Good afternoon, and good morning to those joining us from Europe. Welcome to Cathay Financial Holdings' 2026 second quarter analyst meeting.

I am C.K. Lee, CEO of Cathay Financial Holdings, and I will host today's meeting.

Thank you for joining us. Let me begin by introducing the senior management team with us today: Ms.

Grace Chen, CFO of Cathay Financial Holdings; Mr. Albert Lin, President of Cathay Life; Mr.

Robert Hu, EVP of Cathay United Bank. Before we begin the presentation, let me share a few key highlights.

We delivered strong earnings in the first half of 2026. Cathay Financial Holdings reported net income of $76.5 billion NT dollars.

Net income plus after-tax FVOCI equity disposal gains recognized directly in the retained earnings reached $165.9 billion NT dollars, surpassing the full year level for 2025 and reaching an all-time high. Core business momentum remained strong across the group.

Cathay United Bank delivered record high first-half earnings, supported by strong loan and deposit growth, higher net interest income, and robust wealth management fee growth. Cathay Life net income plus after-tax FVOCI equity disposal gains also reached an all-time high.

New business CSM generation remained robust, the positive spread remained stable, and net worth reached a record high. Cathay Century, Cathay Site, and Cathay Securities also delivered record high first-half earnings.

Cathay Century's earnings were supported by steady premium growth and well-contained loss ratios. Cathay Site continued to expand its AUM, while Cathay Securities benefited from active Taiwan equity market turnover and continued gains in brokerage market share.

Now I will hand over the call to Claire from our IR team for the 2026 first-half result presentation. Claire, please.

Thank you, C.K. Let's start with the business highlights on page 4.

Cathay United Bank net income reached a record high for the first half, up 15% year-on-year. Loans and deposits both posted strong growth, while net interest income and net fee income increased 14% and 11% year-on-year respectively.

Cathay Life new business CSM reached $53.9 billion, while the CSM balance increased 6.9% year-to-date to $547 billion. Liability interest cost declined significantly to 2.13%.

Pre-hedging recurring yield reached 3.47%, and hedging costs remained stable, supporting a stable positive spread. Net worth reached a record high.

Cathay Century, the general insurance subsidiary, recorded steady growth in written premiums, with market share at 13.2%, ranking number 2 in the industry. Net income reached a record high for the first half.

Loss ratio remained well contained, and the retained combined ratio improved year-on-year. Cathay Site, the asset management subsidiary, total AUM reached $3.6 trillion NT dollars.

Discretionary mandate AUM reached $1.7 trillion NT dollars, maintaining the number 1 position in the industry. Net income also reached a record high for the first half.

Cathay Securities net income reached a record high for the first half. The strong performance was driven by active trading in Taiwan's equity market.

Domestic brokerage market share and sub-brokerage trading value continued to grow. Please turn to page 5 for an update on our sustainable finance initiatives.

In July, we hosted the Cathay Sustainable Finance and Climate Change Summit for the 10th consecutive year. This year's event attracted more than 5,800 participants, and participating listed companies represented over 80% of Taiwan's total market capitalization.

Page 6 shows Cathay Financial Holdings net income and EPS. In the first half, Cathay Financial Holdings reported net income of $76.5 billion.

Net income plus $89.4 billion of after-tax FVOCI equity disposal gains recognized directly in retained earnings reached $165.9 billion, surpassing the 2025 full-year level and setting a new all-time high. EPS was $4.95.

Including after-tax FVOCI equity disposal gains, the per-share amount was $11.04. Please turn to page 7 for subsidiaries net income and ROE.

Cathay United Bank, Cathay Century, Cathay Site, and Cathay Securities all delivered record-high net income for the first half. Cathay Life net income plus after-tax FVOCI equity disposal gains surpassed the 2025 full-year level and reached an all-time high.

Cathay Financial Holdings ROE reached 16.9%, and all major subsidiaries delivered double-digit ROEs. Page 8 shows the net worth of Cathay Financial Holdings.

Consolidated net worth reached $1.13 trillion, supported by strong earnings and significant increases in OCI asset and liability valuations. Including after-tax CSM, adjusted net worth reached $1.58 trillion Taiwan dollars, better reflecting economic value.

