cross-

strait financial arena as it continues to provide all

customers with comprehensive financial services.

Research & Development

Risk control and management has emerged as a

top priority across the financial services industry,

as an increasingly competitive marketplace and a

string of challenging, even devastating, crises have

put pressure on the sector. CFHC has long been

a pioneer in introducing the most up-to-date risk

control and management techniques and practices.

More experienced professionals will be brought

in going forward to make sure that the Company

stays abreast of the market and is fully equipped

to perform this increasingly sophisticated job.

When it comes to the scope and depth of business

endeavors, CFHC is set to build on its existing

strengths and come up with an even richer variety

of innovative products and services, thus giving

customers a totally satisfying banking experience.

Future Development

Both the financial market and regulatory environment

have undergone dramatic changes in recent years.

Furthermore, a new era has dawned upon the

economic landscape across the Taiwan Strait. To

actively strive for earnings growth while honoring

its commitment to the community, CFHC is ready to

undertake and pursue the following:

1. Identify worthy M&A targets.

2. Expand in the broadly defined Greater China market

and make inroads into other overseas markets.

3. Launch into a wider variety of businesses so as to

diversify risks.

4. Bolster the image of Chinatrust as a sought-after

brand name and maximize the synergies of the

Chinatrust Group as a whole.

5. Enhance risk control techniques to uphold the

quality of assets.

6. Launch more new lottery offerings and set up a

more comprehensive sales network to further

boost revenue.

Alongside its extensive international reach, CFHC

has long been recognized as a trend-setter when it

comes to product innovation. Always keen to explore

new markets and new business possibilities early

on, the Company has developed a comprehensive

business network that spans the Greater China

market, from Taiwan, Hong Kong and China to

Vietnam and the U.S. It has also built an extensive

presence across the Asian market, thereby heightening

its international visibility significantly. In the days

ahead, it remains committed to serving the communities

where it conducts business and crafting a financial

brand to be treasured by employees, shareholders,

consumers and ethnic Chinese all over the world.

It is ready to usher in another promising decade

of handsome growth and thus bring ever-growing

investment value to shareholders.

Latest Credit Ratings

Type Rating Agency Credit Ratings Outlook Additional Notes Effective Date

Long-Term Short-term

Moody’s - - Stable Issuer rating: A3 2009.09.30

International Standard & Poor’s BBB A-3 Stable - 2009.10.07

Fitch A F1 StableIndividual: B/C

Support: 52009.12.18

Domestic

Taiwan Ratings twAA- twA-1+ Stable - 2009.10.07

Fitch AA+ (twn) F1+ (twn) StableIndividual: B/C

Support: 52009.12.18

Letter toShareholders

Jeffrey L. S. KooChairman

Company Profile

The confidence of working with trusted companies that stand by you.

112009 Annual Report10

Chinatrust Financial Holding Co., Ltd.

Chinatrust Financial Holding Co., Ltd. (CFHC) was

founded on May 17, 2002 with a view to building a

cross-border, diversified financial institution capable

of providing customers with well-rounded services.

Currently, CFHC has seven subsidiaries: Chinatrust

Commercial Bank, Chinatrust Securities Co.,

Chinatrust Insurance Brokers Co., Chinatrust Venture

Capital Corp., Chinatrust Asset Management Co.,

Chinatrust Security Co., and Taiwan Lottery Co., Ltd.

CFHC is committed to the following objectives:

Create a trustworthy financial institution people

can count on.

Offer multi-brand, one-stop shopping services to

even the most demanding customers.

Provide cutting-edge, continually innovated

services.

Become the best financial institution serving

ethnic-Chinese all over the world.

Looking ahead, CFHC will continue to stand by

its corporate motto “To Protect and Build” as it

joins all customers in a common quest for an ever

brighter future for everyone. It will also adhere to

its core values of professionalism, caring and trust

while providing customers with a complete variety

of convenient services. In its turn, Chinatrust is set

to make a “Taiwan Champion, Greater China & Asia

Leader, and one of the world’s great companies”-

a premium brand name that is recognized by

customers everywhere as the most trusted financial

services institution.

Chinatrust Commercial Bank

The predecessor of Chinatrust Commercial Bank

(CTCB), China Securities Investment Corp., was

founded in 1966. CTCB deals in deposits, loans,

guarantees, foreign exchange, OBU, trust, credit cards,

cash cards, equities, bonds, derivatives, factoring, safe

deposit boxes, and electronic banking.

CompanyProfile

Honors - International

Awards Agencies

Best Foreign Exchange Bank in Taiwan, Best Trade Finance Bank in Taiwan,

Best Emerging Market Bank in Taiwan, Best Investment Bank in Taiwan,

Best Corporate / Institutional Internet Bank in Taiwan

Global Finance

Best Private Bank in Taiwan Euromoney

Best Bank in Taiwan, Best Foreign Exchange Bank in Taiwan, Best Cash Management Bank in

Taiwan, Best Trade Finance Bank in Taiwan, Best Private Bank in TaiwanFinanceAsia

Best Transaction Bank in Taiwan, Best Trade Finance Bank in Taiwan, Best Domestic Custodian

Bank in Taiwan, Best Subcustodian Bank in Taiwan, No.1 of The Best Bank in Taiwan Dollar

Corporate Bonds, Best Domestic Investment Bank in Taiwan, Best Debt House

The Asset

Best Local Currency Cash Management Service: TWD, Best Cash Management Bank

in Taiwan (Small, Medium and Large size), Best Domestic Provider of FX Service in Taiwan

as voted by corporates

Asiamoney

Deals of the Year 2009 in Asia, Bank of the Year 2009 in Taiwan The Banker

The Asian Banker IT Implementation Awards-Best ATM Installation and Management Project Award The Asian Banker

Asia Pacific Telecoms Deal of the Year Project Finance

Taiwan Loan House IFR Asia

Honors - Domestic

Awards Agencies

Trusted Brand 2009: Gold Winner in Banking Industry & Credit Card Issuing Bank Reader’s Digest

Cited as No.1 in terms of operating performance by the Banking Education Association of Taiwan

(BEAT) in its evaluation of 24 banks listed on the Taiwan Stock Exchange or Gre Tai Securities Market Taiwan Stock Exchange

Best Bank in Service Award 2009 Next Magazine

Best Bank Awards for Preferred Brands of business people Business Today

CFHC set up a new branch in Singapore in 2009.

12

CompanyProfile

13

To maximize economies of scale, CTCB merged

with Grand Commercial Bank in December 2003

and acquired Fengshan Credit Cooperative in July

2004. These were followed by its successful bid in

May 2007 for Enterprise Bank of Hualien. In April

2008, CTCB merged with Chinatrust Bills Finance

Corp. At the end of 2008, CTCB had 145 domestic

and 75 overseas outlets, along with a total of 4,368

ATMs installed across Taiwan. With deposits totaling

NT$ 1.32 trillion, CTCB had assets of NT$ 1.73

trillion, surpassing all other private banks in Taiwan.

Chinatrust Securities Co.

The predecessor of Chinatrust Securities Co. is Pou

Chen Securities. Established in 1989 with paid-in

capital of NT$ 200 million, it became the largest

securities house in Kaohsiung, southern Taiwan.

It was acquired by CTCB in 2000, at which time

Chinatrust was added to its name and its capital was

expanded to NT$ 3.5 billion. After becoming a CFHC

unit in 2002, it took on its current name and the

following year further increased its capital to NT$ 5

Latest Credit Ratings

Type Rating Agency Credit Ratings Outlook Additional Notes Effective Date

Long-Term Short-term

Moody’s A2 Prime-1 Stable BFSR*: C- 2009.09.30

International Standard & Poor’s A- A-2 Stable BFSR*: C+ 2009.10.07

Fitch A F1 StableIndividual: B/C

Support: 32009.12.18

Domestic

Taiwan Ratings twAA twA-1+ Stable - 2009.10.07

Fitch AA+ (twn) F1+ (twn) StableIndividual: B/C

Support: 32009.12.18

2009 Annual Report

* BFSR refers to Bank Financial Strength Rating

Latest Credit Ratings

Rating Agency Type Credit Ratings Outlook Additional Notes Effective Date

Long-Term Short-term

Fitch

International A- F1 StableIndividual: C/D

Support: 12009.12.18

Domestic AA+ (twn) F1+ (twn) StableIndividual: C/D

Support: 12009.12.18

billion. In addition to assisting businesses in fund-

raising, Chinatrust Securities is an active player in

the brokerage and futures businesses that provides

a full spectrum of securities services.

Yet another capital increase, to NT$ 5.36 billion,

took place in 2009 through a private placement of

common shares with a view to bolstering operating

capital, enhancing capital adequacy and raising net

worth per share.

In tandem with CFHC’s overall strategy, Chinatrust

Securities has also developed a fully integrated

investment service package that spans deposits and

loans, consumer credit, home mortgages, credit

cards, mutual funds, securities, futures, and insurance.

Customers are accorded the convenience of one-stop

shopping which keeps their costs to a minimum.

Headquartered in Taipei, Chinatrust Securities

operates six branches that provide customers with

brokerage services for shares listed on the Taiwan

Stock Exchange, GreTai Securities Market, and

Emerging Market Board as well as for futures. In May

2003, Chinatrust Securities launched electronic trading

services. Giving customers the option to place orders

over the Internet or through the telephone, the platform

provides customers a safer, more comfortable trading

environment. In December 2006, Chinatrust Securities

secured the approval from authorities to offer services

on margin purchases and short sales, allowing it to

give customers greater investment leverage.

14

CompanyProfile

152009 Annual Report

Chinatrust Insurance Brokers Co.

Set up as a CTCB subsidiary in February 1996,

Chinatrust Insurance Brokers was brought into CFHC

in 2002. Chinatrust Insurance Brokers’ P&C and

life insurance offerings are sold through a wide

range of channels: electronic marketing, telemarketing,

over-the-counter, and personal sales. Property and

casualty insurance products include auto/motorcycle

insurance, household fire insurance, construction

engineering insurance, and fidelity insurance. In

the area of life insurance, there are permanent life

insurance, medical treatment insurance, savings

insurance, and investment insurance.

As the financial services industry is increasingly

deregulated and exposed to international competition,

Chinatrust Insurance Brokers is working to team up

with partners and build its own professional capabilities.

Emphasis is placed on building a complete family

of insurance products supported by comprehensive

risk control. Customers are provided wide-ranging

services, including up-to-date market information

and general counseling.

Chinatrust Venture Capital Corp.

Founded in March 2003, Chinatrust Venture Capital

was CFHC’s first foray into the venture capital

market. It invests mainly in information technology,

communications, biotechnology, medical and health

care, and alternative energy and energy-saving

ventures, as well as companies in traditional industries

that have performed reasonably well and shown

great potential to grow further. Leveraging CFHC’s

vast pool of resources, its top-notch management

professionals are well positioned to give startups a

big push on the path toward rapid growth.

Chinatrust Asset Management Co.

Established in May 2003, Chinatrust Asset

Management was founded to take advantage of the

massive amount of bad assets arising from Taiwan’s

sweeping financial reform. A team of high-caliber

professionals was gathered to help businesses

revamp their balance sheets. As such, it buys

non-performing loans from financial institutions or

manages such holdings on their behalf.

