Fubon Financial Holding Co Ltd

TWSE:2881

Earnings Call Transcript 2021-Q2

[Operator]

Thank you for standing by, and welcome to Fubon Financial's First Half 2021 Financial Results. [Operator Instructions]. This call is being recorded. If you have any objections, you may disconnect from the conference. Now I'll hand the call over to your host, Ms. Amanda Wang, IR Officer of Fubon Financial Holdings. You may now begin.

[Amanda Wang, executive]

Thank you, and welcome, everyone, and thank you for joining Fubon Financial's first half results call today. In the call, we will review the first half performance and followed by the Q&A session, hosted by the President, Mr. Harn and the senior management team.

So firstly, please turn to Page 4. In the first half results, we can see the earnings performance has been strong and the net worth and asset all reached record high. For Fubon Life, the net profit shows meaningful growth, up by over 180%. That mainly comes from investment return and also from the hedge cost improvement. And meanwhile, the net worth hit the record high and the premium continued to ramp up to in the market. While in overseas development, Fubon Hyundai Life completed capital raising in June and our shareholding increased to 77%.

In Taipei Fubon Bank, the loan growth of 9.5% is the key driver for net interest income growth. And strategically, we have 3 focus areas. Firstly, we can see the growth in the credit card, which is a strategy to gain our cross-sell opportunities. And secondly, in overseas development, the approval of the wealth management business by the MAS for the Singapore branch to operate wealth management business that will give us more room to play a role in the platform going forward. And thirdly, in terms of digitization, the customers and the online trading volumes continue to see strong growth momentum during the pandemic-hit period of time.

And in Page 5, Fubon Insurance. We see the premium and also the profit shows growth, while the earnings mainly come from investment return improvement. In Fubon Securities, the net profit showed strong growth on back of the strong market turnover and also increase in our brokerage market share.

In terms of the ESG achievement, under the pandemic in Q2, Fubon is committed and be the first corporate in Taiwan to set up a screening station to protect the health of our employees, and also the workplace safety. We also take the opportunity to develop the cross-sell potential of our Fubon Insurance offering of the product that reached over 2 million of insurance policy. And that's over 60% cross-sell through Fubon Life. And in our latest ESG report, we set up long term goal to achieve a low-carbon business model and focus on digitization. For further details, please turn to Page 46 for a full report on the website. We also published the first TCFD report.

In Page 6, in terms of the fundraising and merger timeline, here is some adjustment following FSC's announcement at shareholders' meeting should be postponed due to the pandemic. And therefore, the schedule as this page shows, including the fundraising scheduled to determine the pricing announcement by end of this month, and we aim to complete the fundraising by end of October. The merger between our 2 holding companies is scheduled to complete by first quarter next year and merger of subsidiaries expected to complete by end of next year.

In Page 7, the profitability growth as a result. And we see not only the first 6 months strong results and also for the first 7 months, we continued the strength and reached over $106 billion net profit and translate into EPS of over $10 per share.

In Page 8, among the earnings contribution, we can see Fubon Life's contribution is the highest, that is 77% to the group, and also the net profit growth from insurance to Fubon Securities and Fubon Hong Kong.

In Page 9, in terms of the asset and net worth, the total asset exceeds $9.9 trillion by June and it further go exceed $10 trillion by July. And at the same time, the net worth and book value per share also increased, and book value per share go beyond $75 per share on a common share basis, that's also hit a record high.

In Page 10, the ROA and ROE therefore increased along with the earnings improvement.

Next, let's move on to Fubon Life in Page 12. The total premium declined mainly due to the renewal premiums fall. That is because of the paid-up of the policies with a shorter payment period while the first year premium continued to increase at 4.9%. In terms of our market ranking, we continue to take a solid #2 market position.

In Page 13, the first year's premium growth, we can see here, mainly come from investment-linked and also annuity policy. And meanwhile, the foreign currency policies contribution also increased and accounts for 47% of FYP now.

In Page 14, the FYPE and VNB shows a decline here, mainly due to the rise of the single-pay policies, product among the investment-linked and investment -- interest-sensitive annuity. And along with the product mix adjustment and the more stable situation from pandemic into the second half of the year, we aim to see the gap with last year's performance will be gradually narrowing down.

And in Page 15 in terms of channels, the first year premium contribution mainly come from the bancassurance, which has gone up to 62.8%. On the right-hand side, the FYPE mainly come from internal channels, including the tied agent and also Taipei Fubon Bank, that together accounts for 68%.

