Yuanta Financial Holding Co., Ltd

February 24, 2009

Yuanta Financial Holdings announces the capital reduction of common stock to offset previous loss by its subsidiary, Yuanta Commercial Bank.

Name and nature of the subject matter (if preferred shares, the terms and conditions of issuance shall also be indicated, e.g. dividend yield):
Yuanta Commercial Bank's common stock
Date of occurrence of the event: 2009/02/24
Volume, unit price, and total monetary amount of the transaction:
Reduction volume: 325,491,120 shares; unit price: NTD10 per share;
Total amount: NTD 3,254,911,200
Counterpart to the trade and its relationship to the Company (if the trading counterpart is a natural person and furthermore is not an actual related party of the Company, the name of the trading counterpart is not required to be disclosed):
Counterpart: Yuanta Commercial Bank; the relationship to the company: Yuanta Commercial Bank is Yuanta Financial Holdings' 100% owned subsidiary
Where the counterpart to the trade is an actual related party, a public announcement shall also be made of the reason for choosing the related party as trading counterpart and the identity of the previous owner (including its relationship with the company and the trading counterpart), price of transfer, and date of acquisition: The capital reduction of common stock to offset previous loss by the Yuanta Financial Holdings' subsidiary, Yuanta Commercial Bank.
Where a person who owned the property within the past five years has been an actual related person of the company, a public announcement shall also include the dates and prices of acquisition and disposal by the related person and the person’s relationship to the company at those times: N/A
Matters related to the creditor's rights currently being disposed of (including types of collateral of the disposed creditor's rights; if the creditor's rights are creditor's rights toward a related person, the name of the related person and the book amount of the creditor's rights toward such related person currently being disposed of must also be announced): N/A
Anticipated profit or loss from the disposal (not applicable in cases of acquisition of securities) (where originally deferred, the status or recognition shall be stated and explained):
Yuanta Commercial Bank reduced its capital to offset previous loss, therefore no disposal profit.
Terms of delivery or payment (including payment period and monetary amount), restrictive covenants in the contract, and other important stipulations: Yuanta Commercial Bank reduce its capital to offset previous loss，therefore no delivery or payment terms.
The manner in which the current transaction was decided, the reference basis for the decision on price, and the decision-making department: Yuanta Commercial Bank reduced its capital to offset previous loss; based on par value; Audit Committee and Board of Directors by subsidiary, Yuanta Commercial Bank.
Current cumulative volume, amount, and shareholding percentage of holdings of the security being traded (including the current trade) and status of any restriction of rights (e.g. pledges):
Volume: 1,874,508,880 common stocks; Amount: NTD 18,745,088,800; 100% owned by Yuanta Financial Holdings; Zero common stocks pledged.
Current ratio of private placement of securities (including the current trade) to the total assets and shareholder's equity as shown in the most recent financial statement and the operating capital as shown in the most recent financial statement:
to total assets:96.72%;
to shareholder's equity:105.25%;
operating capital: NTD -1,657,160,000
Concrete purpose or use of the acquisition or disposition: To offset previous loss, increase the book value per share, and further enhance Yuanta Commercial Bank's financial structure.
The discrepancy between the reference price of private placement and the transaction amount per share is 20 percent or more of the transaction amount: N/A
Net worth per share of company underlying securities acquired or disposed of: NTD 8.47per share
Do the directors have any objection to the present transaction?: No