Since its inception, Chinatrust Asset Management

has collaborated with reputable foreign partners

in disposals of bad assets in its home market,

including those of the CFHC group itself. Looking

ahead, it is set to broaden its horizons internationally

in pursuit of business opportunities on a global

scale; it will be an active player bidding for non-

performing loans of financial institutions, either

domestic or overseas. As Taiwan’s financial reform

progresses, it will also be proactive in utilizing the

most up-to-date NPL disposal techniques available

to the industry far and wide.

Chinatrust Security Co.

Established in 1995, Chinatrust Security was

made a CFHC subsidiary in December 2005. It

serves clients, mainly corporate entities and

other organizations, by protecting the safety of

their property and personnel. Picked through a

meticulous screening process, its workforce of

nearly 300 people stands out as the most competent

in the industry.

The scope of its services covers planning and

design of mechanisms for preventing fire and

other accidents, counseling on security systems,

safeguarding the delivery of cash and other

valuables, and personnel protection. Its clientele

mainly comprises financial institutions. Customer

satisfaction is guaranteed as it focuses on security

and gives priority to customer service.

Taiwan Lottery Co., Ltd.

Taiwan Lottery was officially registered on July

18, 2006 as a CFHC subsidiary. It is entrusted by

CTCB to operate the Public Welfare Lottery between

January 1, 2007 and December 31, 2013.

Taiwan Lottery is named to highlight “a sense that

it belongs, not to specific groups or individuals, but

to all the people of Taiwan.” It also clearly reflects

Taiwan Lottery’s commitment to advancing the

collective wellbeing of the overall populace.

The public is entitled to a truly diverse spectrum

of lottery products. Through a carefully devised

network of sales outlets, Taiwan Lottery strives

to encourage a broad-based involvement across

the community. Other than creating jobs for many

people as dealers, it is also keen on ensuring a

healthy and fair lottery industry based on a high

degree of professionalism, so that it can have a

sustainable future in Taiwan. Above all, more of its

profit can be drawn upon to offer relief to the less

fortunate and needy.

The Organization

Evolving organizational excellence to serve you even better.

18

Committees

1. Audit Committee

The Audit Committee shall be formed by all of the

independent directors. Its mission will be providing

assistance to the board of directors in carrying out

the board’s functions and duties in supervising

and monitoring. Matters subject to deliberation by

the Audit Committee are (among others) prescription

or revision of the internal control policy; review

and evaluation of the effectiveness of internal control

system; prescription or revision of the rules for the

acquisition or disposition of assets, rules for

derivatives transactions, and handling procedures for

major financial business activities; matters involving

conflicts of interests of directors; transactions of

important assets or derivatives; major lending,

endorsement or provision of guaranties; capital fund

raising, issuance or private placement of equity

securities; appointment/dismissal of and remuneration

payable to the certified public accountant; evaluation

of the independence and performance of the certified

public accountant; appointment and dismissal of

financial, accounting or internal auditing managerial

officers; annual financial reports and biannual financial

reports; and other important matters according to

Company policy or required by the competent authority.

2. Remuneration Committee

The Remuneration Committee will be formed by

the entire body of the independent directors. The

Remuneration Committee takes incharge of

assisting the board of directors in evaluating

and monitoring the salary policy of the Company

as a whole, as well as reviewing and approving the

remuneration paid to directors and executives.

3. Executive Committee

Placed under the President, the Executive

Committee is responsible for assisting CFHC and

its subsidiaries in mapping out and supervising

policies on business strategy, risk, investments,

and administration. It is complemented by several

subcommittees in related affairs.

4. Credit Approval Committee

Placed under the President, the Credit Approval

Committee is responsible for evaluating major

credit risk cases of CFHC and its subsidiaries.

TheOrganization

192009 Annual Report

General AuditorAudit Committee

Office of General Auditor

Chief Compliance OfficerRemuneration Committee

Executive Committee

Vice Chairman

Office of Chairman

Credit Approval Committee

Chief Administration Officer

General Administration Department

FinancialManagement Department

FinancialOfficer

AccountingOfficer

Office of President

Chief Risk Officer

Chief Information Officer

CEO, Banking Business

CEO, Insurance Business

CEO, China Business

CEO, Securities Business

CEO, Investment Business

Risk Management Department

Deputy Chief Risk Officer

Board of Directors

President

Chairman

Stockholders’ Meeting

20

Directors and Supervisors

Significant Shareholders of Legal Entities

212009 Annual Report

Title NameDate of

AssignmenttOffice Term

Owned Shares Upon Assignment

Presently Owned SharesShares Owned by the Shareholders,

Spouse and Children under the Legal AgesSignificant Experience Education

Number of Shares % Number of Shares % Number of Shares %

Chairman Jeffrey L. S. Koo Jun 13, 2008 3 613,298,917 7.29 683,682,668 7.29 683,682,668 7.29Chairman of CTCBChairman of Chinese International Economic Cooperation Association

Honorary Ph.D., De La Salle University, Philippines

MBA, New York University, USA

Vice Chairman

Charles L. F. LoRepresentative of Kuan Ho Construction & Development Co., Ltd.

Apr 06, 2009 3 59,817,690 0.71 66,682,520 0.71 4,713,277 0.05President of CFHC

Chairman of CTCB

Department of Economics, National

Chung Hsing University, Taiwan

Director Wen-Long Yen Jun 13, 2008 3 44,644,621 0.53 49,768,151 0.53 49,787,738 0.53Chairmam of United Real Estate

Management Corp.

Department of Economics,

Soochow University, Taiwan

DirectorMichael B. DeNomaRepresentative of Kuan Ho Construction & Development Co., Ltd.

Jun 30, 2009 3 64,628,992 0.71 66,682,520 0.71 730,000 0.01Group Executive Director and

CEO of Standard Chartered Bank

MBA, The Wharton School of the

University of Pennsylvania

DirectorDaniel I. K. WuRepresentative of Chung Cheng Investment Ltd.

Sep 04, 2009 3 7,521,492 0.09 8,384,677 0.09 2,435,300 0.03Chief Strategy Officer,

Taishin Financial Holding CompanyMBA, University of Rochester, USA

DirectorChun-Ko Chen Representative of Asia Global Investment Co., Ltd.

Jun 30, 2009 3 1,106,097 0.01 1,233,035 0.01 826,889 0.01Executive Vice President, Chinatrust

Commercial Bank

National Chengchi University

College of Law

Independent Director

Jih-Tsan Huang Jun 13, 2008 3 - - - - - -Partner-in-Charge, Jones Day

Taipei OfficeS.J.D., Harvard University, USA

Independent Director

Chung-Yu Wang Jun 13, 2008 3 - - - - - -Vice chairman of Tong Lung Metal

Industry Co., LTD

Honorary Ph.D., Chung Yuan Christian

University, Taiwan

Independent Director

Wen-Chih Lee Jun 26, 2009 2 - - - - - -Professor, National Kaohsiung University of Applied Science Graduate Institute of Commerce

Ph.D., National Taiwan University

Graduate Institute of Commerce

Note: The office term of the Third Board of Director is from June 13, 2008 to June 12, 2011.

May 02, 2010

Name of Legal Entity Kuan Ho Construction & Development Co., Ltd. Chung Cheng Investment Ltd. Asia Global Investment Co., Ltd.

Main Legal Person

Mizue Hayashi (25.01%) Kuan Ho Construction & Development Co., Ltd. (99.63%) Morgan Stanley Formosa Holding (Cayman) Limited (100%)

Jhong Jyun Investment Corp. (24.93%) Chung Kwan Investment Co., Ltd. (0.18%)

Gin Li Investment Co., Ltd. (24.93%) Jeffrey L. S. Koo (0.18%)

Chan Wei Investment Co., Ltd. (24.93%) Mizue Hayashi (0.01%)

Wen-Long Yen (0.08%)

Wen-Shi Yen (0.03%)

Wen-Tse Yen (0.03%)

Tsai Ming Jih (0.03%)

Wen-Hui Yen (0.03%)

May 02, 2010

Management Team

2009 Annual Report

Charles L. F. Lo Daniel I. K. Wu Michael B. DeNoma

Current Position

- Vice Chairman & CEO, China Business, Chinatrust Financial Holding Company

Significant Experience

- Chairman, Chinatrust Commercial Bank

- Executive of standing Committee, in charge of Consumer Banking, Chinatrust Financial Holding Company

- President, Chinatrust Financial Holding Company

Education

Bachelor of Economics, National Chung Hsing University

Current Position

- President & CEO, Investment Business, Chinatrust Financial Holding Company

- Chairman, Chinatrust Securities Company

Significant Experience

- Executive, in charge of Investment, Chinatrust Financial Holding Company

- Executive Vice President, Chinatrust Commercial Bank

- Chief Strategy Officer, Taishin Financial Holding Company

Education

MBA, University of Rochester, USA

Current Position

- CEO, Banking Business, Chinatrust Financial Holding Company

- President & CEO, Chinatrust Commercial Bank

Significant Experience

- Chairman of Chinatrust Commercial Bank

- Executive of Standing Committee, in charge of Corporate Strategy of Chinatrust Financial Holding Company

- CEO of Standard Chartered Bank

Education

MBA, The Wharton School of the University of Pennsylvania, USA

James J. Sheu Roger Kao Ruu-Tian Chang

Current Position

- Chief Risk Officer, Chinatrust Financial Holding Company

Significant Experience

- President, Chinatrust Financial Holding Company

- Executive of standing Committee, in charge of Risk Management, Chinatrust Financial Holding Company

Education

MBA, The Wharton School of the University of Pennsylvania, USA

Current Position

- Chief Administration Officer, Chinatrust Financial Holding Company Significant Experience

- Deputy Executive, in charge of General Administration of Chinatrust Financial Holding Company

- Executive Vice President, Chinatrust Commercial Bank

Education

MS in Broadcast Journalism, Boston University, USA

Current Position

- Chief Information Officer, Chinatrust Financial Holding Company

Significant Experience

- Executive, in charge of Information Technology, Chinatrust Financial Holding Company

- Executive Vice President, Chinatrust Commercial Bank

Education

MBA, Minnesota University, USA

22 23

James Chen Oliver Shang

Current Position

- CEO, Global Institutional Banking, Chinatrust Commercial Bank

- Chairman, Chinatrust Asset Management Company

Significant Experience

- President & Executive of standing Committee, in charge of Corporate Banking, Chinatrust Financial Holding Company

- President, Institutional Banking Group, Chinatrust Commercial Bank

Education

MBA, The City University of New York, USA

Current Position

- CEO, Global Retail Banking, Chinatrust Commercial Bank

- Chairman, Chinatrust Insurance Brokers Company

Significant Experience

- Executive of standing Committee, in charge of Retail Banking, Chinatrust Financial Holding Company

- President, Retail Banking Group, Chinatrust Commercial Bank

Education

MBA, University of Delaware, USA

Business Review

Performance that keeps gaining momentum year on year.

26

Chinatrust Financial Holding Co., Ltd.

Scope of Business:

As a financial holding company, Chinatrust Financial

Holding Co., Ltd. (CFHC) invests in banking, bills

finance, credit card, trust, insurance, securities,

futures, and venture capital businesses, as well as

foreign financial institutions and other businesses

sanctioned by the regulatory authorities.

Currently CFHC has seven subsidiaries: Chinatrust

Commercial Bank, Chinatrust Securities Co., Chinatrust

Insurance Brokers Co., Chinatrust Venture Capital

Corp., Chinatrust Asset Management Co., Chinatrust

Security Co., and Taiwan Lottery Co., Ltd.