In Page 16, the investment portfolio reflect that our total investment asset grew by 10% from the new allocation and also the value appreciation. The cash position declined in Q2 that mainly reflect the increase in overseas fixed income deployment and also domestic equity.

In Page 17, the deployment more toward investment-grade corporate to enhance our recurring return from overseas fixed income portfolio. In terms of geography, the new allocation mainly comes from North America.

In Page 18, in terms of the investment income, we can see the return shows improvement on both before and after hedge basis in the bottom of this table that we can see that it reached 6.4% before hedge and 5.9% after hedge and the improvement mainly due to the capital gain and also the hedging cost improvement. The recurring investment income, however, declined Y-o-Y. And our team will continue to seek opportunities to deploy assets to enhance the repair return.

In Page 19, the hedging cost in a recurring hedging cost basis actually continue to improve, while the appreciation of NT dollar in second quarter is accelerate that make our FX loss trend higher. However, the total hedge costs in first half continue better compared to the same period last year. And in our lower left-hand side, we can see the return on -- recurring return on before and after hedge basis, both decline that reflects the capital gain realization, and therefore, higher cash position in second quarter and also NT dollar appreciation factors.

In Page 20, the cost of liability improvement also shows a positive spread improvement here. And we can see the positive spreads widen compared to the same period last year. And for the breakeven point also show improvement, and that mainly comes from the product composition. And again, here, we delivered a positive spread between the breakeven point and also the after-hedge recurring return.

In Page 21, the mark-to-market value from the fixed income and equities continue to increase and led to our unrealized balance improved along with the realized gains. And that also bring up our shareholders' equities balance.

In Page 23, let's move on to Taipei Fubon Bank. The net interest income grew 5.9%, mainly due to the asset growth. The total revenue decline mainly come from, number one is the net fee income and number two is treasury business. The net fee income mainly due to the size of the sales team, in our branch actually reduced in response to the epidemic, and also the marketing expenses from the credit card led to a lower net fee in our credit card business. Following the treasury, revenue down mainly reflect a lower swap revenue business.

And in Page 24, the corporate and the retail loan continued to grow steadily, and total credit balance increased by 9.5% Y-o-Y.

In Page 25, the corporate loan rose by 3%, mainly driven by the NT dollar business. While in overseas, given we are taking a more cautious approach and therefore, the foreign currency loan decreased. The SME credit, on the other hand, is up by over 20% and the accounts were now over 49% of our corporate business.

In Page 26, retail credit highlights mainly come from the mortgage and also personal credit loans, that will continue to be our key growth driver.

In Page 27, in terms of the funding structure, we see the demand deposit ratio shows improvement both from NT and also from a foreign currency. The LDR in NT dollar book was further improved to over 89%, while the foreign currencies deployment was down, mainly due to a more cautious approach in the foreign currencies loan business.

In Page 28, due to the market rate cut and also the foreign currency loans mix change, and therefore, net interest spread was down by 2 bps quarter-over-quarter. While the net interest margin, in fact, was up by 1 bp, and that reflects the increase in our foreign currency bonds deployment.

In Page 29, the asset quality of the bank continued to be stable.

In a further breakdown in Page 30, we can see across our business lines, we continue to deliver a stable asset quality. While on the right-hand side, the provisioning cost increased, mainly driven by the general provisions on the loan growth.

In Page 31, credit card business, that is a continuous focus that Fubon intend to grow to increase the market share and also to bring in further cross-sell opportunities. The credit card growth fee also increased by 20% and the per-card spending continue to be top 1 among the top 5 players.

In Page 32, the fee income on net basis was down by 15%, mainly due to the wealth management fee and also the credit card marketing expenses. On the right-hand side, we can see the wealth management fees composition. While the sales volume actually was grown by over 20%, but because of the epidemic that we adjust the sales team and also the product mix, and therefore, we see the decline. But we already see a recovery already take place in July.

In Page 33, in terms of Fubon Bank's overseas operations, the revenue and profit share came down, mainly due to a more cautious approach. Along with the wealth management license, newly granted from Singapore branch, we aim to develop the Great China platform with a more balanced source of revenue going forward.

In Page 35, let's move on to Fubon Insurance. The direct written premium grew 10%, mainly led by the personal line business. And we reached the market leader position for another top 1 leading performance with a combined ratio at 88.9%.

In Page 37, in Fubon Securities, the top line and also the bottom line both shows meaningfully growth. That is driven by the brokerage business and also on back of the higher market turnover and our market share gain. In the meantime, the wealth management is also a key focus, and we can see our sub-brokerage market share also grow.

