Scope of Business:
As a financial holding company, Chinatrust Financial is entitled to deal in banking, securities, bills finance, insurance brokerage, venture capital, asset management, and other businesses sanctioned by the regulatory authority.
Major Subsidiaries:
Chinatrust Commercial Bank, Chinatrust Securities Company, Chinatrust Bills Finance Corporation, Chinatrust Insurance Brokers Company, Chinatrust Venture Capital Corporation, Chinatrust Asset Management Company, and Chinatrust Security Company.

Scope of Business:
A. The Consumer Banking Group is responsible for the following three main businesses:
●Retail banking services: Aiming to serve customers’ loan and deposit needs, including residential mortgage, auto loan, consumer finance , etc. The Bank’s goal is to further consolidate its customer base and increase product-holding ratio in order to increase profitability.

●Credit card services: Aiming to satisfy payment requirements of customers. The Bank has long been the leader in the credit card business. Going forward, the Bank’s goal is to vigorously strengthen the functionality of existing products and develop more diversified payment options.

●Wealth management business: Aiming to satisfy personal investment needs, the Bank’s goal is to provide best-of-breed products and services by employing an “open-platform” strategy. Through strategic alliances with global financial institutions, the Bank will increase product diversification and strengthen the development of personal trust services and overseas offerings.

B. The Corporate Banking Group is responsible for the following three main businesses:
●Investment Banking: The Bank serves corporate clients in both fund-raising and general consulting with regard to financial matters. Tailor-made financial products will be introduced to further cement its partnership with corporate clients, in turn securing Chinatrust’s status as their favored bank to work with.
●Capital Market: Topping the list are services pertaining to foreign-exchange markets and derivatives that cover interest rates, exchange rates, stock prices, indices, and other commodities. The Bank’s offerings range from futures, options, and swaps to forward contracts as well as a mixture of them. Innovative products and services will be developed in accordance with market changes and customer requirements.
●Traditional Commercial Banking: The objective is to offer corporate clients a wider range of financial services, including deposits, loans, remittances, factoring, as well as a bigger variety of channels to raise funds.

Revenue Breakdown（Chinatrust Commercial Bank）
Expressed in Million of New Taiwan Dollars “NT$”

