1. Chinatrust Financial Holding Company

(1) Scope of Business:
As a financial holding company, Chinatrust (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.

(2) Innovative Financial Services Planned:
As it develops new services, CFHC not only invests in integrated risk management frameworks, but it also pursues investments in information infrastructure. Through information engineering, Chinatrust can improve overall financial holding company performance, including integrated storage of customer information and databases, as well as linking information systems to create added value for customers. As CFHC expands its business by developing new products and services and addressing new markets, it constantly enhances its key capabilities in finance, human resources and information technology. Above all, we endeavor to maintain a sound, measurable risk management platform.

2. Chinatrust Commercial Bank

(1) Scope of Business:
A. Corporate Banking:
a. Commercial Banking:
Chinatrust Commercial Bank (CTCB) offers flexible and professional customer-oriented banking services, including syndicated loans, trade finance, cash management, factoring, and letters of credit to facilitate international trade.
b. Investment Banking:
Focused on meeting corporate clients fundraising needs and providing wealth management consultation, Chinatrust Commercial Bank serves clients through expert consulting and developing financial management propositions. The bank also designs transaction financing products that are customized to meet clients’ individual needs.
c. Capital Markets:
The world of corporate banking is continually changing. Chinatrust Commercial Bank stays abreast of capital market shifts. CTCB helps clients hedge potential risks and offers them derivative products in standardized or structured designs, while making continual efforts to develop a variety of new products. It is also engaged in proprietary trading and securities lending to develop a more extensive product line.

B. Consumer Finance:
a. Credit card services: Including the issuance of credit cards and merchant acquisition of credit card bills.
b. Unsecured loans: Including personal loans, cash cards as well as credit card mail loans.

C. Retail Banking:
a. Wealth management: The bank provides individual clients with services for their needs in investment and wealth management, including local/foreign currency deposits, domestic/foreign securities and trust businesses, bankassurance, and others.
b. Secured loans: Including home mortgages and car loans.
c. Small and medium business services: To meet the growth needs for small businesses and entrepreneurs, the Bank provides products that directly meet various needs in different phases of development, including loan products and non-loan products.

(2)Revenue Breakdown:

Unit: NT$ million

(3)Innovative Financial Services Planned:

Chinatrust Commercial Bank’s has long had a goal to offer innovative products and services. New developments in the Bank’s operations in consumer finance, retail banking, and corporate banking are illustrated below:
A. Corporate Banking:
When it comes to corporate banking, the Bank offers loans and guarantees to help enterprises meet their long-term and short-term capital and working capital needs. In line with the trends for fundraising on an increasingly large scale, the Bank’s corporate banking operation has actively entered the syndicated loan market and has successfully launched a number of large-scale syndicated loan projects.

Chinatrust Commercial Bank is the largest corporate bond dealer among all Taiwanese banks. Through its liquid and transparent trading platform, the Bank meets all client liquidity and short-term investment needs. Thanks to its robust financial engineering team, the Bank serves its clients through a variety of structured investment oriented products to help them maximize the payoff from investment while Chinatrust Commercial Bank minimizes its capital costs. Under this successful win-win strategy, the Bank has been growing hand-in-hand with its clients.

When it comes to factoring businesses, Chinatrust Commercial Bank has successfully integrated its receivable and payment system for local and foreign currencies, strong branch office network, FAX trading, and online bank channels to accelerate the current trend for prompt, international and online networks that are rapidly developing among enterprises. The Bank offers extremely prompt and efficient services to clients for collections, payments and remittances. While Taiwan, China, Hong Kong, and other territories with ethnic Chinese communities have been experiencing rapid growth in financial interactions, Chinatrust Commercial Bank makes versatile and comprehensive financial services readily available with integration in financing, dispatch, revenues and expenditures.

This year, the Institutional Banking Group successfully accomplished its project for improvement of information procedures through the cooperation of all the group’s units by focusing on an information engineering corporate culture.

As a result of these achievements, the Bank has been rated the “Best Taiwan Bank” and “Best Taiwan Investment Bank” by authoritative financial journals FinanceAsia and The Asset. These accolades are further evidence that Chinatrust Commercial Bank is both an innovator and an expert in corporate banking.

B. Consumer Finance
a. This year, in credit card services, the Bank has successfully launched contactless credit card chip and has formed strategic alliances with convenience store chains. It has also set-up both an electronic payment environment and the tools needed to make it work.
b. In addition, Chinatrust Commercial Bank continually promotes newly developed credit cards in the market to bring added convenience to cardholders.
c. Chinatrust Commercial Bank promote unsecured personal loans through differentiated marketing and developing special purpose loans for consumers’ capital needs.
d. This year, Chinatrust Commercial Bank updated risk management models to improve credit quality and profitability while maintaining business momentum.