Next, in terms of the overseas banking operation, in Page 39, in Fubon Bank (Hong Kong), as the pandemic is easing, we see the balance sheet and also the profit shows a recovery. The loan growth of over 7%, that's mainly driven by corporate business.

And in Page 40, we also see the net profit grow quite substantially. It actually comes from revenue across business lines and also a lower provisioning cost. The net interest income -- net interest margin also show improvement coming from the funding cost side. Further, asset quality largely remain at a stable level.

In Page 41, in Fubon Bank China, we continue to leverage the group resources for cross-sell and to cultivate a Taiwanese customer base and that led to the asset growth of over 9%. And as we complete the capital raising of RMB 1 billion in June, the shareholdings of Taipei Fubon Bank now reached 58% and 42% held by the holding company. And we aim to deliver further growth with the capital injection.

In Page 42. In terms of the profit, it came down by over 20% Y-o-Y, mainly due to the rise of the swap cost and therefore lead to a lower treasury income. While the bank's net interest margin continued to improve, there's a beneficiary from the funding cost and also loan structure improvement while its asset quality remains at a stable level.

And this will conclude the presentation today. And next, we will have the President of Fubon Financial Holding Company, Mr. Jerry Harn, to host the Q&A session. Thank you.

[W. Harn, executive]

Yes, good afternoon. We welcome any question raised.

[Amanda Wang, executive]

Operator, we can open the floor for questions now. Thank you.

[Operator]

[Operator Instructions] First question comes from the line of Chung Hsu.

[Chung Hsu, analyst]

This Is Chung from Credit Suisse. I have a few questions. Just first on a few numbers. On the bank credit card fee, it seems that the faster you grow spending, the smaller your net income. So can you give us a better sense of how your credit card business and fee income will evolve into 2022? I presume you're subsidizing your spending -- credit card spending and business now for a bigger fee income in the future. So at what point will we start to see that fee income recover? Is it 2022? Or is it something that you have a bigger and longer-term plan, you're going to focus more on market share for the next 12 to 18 months?

My second question is on FX hedging costs. On the second quarter, I just want to clarify, that increase in hedging, the nonswap increased hedging cost, is it just purely because of the Taiwan dollar strengthening? Or did you increase your hedge positions in the second quarter?

And my third question is on the JihSun M&A acquisition. I understand you're finalizing that deal. So can you give us a sense, what are the first few things that you plan to do to integrate the business? I understand there's a cost savings, there's a capital -- upstreaming of capital management. What could be -- what should we expect the first 1 or 2 things that you plan to do on the start of integration that could have visible financial impact as early as 2022?

[W. Harn, executive]

Okay. This is Jerry Harn. Concerning the upcoming mergers with JihSun, at the moment, the priority for us really there is actually to manage employee and manage the customer into the bigger Fubon family. That is the top priority, customer and employee. As to the synergy, there will be 3 steps in our plan. The first is you will see that in next year is actually we merged Fubon -- we merging JihSun Holding and the banking and security operations into Fubon's operation. We are expecting capital reductions through the process. So we will see capital efficiency synergies in year 2022.

And following the actual mergers, we will conducting an exercise to optimize our branch network for both banking and the security operation and also consolidating all the back- and middle-office operations. So through that exercise, we are expecting further cost synergies from that. And at the same time, if not later, we are hoping to see the revenue contribution through a much bigger scale in the security operation and the cooperation with -- further cooperation between the security side and the banking side to further develop our brokerage and wealth management business through the common customer base. So that is roughly our idea and thought and plan.

Okay. On banking side, Roman will answer.

[Yao Hui Cheng, executive]

Okay. This is Roman Cheng from Taipei Fubon Bank, and thank you for your question about our credit card business. Our credit card business in the past 18 months, and -- we have registered significant growth of our new credit card issuing. Using the numbers from the March 2019, our total credit card increased by 2 million cards. 50% -- around 50% of them are new customers to us, which means we bring in about 1 million new customer to the bank.

And compared to the number s in 2020 and the first half of 2021, the cardholder application through the online channels increased from 40% to 75%. And the total credit card spending amount year-on-year growth in first half is 15%, which brings our market share from 9.4% in Taiwan to 10.3% in Taiwan. And our per car acquisition cost reduced from TWD 330 to TWD 195 in the first half of 2021. So for the purpose to increase our market share, so we provide a subsidy or we provide customer reward program in the first half, which are highly welcomed by the customers.

