＜Taipei＞ Industrial Bank of Taiwan held its 2009 Annual Shareholder Meeting this morning (June 19), approving the loss appropriation proposal for year 2008 and electing an independent director, Ms. Yi-Ju Liu, Professor of Department of Finance at National Taiwan University and Chief Economic Advisor of Daiwa Institute of Research Ltd. The bank also announced its earning result for the first five months of 2009 to be NT$ 1.067 billion (before tax), or NT$ 0.45 on a per share basis.

Chairman Kenneth Lo of IBT stated that the financial tsunami in 2008 has seriously hit the group, particularly one of the bank’s subsidiaries, IBT Securities Co., Ltd. (IBTS) On a firm commitment basis, IBTS underwrote a Collateralized Bond Obligation (CBO) in 2005, which were beneficiary certificates backed by credits of quality foreign and domestic corporate debts. However, as the foreign corporate debts started to suffer credit downgrades, the CBO has also caused loss to its investors. IBTS in 2008 recognized loss for its total exposure to the CBO. Since IBT has 93.66% equity stake in IBTS, the bank thus ended the year with an after-tax loss of NT$ 2.45 billion. Apart from the loss, the proposed merger with China Bill Finance Corp. was also halted because of the financial tsunami. However, as the world economy starts to pick up its momentum, it is still likely for the two entities to continue the merger.

Chairman Lo pointed out that the bank has endeavored to strengthen its risk management, resource integration and to expedite synergy creation since the beginning of 2009. Along with a better interest rate spread and rebounds of local stock market, the bank has delivered a fairly good performance in securities and bond trading. Overall, the bank has a pretax profit of NT$ 1.067 billion for the first five months of 2009. The pretax EPS is NT$ 0.45. It is expected the bank shall be able to get rid of the downturns from last year and start to present growth momentum quarter by quarter.