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Product Responsibility

Yuanta Financial Holdings provides a diverse range of financial services. In recent years, the Group has actively implemented a development strategy focused on “the three pillars of securities, banking, and insurance”. Yuanta Bank, in addition to its basic deposit and currency exchange operations, has also found lending business to be a major source of revenue. To prevent creditors having negative environmental or societal impact or statutory violation, resulting in penalties, bad debt or investment losses from business closures, Yuanta Bank has integrated ESG factors into its credit risk analyses and lending business, undertaking careful assessments of the targets and uses of potential loans.

In addition to carrying out responsible financing, Yuanta Financial Holdings emphasizes the importance of responsible investment, harnessing the combined business expertise of each subsidiary to foster company development built on sustainability and furthering the influence of sustainable finance.

Furthermore, we are also committed to strengthening the inclusiveness of financial services. By integrating our core idea of “Achieve Your Greatest Dream”, we provide diverse financial services that are accessible and affordable for underprivileged groups and micro-enterprises, effectively advancing local financial development.

Yuanta Bank
Products that Benefit the Environment
(1) Procedures for Assessing and Screening Environmental and Social Risks

The Board of Directors of Yuanta Bank is the highest decision-making unit with regard to the bank’s granting of credit. Taking the review process for a large-scale project’s syndicated loan as an example, the business unit makes preliminary determination on the business opportunity and understands the operating status of the creditor, then prepares a business interview report and submits it to the Project Finance Department or other relevant units to further study the project’s investment content and conditions and conduct a risk assessment analysis. After obtaining the opinion of president of Yuanta Bank on whether or not to provide financing, approval from the Bank’s Corporate Finance Credit Evaluation Committee, Credit Management Department, president or the Board of Directors is required prior to the execution of syndicated loan.

During the period when a borrower has been extended credit, in the event situation including bad credit, signs of default, financial or business situation worsening, or other non-financial information published through the media (such as food safety concerns, fires, environmental controversies, etc.) which creates doubt as to the borrower’s ability arise, the business unit shall immediately launch an investigation and notify the relevant business units. This will be followed by the drafting of a response plan and implementation of preservation measures such as increasing collateral, raising the interest rates, freezing the credit line, recovering the balance, or negotiating repayment. Additionally, a risk portfolio is formed based on the type of customer and industry, adding requests for the customer’s financial statements and visiting customer office where appropriate to further follow up on the Customers’ credit situation. When undertaking project financing, a plan for the monitoring of the project’s progress should be set out as well as enhance the review process. The impact of negative news or irregularities about the borrower and its management on obligations shall be carefully evaluated, including a full understanding of the borrower’s actual financial status, strict management of the lending process, and examination of the transaction documents for reasonableness or authenticity and where the funds are used.

Note:In 2018, no credit customers violated environmental protection or human rights regulation, which led to the termination of their financing.

(2) Green Energy Industry Financing Loans

In cooperation with Small and Medium Enterprise Administration of the Ministry of Economic Affairs policy to encourage companies to invest in Taiwan domestic industries or the green energy technology projects, Yuanta Bank increased the amount of guaranteed financing by NTD 100 million, which is not subject to the maximum amount limit of NTD 120 million that a single company can borrowed from banks. As of the end of September 2018, one green energy technology related SMEs benefited from this policy, with a loan balance of NTD 13,793,000, accounting for 36.41% of the financing business. With regard to the government’s 5+2 Major Innovative Industries program, we provide loans to businesses in relevant industries, contributing to co-create a new sustainable economy.

(3) Green Bonds

Yuanta Bank has invested NTD 300 million since 2017 in support of a company which issued green bonds. In 2018, it expanded its investment in green bonds, spending NTD 1.8 billion to support four such companies as part of its action to encourage corporate development which is beneficial to the mitigation of global warming and climate change. Yuanta not only directly purchases green bonds through Yuanta Bank, but also assists in underwriting green bonds through Yuanta Securities. In 2017, Yuanta Securities underwrote green bonds of CPC Corporation and Taipower Co. to the tune of NTD 500 million and NTD 1.7 billion respectively and further expanded the scale in 2018 by underwriting four green bonds for a total of NTD 2.71 billion, responding to government’s call for the green industry as well as advancing the impact of green finance.

Products that Benefit Society
(1) Accessible Financial Services

Yuanta is committed to the goal of setting up accessible ATMs across Taiwan, providing all of our customers a convenient, safe environment for financial transactions and has incorporated accessibility specifications into the standards for new ATM purchases. With regard to any ATMs not housed in accessible locations, accessibility of ATMs will be a priority when considering any moves or renovations. In addition, to protect the rights of our hearing-impaired customers, Yuanta Bank service counters all provide accessible card issuance, activation, and loss reporting services, as well as providing telephone and online banking services to meet the needs both of the visually impaired and the hearing impaired.

(2) Investing in the Welfare of Disadvantaged Groups through Charitable Trusts

Yuanta Bank works to help companies and individuals plan their own charitable trusts, helping philanthropic funding enjoy greater transparency and ensuring that those funds are being used to give back to the community.

(3) Doing Good for Society together with Customers by Combining Credit Cards and Charity

Yuanta Bank offers cardholders with the option to use their credit cards to donate to a range of charitable foundations and social welfare organizations, including the Eden Foundation, the Taiwan Fund for Children and Families, and the Children Are Us Foundation. Yuanta Bank also provides a platform for donation assistance, actively taking into account credit card products in planning activities to give back to society. For example, the “Turn Reward Points into Love” service allows cardholders to convert reward points collected on their cards into charitable donations, making those points a tool for caring for society.