And particularly the customers, they spend money through online in, for example, LINE Pay channel. The total renewal cost in first half, close to TWD 800 million, but we also see a significant growth in our credit card holder unsecured lending. And the first half, the interest earned from this unsecured lending also close to TWD 400 million. So starting from July, we carefully modified the reward program, we provide 3.5% reward to the new-to-bank customers, and the remaining 3% unlimited reward to the customers who spend money on the LINE Pay channel. But we reduced the reward from 3% to 2% through those spending that are in physical channels. So we see the spending on LINE Pay channel growth in July, reaches the 42% month-on-month growth. And they're also giving us, every month, more than 1,200 every day. We have about -- more than 1,200 new customers to us.

So this is -- the purpose is clear here is to increase our market share, to get more customers. And those new customers with us, they will open for example, they will open digital deposit account with us. And when they place money in the deposit account to repay their credit card's liability, they will also buy online wealth management and may also consider our mortgage loan. Those cross-sell in the past 2 year are quite satisfactory. So that's the purpose for all the credit card strategy.

[Amanda Wang, executive]

And about the -- our net position on Page 19. And we see the NT dollars against U.S. dollar, it actually appreciate from TWD 28.55 to TWD 27.87 during the second quarter. So therefore, we decreased our net provision about 3% in this period. Therefore, you can see the point in Page 19 that nonswap cost portion, which is about 80 basis -- 81 basis points, which mostly came from the IFRS losses.

[Chung Hsu, analyst]

Okay. Understood. If I may ask a follow-up question on the hedging. Is there any plan to take extra FX reserve given that you have make so much more money elsewhere on the investment side and hence, put a stronger buffer against any capital market volatility into 2022?

[Amanda Wang, executive]

Sorry, at this moment, we only consider if the NT dollars keep appreciating in the second half of this year, then we may consider to take additional reserves if necessary. But we will continue evaluating this need for extending the buffer. It depends on the market condition.

[Operator]

Our next question comes from the line of [ Ken Yu Kwang ].

[Unknown Analyst]

Three questions from me. The first one is also for the JihSun merger acquisition. I think previously when you had the tender offer, you actually didn't have the chance to do any detailed due diligence. But after you becoming the controlling shareholder after end of March, not sure whether you have a better chance to take a detailed look on the operating condition for JihSun. And then is there -- are there any effects that you find better than expected or worse than expected that you can provide additional color?

The second question is for Fubon Life. I think if we assume the market yields won't change for the rest of the year, I know this is against your expectation, but if we assume there is no major changes on the market yields, then have you done any scenario analysis how -- what's the magnitude of the decline on recurring yield on the year-on-year basis.

The final question is I think Taipei Fubon Bank is the second-largest shareholder for LINE Bank. Just trying to get some idea like after a couple of months of operation at the LINE Bank, anything that you have observed from that operation? And then any implication for you in terms of the type of loan bank segment?

[W. Harn, executive]

Okay, with regards to the Fubon's understanding about JihSun's operation, yes, after the settlement at the end of the March, we have collected some financial -- primarily financial information from JihSun. Unfortunately, there are some resistance from part of the existing management of JihSun, particularly on the securities side. So we haven't been able to get enough information as we would expected. So on the -- the detail of the operation, we are still not reached the level that we desire for. But the -- I guess after the Board meeting -- no, sorry, the shareholder meeting to be held at the end of this month, we will get control and get to know the entire operation very quickly. I guess the -- well, you know that we pay a small premium at the time that we offer or we make the cash offer to the market, and we actually settled the deal, the book value of JihSun actually has exceeded our purchase price. So therefore, we have booked a what?

[Amanda Wang, executive]

Negative goodwill.

[W. Harn, executive]

We have booked a negative goodwill on the earnings on our book. So that is a good surprise. And the operations is better than our original plan in the first half this year and -- actually. So purely on financial side, we are happy about their performance, although we haven't really actually have done anything on them yet, okay? So that's the only thing I can provide, unfortunately, at the moment. We will probably be able to give you more color in the following months, okay?

Roman, LINE Bank?

[Yao Hui Cheng, executive]

Okay. This is Roman Cheng from Taipei Fubon Bank. Regarding the question about LINE Bank, in the first place that Taipei Fubon Bank invest into LINE Bank as 25% shareholder. But to us, we just participate the Board discussion and leave the management to run the bank on a stand-alone basis. So -- and then their focus is to provide the banking service within the LINE ecosystem. So all the Taiwanese with LINE can easily find LINE Bank on their LINE over their mobile phone without downloading everything. So that's the privilege of LINE Bank. And starting from this April, LINE has grand opening. Now they provide deposit debit card and unsecured lending business. By the end of June, their digital account opening accumulate to 160,000 accounts.