BusinessReview

272009 Annual Report

Business discussion:

In an increasingly competitive marketplace, risk

management is all the more important in the wake

of a string of financial crises. Over the years CFHC

has constantly taken the initiative to adopt the latest

risk managment mechanisms ahead of most peers.

CFHC will bring in even more top-of-the-line profe-

ssionals to help address the ever greater challenge

of managing risk going forward. Meanwhile, emphasis

will be placed on finding ways to effectively enhance

CFHC’s capacity across such strategic fronts as

information, finance and human capital. The objective is

to enable CFHC to maximize its synergies and reduce

operating costs, thereby attaining economies of scale

across a full spectrum of financial services.

Revenue Breakdown

Item Amount %

Income (loss) under equity method 2,808 87

Other Income 418 13

Total 3,226 100

Unit: NT$ million

Chinatrust Commercial Bank (CTCB)

Scope of Business:

A. Institutional Banking

Commercial Banking

Provide flexible, tailor-made services, including

loans, trade finance, cash management, trust

and proxy services, and letters of credit for

international trade.

Capital Markets

1. Corporate Finance Division: Offer tailor-made

services based on clients’ specific funding and

financial management needs, including syndicated

and structured loans, planning of financial

structure, and advisory services on domestic or

overseas IPOs and secondary offerings.

2. Financial Markets Division:

The operations in Financial Markets Division

comprise the sales and trading of capital

markets products including debt and equity

securities, foreign exchanges and related

derivatives. We provide tailored investment

and hedging advise and solution to corporate

and institutional clients to minimize their risk.

B. Retail Banking

Wealth Management

Provide target clients with financial planning

and advisory services regarding asset allocation,

as well as access to CFHC’s large variety of

financial products.

Secured Lending

Provide individuals with residential mortgages,

extend loans to small and medium-sized

businesses, and design repo-related products

and services for other corporate clients.

Credit Cards

Offer stored value cards and VISA-ATM cards

as well as credit cards.

Unsecured Lending

Extend various unsecured loans, such as loans

for cardholders, personal credit loans, cash

cards, and revolving credit loans.

Business discussion:

A. Retail Banking

Wealth Management

Since entering the wealth management business

eight years ago, Chinatrust has built the leading

position across all five major wealth management

product lines, including mutual funds, collective

investment accounts, foreign structured notes,

personal trusts, and bancassurance. Up to Dec.

2009, the market share of VIP clients (i.e. more

than NT$ 3 million of assets under management

at Chinatrust) has remained at 18.26%, placing

Chinatrust No.1 in the market. Following the

global economic downturn in 2008, the

performance of Chinatrust’s wealth management

business improved in 2009, thereby improving

Chinatrust’s fee income. With strong sales in

bancassurance and greater demand in mutual

funds, fourth quarter 2009 wealth management

fee income grew 37% when compared to third

quarter 2009.

In 2009, in order to better understand customers’

risk characteristics and provide effective portfolio

management, Chinatrust developed an upgraded

new investor risk attribute prediction model and

a New Advisory Business Strategy. Meanwhile,

Wealth Management also combined with the

Overseas Asset Management Center to fulfill

customer’s offshore financial needs and provide

globalized financial services.

New Advisory Business Strategy

The Chinatrust Investment Consulting Center

evaluates all IPOs (Initial Public Offerings of

stocks) as well as revised or updated investment

products based on their historical performance

and risks, and gives each one a Chinatrust Risk

Label. The Product and Advisory Committee

(PAC), a cross-functional forum, then examines

the profiles of those products with higher

standards than ordinary products.

Furthermore, for structured products, Chinatrust

has established a risk evaluation team to monitor

the credit risk of issuers, the investors’ potential

28

BusinessReview

292009 Annual Report

profit and loss, and marketability. If the structured

product does not pass the risk evaluation, the

PAC will not approve the product for sale to

Chinatrust customers. Chinatrust will also

provide the appropriate investment portfolio

recommendations for different investors

individual risk-profiles and monitor the clients’

investments regularly to make sure they won’t

face too much unnecessary risk.

Internet Banking

Chinatrust Internet Banking has gradually moved

its business function from the role of supporting

the branch channel to stand on the frontline and

proactively provide services to our customers.

Chinatrust Internet Bank was awarded “The Best

Consumer Internet Bank in Taiwan” by Global

Finance in 2008 and was the only banking website

in Taiwan that has been recognized with this award

for five consecutive years since 2003. We were also

recognized for the “2008 Online Banking Security

Project of the Year” by The Banker magazine.

In summary, despite going through the global

financial crisis, we still maintained high

performance in Internet Banking. There were more

than 4.2 million transactions performed online

during in 2009, for which the fee income of mutual

funds generated in excess of NT$ 320 million,

with additional benefits from other income and

cost savings on top of that. The penetration

rate of Internet customers has increased to

28%, and the annual growth rate was around

20% in 2009. With its large customer base,

Internet Banking will play an important role in

driving revenue for Chinatrust’s overall business.

ATM Services

“To provide the ATM services to everybody” is the

mission of Chinatrust’s ATM channel. To achieve

this objective, we have built up the biggest ATM

network and provide 24 hour / 365 day service in

Taiwan. As of December 2009, Chinatrust had set

up a total of 4,359 ATMs and leads Taiwan’s ATM

market, no matter whether it relates to network

breadth or transaction volumes. Including branches

and 7-Eleven convenience stores, Chinatrust

captured 26.1% of interbank transaction volumes

and continues to hold the No.1 position in terms

of the number of ATMs. Furthermore, since 2008,

Chinatrust has installed more than 500 Recycle

ATMs with deposit and withdrawal services in

7-Eleven convenience stores that service customers

24 hours a day instead of the restrictive service

hours of branches. Total Recycle ATMs will up to

700 by the end of 2010. Under this program,

Chinatrust was awarded “2009 Best ATM

Installation and Management Project in Asia” by

The Asian Banker.

Bancassurance

For years, Chinatrust has leveraged the synergies

across its units and with its partners, and has

been devoted to product innovation, quality

service and branding awareness in order to

magnify customer benefits. Utilizing this strategy,

Chinatrust has always been in a leading position

in the bancassurance market. In first quarter

2009, Chinatrust created NT$ 1.6 billion sales

volume in 3 months, thereby setting a new

historical record in Saving-oriented products in

Taiwan Bancassurance. In late second quarter

2009, as the deposit interest rate was still low

and capital from deposit customers was still

high, Chinatrust started a marketing campaign

geared toward customers seeking higher return

than the deposit rate, along with capital liquidity.

This marketing campaign, involving interest

sensitive annuity and universal life products,

resulted in over NT$ 9 billion in sale volume

within 3 months.

Credit Card

The global financial crisis slammed the credit

card industry in Taiwan; in these tough times,

Chinatrust has continuously practiced customer

segmentation to identify underserved customers

in the financial industry. For example, we aligned

business units with segments to manage

customers in different life stages and merchants

in different fields.

In 2009, we launched the “Multi-Merchant

Preferential Program”, which cooperates with

leading brands in various industries, e.g. Watsons

Your Personal Store, ULead gasoline stations,

Ambassador movie theaters, and Eslite bookstore.

This program not only increases cardholders’

usage and sales volume, but also strengthens

customers’ preference and loyalty. Chinatrust

is not only a leading brand in Taiwan but also

outperformed the market in several key indicators

of the credit card business, including spending

volumes, total cash advance amount and cards in

circulation. The market share of cards in circulation

was 16.2% and the total card sales volume market

share was 18.5% throughout the year 2009.

Integrated Call Center Function

Over the decades, Chinatrust has been

consistently committed to deliver outstanding

customer service experience and gets high

recognition both from its customers and industries.

Due to the influx of information technology,

customers’ expectations for service quality have

grown more challenging. In order to meet

customers’ high expectations and stay ahead

of ever-improving competitors, Chinatrust

remains devoted to developing new client-

centric service standards and state-of-the-art

IT infrastructure to provide tailor-made

customer services and to maintain our leading

role in the financial industry. Therefore, we have

Revenue Breakdown

Item Amount %

Institutional Banking 18,846 43

Retail Banking 25,181 57

Total 44,027 100

Unit: NT$ million

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312009 Annual Report

built a New Call Center System to fulfill clients’

needs as well as address current issues,

including: poor stability for CTI (Computer

Telephone Integration) inbound customer service

system, and out of date IVR (Interactive Voice

Response) infrastructure which could not

support the new demand challenges.

After implementing this call center project,

Chinatrust has experienced a NT$ 36.5 million

increase in annual service charge from Gross

Cross-Sale Volume and 12% increase in clients’

satisfaction regarding their self-directing within

the Interactive Voice Response System. In

addition, The Asian Banker also honored us for

the Best Call Centre Project of Technology

Implementation Award in 2010.

B. Institutional Banking Business

Transactional Banking Business

Cash Management

Over the past year, many banks have faced such

serious losses that they were forced to reorgani-

zation and recapitalize. With a strong value-

proposition and product packages, and

empowered by excellent sales services,

Chinatrust has seized the opportunity to make

a new road. From 2007 through 2009, we have

had steady growth in both NT Dollar and

foreign currency deposit volume and had year-

over-year growth of up to 6%. Although the

poor banking environment negatively influenced

our total revenue, we have increased the portion

of stable revenue sources. According to our

portfolio data, the stable fee income accounted

for 19% of corporate banking revenue in 2009,

with year-over-year growth of 7%.

Factoring/Trade Finance Business

1. Factoring

Chinatrust product offerings include both

traditional factoring services as well as tailor-

made structured products. This product

breadth allows us to serve both mainstream

and niche markets as well as providing

Chinatrust customers a range of choices

regarding different levels of financing and

credit protection. As a result, Chinatrust has

maintained its leadership position in the

Taiwanese factoring market while retaining

an 18% market share at the end of 2009.

2. Trade Finance

Similar to factoring services, Chinatrust

provides new product that combine traditional

and innovative trade services to meet clients’

requirements. For example, the forfeiting

products help the LC beneficiary hedge

country/credit risk, and thus obtain financing

that would otherwise be too risky. In addition,

in order to provide service promptly and

efficiently, since 2009 Chinatrust has gradually

upgraded the operations systems in Hong Kong,

Ho Chi Minh City, Singapore and the New York

Branch. The functions of the new system, such

as image storage and electronic workflow, will

help Chinatrust to centralize operations and

deal with contingencies and overloading.

Capital Market Business

Sales and Trading of financial market products

Our Financial Markets (FMD) business offers

a wide range of capital markets products for

corporations, governments, and institutional

investors with a combination of global experience,

product scope and expertise. Our comprehensive

trading and distribution platform operates

primarily in Taiwan, Hong Kong, and Southeast

Asia, including the Philippines and Indonesia,

complemented by superior market-making

capabilities and sales relationships. In 2009,

the trading and distribution platform in New

York was established and was marked as the

first full-function treasury operation in New York

among Taiwanese banks. In addition, our

derivatives business was ranked number one

among local banks. We have a significant lead

over other competitors, according to statistics

published by the Central Bank of China.

FMD revenue is generated primarily from

interest on debt securities, fees, spread and

trading income on foreign exchange, securities

and related derivatives. Chinatrust has continued

differentiating itself from competitors in the

tough year since the financial crisis, with the

proof of awards received since 2005, continuing

until now. We have been recognized as the Best

FX provider, Best Foreign Exchange Bank in

Taiwan, Best Domestic Investment Bank

in Taiwan, Derivatives House of Year in Taiwan

from several well-known institutions such as

Euromoney, Global Finance, and Asia Risk.

