CTBC Financial Holding Co Ltd
TWSE:2891
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CTBC Financial Holding Co Ltd
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Welcome, everyone, to CTBC Financial Holding Co.'s 2020 First Quarter Earnings Conference Call. [Operator Instructions]
And today's host will be Ms. Ya-Ling Chiu, Executive Vice President and Spokesperson of CTBC Financial Holding Company; and Mr. Pai-Hung Yeh, Executive Vice President of Taiwan Life Insurance Company. And the presentation will begin now.
Thank you, everyone, for joining CTBC's First Quarter 2020 Earnings Call. Please turn to Page 3 on 1Q '20 highlights.
Overall, CTBC holding continued to deliver strong earnings amid COVID-19's impact on global economy. At holding level, ROE reached 14.67%. ROA at 0.77%, EPS at $0.62.
Net profit grew 9.8% Y-o-Y, attributed to both banking and life businesses. Holding also maintained well capitalized with CAR ratio at 115.92% and maintained decent double leverage ratio at 117.5%.
For CTBC Bank, it observed solid core revenue growth as NII was up 4.9% Y-o-Y and fee income up 6.9% Y-o-Y.
Loan growth was stable at 6% Y-o-Y. And overall asset quality remained benign with NPL ratio at 0.41%.
Wealth management, corporate and retail business were strong, though credit card spending was lower. Capitalization remains strong with CAR ratio at 13.82%, and CET1 ratio was 11.31%.
For Taiwan Life, its after-tax net profit increased 52.9% Y-o-Y due to strong investment gains and lower hedging costs.
Life also successfully shifted to a value-focused strategy with cost of liability declining to 3.4%.
RBC ratio remained superior at 302%.
Page 4, on event updates for 1Q '20. For impacts from COVID-19, IMF revised its 2020 global economic growth forecast downward to negative 3% with the baseline scenario, assuming that the pandemic fades in second half 2020. And Taiwan's major economic research institutes forecast domestic 2020 GDP growth of 1% to 2%.
To support our clients, CTBC Bank and Taiwan Life launched a series of COVID-19 relief programs. For dividend, the Board of CTBC Holding approved the distribution of a cash dividend of TWD 1 per common share based on the 2019 earnings, implying a payout ratio of 46%. And a dividend yield of 5.05%, according to the closing price of TWD 19.8 per share on May 8, 2020.
Regarding the ESG highlights. As for the honors, CTBC won 3 major accolades at Global Views Monthly's 2020 Corporate Social Responsibility Awards, including the Education Promotion and Charity Promotion Honors as well as the Exemplary Model Award in the Finance and Insurance category.
CTBC also remains a constituent stock of the MSCI Taiwan ESG Leaders Index, DJSI Emerging Markets Index, FTSE4Good Index Series and TWSE Corporate Governance 100 Index.
For ESG implementations, CTBC signed a commitment to implement the recommendations of the TCFD of the G20 Financial Stability Board in April 2020.
In March 2020, CTBC also established an ESG office, reporting directly to the President, while Sustainability Committee with an independent Board director as commissioner will be established in 2Q '20.
Page 5. First quarter net profit was TWD 12 billion, increased by 158.4% Q-o-Q, up 9.8% Y-o-Y. EPS was TWD 0.62.
Page 6. Group ROE was high at 14.67%, and ROA was 0.77%.
Page 7 on capital ratio. Remain well capitalized with group CAR at 115.9%; bank CAR at 13.8%; Tier 1 ratio at 12.4%; and CET1 ratio at 11.3%; Life RBC ratio was 302%.
Page 8 on profit breakdown by legal entities. In 1Q, bank profits reached TWD 8.4 billion, up 47.5% Q-o-Q and 1.2% Y-o-Y.
Life profits reached TWD 4.2 billion, up 633.3% Q-o-Q and 52.9% Y-o-Y. Holdings profit reached TWD 12.2 billion, up 158.4% Q-o-Q and 9.8% Y-o-Y.
Bank and Life contributed 69% and 35%, respectively.
Page 9 on net profit movements. In 1Q, operating revenue was up 1% Q-o-Q with the growth in loans, net interest income and fee income, offset by the decrease in trading gain and an impacted financial market under the pandemic.
Provisions down 33.9% Q-o-Q, and credit cost was 31 bps, down 13 bps from previous quarter with more specific cases in 4Q '19. Expense was down 14.2% Q-o-Q, mostly reflecting the decrease in ESOP valuation. Insurance pretax profit was up 416.1%, benefited from improved investment income and lower hedging costs.