After deducting preferred shares, adjusted book value per share was $101.2 Taiwan dollars. Now let's move to the performance of the major subsidiaries.

Please turn to page 10 for Cathay United Bank's loan and deposit performance. Total loans reached $3.1 trillion, up 14% year-on-year, driven by double-digit growth in corporate and consumer loans and steady mortgage growth.

Deposits grew 15% year-on-year to $4.6 trillion, with the demand deposit ratio rising to 62.4%. Interest yield is shown on page 11.

Supported by strong foreign currency loan growth and a higher demand deposit ratio, first-half net interest margin and interest spread were 1.61% and 1.93%, up 5 basis points and 7 basis points year-on-year respectively, while both second-quarter metrics increased by 4 basis points quarter-on-quarter. Page 12 shows the asset quality.

Asset quality remained sound, with the NPL ratio at 14 basis points and the coverage ratio at 1,100%. Annualized credit cost was 24 basis points, up year-on-year, mainly reflecting higher general provisions due to loan growth.

Please turn to page 13 for SME and foreign currency loans. SME loans grew 7% year-on-year to $377 billion, accounting for 12% of total loans.

Foreign currency loans reached $378 billion at the end of the second quarter, up 34% year-on-year, or 26% excluding FX impact, supported by supply chain realignment and corporate overseas capex demand. Page 14 shows offshore earnings.

Offshore earnings increased 5% year-on-year to $5.4 billion, driven by growth in loans and deposits and investment income. Please turn to page 15 for net fee.

Net fee income was $19.8 billion, up 11% year-on-year, driven by strong wealth management momentum. Wealth management fees reached $13.9 billion, up 25% year-on-year.

Page 16 shows the breakdown of wealth management fees. Fees from mutual funds grew 60% year-on-year, while fees from securities and structured products grew 74%.

Fees from insurance products also grew steadily. Please move to page 18 for Cathay Life's earnings breakdown.

Insurance service result was $22.2 billion, supported by stable CSM release, while financial result was $38.8 billion, driven by recurring positive spread. Net income reached $46.2 billion.

Net income plus after-tax FVOCI equity disposal gains reached an all-time high of $131.2 billion. Please move to page 19 for Cathay Life's premiums performance.

FYP and FPE reached $195.4 billion and $39.3 billion, up 105% and 27% year-on-year respectively. Growth was driven by continuous strong sales momentum in investment-linked products amid strong equity markets, while FYP from health and accident products, key contributor to new business CSM, also increased year-on-year.

Page 20 shows the distribution channels and persistency ratios. FYP was mainly generated through tied agents and Cathay United Bank, which together accounted for nearly 99%.

Please turn to page 21 for new business CSM. New business CSM reached $53.9 billion in the first half.

Health and accident products contributed nearly 60% despite their relatively small share of FYP. Tied agents remained the primary contributor, while telemarketing accounted for only 0.2% of FYP, but contributed 4% of new business CSM.

Please turn to page 22 for CSM balance movement. CSM balance reached $547 billion, up 6.9% year-to-date, mainly driven by new business CSM.

CSM release was $17.4 billion, providing stable support to the insurance service result. Page 23 shows the liability interest cost and break-even asset yield.

Under IFRS 17, insurance liabilities are measured using market-based discount rates. Liability interest cost declined by 127 basis points to 2.13%, while the break-even asset yield also declined to 2.07%.

Please look at page 24 for the investment portfolio. Total investments were $8 trillion Taiwan dollars at quarter-end, with overseas investment accounting for nearly 70%.

Please refer to the right-hand column for investment return by asset class. Please turn to page 25 for investment performance.

Cathay Life realized equity capital gains amid strong equity markets, bringing the after-hedging investment yield, including FVOCI equity disposal gains, to 5.55% in the first half. On a P&L basis, the after-hedging investment yield was 3.27%.

Pre-hedging recurring yield was 3.47%. Please turn to page 26 for FX hedging strategies.

Annualized hedging cost was 1.21%, down year-on-year, following the adoption of the new FX volatility reserve mechanism and FX amortization for bonds classified as amortized cost. Volatility in FX gains and losses declined significantly, and hedging costs stabilized.