And starting from the middle of July, they provide more benefit to their account holder, for example, 3% payment reward for their customer using LINE Bank to spend on LINE Pay. So they provide 3% LINE Points reward, which is also very highly received by their customers. By far, based on what I know, their account members has over 300,000. So we see that they may increase their account opening 50% a month for the timing ahead. So comparing with LINE Bank and other traditional bank like Taipei Fubon Bank, I think they provide service on different channel, and they are -- each player can provide customers much, I think, much better digital experience for their account holders and users. I believe that they will provide more service online to their ecosystem customers.

[Amanda Wang, executive]

And okay. About the recurring. I would say, at this moment, we did not calculate the scenario of the no change in the market yield. But based on the current asset allocation, our new money actually is quite low, less than 10% of our asset need to replace and also considering we can also reallocate or rebalance our asset allocation. So we think the new money rate, I would say, yes, right now, it's quite -- only 3% to 3.1%, but the impact should be -- is not material. Also given the improvement in our hedge costs are significantly, we think it will keep compensating for our -- the declines in the pre-hedge recurring yield. So we will say, actually, we are quite confident at this moment.

[Operator]

Our next question comes from the line of Steven Lam.

[Steven Lam, analyst]

Can you hear me? Hello?

[W. Harn, executive]

Yes, clearly. Yes.

[Steven Lam, analyst]

I have about 3 areas of questions, so one on investment, one on the life products and the last one is on the strategy Korea. So for the first one, I was just curious to hear your thoughts on -- I know this is a trillion-dollar question, but what do you think the U.S. bond yield outlook would be, say, for the next 6 to 12 months? Are you on the camp where it can shoot back up again or it's pretty much sideways or if there's a lot more downside risk? That's sort of the first one.

And within that, just some numbers I just want to confirm. I see your asset allocation on a quarter-on-quarter basis or even from half-on-half, there's a consistent sort of decrease in the allocation to European bonds, but then your allocation to North American bonds increased. Would you -- you might have mentioned this before, but would you remind us any specific sectors that you're sort of switching or changing in the period? And also within the investment area, what's your take on your appetite between overseas stocks versus overseas bonds for the next 6 months or so?

On product, a very quick one. Noticed, of course, the big change in the investment-linked and the interest-sensitive annuity. I'm just curious from a product margin standpoint, what is the sort of give and take after the consideration of, say, RBC or IFRS 17? Is there a big difference versus the other products? Or is there even like motivation for you to move towards investment-linked and interest-sensitive annuity?

And lastly, of course, you have made quite some substantial acquisition in the past in Hyundai Life. And if I'm not mistaken, you've also spent a few hundred million dollars, U.S. dollars, to acquire a 20% stake in Hyundai Card recently. Do you mind to update us your sort of strategy in Korea? And what do you expect to achieve, say, within the next couple of years?

[Unknown Executive]

It is [ Mr. Udon ]. This represents yields not fully under control. The Fed will keep the current policy rate at the current level this year. However, the Fed would be likely to announce the QE reduction plan by end of this year as far as gradual withdrawal from the bond-buying program next year. When they made the announcement, the U.S. bond yields will start to increase, which will be quite different from the current level.

[Steven Lam, analyst]

I see. So could I take it -- could I read it as you may not accelerate the purchase on overseas bonds yet and rather would wait a little bit until the yield actually go back up again?

[Unknown Executive]

In time.

[Steven Lam, analyst]

It's more like a timing thing. Yes, okay.

[Amanda Wang, executive]

And the second question is about decrease in the financial bonds in Europe actually is due to the redemption or callback of the OTC international bond issued by the European financial institution. This also mirrors the continued decline in the European regions under Pages 17's right chart. So it's the second question.

And the third one is about the appetite on overseas stock. I would say that actually, we expect to maintain a similar level right now of the overseas bond -- stock, sorry. And about the bonds, just we mentioned earlier that we will seek the opportunity when interest rates increase further. That's my answer.