Overall, net income reached TWD 12.2 billion, up 158.4% Q-o-Q.
On the bottom, operating revenue was down 5.7%, with the growth in core earnings, including net interest income and fee income, offset by the decrease in trading gain and an impacted financial market under the pandemic.
Provision was up 70.3% and credit cost was up 12 bps Y-o-Y. Expense was down 9.1% Y-o-Y, reflecting the decrease in ESOP valuation. Insurance pretax profit was up 51.8%, benefited from investment income and lower hedging costs as well as decreasing cost of liability.
Overall, Holding net income was up 9.8% Y-o-Y.
Page 10 on revenue breakdown, excluding Life. Total revenue was up 1% Q-o-Q, down 5.7% Y-o-Y. The solid core NII and fee income growing 7.6% Q-o-Q and 6.5% Y-o-Y. Net interest income was up 1.4% Q-o-Q and up 5.4% Y-o-Y. Fee income was up 17.9% Q-o-Q from lottery, wealth management, corporate business and overseas subsidiaries and up 8.3% Y-o-Y on the growth of wealth management, lottery, retail and corporate fees as well as overseas subsidiaries. Combined derivative FX and trading gains were down 10.3% Q-o-Q and down 50.8% Y-o-Y due to market volatility under the pandemic.
Please see profit mix on the right where NII accounted for 57%; fee, 40%; trading derivatives and FX, 8%; others combined, negative 5%.
Page 11 on bank's loan breakdown. Total lending with credit card revolving at the end of March was TWD 2.5 trillion, reflecting 1.7% Q-o-Q and 6% Y-o-Y growth. NT dollar corporate loan was up 2.4% Q-o-Q. Growth from public enterprises, construction and real estate as well as manufacturing industries. It was up 10.5% Y-o-Y with increased demand in working capital under repatriation program from construction and real estate, public enterprises, service industry and manufacturing industries.
Foreign currency loan was up 1.3% Q-o-Q and up 1% Y-o-Y, which will be further explained on Page 12.
Mortgage continued to grow 1.4% Q-o-Q and up 8.6% Y-o-Y. Unsecured lending was up 4.4% Q-o-Q and up 15.5% Y-o-Y. Credit card revolving was down 2.8% Q-o-Q and 0.3% Y-o-Y as consumptions weakened due to the pandemic.
Please refer to the graph on the right for our lending portfolio mix, where foreign currency loan accounted for 42%; NTD corporate loan accounted for 24%; mortgage, 28%; unsecured lending, 5%; and credit card revolving and others together accounted for 2% of the total lending.
Page 12 on foreign currency loan breakdown. Foreign currency loan at the end of December was TWD 1.05 trillion, which constitutes 42% of total lending. Overseas subsidiaries accounted for 57.3% of total foreign loan with TSB accounting for 43.6%. Overseas branches accounted for 30.8%. OBU plus DBU was 11.9%.
On the right, overseas subsidiary loan was down 0.7 % Y-o-Y; others in TSB, which we employ a slow growth with value strategy. Other overseas subsidiaries maintained growth. Overseas branches loan was up 1.5% Y-o-Y, mainly from China, Hong Kong, India and Vietnam branches. OBU plus DBU was up 7.3% Y-o-Y due to increased demand in working capital.
Page 13 on bank deposit mix. Total deposit as of March reached TWD 3.4 trillion of which NTD accounted for 55% and foreign currency accounted for 45% of the deposits.
On the left, total NTD deposits were up 3.2% Q-o-Q and up 8.7% Y-o-Y. NT dollar saving deposit accounted for 58.1%.
On the right, total foreign currency deposits were up 0.2% and up 2.6%. Foreign currency savings deposit time accounted for 50.8% of foreign currency deposits.
Page 14 on loan-to-deposit ratio. Overall, LDR was 73.35%. NT dollar LDR was 78.5%. Foreign currency LDR was 67.14%.
Page 15 on NIM and spreads. And the foreign currency spreads were up 2 bps Q-o-Q to 2.25%, attributed to more decrease in deposit rate compared to lending rate due to the lagging effect from U.S. rate cut on longer-term deposits.
NT dollar spreads were 1.58%, up 2 bps Q-o-Q due to TWD rate cut in the first quarter, cutting the deposit rates. Overall spreads were 1.85%, up 2 bps from last quarter. 1Q '20 NIM was up 2 bps Q-o-Q to 1.49%.