Besides being the leading bank specialized in

interest rate derivatives trading, Chinatrust is

also a major player in the NT Dollar swap

market, and also holds the #1 market share in

interest rate option trading and money market

swaps. Chinatrust has kept up our pace in

developing new business in order to maintain

our commitment in continuous innovation and

business momentum in key areas, such as

offshore Taiwan Dollar and Renminbi interest

rate derivatives to offer our Taiwanese clients

comprehensive hedging tools.

Global Structured Finance

Syndicated Loans

Chinatrust has a proven track record of being

recognized as the leading bank in the Taiwanese

syndicated loan market. In addition to being a

leading player in terms of deal volume and deal

numbers, Chinatrust is also widely recognized for

its deal quality and Agent bank services. In 2008

and 2009, Chinatrust was a Top 3 and Top 5

bookrunner, respectively, according to IFR Asia.

Beginning in the second half of 2008, momentum

in the Taiwan loan market was inevitably affected

by the financial crisis, resulting a 32% year-on-year

drop in market volume in 2009. While foreign

banks and private banks are more risk averse,

certain Taiwanese state-owned banks were

obliged to increase leading to comply with the

The opening ceremony of Singapore Branch was held on July 2009.

32

BusinessReview

332009 Annual Report

government’s economic stimulus plan, focusing

on real estate related financing and other key

industries. Chinatrust has purposefully avoided

some deals with higher risks but lower yields, in

order to best utilize our capital. Instead,

Chinatrust aims to pioneer in innovation and

offers a wide spectrum of structured products

to bring more value added services to our

clients. Our outstanding features include:

(1) Market Leading Position:

Chinatrust continues to maintain its leading

position as a syndication powerhouse thorough

comprenhensive coverage in depth and width

of client base, investor base, structure

diversity and geographic/sector diversification.

(2) First Time Borrowers:

By successfully introducing 18 first time

borrowers to the syndication market, despite

the financial turmoil, Chinatrust demonstrated

unparalleled origination and distribution ability.

(3) Unrivaled Distribution Ability:

74% of deals arranged by Chinatrust are

oversubscribed, with an average deal

over-subscription rate of 26% in 2009,

clearly demonstrating Chinatrust’s strong

distribution capability.

(4) Leader in the Taiwanese Secondary

Loan Market:

Chinatrust successfully closed 11 transactions

in the Taiwanese secondary loan market in

2009. Chinatrust is also the only market

maker who actively created a secondary

deal pipeline, outperforming other major

syndication arrangers.

(5) Eminent Position in Leveraged Finance:

In 2009, only three leveraged deals were

closed in Taiwan, and all of them were led by

Chinatrust in a proficient and efficient manner,

obtaining high satisfaction from both the

acquirer and the target. Chinatrust’s

structuring capability was further evidenced by

its completion of the most complicated LBO

financing transaction in Taiwan (Eastern Home

Shopping & Leisure Co., Ltd. - NT$ 5 Billion

Term Loan Facility), which featured an

innovative investment transaction and debt

structure. This deal was also awarded The

Banker “Deals of the Year” in Asia in 2009,

among over 480 deals across the region.

To sum up, Chinatrust shows superior distribution

capability, structuring capability and agent bank

services by offering the best total solution, best

execution and post-deal service to clients. Though

Chinatrust’s bookrunning loan volume is lower than

the aggressive state-owned banks, Chinatrust still

stood out from peers by arranging more complex

and innovative, quality deals. Chinatrust was once

again (for the third time) recognized as “Taiwan

Loan House” by IFR Asia in 2009, which indeed

demonstrates that Chinatrust is a true leading bank

in the Taiwanese syndicated loan market.

Chinatrust Securities Co.

Scope of Business:

A. Underwriting: preparing companies for getting a

listing; assisting listed companies’ fundraising in

capital markets.

B. Brokerage: Brokerage of stocks listed on the

Taiwan Stock Exchange, GreTai Securities Market,

or Emerging Stock board; provision of credit for

margin trading; brokerage of futures and options.

C. Proprietary Trading: Transactions of stocks listed

on the TSE, GreTai Securities Market, or Emerging

Stock board; securities lending; Strategic and

arbitrage trading of futures contracts on the Taiwan

Futures Exchange; bond trading; repos and reverse

repos in bonds.

D. Advisory Services: Offering analyses and recom-

mendations on securities investments. Advice on

mergers and acquisitions by companies listed on

the Taiwan Stock Exchange (TSE), GreTai Securities

Market, or Emerging Stock board.

E. Warrant Issuance: Issuing call and put warrants

on equities.

Business Discussion:

After a steep decline in 2008, Taiwan’s stock market

started to stage a significant rebound in March 2009

and eventually ended the year with a cumulative

78.34% gain that had been attained amid hectic

trading. In turn, 2009 turned out to be a very

profitable year for Chinatrust Securities. More brisk

market trading made a major contribution to the

company’s brokerage business; brokerage fees thus

rose 18.56% from a year earlier to NT$ 271,499,000.

As for margin trading, the company posted an

outstanding balance of NT$ 1.438 billion in margin

lending at the end of 2009, up about NT$ 784 million

from the beginning of the year. Interest income

earned for the year amounted to NT$ 64,378,000. The

underwriting business also enjoyed year-on-year

Revenue Breakdown

Item Amount %

Net Profit from Issuing Warrants 4 1

Brokerage Commissions 271 33

Profit from Securities Sales – Proprietary 93 11

Profit from Securities Appraisal – Hedging 2 -

Profit from Securities Sales – Hedging 2 -

Interest Revenue 80 10

Profit from Securities Appraisal – Underwriting 191 23

Profit from Securities Sales – Underwriting 81 10

Dividend Income 7 1

Underwriting Commissions 38 5

Other Operating Revenues 11 6

Total 780 100

Unit: NT$ million

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352009 Annual Report

growth, with fee income totaling NT$ 37,554,000 and

capital gains amounting to NT$ 80,881,000. Thanks

to a market run-up toward year’s end, the company’s

holdings of shares also ended the year with an

unrealized profit of NT$ 190,434,000, higher than

what was recorded a year earlier. In addition, effective

proprietary and warrant trading brought another

NT$ 94,920,000 in capital gains for the year. In total,

Chinatrust Securities registered 2009 revenue of NT$

780,436,000. With NT$ 1,256,000 in non-operating

profit helping offset NT$ 533,138,000 in expenses

and losses, the company concluded the year with a

higher-than-expected pretax profit of NT$ 248,554,000.

Furthermore, a NT$ 5,124,000 income tax rebate was

made possible after disputes over the levy on warrants

were resolved. As such, the company reported net

income of NT$ 253,678,000, or NT$ 0.47 per share.

On the balance sheet, the company posted assets of

NT$ 7.36 billion, of which total liabilities accounted

for 18.76%. The liabilities mainly included deposits

and guarantees for borrowed securities and

cumulative reserves for income tax payments on

warrants. Both current and quick ratios exceeded

500%, pointing to the company’s above-average

capacity to meet its debt obligations. Stockholders’

equity amounted to NT$ 5,895,411,000 and net

worth per share came in at NT$ 11. The company’s

financial soundness was best illustrated by its

1,018% capital adequacy ratio that far exceeds the

regulatory requirement.

Strategies for 2010

A. Pursue the primary listing of TDRs and convertible

bond issues by blue-chip companies.

B. Boost underwriting fees and commissions as a

financial advisor.

C. Continue to expand retail outlets so as to win a

bigger market share for brokerage.

D. Revamp the electronic trading system for equities,

futures, and options to encourage greater

transaction volume.

E. Draw on the Chinatrust group’s strong position,

particularly its extensive network of retail outlets,

to build a broader institutional clientele.

F. Launch new products and services to diversify

revenues.

Looking to the future, Chinatrust Securities is set to

abide by the Chinatrust family’s way of doing business-

cautious and conservative-as it seeks to evade risks

and reduce costs in the provision of a full spectrum of

services: brokerage, underwriting, proprietary trading,

futures, derivatives and bonds. Meanwhile, it will play

a due part in the consolidation of all CFHC resources

in order to maximize synergies and persistently

enhance its earnings in the securities sector.

Chinatrust Insurance Brokers Co.

Scope of Business:

The company mainly deals in personal insurance

and property insurance. In addition to insuring

people and their property against the unknown,

it offers services on savings, investment, and tax

and retirement planning. Its personal insurance

offerings include life insurance, medical insurance,

endowment insurance, and investment-linked

insurance. Property insurance products include auto/

motorcycle insurance, fire insurance, construction

engineering insurance, fidelity insurance, etc.

Chinatrust Insurance Brokers makes it a point to

design products that specifically cater to the needs

of different clients. The wide variety of tailor-made

Revenue Breakdown

Item Amount %

Property Insurance Commissions 108 3

Life Insurance Commissions 3,880 97

Total 3,988 100

Unit: NT$ million

products deriving from its collaboration with

insurance providers has long been favorably

received by the public.

Discussion of Results and Strategies:

Over the years Chinatrust Insurance Brokers has

been committed to adding value to its products,

offering quality services, and bolstering the brand.

To attain the most rewarding wealth management

for clients and optimize CFHC’s synergies in cross-

selling, it is set to gear its future R&D endeavors

toward the following:

A. Build up a risk-tracking and risk management

mechanism.

B. Study cross-sector alliances and the

characteristics of various retail channels.

C. Fully integrate and revamp information retrieval

and other operating procedures.

D. Identify potential clients and new sources of

revenue by strengthening customer relationship

management and data analysis.

E. Further expand partnerships with insurance

companies and retail channel partners.

F. Integrate and streamline service procedures and

sales documentation.

G. Evaluate the security processes for using cross-

selling data.

Chinatrust Venture Capital Corp.

Scope of Business:

Seek long-term holdings in companies yet to list on

the TSE or GreTai Securities Market.

Revenue Breakdown:

In 2008, Chinatrust Venture Capital added nine new

domestic investment projects totaling NT$ 307 million

to its portfolio. As of the end of 2008, it had invested

a cumulative $1.07 billion in 28 projects. Of the total,

domestic investments amounted to NT$ 779 million,

or 72.8%; overseas investments came in at NT$ 291

million for a 27.2% share. A summary is as follows:

Business Discussion:

In tandem with the latest trends, the Chinatrust

Venture Capital investment team continuously builds

its knowledge base in growing sectors. Meanwhile,

the company is an active participant in various

exhibitions and seminars both at home and abroad,

in order to expand contacts with industry insiders in

all fields as these may well sow seeds for future

cooperation. The company’s investment professionals

are keenly aware of the necessity of always broadening

Separately, Chinatrust Venture Capital will pursue

cooperation with top firms in the global private-

equity industry with a view to carving a niche in

new markets.

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372009 Annual Report

Revenue Breakdown

Item Amount %

Stationing of Security Guards 85 50

Bank Security 83 50

Total 168 100

Unit: NT$ million

and deepening their knowledge. This relentless self-

enhancement is key to finding new projects worthy

of investment, in turn boosting the return of the

company’s overall portfolio.

Revenue Breakdown

Item Amount %

Income from Lottery Sales 699 98

Other Income 15 2

Total 714 100

Unit: NT$ million

Revenue Breakdown

Item Amount %

IT (Software & Hardware) 68 7

Biotechnology 125 13

Semiconductors & Optoelectronics 634 68

Others 111 12

Total 938 100

Unit: NT$ million

Chinatrust Asset Management Co.