C. Retail Banking
For customer acquisition, in addition to leveraging database marketing to full utilize CRM information in identifying potential customers, the Bank has designed a service platform with a team of specialists ready to serve customers in its branches. Through such efforts, the Bank is able to seize new opportunities and new segments for wealth management, generated through the close relationship it maintains with its customers. Through face-to-face encounters, the Bank identifies and meets potential customer demands that would never be satisfied by other means.

For future development programs, Chinatrust Commercial Bank will maintain its retail banking services while boosting its capabilities to serve affluent customers. Through product marketing and maintaining close customer relationships, Chinatrust Commercial Bank will create overall customer gains and increase the quality of its assets to continue its leadership position as acknowledged by customers in the market.

3.Chinatrust Securities Company

(1) Scope of Business:
A. Brokerage of securities listed on the Taiwan Stock Exchange (TSE).
B. Brokerage of over-the-counter (OTC) securities.
C. Proprietary trading of listed securities on the TSE.
D. Proprietary trading of OTC securities.
E. Securities borrowing & lending.
F. Underwriting services.
G. Stock agent for public and listed companies.
H. Securities-related futures operations.
I. Other securities and futures services permitted by the regulatory authorities.

(2) Revenue Breakdown:
Unit: NT$ million

(3) Innovative Financial Services Planned:
In an attempt to integrate the resources and the development of securities capabilities within Chinatrust Financial Holding Company, Chinatrust Securities Company was granted approval in February 2007 to set up the “Investment Consulting Department”, which provides research, analysis, and consultation services. The regular & irregular published industrial analysis & investment advices not only provide the proprietary trading division the guidance to trade, but also complete the range of investment services offered to investors.

4.Chinatrust Insurance Brokers Company

(1) Scope of Business:
A. Property Insurance:

a.Corporate: Marine insurance, fire insurance, liability insurance, engineering insurance, and fidelity insurance.

b.Personal: Fire insurance, fidelity insurance, auto/ motorcycle insurance, unemployment insurance, and group accident insurance.

B. Life Insurance:

a.Corporate: Group fixed life insurance, group health insurance, and group accident insurance.

b.Personal: Accident insurance, health insurance, whole-life insurance, endowment insurance, investment-linked insurance, and annuity insurance.

(2)Revenue Breakdown:

Unit: NT$ million

(3) Innovative Services being Planned:
Chinatrust Insurance Brokers Company, or Chinatrust Insurance, is focused on wealth management for customers with various levels of demand for insurance products. Chinatrust Insurance focuses on the life insurance market as it represents a critical element of wealth management. It will utilize its full efforts to develop the market channels that have not yet demonstrated the maximum synergies and maximize cross-marketing within Chinatrust Financial Holding Company members. Chinatrust Insurance will therefore focus on the following goals in the future:
a. R&D on market channel characteristics.
b. Improving operating procedures.
c. Updating insurance information systems.
d. Partnership development with new insurance firm.
e. Relationship maintenance with corporate and retail banking customers.
f. Improving the speed of the insurance operation platforms.
Through the aforementioned efforts, Chinatrust Insurance will create diversified, comprehensive, multifaceted and personalized offerings to make the best possible product portfolios available to customers. Meanwhile, it will revitalize its corporate image and value propositions.

5.Chinatrust Venture Capital Corporation

(1) Scope of Business: Venture Capital Investments

(2) Revenue Breakdown
Chinatrust Venture Capital’s major business involves direct investments in non-listed companies. In 2006, the company invested in a total of two new projects and made capital injections for one of its existing projects. Of these three investments, one was a domestic investment and two were overseas investments. As of December 31, 2006, the company’s investment portfolio included domestic investments amounting to NT$300 million, or 41%, and overseas investments amounting to NT$430 million, or 59%. A breakdown by industry is as follows:
Unit: NT$ million

(3) Innovative Financial Services Planned:
With Chinatrust’s extensive client base, Chinatrust Venture Capital aims to provide clients with total solutions together with other subsidiaries of the Group. The future planning of Chinatrust Venture Capital is as follows:

A.Introduce cross-border cooperation opportunities: Due to Chinatrust’s long-established connections with the international investment community, Chinatrust Venture Capital is in a good position to introduce strategic partners and assist in the transfer of advanced technology, which will bring about competitive advantage to companies in Taiwan.