Page 16 on fee breakdown. Total fees were up 18.1% Q-o-Q and up 6.9% Y-o-Y. Wealth management fee was up 5.3% Q-o-Q and up 16.4% Y-o-Y due to higher sales from mutual fund and bonds.
Credit card fee was down 16.6% Q-o-Q and down 10.1% Y-o-Y due to decreased consumption momentum under the pandemic.
Retail business was down 3.9% Q-o-Q as 4Q serves as peak season for ATM fees. But it was up 5.3% Y-o-Y driven by ATM and loan-related fees.
Corporate business was up 46.8% Q-o-Q and up 9.3% Y-o-Y, mainly due to increasing fee income from syndication loan, trust and private banking.
Overseas subsidiaries fee was up 10% Q-o-Q and up 6.9% due to syndication fee and wealth financial fee from TSB. Lottery fee was up 133.4% Q-o-Q due to seasonal effect and up 0.3% (sic) [ 0.6% ] Y-o-Y.
Page 17 on wealth management fee where wealth management fee breaks down. Bancassurance contributed 54%; mutual fund 35%; custodian and trust 3%; structured and other, 8% of total wealth management fees.
Bancassurance fee was down 6.5% Q-o-Q as a decrease in liability, reserve interest rates, rise of premiums for new policies.
Mutual fund fee increased 23.8% Y-o-Y. Custodian and trust fee, up 2.8% Y-o-Y. Structured and others, up 33% Q-o-Q due to stimulated sales in bonds.
Page 18 on cost-income ratio. As core businesses grew stably in the first quarter, total revenue was up 4.4% Q-o-Q and as ESOP lowered, operating expense was 8.6% in the first quarter.
Cost-income ratio was 52.72% in the first quarter.
Page 19 on asset quality. Asset quality was benign with NPL ratio at 0.41%, up 7% -- up 7 bps from last quarter and NPL coverage ratio increased to 324.2%.
Page 20 on credit costs. 1Q '20 credit cost was 31 bps, down 13 bps Q-o-Q and up 12 bps while reflecting provisions on specific cases.
Moving on to Life businesses. Page 21 on total premium. Total premiums were TWD 59.9 billion in 1Q, down 6.3% Q-o-Q, down 12.8% Y-o-Y. Market share was 7.3%, ranked #6 in the industry.
Page 22 on first year premium. FYP reached TWD 23.3 billion in first quarter, up 15.6% Q-o-Q due to stronger sales and investment-linked products and U.S. interest-sensitive products. 3M '20 FYP was down 26.9% Y-o-Y, reflecting the decrease in interest-sensitive products as we sell NTD single-pay products and short-term regular paid NTD policies last year. Market share was 9.2%, ranked #4 in the industry.
Page 23 on FYP breakdown by types of payment and products. On the left, mix of single-pay products have increased to 42% of FYPs. And regular paid products accounted for 27.5% of the FYPs.
On the right is the product breakdown. Interest-sensitive policy accounted for 63.3% and investment-linked accounted for 30.5% of FYP. Traditional for 2.1% and health and PA increased to 4.1% of FYP.
Page 24 on FYP breakdown by channels and currencies. In terms of channel, contribution was mainly from bancassurance with 44.3% from CTBC Bank and 29.7% from external banks. Tied agents contributed 15.2% of FYP; insurance brokers, 9.7%; and others, 0.3%.
On the right, investment-linked product accounted for 30.5%; foreign currency policy accounted for 55%; and NT dollar policy for 14.5% of FYP.
Page 25 on FYPE. 1Q and 3M '20 FYPE reached TWD 5.6 billion. Market share was 5.8%, ranked #6 in the industry. On the right is the FYPE index for your reference.
Page 26 on investment and asset mix. Total investment assets reached TWD 1.9 trillion, up 8.1% Y-o-Y.
In terms of portfolio breakdown, cash accounted for 3.8%; domestic fixed income, 11.2%; overseas fixed income, 60.3%; equities, 8.8%; real estate, 4.4%; mutual fund, 8.7%; mortgage, 1.5%; and policy loan was 1.4%.
Page 27 on investment yield, cost of liability and hedging mix. 3M '20 cost of liability was 3.4%, down 5 bps Q-o-Q.