Scope of Business:

A. Purchase of non-performing loans (NPLs) from

financial institutions.

B. Handling the auction of NPLs for financial institutions.

C. NPL management services for financial institutions.

D. Appraisal of NPLs for other financial institutions.

E. Investment in NPLs.

Revenue Breakdown:

As a holding company, Chinatrust Asset Management

has three wholly owned subsidiaries: Chung Shin-1

Asset Management Co., Ltd., Tuo Yu Asset Management

Servicing Co., Ltd., and CT Opportunity Investment

Co. They all deal in NPLs. To date, the parent company

has invested a cumulative NT$ 40.25 billion in the

three units.

Business Discussion:

Building on the Chinatrust group’s far-reaching

business outlets and customer base, Chinatrust Asset

Management is confident of opening more new

frontiers. It will take the initiative to acquire various

kinds of NPLs as market conditions dictate. In the

meantime, it will strengthen on-the-job training to

boost employees’ understanding of the industrial

environment at large and their financial and

accounting competence. Special emphasis will be

placed on the legal aspects of NPL-related processes.

Looking ahead, Chinatrust Asset Management will

make use of its experience and expertise to phase

in a best-practice business model so that it may

optimize its return on investment.

Chinatrust Security Co.

Scope of Business:

A. Stationing of security guards

Stationing of security guards at office buildings

and residential locations.

Stationing of security guards at bank outlets.

B. Counseling and advisory services on theft

prevention and preparation for natural disasters.

Business Discussion:

Aiming to become the country’s most professional

security company, Chinatrust Security will invest

its efforts in the field of damage prevention and

risk management - a pursuit it believes will win the

company public support and trust.

Taiwan Lottery Co., Ltd.

Scope of Business:

Commissioned by Chinatrust Commercial Bank,

Taiwan Lottery is responsible for operating the Public

Welfare Lottery. Its duties include lottery issuance,

sales, promotion, winner-drawing, payment of prizes,

and other related affairs.

Business Discussion:

Given all the lotteries already available in Taiwan, studies

of purchase patterns and other specific-purpose market

surveys will be conducted to uncover consumer needs

and identify potential new buyers. These will prove useful

in finding new offerings suitable for the Taiwan market.

Moreover, there will be more research on the global

lottery industry to learn more about the characteristics

of overseas lottery markets for reference of formulating

an optimal strategy for domestic lottery sales.

Corporate Social Responsibility

Our ethos of advancing and caring also extends whole-heartedly to our community.

40

At Chinatrust, corporate social responsibility is

considered one of the company’s core values.

Keenly aware of its duty to serve the community

where it has thrived, Chinatrust has spared no funds

and resources at its disposal to contribute a due

share to public good. The company’s corporate

motto “We are family” is best reflected by its heart-

felt care for employees, the community, and the

environment. Chinatrust’s active involvement in all

kinds of social events, including charity, the arts, and

environmental protection, is intended to make real the

vision of creating a better tomorrow for everyone.

Pioneer in Charity Endeavors

The Chinatrust Charity Foundation was founded

on November 2, 2004 to coordinate various charity

projects already under way and expand their reach

across the community. Special emphasis is placed

on caring for the economically disadvantaged and

physically or mentally disabled children. Volunteers

from within Chinatrust are encouraged to take part in

various activities all year round to make the vision of

“Love for kids” a reality.

Care for Economically Disadvantaged Children

Chinatrust launched the “Light Up A Life” fund-

raising campaign in 1985. The first such campaign

meant for disadvantaged children to be sponsored

by a local private enterprise, it has received

donations totaling about NT$ 830 million over

the past 25 years. By aiding 35 charity groups,

more than 150,000 needy children have

benefitted from the initiative.

The bulk of the funds raised from the “Light

Up A Life” campaign are handed over to the

Taiwan Fund for Children and Families (TFCF)

that operates support centers throughout the

country. Under the banner of the “Poverty-

Relief Project,” the fund devises programs

to promote early education of pre-school children,

and advance vocational training and self-

enhancement of parents and youngsters. Relief

efforts are continuously made toward enabling

less fortunate families to have a fresh start.

Care for Physically/Mentally Disabled Children

According to an international study, a full year

of early treatment given to children with

developmental delay before they reach the age

of three can be as effective as what one can

expect to achieve in 10 years if such treatment

is provided only after this “golden period” is already

over. Thus, every dollar spent on early intervention

programs promises to save three dollars in

future expenditure on special education.

Over the years, the Chinatrust Charity Foundation

has collaborated with charity groups to provide

screening services meant to spot candidates

deserving early treatment, as well as provide house

calls and resident services. The objective is to

take advantage of the “golden period” in making

early treatment available to less fortunate children

in remote areas. In particular, Chinatrust and the

Eden Social Welfare Foundation have joined hands

in offering early intervention screening services

across faraway communities in nine counties and

cities throughout Taiwan. A better-rounded early

intervention process was put in place in the

offshore county of Penghu, now that an early

Corporate SocialResponsibility

412009 Annual Report

treatment van and a speech therapist are stationed

there. In 2009, Chinatrust was involved in the

screening of 993 children. Of the total, 142 or 14.3%

were suspected of falling victim to developmental

delay. Furthermore, 28 of the 142 children live in

Penghu. Social workers, special education

teachers and therapists jointly performed a second

screening, two months after the first one, on the

children identified as candidates for early

intervention in the first screening. Meanwhile, they

looked into the children’s family backgrounds,

informed parents of subsequent steps to be taken

and alerted social affairs agencies of local

governments to ensure that these less fortunate

children could secure all the care they need.

In 2009, Chinatrust rendered charity services to

a total of 248,256 people. The feat was made

possible only with assistance from such charity

groups as the Eden Social Welfare Foundation,

First Social Welfare Foundation, Maria Social

Welfare Foundation, Yu-Cheng Social Welfare

Foundation and Catholic Kuang Jen Social

Welfare Foundation.

Volunteer Activities

From its beginning, the Chinatrust Charity

Foundation has made it a point to solicit

volunteers from within the Chinatrust Group to

help in the care of and providing relief to

economically disadvantaged children. A long-

term counseling project was launched in

September 2005 to help needy children in their

after-school studies. In 2006, Chinatrust began

dispatching volunteers to host financial

management workshops at TFCF support centers

across the country. Underprivileged children

and their families, be they in Taitung or Hualien

on Taiwan’s eastern seaboard or on offshore

islands like Penghu and Kinmen, were provided

with a better understanding of the fundamentals

of sound financial and debt management.

Chinatrust volunteers offered activities such as company visits, interview skills training, and financial planning for many economically disadvantaged children.

42

Corporate SocialResponsibility

432009 Annual Report

In March 2007, the Chinatrust Charity Foundation

launched a volunteer English-teaching program.

Teaching and game play are intertwined to give

children a stronger incentive to learn English.

Separately, the Foundation joined forces with

the Ministry of Interior’s Northern Region

Children’s Home in launching a program that

helps prepare orphans and abused children to

better blend into society. During weekends

between summer vacation from 2008 to 2009,

Chinatrust volunteers offered these children such

activities as company visits, sharing with job-

market achievers, interview skills training, and

financial planning.

As of the end of 2009, the Chinatrust Charity

Foundation had sponsored a total of 597

volunteer events at hospitals, children’s homes,

and TFCF centers as well as other remote areas

across the island. These include after-school

counseling, reading of illustrated books to sick

children, financial management workshops, and

early intervention and screening services. In

total, Chinatrust volunteers had contributed a

combined 99,036 hours of their time serving

more than 20,000 disadvantaged children.

Emergency Relief

There is no telling when a family may be

impacted by natural disasters such as

earthquakes, typhoons or other events. For

children, these are invariably traumatic

experience. Even worse, many of them will be

rendered homeless or denied their chance of

going to school after a disaster. Chinatrust

recognizes that such children may need help

from the community. Some recent disasters in

the region include the devastating September

21, 1999 earthquake in central Taiwan; Typhoon

Nari that ravaged the island in September 2001;

the catastrophic May 12, 2008 quake in Sichuan,

China; and the August 8, 2009 flooding that

caused heavy casualties in southern Taiwan.

Immediately after these calamities, Chinatrust

responded by donating cash, financing

reconstruction projects and offering psychological

counseling to those impacted by the disasters.

Some of Chinatrust’s disaster relief efforts include:

A. 1999 – Donated NT$ 24 million to be used by

the government in its coordinated relief

efforts after the September 21 earthquake.

B. 2004 – Donated NT$ 10 million for victims of

the July 2 flooding.

C. 2004 – Donated NT$ 10 million for reconstru-

ction in the wake of the Indian Ocean Tsunami.

D. 2008 – Donated CHY 10 million for rescue

and relief of victims of the May 12 earthquake.

E. 2009 – Donated NT$ 127 million to help with

accommodation and schooling of children

impacted by the August 8 flooding and to

offer them psychological counseling.

Distribution of Public Welfare Lottery’s Proceeds

Chinatrust was entrusted to operate the Public

Welfare Lottery—a duty assigned to its wholly

owned subsidiary Taiwan Lottery--in 2007. Of its

NT$ 56 billion of proceeds from 2007 to 2009, 50%

were set aside for social welfare and charity

programs undertaken by local governments; 45%

were earmarked as government subsidies for the

national annuity program; and 5% went toward the

reserve for the national health insurance scheme.

As of the end of 2009, Taiwan Lottery had

solicited a cumulative NT$ 1.02 billion in donations

from lottery jackpot winners. The Chinatrust

Charity Foundation has ensured that these funds

be put to optimal use, supporting many of

Chinatrust’s charitable activities.

A. There was a NT$ 14 million donation

designated specifically to help with

reconstruction of the Guihua Nine-Year

School in Pengzhou, Sichuan province.

B. In cooperation with the Ministry of Education’s

“educational savings account” scheme,

Chinatrust has offered subsidies for lunches

at 71 primary and junior high schools in

Nantou County and Kaohsiung City.

C. Chinatrust donated three buses meant for

the physically disabled to Tainan and

Kaohsiung counties; and also provided

subsidies for supplementary equipment and

related service programs.

D. Chinatrust donated funds to assist nine

orphanages throughout the country in

establishing their capacity for psychological

counseling.

E. Chinatrust subsidized the Boyo Social

Welfare Foundation’s schoolwork guidance

program meant for children from less fortunate

families in Nantou County; which benefited

362 children.

F. Chinatrust donated an early treatment van to

the Pingtung County Government and provided

medical care subsidies to the local community;

which benefited 14,945 children and adults

from low-income households.

Chinatrust Charity Foundation launched several programs to help the needy children.

44

Corporate SocialResponsibility

452009 Annual Report

Sponsorship of Arts and Cultural Activities

From January 2001 to December 2009, Chinatrust

sponsored over 40 arts and cultural performances,

including a concert by famous singer Michael Bolton,

a piano concert by Richard Clayderman, the Golden

Classics Concert, the International Children’s Folk

Game Festival of Yilan, 2008 Yilan International Rain

Festival and exclusive exhibitions such as the “

Ancient Egyptian Art of the Louvre”, “Millet, The

Beauty of Countryside”, “ALEGRIA, Cirque de Soleil”,

“Arts from Van Gogh” and more. These activities

contributed greatly by raising the arts and cultural

standards of Taiwan as well as enhancing the leisure

quality of its people.