B.Leverage Chinatrust’s resources to service high potential clients: Chinatrust Venture Capital focuses on emerging industries and companies with high-growth potential. By leveraging Chinatrust’s resources for comprehensive financial services, Chinatrust Venture Capital is able to provide clients with capital requirements or financial services in its various stages of business operation.

6.Chinatrust Asset Management Company

(1) Scope of Business:
A. Purchase of Non-Performing Loans (NPLs) from financial institutions
B. Management of the NPL auction process for financial institutions
C. NPL management services for financial institutions
D. Appraisal of NPLs for other financial institutions
E. Related businesses to investments in NPLs

(2) Breakdown Revenue

(3) Innovative Financial Service Planned:

A.Enhancing the recovery value of NPLs:

Lower NPL supplies, due to Taiwan’s economic recovery in recent years, and increasing competition among asset management companies have resulted in relatively higher acquisition costs of new NPL portfolios in Taiwan since last year. In 2007, Chinatrust Asset Management will focus on selling NPL asset portfolios on hand and pushing foreign asset-management-company partners to realize gains in our overseas NPL investments to optimize the recovery value of NPLs.

B.Exploring investment opportunities in Asia: Under the requirements of the Ministry of Finance (MOF) to lower the NPL ratio, the banking industry as a whole reduced its NPL ratio (as defined by the MOF) to 2.13% as of December 2006. With the improvement of financial institutions’ asset quality and the recovery of the real estate market, the development of the NPL market in Taiwan has unavoidably slowed down. Chinatrust Asset Management will continuously look for more investment opportunities outside Taiwan in the Asia market, where Non Performing Loans ratios remain high, to fuel future profit growth.

(1) Scope of Business:
Chinatrust Security Company engages mainly in the following:

A.Stationing of security guards in office buildings and communities to render efficient security services.

B.Providing consultation services to help clients reduce theft and the impact of natural disasters.

(2)Revenue Breakdown:

Unit: NT$ million

(3) Innovative Financial Services Planned:
Chinatrust Security Company will train security guard personnel to enhance their expertise and capacity in order to upgrade the quality of security management services.

A.Chinatrust Security Company closely teams with government agencies to help protect customers from potential fraudulent practices.

B.Chinatrust Security Company will continue to improve its professional training programs. All newcomers are expected to satisfactorily complete the initial educational and training programs under the auspices of the Security Association. In addition, current security guards are required to attend and complete on-the-job training programs organized by Chinatrust Security Company on a monthly basis. These intensive educational and training programs will allow Chinatrust Security Company to assure the best possible expertise and top-caliber performance.

C.Chinatrust Security Company has been invited and appointed by the National Police Administration to join the appraisal of security firms in their performance. In the same spirit, the Company will assure that its entire staff will take the initiative to carry out their duties and assignments with a committed attitude and will encourage its staff to participate in all professional educational and training programs held in Chinatrust Security Company and in other outsourced training institutions. Through practical and efficient management methods, the Company will attain its goal of making itself the highest-caliber security expert.

8.Taiwan Lottery Corporation

(1) Scope of Business:
Taiwan Lottery Corporation (TLC), is consigned by the Chinatrust Commercial Bank to carry out various services for the Public Welfare Lottery, including issuance, marketing, promotion, prize drawing, prize claiming, and management.

(2) Revenue breakdown:
Taiwan Lottery Corporation was established in 2006, and started to operate the Public Welfare Lottery business in the beginning of 2007. There is no available revenue breakdown in 2006 since TLC only began its official operations at the beginning of 2007.

(3) Innovative Financial Services Planned:

a.For long-term development, the lottery is guided by three principles, namely “dream, fun, and charity.” TLC’s mission is to make the Public Welfare Lottery completely trustworthy, and ensure it plays a vital role in benefiting the entire society.

b.TLC will develop the finest lottery products for public consumers in Taiwan, and a variety of incentives and games that are both fun and best suited for distributors. Through these efforts, the mission for TLC is to maximize profitability for society and its consumers.

c.Appropriate market segmentation will allow different types of lottery games and activities to maximize the customer base as well as contribution to public welfare generated from lottery sales. From the time TLC began preparing the Public Welfare Lottery until it started operating today, TLC has invested both talented people and extensive resources to conduct relevant market research and pin-point analysis. As a result of its sound and comprehensive research and planning, TLC has successfully laid a solid foundation for maximizing the potential to generate public funds and improve public welfare.