The FX volatility reserve balance increased to $130.9 billion. Please turn to page 27 for cash dividend income.

Cathay Life adjusted its equity position and realized capital gains amid strong equity markets. Cash dividend income totaled $12.7 billion as of the end of July.

Page 28 shows the net worth and OCI valuation changes. Net worth reached a record high of $958.7 billion, up $454.2 billion NT dollars in the first half, supported by earnings, equity disposal gains, and OCI valuation gains.

The OCI valuation gains reflected higher asset valuation amid strong equity market and liability valuation gains due to higher Taiwan interest rates. The equity-to-asset ratio and adjusted equity-to-asset ratio reached 11.8% and 17.1% respectively.

Page 29 summarizes Cathay Life's key operating and financial metrics under IFRS 17 for reference. Now let's move to Cathay Century, Cathay Site, and Cathay Securities.

Page 31, Cathay Century's written premium continued to grow, reaching $21.3 billion in the first half. Market share was 13.2%, ranking number 2 in the industry.

On page 32, the retained combined ratio improved by 2.4 percentage points year-on-year as expanded underwriting capacity drove higher insurance revenue, while loss ratios remained stable. Moving to Cathay Site on page 33, Cathay Site net income reached a record high for the first half, up 27% year-on-year, with ROE at 66.4%, supported by solid AUM growth.

Fund AUM and the number of beneficiaries also continued to grow. Moving to Cathay Securities on page 34, Cathay Securities net income reached a record high for the first half, up 148% year-on-year, with ROE at 44.7%, supported by active trading in Taiwan's equity market.

Domestic brokerage market share reached a new high, while sub-brokerage trading value continued to grow. By the end of July, cumulative net income had already surpassed the 2025 full-year level, setting a new all-time high.

This concludes the presentation. I will now hand it back to C.K.

for the Q&A section. Thank you.

Thank you, Claire.

Good afternoon, this is Grace Chen. Before we move into the Q&A, let me briefly recap some of the key topics discussed during our Chinese session, which may also be of interest to international investors.

Given our strong first-half results, participants were particularly interested in recent operating trends, the outlook for key earnings drivers, and dividend policy. For banking business, operating momentum remained resilient.

Corporate and foreign currency loans showed strong momentum, which should continue in the second half. We maintain our full-year target of double-digit loan growth.

First-half net interest margin expanded by 6 basis points, better than expected. Given strong foreign currency loan momentum, effective funding cost management, and greater visibility into the interest rate environment, we now expect full-year NIM to be around 1.63% to 1.65% level.

Asset quality remained stable in the first half, with annualized credit cost at 24 basis points, and should remain stable in the second half. Strong wealth management momentum should support double-digit growth in net fee income.

For Cathay Life, performance remained strong across both the insurance and investment sides. New business CSM reached $53.9 billion Taiwan dollars in the first half, representing 72% of the full-year target of $75 billion.

Given the strong momentum, new business CSM should exceed the full-year target. On the investment side, the new AC FX accounting treatment has significantly reduced volatility in FX gains and losses, and hedging costs have stabilized.

Full-year hedging costs should be around 1.2%. Interest rates have remained elevated year-to-date, which has been beneficial to recurring income.

The full-year pre-hedging recurring yield could exceed 3.5%, supporting a stable positive spread. The significant increase in OCI valuation drove a strong rebound in Cathay Life's net worth and further strengthened its capital position.

On dividend policy, net income plus after-tax FVOCI equity disposal gains reached an all-time high. In addition, Cathay Life's strengthened capital position supports a positive outlook for future dividend upstreaming to the holding company.

These developments provide a solid foundation for our dividend distributions. In determining future dividends, we will continue to consider overall earnings performance, business development needs, shareholders' expectations, and peers' dividend yields, while maintaining healthy financial and capital ratios.

As we have consistently communicated, our objective is to appropriately reflect our strong earnings performance and provide a competitive dividend yield. These are the key highlights.

Thank you. Any question?

At this time,

It sounds we had answered all the questions from the Chinese presentation. [laughter] Okay, thank you so much for your participation.

Should you have any question, please feel free to contact our IR team. Thank you.

Thank you.

Thank you.