To raise the appreciation for domestic arts as well

as enhance the lifestyles of Taiwanese, Chinatrust

led the business community in providing the funds

for building the Novel Hall, which is currently used to

launch and sponsor numerous art performances both

from Taiwan and overseas. By the end of 2009 there

had been a total of 2,668 performances held at the

Novel Hall, attracting over 1,600 thousand people.

Care for the Environment

As global warming increasingly becomes an issue

around the world, Chinatrust is keen on playing a

due part in the cause of preserving the environment.

In addition to sponsoring community parks and

planting projects, it looks within to help uphold

Taiwan’s environmental integrity. Efforts made

across the Chinatrust group include garbage and

kitchen refuse recycling, paperless operations at the

office, and energy conservation by means of special

devices to save electricity and water consumption.

In 2006, Chinatrust became a patron of the Sungchi

Park in Taipei’s Xinyi District, which is designed to

be a place where residents and visitors can rest

and relax.

In step with rapidly unfolding global trends, in 2007

Chinatrust introduced a company-wide project to

help with environmental protection and energy

conservation. More than just reducing costs, it goes

a long way toward reducing carbon dioxide emissions

and keeping damage to the environment to a minimum.

Chinatrust’s energy conservation endeavors cover

elevators, lighting, and air-conditioning; the concept

is also a key consideration in its deployment of

facilities, procurement, and resource allocation.

Protection of Consumer Interests

Serving customers—who always come first—with

the heart is constantly top-of-mind at Chinatrust.

Chinatrust offers a full package of products and

services so that it can truly satisfy clients no matter

what they may need and desire. All products must

conform to the most stringent selction criteria

before hitting the market. Every wealth management

specialist at Chinatrust is fully supported by an elite

research team so that he or she can provide the

client with comprehensive, professional services

people will expect of a true expert.

Chinatrust is absolutely committed to keeping

personal data provided by its clients confidential.

Clients are urged to take their case to Chinatrust

if they think that the Company has been unfair in

promoting or selling a given product, or that it has

failed to adequately disclose the risks involved

beforehand. For such and other disputes, clients can

call the company, send email, write letters, or head

directly to a Chinatrust counter. Chinatrust pledges

to approach any such problem from the client’s

perspective. Acting with goodwill to help clients solve

their problems, Chinatrust is keen to win trust and

longtime support.

Emphasis on Human Rights;

Care for Employees

Human rights constitute a key ingredient of Chinatrust’s

corporate values. Taking employees as family, it is

committed to taking care of each and every one of

them. This pledge is honored in the pay structure,

welfare regime and other employee benefits—that

is, every aspect of employee’s daily necessities and

medical needs.

Pay Structure: A well-rounded pay structure and

benefit package goes a long way toward retaining

talent who must find it happy reporting to work

every day. Chinatrust offers a highly competitive

remuneration package so that a top-notch

workforce can foster and share its growth.

Core Benefits: Chinatrust makes sure that

employees’ basic needs are fully satisfied,

including coverage by the national labor and

health insurance program as well as the

corporate insurance scheme. They are also

entitled to grants for marriage, death, and child

birth; subsidies for medical care of family

members and children’s education; gift money

for birthday; and bonuses often paid ahead of

three major Lunar calendar festivals: the Dragon

Boat Festival, Moon Festival, and Lunar New Year.

Complementary Benefits: Chinatrust put into

force a complementary benefit scheme that features

a point accumulation program in 2003. Employees

are granted options to focus more heavily on

benefit items they desire most and enjoy some

shopping discounts, depending on their own

specific needs in terms of everyday necessities.

“Bank of Love, Happy Enterprise”: Chinatrust

provides its employees with health checkup and

follow-up programs and medical treatment services

that go beyond what is required by pertinent

government regulations. It also sponsors various

sports clubs, employee travel, employee lunches,

outdoor camps for employees and their families,

lectures on various topics, and procurement of

organic vegetables. There is even a massage parlor

for employees to relax before returning to work.Chinatrust is a patron of the Sungchi Park, which is designed to be a place where residents and visitors can rest and relax.

Financial Review

Building solid results and protecting the bottom line.

48

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492009 Annual Report

Independent Auditors’ Report

The Board of Directors

Chinatrust Financial Holding Company, Ltd.:

We have audited the accompanying consolidated balance sheets of Chinatrust Financial Holding Company,

Ltd. and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income,

changes in stockholders’ equity, and cash flows for the years then ended. These consolidated financial

statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on

these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing Auditing and Certification of Financial

Statements of Financial Institutions by Certified Public Accountants and generally accepted auditing standards

in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

consolidated financial statements. An audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall consolidated financial statement

presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,

the consolidated financial position of Chinatrust Financial Holding Company, Ltd. and subsidiaries as of

December 31, 2009 and 2008, and the consolidated results of their operations and cash flows for the years

The Audit Committee’s Report

In accordance Article 14-4 of Security and Exchange Law and with Article 219 of the Company Act, the

undersigned, have duly examined and accepted as correct the financial reports for the year 2009 along with

the business report and earnings distribution plan submitted by the Board of Directors of Chinatrust Financial

Holding Co., Ltd.

Chinatrust Financial Holding Co., Ltd

Audit Committee’s Convener

Wen-Chih Lee

Taipei, Taiwan, R.O.C.

April 28, 2010

As stated in Notes 5 and 7(D), Chinatrust Financial Holding Company, Ltd. and its subsidiary Chinatrust

Commercial Bank Co., Ltd. Hong Kong Branch were assessed an administrative fine and prohibited from

engaging in certain business activities by the Financial Supervisory Commission (FSC) due to their flawed

process for disposing of overseas structured notes. The FSC lifted the business restrictions described above

in March 2007 after certain operation deficiencies had been corrected and improved by Chinatrust Financial

Holding Company, Ltd. This case, now under review by the court, has been filed with the FSC to examine if

Chinatrust Financial Holding Company, Ltd. had breached the regulations of the Financial Holding Company

Law. The cases as stated in Note 7(D) are still under investigation by the authority and the judiciary, and the

results remain uncertain.

Taipei, Taiwan, R.O.C.

March 10, 2010

50

FinancialReview

512009 Annual Report

then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities

Issuers, the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies, the

Regulations Governing the Preparation of Financial Reports by Publicly Held Banks, the Regulations Governing

the Preparation of Financial Reports by Securities Firms, the Regulations Governing the Preparation of

Financial Reports by Futures Commission Merchants, the Rules Governing Securities Firms, the Rules Governing

Futures Commission Merchants, and generally accepted accounting principles in the Republic of China.

As stated in Notes 3 and 4(AA), commencing from July 1, 2008, Chinatrust Financial Holding Company,

Ltd.’s subsidiary Chinatrust Commercial Bank Co., Ltd. has reclassified financial assets in accordance with

the second amendment of Republic of China Statement of Financial Accounting Standards (SFAS) No.34

“Financial Instruments: Recognition and Measurement.” For the year ended December 31, 2008, this resulted

in an increase in after-tax net income of NT$ 6,242,549 thousand and an increase in EPS of NT$ 0.69 (dollars).

As stated in Note 1, Chinatrust Financial Holding Company, Ltd.’s subsidiary Chinatrust Commercial Bank Co.,

Ltd. merged with Chinatrust Bills Finance Corp., which is a wholly owned subsidiary of Chinatrust Financial

Holding Company, Ltd., in a stock conversion transaction on April 26, 2008. After the merger, Chinatrust

Commercial Bank Co., Ltd. was the surviving entity and Chinatrust Bills Finance Corp. was dissolved. Pursuant

to Interpretations (91) No.243 and 244 issued by the Accounting Research and Development Foundation,

the merger could qualify as a reorganization, and thus both merging entities’ assets and liabilities shall

be recorded at the book value on a consolidated basis. In accordance with Interpretation (95) No.141, the

financial statements of Chinatrust Commercial Bank Co., Ltd. reflected the merger assuming the two entities

had merged on January 1, 2008.

52

FinancialReview

53

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008 Change in

ASSET Amount Amount %

Cash and cash equivalents $ 23,176,377 $ 42,688,206 (46)

Due from Central Bank and call loans to banks 113,851,985 96,863,876 18

Financial assets measured at fair value through profit or loss—net

77,586,375 172,172,441 (55)

Receivables—net 113,430,185 115,703,730 (2)

Loans—net 905,880,405 921,675,255 (2)

Available-for-sale financial assets—net 131,257,474 122,702,320 7

Held-to-maturity financial assets—net 323,266,155 171,565,663 88

Investments under equity method—net 2,265,306 2,229,079 2

Other financial assets—net 12,245,824 23,281,020 (47)

Premises and equipment—net 34,142,407 33,493,548 2

Intangible assets 12,087,645 11,964,807 1

Other assets—net 11,395,872 11,165,540 2

TOTAL ASSETS $ 1,760,586,010 $ 1,725,505,485 2

FinancialReview

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008 Change in

LIABILITIES Amount Amount %

Deposits from Central Bank and other banks $ 32,929,546 $ 17,070,983 93

Due to Central Bank and other to banks 12,328,735 13,830,249 (11)

Financial liabilities measured at fair value through profit or loss

35,174,540 91,604,627 (62)

Securities sold under repurchase agreements 78,056,521 73,433,455 6

Payables 46,646,661 47,956,005 (3)

Deposits and remittances 1,307,716,829 1,226,170,702 7

Corporate bonds and financial debentures 91,119,506 110,575,565 (18)

Other financial liabilities 2,453,657 1,249,852 96

Other liabilities 4,345,240 3,347,276 30

Total Liabilities $ 1,610,771,235 $ 1,585,238,714 2

Stockholders’ Equity—Parent Company

Common stock 93,844,353 90,986,544 3

Preferred stock 7,500,000 7,500,000 -

Capital surplus 36,483,130 38,903,887 (6)

Retained earnings

Legal reserve 2,804,600 1,333,917 110

Special reserve 15,156,099 4,490,248 238

Undistributed earnings 2,480,993 14,843,988 (83)

Other adjustments to stockholders’ equity:

Cumulative translation adjustments (1,466,556) (1,614,457) 9

Unrealized losses on financial instruments (4,951,224) (13,516,512) 63

Treasury stock (1,789,191) (2,711,319) 34

Net loss not recognized as pension cost (336,997) (25,130) (1,241)

Subtotal: Stockholders’ Equity—Parent Company 149,725,207 140,191,166 7

Minority Interest 89,568 75,605 18

Total Stockholders’ Equity 149,814,775 140,266,771 7

Commitments and Contingencies

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,760,586,010 $ 1,725,505,485 2

CONSOLIDATED BALANCE SHEETSCHINATRUST FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES

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55

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008 Change in

Amount Amount %

Interest income $ 36,594,201 $ 58,639,409 (38)

Less: Interest expenses (14,234,199) (28,872,867) 51

Net Interest Income 22,360,002 29,766,542 (25)

Non-interest income

Service fee and commission income 22,676,705 22,525,260 1

Gains on financial assets or liabilities measured at fair value through profit or loss

3,338,952 5,132,967 (35)

Realized gains on available-for-sale financial assets 1,722,689 634,878 171

Realized losses on held-to-maturity financial assets - (4) 100

Income from investments under equity method 65,515 39,408 66

Foreign exchange gains 1,649,304 1,712,914 (4)

