Cathay Financial Holdings April 25 th, 2003 Management Presentation Q

2 Agenda  Q Operational Results of Cathay FHC  Q Operational Results of Each Subsidiaries –Cathay Life –Cathay Century –UWCCB –CUB  Banks Integration – UWCCB & CUB

3 Cathay FHC - Strong Financial Performance Income & EPS Net incomeEPS NT$bn Total Shareholders’ Equity & ROAE Total Assets & ROAA Note: Non-consolidated basis Source: Company reports NT$bn

4 Cathay FHC – Operational Results

Q - Performance Achievement (45.5%) 0.4 (29.4%) 1.87 (28.8%) 5 (38%) 7.25 (34.5%) Cathay Century CUB UWCCB Cathay Life CFH Q (Achievement Ratio) 2003 Proforma Figure NT$Bn

6 Subsidiary Contribution Analysis – Q Sales Contribution Q Asset Allocation Q Total Sales: NT$7.25BnTotal Revenue: NT $113.7Bn Total Asset: NT$2128.1Bn Revenue Contribution Q CUB 6.2% UWCCB 25% Cathay Century 1.7% Cathay Life 67.1% CUB 2.5% UWCCB 6.3% Cathay Century 5.1% Cathay Life 86.1% CUB 8.3% UWCCB 30.5% Cathay Century 0.5% Cathay Life 60.7%

7 Profit Analysis – Q ROE Analysis ROA Analysis Note: ROA, ROE have been annualized.

8 Cathay FHC has been focusing on improving operation efficiency % Expense ratio of Cathay Life % Efficiency ratio of UWCCB Operation efficiency improvement  Integrate IT and data warehousing systems and centralize CRM development to share customer base  Integrate back-end platforms and operation to reduce administration costs Source: Company reports % Combined ratio of Cathay Century Ins.

9 Agenda  Q Operational Results of Cathay FHC  Q Operational Results of Each Subsidiaries –Cathay Life –Cathay Century –UWCCB –CUB  Banks Integration – UWCCB & CUB

10 Cathay Life – Operational Results Note: ROA, ROE have been annualized. Net policy reserve = policy reserve – policy reserve writeback

11 Improve sales performance  Reward summit Reinforce organizational capacity  Premium sales performance calculation Strengthen sales force  Combination of the sale of cross-selling products and insurance sales quota Constitute professional and efficient marketing team  US recruiting program  Transformation of sales manager Cathay Life – Operating Activities

12 Cathay Life – Operating Indicators Expense ratio Persistency ratio

13 NT$ bn Cathay Life – Investment Performance

14 Cathay Life – NPL ratios

15 Cathay Century – Operational Results Note: ROA, ROE have been annualized. Other operating cost include General & admin expense.

16 Meet customers’ demands for one-stop shopping and cross-selling through distribution channels of each subsidiary Achieve cost savings by sharing group’s resources to enhance profits Integrate information platforms and CRMs of subsidiaries to better serve customers Refine performance evaluation system of capital and gain access to emerging investment opportunities aligned with international practice Pursue scale of economics and leverage advantages of each subsidiary under the holding company structure Cathay Century – Operating Activities

17 UWCCB – Operational Results Note: ROA, ROE have been annualized.

18 Accelerate pace of banks integration Establish co-franchises with Cathay Life, provide easy access to ATM policy loans, and get written consents from customers for cross-selling purposes Focus intensively on mortgage loans with a net increase of NT$3.95 billion Launch cash cards, platinum credit cards and small-sized consumer credit loans Train 30 dedicated financial advisors, and have proprietary “Information system for FAs” in place Establish centralized loan management department for credit and debt quality control Set up Mainland China development team and visit Taiwanese businessmen in Mainland in preparation for coming operations of Shanghai branch Provide direct financing, guarantee, and A/R factoring services to Taiwanese companies in Mainland China. UWCCB – Operating Activities

19 Cathay United Bank – Operational Results Note: ROA, ROE have been annualized.

20 CUB – Operating Activities Roll out U-LIFE cash cards, mortgage and auto loans to increase weighting of consumer banking Initiate to launch Master World cards in anticipation of fee income surge Set up wealth management system, intensify trainings for FAs, leverage group resources for revenue synergies Establish VIP center, first rated safes to cater to demands of high net worth clients Innovate financial products, and seek strategic alliance with foreign partners to enrich product offerings Have 2nd generation credit card system and tele-marketing on track Establish multi-distribution channels

21  Q Operational Results of Cathay FHC  Q Operational Results of Each Subsidiaries –Cathay Life –Cathay Century –UWCCB –CUB  Banks Integration – UWCCB & CUB Agenda

22 Banks integration – Accelerating operating capacities  Timetable Scheduled to complete integration in 6 months Organizational structure for integration Steering committee on top and followed by 7 execution teams, including Administration & Personnel, IT, Corporate Banking, Consumer Banking, Credit Card, Wealth Management, Finance & Risk Management as well  Key themes for integration……. –Bank integration –Assurbanc –Bancassurance Cathay United Bank, post integration, is ranked #3 private banks in Taiwan with 112 franchises and total assets of more than NT$840 bn

23 Comparison of CUB and UWCCB Note: The consolidated capital is NT$43.18 bn. The above figures are based on proforma basis. Market shares are calculated based on total assets at the end of 2002.

24 Cathay has developed a comprehensive blueprint for its banking platform integration… IT structure  Centralize IT systems for UWCCB’s and Cathay United’s credit card business  EIP (Enterprise Info Protocol) and EAI (Enterprise Application Integration) in process  Obtain written consents to share customer information among subsidiaries  Form Product and Marketing Committee to determine cross-selling strategy  Leverage CRM system to segment consumer banking customer base Credit risk control  Centralize credit policy and monitoring for major exposure  Data sharing for real estate appraisal system  Cleaner asset portfolio is the consistent policy Corporate banking  Treasury function integration  Centralize marketing strategy for corporate clients  One trading team Consumer banking