Innovative Services Being Planned:
Chinatrust Commercial Bank is committed to constantly improving its products and services, including establishment of an optimized customer service platform, design of innovative products and services, streamlining of internal operational processes, renovation of IT systems, upgrading of risk management, and systematization of lending control. This relentless pursuit of customer-centered innovation justifies the Bank’s excellence on all fronts – be it corporate banking, personal banking, wealth management, Internet-enabled banking, or human resources – that in turn creates a trustworthy brand and image.
Chinatrust Commercial Bank was Taiwan’s first bank to be awarded by the Financial Supervisory Commission (FSC) a license for provision of wealth management services. Furthermore, it was cited by the prestigious magazine Euromoney as “the Best Bank in Taiwan” for two consecutive years – 2005 and 2006. Based on its vision for “the most preferred and trustworthy wealth management,” the Bank seeks to provide clients with a complete range of services by drawing on the “best people, best product, best solution.” For each and every customer, Chinatrust Commercial Bank readies a tailor-made wealth-management package that not only manages his or her assets but also satisfies any other financial needs he or she may have.
With a view to offering consumers the most convenient, secure payment instrument, Chinatrust Commercial Bank joins hands with Visa International in introducing EMV (Europay MasterCard VISA) credit cards, making Taiwan the second market worldwide to adopt the VISA WAVE chip card. The EMV standard defines interactions at the physical, electrical, data and application levels between IC cards and IC card processing devices for financial transactions. A big benefit for moving to EMV-based credit card payment systems is improved security with associated fraud reduction. Regardless of the transaction value, consumers can expect speedy completion of transactions without having to worry about security.
Chinatrust Commercial Bank is keen to develop a vast array of products to make life easier for consumers. One prime example is “debt-management mortgage,” allowing customers to secure a greater quota of loan at a reasonable interest level in accordance with the value of his or her property being collateralized. Meanwhile, customers are accorded the benefit of consolidating all housing loans, credit loans, credit and cash card debts, and automobile loans, thus sparing them the trouble of having to take care of all these money matters separately. As such, the renowned magazine Asian Banker Journal cited Chinatrust Commercial Bank as “The Best Retail Bank in Taiwan.” It was recognized as not only the most trustworthy and respected consumer bank in Taiwan but also one of the most competitive banks throughout Asia.
Backed by its 66 overseas outlets, Chinatrust Commercial Bank is able to provide corporate banking services across a network of 847 foreign banks in more than 100 countries. In particular, a service is made available to Taiwanese enterprises through iaccount that can fully meet their needs in financing, investment, fund allocation, and risk-hedging. Corporate clients are given a cross-border platform that spans Taiwan, Hong Kong and China as well as Southeast Asia. They have the option of making a transaction on the Internet, by fax, or over the phone. The benefit is self-evident, that is, central control over global operations, diversification of risks, and access to cross-border resources at the same time. At present, Chinatrust Commercial Bank offers such one-stop services for financing, fund allocation, wealth management, and risk-hedging for markets spanning Taiwan, Hong Kong, Indonesia, Vietnam, the United States, and China.
The Bank’s excellence in corporate banking was best illustrated by International Finance Review’s awarding its securitization of 2005-1, NT$18billion CBO bonds as the “Taiwan Bond of the Year.” The same exercise also won the citation as the “Best Deal in Taiwan” by the prestigious magazine The Asset.
Chinatrust Commercial Bank does not take its corporate citizenship lightly. One public-good activity universally undertaken by its branches all over the island is provision of umbrellas as a token of the Bank’s caring for customers in the event of their being caught in an unexpected rain. Seemingly minor gestures like this can prove conducive to fostering customer loyalty and leaving the general public a positive impression.

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. Underwriting services.
F. Acting as agents for public and listed companies.
G. Securities-related futures operations.
H. Other securities and futures services permitted by the regulatory authority.

Operating Revenue Breakdown（Chinatrust Securities Company）
Expressed in Million of New Taiwan Dollars “NT$”

Innovative Services Being Planned:
The Company is set to pursue revenue and earnings in areas outside of securities trading and launch into the investment banking business. Since 2005, Taiwan has seen a proliferation of mergers and acquisitions amid ever-growing competition, resulting in a significant increase in demand for consulting services. Many local houses have taken advantage of this opportunity to make inroads into the investment banking business in the footsteps of their foreign counterparts. Provision of mergers and acquisition consulting and financial advisory services is certainly an additional boost to revenue and earnings for securities houses. Furthermore, Taiwan’s fast-changing economy is also making it an inevitability for securities houses to expand their economies of scale and evolve into investment banks. Such an approach is needed for companies to diversify risks and enhance competitiveness.
For the island’s securities industry, wealth management is poised to garner the spotlight in 2006. The FSC first allowed the securities industry to provide wealth management services in July 2005. In today’s marketplace, where information is readily available and makes a real-time impact, people have a need for making investments and hedging risks globally. In Taiwan, the stock market has seen a gradual decline in daily turnover in recent years. While reflecting a lack of confidence among investors, the phenomenon testifies to people’s increasingly looking to other modes and options of investment. This certainly bodes well for the island’s wealth management industry. As securities houses seek to diversify their business, both wealth management and financial advisory services are bound to attract a lot of attention in 2006 and should constitute a significant new source of earnings.
Securities companies are poised to seek cooperation with other financial institutions, including mergers and acquisitions, to secure more resources and retail outlets. Pitted against established international investment institutions, Taiwan’s investment banks still have a long way to go before becoming competitive players. Within the home market, however, securities houses under the wings of financial holding companies are certainly better positioned than non-affiliated counterparts to engage in financial advisory services and build a presence in the investment banking market. The less-equipped smaller houses stand to feel the pinch as medium to large-sized companies strive to become even bigger. Mergers and acquisitions as well as strategic alliances will be commonplace for companies to build and consolidate their market standing down the road.