(4) Insurance Agent Services – Providing Basic Coverage to Disadvantaged Groups

Yuanta Bank offers long-term alternative and low-cost elderly insurance as its primary financial inclusive insurance products, aiming to provide affordable protection to plan for relevant personal risks.

Yuanta Securities

During investment meetings, Yuanta Securities relies on investment consulting or internal research reports to assess the prospects of the target and the compliance on ESG issues, including any ESG violations in the past year, positive performance in promoting ESG, and if it is categorized as high-risk or highly controversial industry. In the event that there is any confirmed violation of relevant laws, the decision not to invest will be made if the case is determined to carry relevant risks to the Company after internal review, and the conclusions will be recorded in meeting minutes

(1) Sustainability-Linked Warrants

In recent years, the market has shown growing concern on sustainability issues. Yuanta Securities has responded to market demand by issuing warrants linked with green energy; according to statistics from the Financial Trading Department, as of December 31, 2018, there are 186 products linked to solar power related stocks, 196 linked to wind power related stocks, and 7 linked to water resource related stocks. From 2016 to 2018, the market share was 16.1%, 18.7%, and 21.4%, respectively, ranking at the top of the market for three consecutive years.

Yuanta Life
(1) Sustainability Investing and Related Financial Services

According to the analysis of top 10 constituents of the FTSE4Good TIP Taiwan ESG Index (including TSMC, Hon Hai, MediaTek, Nan Ya Plastics, Cathay Financial Holdings, Fubon Financial Holdings, Chunghwa Telecom, CTBC Financial Holdings, Uni-President, and Delta), based on total market capitalization of shares held at the end of 2018, a total of 44.55% of Yuanta Life’s investment assets are in constituent stocks of the Taiwan ESG Index.

(2) Customer Care Initiatives

When disaster strikes, Yuanta Life will immediately initiate checks on policyholders and strive to collect information on injuries and casualties among policyholders. We also activate our customer care measures, including quick claims processing, premium payment extensions, interest-free policy loans, and free policy reissuing.

(3) Introducing Protection Products to Solve Social Problems

In 2018, Yuanta Life launched a comprehensive product program, focusing on providing comprehensive medical protection in nine areas: disability support, whole-life medical care, cancer protection, hospitalization, medical reimbursement, surgical treatment, critical illness, accidental injuries, and waivers of premium. The program consists of one whole-life main coverage, three whole-life insurance riders, eight one-year renewable insurance riders, and one waiver of premium rider, for a total of 13 insurance products. For young people, if we take a 20-year payment period as an example, the annual premium will be around NT$30,000, enabling even those with limited resources to easily plan their medical coverage. For those who already have some medical insurance, the program can also serve as a practical checklist to see if they are adequately covered and make up for any gaps.

(4) Launching Microinsurance to Benefit the Underprivileged

To advance the basic insurance coverage for the economically disadvantaged and other specified groups, Yuanta Life introduced “Yuanta Life Injury Micro-insurance (MC)” in 2014. A collective insurance product, this one-year personal injury insurance features low sum insured, low premiums, and easy-to-understand coverage, providing the underprivileged a product to protect their families or themselves from falling into financial difficulties should disaster strike. In addition, to help underprivileged groups save money, reduce the government’s financial pressure from public pension system, and improve the retirement planning of the young working class, in January 2017, Yuanta Life introduced the Group Interest Sensitive Annuity Type A and Type B group annuity products. As of January 14, 2018, twelve groups are insured under these group annuities products, contributing a cumulative total of approximately NTD 250 million in premium.

Yuanta Funds

In November, 2007, Yuanta Funds set up the Yuanta Global Utility Fund, seeking out and investing in relevant companies to help encourage the improvement and popularization of renewable energy resources, thus helping to mitigate the greenhouse effect. In second half of 2019, Yuanta Funds plans to introduce Yuanta FTSE4Good TIP Taiwan ESG ETF. This exchange-traded fund (ETF) was jointly composed by Taiwan Index Plus and FTSE Russell, and is the first investment ESG index in Taiwan to incorporate ESG (Environment, Social, and corporate Governance) with financial indicators, enabling people to enjoy stable, long-term investment returns while engaging in sustainable investment. The FTSE4Good TIP Taiwan ESG Index is based on FTSE Russell’s ESG methodology in assessing the inputs and performance of listed companies in ESG dimensions and then screening component stocks through financial indicators, creating an index of listed companies with suitable corporate sustainability responsibility and business performance, among which electronics industry accounted for approximately 60% and the financial and traditional industries each accounting for 20%. The creation of the FTSE4Good TIP Taiwan ESG Index has significant importance in fostering an environment for sustainable and responsible investment in Taiwan.

Yuanta Venture Capital

Since its inception, Yuanta Venture Capital has worked along with government policies to promote the high-tech sector and selected investment targets in line with trends in those industries. With the government’s strong push behind the 5+2 Major Innovative Industries plan, lowering the restrictions on investment, we have begun actively investing in the related industries, aiming to provide a diverse funding basis to promote industrial development and help Taiwan companies in their financial transition. In response to support the 5+2 Major Innovative Industries plan, Yuanta Venture Capital’s investment amount in related industries in 2018 was NTD 986 million, accounting for 78.1% of the business.

5+2 Innovative Industry Breakdown by Yuanta VC in 2018
Total investment amount 986 NTD mn
Unit: NTD mn
Amount Percentage
Biomedical 416 42.16%
High-value Agriculture 90 9.16%
Smart Machinery 83 8.45%
Green Energy 69 7.02%
Circular Economy 50 5.07%
Defense 44 4.46%
Asia Silicon Valley 233 23.68%
 
Note: The industries are categorized according competent authority.