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Net interest income: increased by NT$ 348 million from year 2012 as a result of the increase in deposits and loans by NT$ 34.2 billion and NT$ 19.7 billion respectively and the increase in interest income on securities investment.

Net non-interest income: grew by NT$ 1.098 billion from 2012 as a result of the increase in net service fee and commission income, trading and foreign exchange.

The bad debt expense in 2013 amounted to NT$ 720 million, an increase of NT$ 239 million from year 2012. Operating expenses in 2013 was NT$ 5.206 billion or an increase of NT$ 185 million from 2012.

In conclusion, the bank’s net income before tax in 2013 was NT$ 3.401 billion. After deducting income tax at NT$ 349 million, the net income was NT$ 3.052 billion with the budget achieving rate as 110%, or an increase of NT$ 993 million from NT$ 2.059 billion in 2012.

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The Announcement of U.S. Foreign Account Tax Compliance Act (thereafter FATCA):
        In order to investigate if U.S. taxpayer pays tax on overseas income according to the laws, the U.S. proclaimed Foreign Account Tax Compliance Act (FATCA) to require foreign financial institutions (FFI) sign agreements with Internal Revenue Service and provide account information of U.S. taxpayer. Otherwise, 30% of FFI income from the U.S. will be withheld. Therefore, FATCA impacted significantly on financial institutions and their customer’s financial accounts involving income from U.S.. In response to FATCA, which takes effect as of July 1, 2014 and whose according procedures regarding account opening, investigation, declaration and tax withholding will be executed in phases, the Bank has appointed a professional consultant to plan on and execute the FATCA project to ensure rights of the Bank and customers.

The Government’s Promotion of Financial Operations Plan with Cross-strait Characteristics and Gradual Opening of Renminbi Businesses:
        After signed Memorandum on Cross-strait Currency Clearing Cooperation with People’s Bank of China (PBC) in 2012 to approve Offshore Banking Unit (OBU) of banks in Taiwan and their branches in the third areas to launch Renminbi services (no application required), Central Bank of ROC (CBC) completed the establishment of Currency Liquidator Mechanism of the Cross-Strait in early 2013. On January 28, 2013, Taipei Branch of Bank of China was approved as Renminbi clearing bank in Taiwan and Domestic Banking Unit（DBU）and Offshore Banking Units of Taiwanese banks are permitted to apply for launching Renminbi services. Meanwile, Renminbi is subject to Foreign Exchange Regulation Act, according to Article 4 in Regulations Governing Foreign Exchange Business of Banking Enterprises, the DBUs may conduct Renminbi related foreign exchange business including export, import, Inward and outward remittances, deposits, loans, payment guarantees, derivatives (separately stipulated by Central Bank otherwise), and others. On February 6, 2013, the Bank got approval from CBC to launch Renminbi DBU service.
        In addition, CBC aggressively plans to have Financial Information Service Co., LTD. (FISC) construct Foreign Currency Settlement Platform that comply with SWIFT, a global standard. The Bank has joined such settlement platform in March 2013 and is among one of the first banks joining it. This settlement platform, after USD remittance was officially launched in March 2013 and Renminbi is officially launched on September 30, 2013, provides more beneficial inshore and offshore clearing and settlement services in Renminbi remittance and capital allocation. It helps to the growth of the amount of Renminbi transactions, the development of diverse product and the expansion of the offshore Renminbi market in Taiwan.
        In conformity of the policy of Free Economic Pilot Zone, Financial Supervisory Commission plans, through “Virtual Concept, Loosened Regulations, Open Area and Retained People and Capital”, to develop Taiwan’s wealth and asset management business. Directions for Offshore Banking Units of Banks Conducting Financial Derivatives Business and Regulations on Negative Listing for Offshore Banking Units of Banks Conducting Finance-Related Foreign Exchange Business were proclaimed on December 27, 2013 and Regulations for Offshore Banking Units of Banks Conducting Trust Business on January 29, 2014 to respectively loosen the restrictions against foreign exchange derivatives for the OBU customers and the scope of product investment. Financial Supervisory Commission also permits OBUs to conduct new types of foreign currency services not involving New Taiwan Dollars and not in negative listings. In the future, banks may not only accept offshore customers’ appointment to invest in offshore financial products not sold inshore, but also freely design wealth management products, such as common trust fund or collective trust fund account. The bank sector is also encouraged to innovate all kinds of financial products. The Bank, echoing government’s policy, will persistently develop Renminbi services and seize business opportunities brought by the opening of new services.

Revised Regulations of the Procedures for Banking Institutions to Evaluate Assets and Deal with Past-Due/Non-Performing Loans:
        As of January 28, 2014, Financial Supervisory Commission revised and executed the provision regulations regarding loan loss provision and guarantee reserve in Regulations of the Procedures for Banking Institutions to Evaluate Assets and Deal with Past-Due/Non-Performing Loans, which requires that a bank shall allocate sufficient loan loss provision as well as reserves against liability on guarantees, while the minimum loan loss provision and guarantee reserve shall be the sum of 1% of the outstanding balance of Category One credit asset's claim (excluding assets that represent claims against the central and local government in Taiwan), 2% of the balance of Category Two credit assets, 10% of the balance of Category Three credit assets, 50% of the balance of Category Four credit assets, and the full balance of Category Five credit assets.
        As of the end of December 2013, the Bank’s account balance of loan loss provision and guarantee reserve amounted to NT$ 5.345 billion. According to the revised regulations, the Bank’s provision ratio of Category One Credit Asset on December 2013 reached 1.10%, which complied with the requirement of the competent authorities’ policy.

Revised Compliance Matters for Disclosure of Information on Investment-linked Insurance:
        As of January 15, 2013, Financial Supervisory Commission proclaimed the revised Compliance Matters for Disclosure of Information on Investment-linked Insurance to regulate the fonts for cautionary message, principal protection or guaranteed payment on sales documents and the according rules to taxation laws that shall be marked and disclosure of critical items and investment risk shall be clearly stated on the insurance policy instructions. The Bank not only amended Bylaws on Conducting Insurance Business Operation for fully regulation observation, but also successively revised Code of Ethics and Standards of Behavior for Insurance Agents, Operational Guidelines for Insurance Agents Conducting Insurance Solicitation, Operational Bylaws for Insurance Business and Managerial Guidelines for Insurance Agents to ensure the qualification to sell insurance policies and customer’s rights to be protected during the sale of insurance products.

The Strengthened Notification of Funds Invested in High Yield Bonds:
        In order to ensure that customers fully understand the credit risk, interest risk and liquidity risk of the funds invested in high-yield bonds, the Bank accorded with Risk Disclosure Templates for Security Trust Fund and Offshore Funds Aiming At High Yield Bonds, which developed by Trust Association of R.O.C, revised Financial Product Sale Operation Checklist ( for funds only) to add examination criterion- Fund Risk Disclosure Statement for Non-Discretionary Monetary Trust Invested in High Yield Bond Funds and Dividend Distribution Involving Principle to fully shield customer’s rights and comply with authority’s rules.

Ministry of Finance Planned to Raise Business Tax of the Banking and Insurance Sectors:
        As of February 2014, Ministry of Finance announced Fiscal Reform Package that planned to raise business tax of the banking and insurance sectors from 2% to 5%. Such raise will further drive up the operation cost of banks. According to the Bank’s revenue for 2013, the operation expense after adjustment would be increased by NT$ 280 million, accounting for 8% of annual net income before tax.