Scope of Business:
A. Brokerage and proprietary trading of short-term bills.
B. Certification of bills.
C. Underwriting of bills.
D. Serving as guarantor for notes/debts.
E. Brokerage of interbank loans.
F. Certification, underwriting, brokerage, and proprietary trading of financial bonds.
G. Brokerage and proprietary trading of government bonds.
H. Proprietary trading of corporate bonds.
I. Financial advisory services to enterprises.
J. Financial derivatives as sanctioned by the Ministry of Finance.

Revenue Breakdown（Chinatrust Bills Finance Corporation）
Expressed in Million of New Taiwan Dollars “NT$”

Innovative Services Being Planned:
Chinatrust Bills Finance Corporation is involved mainly in bill and bond trading, futures on bonds and short-term interest rates, bond options, and interest-rate swaps. In addition to further consolidating these existing operations, the Company is committed to developing innovative products capable of fostering earnings growth. A summary of such endeavors is as follows:
●Bills: In 2005, Chinatrust Bills Finance Corporation issued bills totaling NT$126 billion and registered transactions of NT$1.2183 trillion in the secondary market. In turn, the Company earned a profit of NT$322.133 million from bill operations. Amid an extended liquidity glut on the market, Chinatrust Bills Finance Corporation is set to remain an active participant while seeking to keep risks to a minimum.
●Outright bond purchase/sales: In 2005, Chinatrust Bills Finance Corporation undertook trading of NT$274.1858 trillion, accounting for a 4.02% market share. There was a profit of NT$519.378 million for the year. As Taiwan has had a robust market for outright purchases and sales of bonds, the Company has been able to grow its earnings continuously. It is set to remain an active participant going forward.
●Futures on bonds & interest rates: There has been a growing risk of liquidity stagnation due to significant reduction of market activities. In turn, the Company has adopted a wait-and-see stance currently.
●Bond options: Chinatrust Bills Finance Corporation stepped into the business in March 2005, making it a priority for the year. As of the end of December 2005, there had been an average monthly turnover of NT$10.5 billion. There was a cumulative loss of NT$1.135 million for the 10-month period. As the business expands and matures, it is expected to turn profitable in 2006. Based on statistics released by the GreTai Securities Market, Chinatrust Bills Finance Corporation ranked among the island’s top five houses in terms of bond-option turnover in 2005.
●Interest-rate swaps: Turnover in 2005 was NT$6.1 billion, incurring a loss of NT$53.538 million. As total market turnover was hard to determine, the Company could not readily determine its own share in the industry. In interest-rate swaps, Chinatrust Bills Finance Corporation adopts a strategy of pursuing price differences due to the limited volatility that characterizes the market.
Now that bills finance companies have been permitted to deal in securitized products, Chinatrust Bills Finance Corporation is ready to make them a new source of revenue.

Scope of Business:
A. Non-Life Insurance:
●Corporate:Property Insurance, Business Interruption Insurance, Electric Data Processing Equipment Insurance, Fidelity Insurance, Marine Cargo Insurance, General Liability Insurance, Directors & Officers Liability Insurance, Bankers Blanket Bond Insurance, Construction/Erection Engineering Insurance.
●Personal: Household Fire insurance, Personal Accident Insurance, Auto/ motorcycle insurance, Unemployment Insurance.
B. Life Insurance:
●Corporate: Group fixed life insurance, group health insurance, and group accident insurance.
●Personal: Accident insurance, health insurance, whole-life insurance, endowment insurance, investment-linked insurance, and annuity insurance.

Revenue Breakdown（Chinatrust Insurance Brokers Company）
Expressed in Million of New Taiwan Dollars “NT$”

Innovative Services Being Planned:
To satisfy the needs of all spectrums of clients, Chinatrust Insurance Brokers Company will develop insurance products as part of a well-rounded wealth management package. Special emphasis will be placed on making further inroads into the property insurance market. While the existing sales channels have yet to fully achieve their potential, the Company will strive to optimize the Chinatrust group’s synergy in cross-selling. Chinatrust Insurance Brokers Company makes it a point to strive for improvements in the following fields: sales channels, operational processes, and information systems and database. Equally important, it will seek out more partners in the insurance industry, maintain loyalty among both corporate and individual customers, and streamline its internal working process.

