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Mega ICBC
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K.
Risk management for equity securities
Due to needs of proprietary, make market and tactic, etc., the Bank held equity securities within the regulations of the law. That market
risk comprises the risk of individual equity security arising from the security’s market price changes and the general market risk arising
from overall equity securities market price changes.
The investment operating group mainly selects blue chip stocks which have high liquidity and sets the investment price according to
fundamentals and market transactions. After the investment has been approved by the investment deliberation committee, the operational
personnel purchase the stock within the maximum percentage of the approved price, as the case may be.
Daily trading records, details of investment portfolios and overview of profit or loss shall report to the management and measurement of
the extent of the impact of systematic risk on investment portfolios using β value monthly. The Bank and its subsidiaries generally set a
stop loss, stop interest, pre-warning and exception handling requirements, and limit control to held individual stock and industry
concentration.
L.
Sensitivity analysis
Sensitivity analysis of the Bank and its subsidiaries’ financial instruments (including trading book and non-trading book):
December 31, 2015 UNIT
：
In NT Thousand Dollars
Risks
Extent of Variation
Effect on Profit or Loss
Effect on Equity
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies appreciated by 1%
( $
168,072 ) $
-
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies depreciated by 1%
168,072
-
Interest rate risk
Major increases in interest rates 1BPS
17,717 (
23,172 )
Interest rate risk
Major decline in interest rates 1BPS
(
17,717 )
23,172
Equity securities risk
TAIEX declined by 1%.
(
28,735 ) (
55,601 )
Equity securities risk
TAIEX increased by 1%
28,735
55,601
December 31, 2015 UNIT
：
In US Thousand Dollars
Risks
Extent of Variation
Effect on Profit or Loss
Effect on Equity
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies appreciated by 1%
( $
5,110 ) $
-
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies depreciated by 1%
5,110
-
Interest rate risk
Major increases in interest rates 1BPS
539 (
705 )
Interest rate risk
Major decline in interest rates 1BPS
(
539 )
705
Equity securities risk
TAIEX declined by 1%.
(
874 ) (
1,691 )
Equity securities risk
TAIEX increased by 1%
874
1,691
December 31, 2014 UNIT
：
In NT Thousand Dollars
Risks
Extent of Variation
Effect on Profit or Loss
Effect on Equity
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies appreciated by 1%
( $
47,016 ) $
-
Foreign exchange risk
Exchange rate of USD to NTD, to JPY, to EUR and
to each of other currencies depreciated by 1%
47,016
-
Interest rate risk
Major increases in interest rates 1BPS
226 (
15,411 )
Interest rate risk
Major decline in interest rates 1BPS
(
226 )
15,411
Equity securities risk
TAIEX declined by 1%.
(
51,040 ) (
75,788 )
Equity securities risk
TAIEX increased by 1%
51,040
75,788
M.
Disclosure requirements in the “Regulations Governing the Preparation of Financial Reports by Public Banks”
Interest rate sensitivity analysis on assets and liabilities (NT Dollars)
December 31, 2015
UNIT
：
In NT Thousand Dollars, %
1-90 days
91-180 days
181 days to 1 year
Over 1 year
Total
Interest rate sensitive assets $
516,266,779 $ 828,046,861 $
7,364,395 $ 44,195,492 $ 1,395,873,527
Interest rate sensitive
liabilities
474,574,216
616,401,650
88,037,742
44,684,635 1,223,698,243
Interest rate sensitive gap
$
41,692,563 $ 211,645,211 ( $
80,673,347 ) ( $
489,143 ) $
172,175,284
Net worth
$
239,592,215
Ratio of interest rate sensitive assets to interest rate sensitive liabilities
114.07%
Ratio of interest rate sensitivity gap to net worth
71.86%