Reversal of impairment recognized in profit or loss (impairment loss on asset)

9,797 (1,092,226) 101

Public-welfare lottery payment (2,086,800) (2,086,800) -

Other losses (4,156,956) (1,328,143) (213)

Other miscellaneous income - 3,165,301 (100)

Gain on financial assets carried at cost 515,770 374,652 38

Other non-interest income 386,185 975,186 (60)

Net Revenue 46,481,163 59,819,935 (22)

Bad debt expenses (12,432,897) (12,621,351) 1

Operating expenses

Personnel expenses (15,750,409) (15,287,777) (3)

Depreciation and amortization expenses (2,417,577) (2,580,708) 6

Other general and administrative expenses (12,124,345) (12,968,212) 7

Net Income before Tax from Continuing Operations 3,755,935 16,361,887 (77)

Income tax expenses (1,316,588) (1,583,947) 17

Net income from continuing operations before extraordinary gain or loss and cumulative effect of changes in accounting principles

2,439,347 14,777,940 (83)

Cumulative effect of changes in accounting principles(after deducting income tax of $20,126)

- (65,296) 100

Consolidated Gross Income $ 2,439,347 $ 14,712,644 (83)

Consolidated Income Attributable to:

Parent company (consolidated net income) $ 2,431,057 $ 14,706,829 (83)

Minority interest 8,290 5,815 43

$ 2,439,347 $ 14,712,644 (83)

Earnings per Share (EPS)Before

income taxAfter

income taxBefore

income taxAfter

income tax

Basic EPS

Net income from continuing operations $ 0.29 $ 0.15 $ 1.69 $ 1.52

Cumulative effect of changes in accounting principles - - (0.01) (0.01)

Net income $ 0.29 $ 0.15 $ 1.68 $ 1.51

Basic EPS - retroactive adjustment $ 1.63 $ 1.46

Diluted EPS $ 0.29 $ 0.15 $ 1.68 $ 1.51

Diluted EPS - retroactive adjustment $ 1.63 $ 1.46

CONSOLIDATED STATEMENTS OF INCOMECHINATRUST FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES

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57

Retained earnings Other adjustments to stockholders’ equity

Special reserve

Undistributed retained earnings

Cumulative translation

adjustments

Unrealized losses on financial

instruments

Treasury stockNet loss not

recognized as pension cost

Minority interest Total

$ 366,207 $ 13,339,174 $ (1,060,715) $ (3,403,403) $ - $ (26,131) $ 77,518 $ 143,157,240

- (1,333,917) - - - - - -

4,124,041 4,124,041) - - - - - -

- (161,968) - - - - - -

- (53,989) - - - - - (53,989)

- (1,681,937) - - - - - (1,681,937)

- (3,363,873) - - - - - -

- (2,482,290) - - - - - (2,482,290)

- - - - - - - -

- - - - (2,711,319) - - (2,711,319)

- - - (4,877,836) - - - (4,877,836)

- - - 154,558 - - - 154,558

- - (553,742) - - - - (553,742)

- - - (5,394,247) - - - (5,394,247)

- - - 4,416 - - - 4,416

- - - - - 1,001 - 1,001

- - - - - - (1,913) (1,913)

- 14,706,829 - - - - - 14,706,829

$ 4,490,248 $ 14,843,988 $ (1,614,457) $ (13,516,512) $ (2,711,319) $ (25,130) $ 75,605 $ 140,266,771

$ 4,490,248 $ 14,843,988 $ (1,614,457) $ (13,516,512) $ (2,711,319) $ (25,130) $ 75,605 $ 140,266,771

- (1,470,683) - - - - - -

10,665,851 (10,665,851) - - - - - -

- (1,607,518) - - - - - (1,607,518)

- (1,050,000) - - - - - (1,050,000)

- - - - - - - -

- - - - 922,128 - - 1,359,180

- - - 4,160,842 - - - 4,160,842

- - - (48,213) - - - (48,213)

- - 9,045 - - - - 9,045

- - 138,856 - - - - 138,856

- - - 4,476,200 - - - 4,476,200

- - - (23,541) - - - (23,541)

- - - - - (311,867) - (311,867)

- - - - - - 13,963 13,963

- 2,431,057 - - - - - 2,431,057

$ 15,156,099 $ 2,480,993 $ (1,466,556) $ (4,951,224) $ (1,789,191) $ (336,997) $ 89,568 $ 149,814,775

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

Expressed in Thousands of New Taiwan DollarsCapital stock

Common stock

Preferred stock

Capitalsurplus

Legal reserve

Beginning Balance-January 1, 2008 $ 84,096,830 $ 7,500,000 $ 42,267,760 $ -

Appropriation and Distribution of 2007 Earnings:

Legal reserve - - - 1,333,917

Special reserve - - - -

Employee bonuses-stock 161,968 - - -

Remuneration to directors and supervisors - - - -

Cash dividends-common stock - - - -

Stock dividends-common stock 3,363,873 - - -

Dividend paid for preferred stock - - - -

Capitalization of capital surplus 3,363,873 - (3,363,873) -

Purchase of treasury stock - - - -

Recognition of unrealized losses on available-for-sale financial assets - - - -

Recognition of unrealized gains on cash flow hedges - - - -

Recognition of cumulative translation adjustment of subsidiaries - - - -

Recognition of unrealized losses on available-for-sale financial assets of subsidiaries - - - -

Recognition of unrealized gains on cash flow hedges of subsidiaries - - - -

Recognition of net loss not recognized as pension cost of subsidiaries - - - -

Change in minority interest - - - -

Net income for the year ended December 31, 2008 - - - -

Ending Balance—December 31, 2008 $ 90,986,544 $ 7,500,000 $ 38,903,887 $ 1,333,917

Beginning Balance—January 1, 2009 $ 90,986,544 $ 7,500,000 $ 38,903,887 $ 1,333,917

Appropriation and distribution of 2008 earnings:

Legal reserve - - - 1,470,683

Special reserve - - - -

Cash dividends—common stock - - - -

Dividend paid for preferred stock - - - -

Capitalization of capital surplus 2,857,809 - (2,857,809) -

Transfer of treasury stock to employees - - 437,052 -

Recognition of unrealized gains on available-for-sale financial assets - - - -

Recognition of unrealized losses on cash flow hedges - - - -

Recognition of cumulative translation adjustment of subsidiaries - - - -

Recognition of hedge of net investment in foreign operations of subsidiaries - - - -

Recognition of unrealized gains on available-for-sale financial assets of subsidiaries - - - -

Recognition of unrealized losses on cash flow hedges of subsidiaries - - - -

Recognition of net loss not recognized as pension cost of subsidiaries - - - -

Change in minority interest - - - -

Net income for the year ended December 31, 2009 - - - -

Ending Balance-December 31, 2009 $ 93,844,353 $ 7,500,000 $ 36,483,130 $ 2,804,600

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCHINATRUST FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES

58

FinancialReview

59

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008

Cash Flows from Operating Activities

Consolidated Net Income $ 2,431,057 $ 14,706,829

Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:

Cumulative effect of changes in accounting principles - 65,296

Minority interest income 8,290 5,815

Transfer of treasury stock to employees and subsidiaries’ employees 468,134 -

Depreciation and amortization 2,417,577 2,580,708

Depreciation on rental and idle equipment (accounted for under other non-interest income)

10,146 18,575

Investment income accounted for under equity method in excess of cash dividends received

(40,495) (36,456)

Unrealized losses (gains) on valuation of financial instruments 2,882,363 (2,771,162)

Gains on disposal of financial assets carried at cost (515,770) (374,652)

Gratuitous acquisition of financial asset carried at cost - (1,397,194)

Net amortization of premiums and accretion of discount on investments in held-to-maturity bonds

164,674 (18,226)

Amortization of premiums on financial debentures 13,109 9,862

Gains on disposal of premises and equipment (including idle premises and equipment) and foreclosed properties

(124,244) (294,189)

(Reversal of impairment recognized in profit or loss) impairment loss on assets (9,797) 1,092,226

Losses on asset retirement 33,629 27,145

Provision for bad debt expenses 12,367,437 12,816,282

Provision for (reversal of) guarantee reserve 75,307 (194,931)

Provision for miscellaneous trading loss reserve 132,582 47,315

Provision for default loss reserve 8,086 6,698

Others (488,148) 260,837

Net Changes in Operating Assets and Liabilities:

(Increase) decrease in receivables (657,177) 10,344,404

Decrease (increase) in financial assets measured at fair value through profit or loss

90,471,625 (72,597,256)

Decrease (increase) in other financial assets 11,301,152 (8,077,859)

Increase (decrease) in other financial liabilities 1,203,805 (1,058,216)

Decrease in payables $ (1,193,755) $ (11,399,574)

(Decrease) increase in financial liabilities measured at fair value through profit or loss

(56,430,087) 55,989,285

Net Cash Provided by (Used in) Operating Activities 64,529,500 (248,438)

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008

Cash Flows from Investing Activities:

Decrease (increase) in loans 2,325,379 (53,625,312)

Decrease in due from Central Bank and call loans to banks (excluding cash equivalents)

21,201,011 30,795,913

(Increase) decrease in available-for-sale financial assets (45,657) 60,014,551

Purchase of held-to-maturity financial assets (175,186,196) (62,963,871)

Proceeds from maturities and paydowns of investments in held-to-maturity financial assets

23,493,556 32,434,551

Purchase of financial assets carried at cost (289,970) (307,810)

Proceeds from disposal of financial assets carried at cost 682,143 1,298,310

Proceeds from capital reduction and liquidation of investee 18,419 91,406

Proceeds from disposal of premises and equipment (including idle premises and equipment) and foreclosed properties

1,883,559 1,282,639

Purchase of premises and equipment (2,134,137) (1,265,398)

Purchase of intangible assets (677,255) (695,983)

(Increase) decrease in other assets (183,024) 292,046

Decrease in receivables 1,862,952 9,993,132

Net Cash (Used in) Provided by Investing Activities (127,049,220) 17,344,174

Cash Flows from Financing Activities:

Increase (decrease) in deposit from Central Bank and other banks 15,858,563 (30,902,032)

Increase in deposits and remittances 81,546,127 45,768,687

(Decrease) increase in payables (111,771) 160,750

Decrease in commercial paper payable - (599,781)

Decrease in due to Central Bank and other banks (1,501,514) (1,791,348)

Increase (decrease) in securities sold under repurchase agreements 4,623,066 (14,335,108)

(Decrease) increase in corporate bonds and financial debentures (18,237,111) 1,220,856

Increase (decrease) in other liabilities 372,463 (4,934,876)

Remuneration to directors and supervisors - (53,989)

Dividends - preferred stock (1,050,000) (2,482,290)

Cash dividends - common stock (1,607,518) (1,681,937)

Transfer of treasury stock 890,308 -

Purchase of treasury stock - (2,711,319)

Net Cash Provided by (Used in) Financing Activities 80,782,613 (12,342,387)

FinancialReview

CONSOLIDATED STATEMENTS OF CASH FLOWSCHINATRUST FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES

60 612009 Annual Report

Internal Control Representation

Financial Supervisory Commission

Dear Sirs:

On behalf of Chinatrust Financial Holding Co., Ltd, we hereby certify that the company’s internal control

system and risk management mechanism for the fiscal year of 2009 have been implemented and audited by

the independent internal auditors as to comply with “ Regulations Governing the Implementation of Internal

Control and Audit Systems by Financial Holding Companies”, and the internal audit reports are periodically

presented to the company’s Board of Directors and the Audit Committee.