Business:
Venture Capital Investments
Segmentation by Business
Chinatrust Venture Capital Corporation’s major business involves direct investments in non-listed companies. In 2005, the company invested in a total of three new projects and made capital injections for its two existing projects - three of which were domestic investments and two of which were overseas. As of December 31, 2005, in the company’s investment portfolio domestic investments amounted to NT$260 million, or 35%, and overseas investments NT$480 million, or 65%. A breakdown by industry is as follows:
Revenue Breakdown (Chinatrust Venture Capital Corporation)
Expressed in Million of New Taiwan Dollars”NT$”

Innovative Financial Services Being Planned:
With Chinatrust’s vast 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:
●Introducing 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 advantages to industries in Taiwan.

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

Business:
A. Purchase of Non-Performing Loans (NPLs) from financial institutions
B. Managing the NPLs auction process for financial institutions
C. NPLs management services for financial institutions
D. Appraisal of NPLs for other financial institutions
E. Related business to investments in NPLs
Segmentation by Business
Expressid in Million of New Taiwan Dollars”NT$”

Innovative Financial Services Being Planned:
●Enhancing the recovery value of NPLs: Chinatrust Asset Management continuously reviews the NPL portfolio. By categorizing the individual significant NPL or the collateral, the company seeks to sell itself in the market - by means of asset portfolios - in order to enhance the recovery value. In addition, Chinatrust Asset Management Company will actively acquire NPLs in domestic and overseas markets – either directly or through alliance with strategic partners – to improve the profitability of the company.

●Exploring investment opportunities in Asia: Under the requirements of the Ministry of Finance (MOF) to lower the NPL ratio, the overall NPL ratio as defined by MOF of all banks has been brought down to 2.3% at the end of 2005. 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 Company will continuously look for more investment opportunities in the Asia market, where the NPL ratios remain high.

Chinatrust Security Company was created as an entity dedicated to provision of security services, particularly to the financial services industry. The primary business for now is deployment of security guards at banks and undertaking of other security-related tasks. The ultimate goal is to preserve client property without fail by means of 24-hour monitoring and unscheduled patrolling and inspection plus linking online alarm systems to local police.
Scope of Business:
Chinatrust Security Company is responsible for security operations, personnel and vehicles included, at all the outlets of Chinatrust Financial Holding Company and its other units, as well as during their shareholder meetings and other major gatherings. The Company also deals in provision of exclusively appointed bodyguards and other services approved by the regulatory authority. In addition to protecting clients, it is committed to helping government agencies in their combat against financial fraud .

Revenue Breakdown (Chinatrust Security Company)
Expressed in Million of New Taiwan Dollars “NT$”

Innovative Services Being Planned:
Chinatrust Security Company is set to diversify its operations and equip itself with cutting-edge technology so as to best serve its clients. The ultimate objective is to offer efficient services while keeping manpower to a minimum. By drawing on the most advanced technology and equipment, it will make sure that clients can enjoy convenience without worrying about their safety. In the meantime, the Company will not neglect a human touch in its endeavors to ensure that clients lead a secure and comfortable life.
In the Internet era when everything is being digitized, Chinatrust Security Company will keep pace with the fast-growing security technology made available to the industry. In particular, the combination of up-to-date communications and video-preserving technologies will enable the Company to further upgrade its service capability. Computer-aided automatic alarm systems installed at designated posts, for instance, will alert the control center of any irregularity the instant it occurs. Security personnel will be dispatched to the spot quickly. The Company is not counting on equipment suppliers alone for innovation and improvement. In order to stay competitive, Chinatrust Security Company regards in-house research and development as a daily endeavor for upgrading operational procedures, designing new products, and simulating management of critical situations.