[W. Harn, executive]

Okay. With regards to our proposed purchase of 20% stake in Hyundai Card, actually, we're still in the process applying to the authorities. So this is not a done deal yet. But it moved smoothly. We're expecting to close it, at the earliest, the end of this year and probably in the first half of next year, okay. And all we can say about Korean market is we have invested a couple of years. There are some up and downs, but the good thing is we have known the market better, and we know the people there better, so give us a more in-depth understanding in terms of evaluating the business opportunity from the markets. I would tend to say we'll continue to review the overseas investment opportunity from a case-by-case perspective. And we would also consider the concentration particularly from -- of the risk overall, okay? So that's a little bit our thought on that for your information.

The insurance product strategy.

[Amanda Wang, executive]

You talked about the investment-linked and interest-sensitive annuity product, we sold many in the first half period. And the profit -- the VNB margin for this kind of product because of the single-pay feature, the VNB margin is single digit. So even though the VNB margin is not -- but during the pandemic, I think the interest-sensitive annuity product is something that is easier to explain to the customer. So it also has -- and also because the stock market is very promising during the pandemic in Taiwan market. So this is also result good sales for investment-linked product for this year.

And in terms of the -- our capital, which RBC side, investment-linked product, because the investment risk is mostly transferred to our customers, so it's very capital-light. In terms of interest-sensitive annuity, the capital charge is slightly higher for the -- for this kind of product, but it's not a big concern when -- for our company capital position because, as you see, our RBC ratio is well above 300% so this will not be a concern.

And in terms of IFRS 17 you mentioned, this is a financial reporting standard. So for the investment-linked products sold on our book, many of them are variable annuity, which is investment products, right? So it's not related to IFRS 17, which was meant for insurance contracts. So for investment-linked products, this is not much related. And for interest-sensitive annuity product, I think the impact on IFRS 17 would not be subject to certain type of product, but in the sense of total company portfolio. I'm not sure whether I answer all your questions or you have -- or I can make some more statements for further explanation. Thank you very much.

[Steven Lam, analyst]

That's very helpful, very comprehensive. Sorry, I sort of missed one within the investments, I forgot to ask. Could you remind me the trends of your investment in the bond ETFs? Are those still -- those are classified within the domestic stocks, if I'm not mistaken. Have those changed quite a bit in the past couple of months or quarters?

[Amanda Wang, executive]

Actually, the ETF -- bond ETF hedge exposure, we have disposed some position during last quarter because we consider the NT dollars may go stronger further. So it will make the holding suffer so we actually disposed. And also for your information, we give some color of our outlook of our recurring yield forecast. Just considering the stronger [indiscernible] and also slightly bit lower for the new investment compared to last year, so we predict our prehedge recurring yield could be decreased 20 to 30 basis points at this moment. And also, if the hedge cost is likely to improve or maintain the current low levels, it will compensate our investment yield. So we predict the whole year after hedge recurring yield could be slightly lower than last year than maybe just 10 to 15 basis point compared to last year, slightly lower.

[Operator]

Our next question comes from the line of Brooksley Kang.

[Brooksley Kang, analyst]

It's Brooksley from Bank of America Securities. So just one question more on your long-term perspective that -- on Fubon China. I think the enterprise has grown like 2x from 5 years ago. So do we have any planning to grow Fubon China to what feasible size in a long-term perspective? And going forward, by currently like high teens of loan growth, it is fair to expect that maybe once in a few years, Fubon China will need capital injection to refuel the growth again.

[W. Harn, executive]

Okay. Well, we don't have a perfect world. On the one hand, we are hoping then to grow fast and healthy. On the other hand, we are hoping that not demand too much capital from home market. Well, that's always the dilemma in between, and we're trying to balance these things. At the moment, based on our forecast, the Fubon China probably do not need the further capital injection from Taiwan in the next 2 to 3 years. But you never know, but that's our forecast. If you ask me our longer-term perspective, China is a very big market. And we're hoping, in the foreseeable future, the size of our Fubon Bank (China) has to grow to a level at least equal, if not more than, the size of Taipei Fubon Bank. So we are pretty much expecting the son will grow bigger than the father. So that is our expectation, if you like. Okay? That's my short statement.

[Operator]

Thank you. At this time, there are no questions over the phone. [Operator Instructions] At this time, speakers, there are no questions over the phone. You may proceed.

[Amanda Wang, executive]

Okay. Well, if there's no further question, we thank you all for your participation today. And please feel free to contact the IR team if we can be of further assistance. Thank you again.

[W. Harn, executive]

Thank you very much for your participation.

[Amanda Wang, executive]

And operator, we can close the call off now. Thank you.

[Operator]

Thank you. That concludes today's conference. Thank you all for joining. You may now disconnect.