Except items listed on attachments, we hereby certify that the company complies with all related laws and

regulations, and the internal controls are effectively in place. This representation is part of the annual report

and publicly disclosed.

We understand that we are legally bound to SEC ordinance #20, 32, 171 & 174.

Sincerely yours,

Jeffrey L. S. Koo

Chairman

Daniel I. K. Wu

President

Julie Yang

General Auditor

Aaron King

Compliance Officer

Taipei, Taiwan, R.O.C.

March 31, 2010

Internal ControlRepresentation

DECEMBER 31, 2009 AND 2008Expressed in Thousands of New Taiwan Dollars

2009 2008

Effect of exchange rate changes 414,398 (903,977)

Net Increase in Cash and Cash Equivalents 18,677,291 3,849,372

Cash and Cash Equivalents, at the Beginning of the Period 86,051,316 82,201,944

Cash and Cash Equivalents, at the End of the Period $ 104,728,607 $ 86,051,316

Cash and cash equivalents

Cash and cash equivalents $ 23,176,377 $ 42,688,206

Call loans to banks 30,837,554 30,058,399

Due from Central Bank 50,714,676 13,304,711

$ 104,728,607 $ 86,051,316

Supplemental Disclosures of Cash Flow Information:

Interest $ 17,317,234 $ 28,467,129

Income tax $ 2,138,093 $ 2,362,294

Investing and Financing Activities Not Affecting Cash Flows:

Employee bonuses - stock $ - $ 161,968

Stock dividends - common stock $ - $ 3,363,873

Capitalization of capital surplus $ 2,857,809 $ 3,363,873

Reclassification of financial assets $ - $ 12,567,964

Premises and equipment acquired in exchange $ 3,148 $ -

CONSOLIDATED STATEMENTS OF CASH FLOWSCHINATRUST FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES

62

Internal ControlRepresentation

632009 Annual Report

1. Dividend policy and status of execution

(1) Dividend policy:

In order to sustain growth and increase profitability, the company shall keep a policy of retaining a portion of

the earnings in conformity with relevant laws and regulations. After deduction of the retained earnings, the

balance of the surplus is, in principle, distributed in the form of stock dividends and cash dividends, but the

cash dividends shall not be less than 10% of the distributed earnings. Nevertheless, if the company has urgent

needs for funds to meet requirements for business operations, investments, mergers, or necessary adaptation

to new laws and regulations, the board of directors may request the shareholders’ meeting to make adequate

adjustment in the ratio of cash dividends; but in any case, the ratio shall not be less than 1% of the distributed

earnings. If the distributable cash dividend is less than NT$ 0.1, then it shall not be distributed.

Terms, timing, and amounts for distribution of earnings: In case there is a surplus, the company shall first pay

taxes, and after adjustment in accordance with accounting principles, make up losses and set aside retained

earnings, legal surplus, and dividends for preferred shares specified in Article 6-1 and Class-B preferred

shares in accordance with the law. For the balance, 0.05% shall be for the bonuses of the employees, and 1%

shall be for the remuneration of directors. Distribution of the remainder funds, together with the undistributed

surplus in the previous year, shall be proposed by the board of directors at the shareholders’ meeting for

approval or adjustment.

The board of directors shall be authorized to decide on the distribution of bonuses to employees. If the

bonuses are distributed in the form of stock dividends, employees of subsidiary companies approved by the

Company Law shall also be entitled to the distribution. The details are to be decided by the board of directors.

(2) The Board has approved the earnings appropriation proposal for Year 2009. The proposed resolution of

dividend distribution approved by the Board is as follows:

Preferred stock dividends: NT$ 1,050,000 thousand

Common stock dividends: It is proposed that NT$ 9,577,255 thousand from retained earnings of Year

2009 and NT$ 2,324,576 thousand from capital surplus will be distributed in cash and in stock according

to the record shown in the shareholder book on the distribution record date (Record Date) respectively.

The dividends are NT$ 0.64 per share in cash and NT$ 0.64 per share in stock, total common stock dividends

NT$ 1.28 per share. If the private placement of 2,500,000 thousand shares of common stock is accomplished

before the Record Date of cash and stock dividends, the common stock dividends would be NT$ 0.50 per

share in cash and NT$ 0.50 per share in stock, total common stock dividends NT$ 1.00 per share after

considering the increase 2,500,000 thousand shares entitled to earning distribution.

Internal Control System - Items for Improvement/Improvement Plan

Cut-off Date: 2009/12/31

Items for Improvement Improvement Measures Scheduled Date of Completion

A. Chinatrust Financial Holding Co., Ltd. (CFHC) was reprimanded by Taiwan Stock Exchange Corporation (TWSE) for incomplete disclosure of information in connection with its signing of a Memorandum Of Understanding (MOU) with China Strategic Holdings Limited (CSH) in Hong Kong. The news was entered into the Material Information section of Market Observation Post System on 2009.11.17 and announced in a press conference held on 2009.11.18 regarding the material information. However CFHC did not fully disclose a clause of the MOU that in three years after the signing, CSH may increase its shareholding in CFHC to the extent that the affiliation between the two companies meets the criteria for preparation of consolidated financial statements. This incomplete disclosure violated Article 9 of the Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Listed Companies and thus TWSE meted out a fine of NT$ 200,000 against CFHC. CFHC is admonished to pay closer attention to such matters and follow the rules accordingly. <Letter No. Taiwan-Stock-Shang- 0981704826 dated 2009.12.01>

A. CFHC has made a supplemental announcement.

A. 2009.12.7

B. CFHC was reprimanded by TWSE for incomplete disclosure of information in connection with its cash capital increase announcement. CFHC decided to raise cash capital with the issuance of common shares through private placement and the decision was approved by its shareholders’ meeting held on 2009.06.26. However the capital increase application was returned by Banking Bureau of Financial Supervisory Commission (FSC) on 2009.11.20 for failing to give explanation to the per-share price for the private placement offering. CFHC did not enter such information into the Material Information section of Market Observation Post System until the afternoon of 2009.11.24, which violated Article 9 of the Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Listed Companies and TWSE meted out a fine of NT$ 30,000 against CFHC. CFHC is admonished to pay closer attention to such matters and follow the rules accordingly. <Letter No. Taiwan-Stock-Shang -0981704763 dated 2009.11.27>

B. CFHC has made a supplemental announcement.

B. 2009.12.7

C. Chinatrust Commercial Bank (CTCB), a subsidiary of the Company, was reprimanded by FSC in the accounts receivable factoring to Everskill Technology Co., Ltd. The factoring fraud exposed CTCB’s oversights in related operational processes and subsequent management which caused the Bank to sustain a loss of about NT$2.3 billions. This incident indicated that the enforcement of CTCB’s internal control systems was inadequate and FSC meted out a fine of NT$3,000,000 against CTCB pursuant to Subparagraph 7, Article 129 of the Banking Act. <Letter No. Jin-Kuan-Yin-Kong-Zi-09800036621 dated 2009.08.14>

C. CTCB has conducted a full-scale review of related operational processes in reference to the fraudulent practices of Everskill Technology Co., Ltd. and enhanced the system functions. The remedial actions taken were reported to the FSC on 2009.09.08.

C. 2009.9.8

D. Chinatrust Insurance Brokers Co., Ltd. (CTIB), a subsidiary of the Company, was reprimanded by FSC in its telemarketing operation. When CTIB engaged in telemarketing, the solicitors attempted to secure new business through improper verbal schemes by promoting a deposit interest rate of 16% per annum. Such improper solicitation method violated Subparagraph 5, Article 36 of the Regulations Governing the Supervision of Insurance Brokers set forth in Article 177 of the Insurance Act. FSC meted out a fine of NT$900,000 against CTIB and ordered CTIB to promptly rectify the practice according to Article 167-2 of the Insurance Act. <Letter No. Jin-Kuan-Bao-Cai-Zi-09802508562 dated 2009.08.19>

D. Chinatrust Insurance Brokers has taken actions to remedy relevant operational procedures and stepped up in-house education on compliance. The company has also imposed disciplinary action against the personnel involved and reported the matter to The Life Insurance Association via the Insurance Brokers’ Association in accordance with the Regulations Governing the Supervision of Insurance Brokers.

D. 2009.6.30

Dividend Policyand Earnings Distribution

64

Dividend Policyand Earnings Distribution

2.The influence of dividend allocation this time to the operation performance, earnings per share and

investment return rate for the stockholders:

There was no announced financial forecast for the company in Year 2010; therefore no disclosure of such

information is needed.

3.Information relating to employee bonuses and remuneration to directors and supervisors of the Board:

(1) The allocation percentage or range of employee bonuses and remuneration to directors and supervisors of the

Board mentioned in the Articles of Incorporation: The employee bonuses is 0.05%, and the remuneration to directors

of the Board is 1%.

(2) The proposed resolution of dividend distribution for Year 2009 approved by the Board is as follows:

Cash bonus of employee is NT$ 569 thousand; remuneration to directors is NT$ 11,380 thousand.

No employee bonus distributed in the form of stock and the percentage of employee stock bonus over stock

dividend distributed from earnings is 0%.

The assumptive earnings per share after allocation of employee bonuses and remuneration to directors and

supervisors of the Board: It is not applicable due to the employee bonuses and remuneration to directors and

supervisors of the Board has been expensed from January 1, 2008.

(3) The appropriation of employee bonus and remuneration to directors and supervisors for Year 2008:

Year of 2008

Distributed with the resolution from the

Annual General Meeting

Distribution pro-posal approved by the

Board of DirectorsDifference Explanation

1. Distribution status:

A. Employee bonus distributed in the form of cash 760 thousand 760 thousand -

B. Employee bonus distributed in the form of stock

(1) shares 0 0 -

(2) amount NT$ 0 NT$ 0 -

(3) % of outstanding shares of the Year 0% 0% -

C. Remuneration to Directors and SupervisorsNT$ 15,203

thousandNT$ 15,203

thousand-

2. EPS: (Note)

A. Original EPS NT$ 1.51 NT$ 1.51 -

B. Pro forma EPS NA NA -

Note: Pro forma EPS is not applicable due to the employee bonuses and remuneration to directors of the Board has been expensed from January 1, 2008.

Chinatrust Financial Holding Co., Ltd.

18F, No.3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2722 - 2002www.chinatrustgroup.com.tw

Chinatrust Commercial Bank Co., Ltd.

No.3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2722 - 2002www.chinatrust .com.tw

Chinatrust Securities Co., Ltd.

10F, No.3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 8780 - 8867www.win168.com.tw

Chinatrust Insurance Brokers Co., Ltd.

13F, No.16, Young-Ji Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2768 - 0505www.ctbrokerage.com.tw

Chinatrust Venture Capital Corp.

7F, No. 3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2722 - 2002www.chinatrustgroup.com.tw/ investment.htm

Chinatrust Asset Management Co., Ltd.

7F, No. 3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2722 - 2002www.chinatrustgroup.com.tw/manage.htm

Chinatrust Security Co., Ltd.

15F, No.3, Sung Shou Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2722 - 2002www.chinatrustgroup.com.tw/safe.htm

Taiwan Lottery Corporation

9F, No.133, Sec4, Minsheng E Road, Taipei, Taiwan, R.O.C.Tel: + 886 - 2 - 2175 - 1915www.taiwanlottery.com.tw