Investment yield was 4.07%. Recurring yield before hedging was 3.42%. Annualized hedging cost was 0.87% for 1Q '20.
In terms of hedging, 40% of overseas investment assets were foreign currency policies, while 60% of overseas investment assets were NT dollar policies, of which 61% were fully hedged, 15% were OCI acquisition and 24% were unhedged.
Next, we move on to Taiwan Life 2019 embedded value report. Page 29 on EV. For EV assumptions, investment yield for NT dollar policy started from 3.52% in 2020 and will rise to 4% in 2039 and stay flat after. Investment yield for U.S. dollar policy started from 4.6% in 2020 and will rise to 5.03% in 2039 and stay flat after.
Discount rate applied was 10%. EV reached TWD 208.8 billion as of end of 2019, of which adjusted net worth was TWD 108 billion. Value of in-force business before cost of capital was TWD 144.8 billion, and the cost of capital was TWD 43.9 billion. EV is TWD 47.2 per Taiwan Life share and TWD 0.7 (sic) [ TWD 10.7 ] per CTBC Holding share.
Page 30 on other fee assumptions. RBC Capital requirement remain at 200% based on the 2019 RBC formula announced by Insurance Bureau.
Mortality, morbidity and lapse rate are determined with related experience rate and product type. PwC has provided an independent review on our EV assumptions.
Page 31, sensitivity discloses scenarios based on changes of 25 bps on investment yield and changes of 1% of discount rate for your reference.
Page 32 on EV comparison. We adjusted investment yield assumptions on NTD and USD policies to reflect the changes in the market. 2019 EV increased year-on-year to TWD 208.8 billion. And there will be information on movement on adjusted net worth, this and VNB in the following pages.
Page 33 on adjusted net worth movement. Adjusted network in 2019 increased to TWD 108 billion. 2018 adjusted net worth was TWD 66.5 billion, having 2019 profits of TWD 13.1 billion.
Changes in unrealized gains on financial assets, excluding bonds, TWD 16.4 billion; capital injections, TWD 10 billion; changes in unrealized gain from property, TWD 0.9 billion; and other adjustment, TWD 1.1 billion, mainly due to the FX reserve.
Page 34 on VIF movement. VIF increased from TWD 140.7 billion in 2018 to TWD 144.8 billion. The increase in VIF was due to VNB of TWD 16.2 billion; release of 2019 expected profits and interest rolling forward of TWD 3.3 billion, offset by investment yield assumption change of TWD 15 billion; other function changes of negative TWD 0.8 billion; and data and model changes, TWD 0.3 billion.
Page 35 on VNB movement. VNB remained at TWD 14.2 billion, with sales volume change of negative TWD 5.7 billion and product mix exchange of TWD 4.3 billion; and investment yield and other assumption changes of TWD 1.4 billion.
The presentation will stop here. We'll now open for Q&A.
Hi, this is Ya-Ling. As you know, the market was crazy in March after our last analyst meeting on March 12. So this then, we have revised our outlook guidance for this year. So let me briefly give you this update.
And for NT dollar loan, we foresee it will have mid- to high single-digit growth, mainly from mortgage and corporate loan. We see the property market and housing price will keep stable in Taiwan for this year. And for corporate loans, we see the opportunity from the Taiwanese corporates coming home program. And also the opportunity from the domestic demand from government policy for infrastructure like 5G and green power. And for foreign currency loan, except for China, most of the cities where our overseas branches and subsidiaries are located are having lockdown, which resulted in the flattish momentum of loan growth in first quarter. So we anticipate there'll be low single-digit growth for foreign currency loan because we don't know how long this COVID-19 will last.
For NIM, last time, our assumption is Fed rate -- Fed bond rate will cut by 100 basis points. But actually, Fed bond rate cut by 125 basis points -- no, sorry, 150 basis points. So we assume for this year, there would be about 7 to 8 basis point decline compared to last year, full year. Meaning that last year, we had 1.5% of NIM. This year, we foresee NIM will be about 1.42% to 1.43%.
I foresee -- because the COVID-19 outbreak that impacted the consumption of the credit card spending and also our wealth management customers are hesitating to invest more. They prefer cash now at this volatile market. So we foresee our fee income will be flat for this year.
And for credit cost, we anticipate credit cost will deteriorate to around 40 basis points. We -- the normal credit cost for the whole bank is about 20 basis points, which was the guidance that we usually will give to investors. So 20 basis points is the basic, plus the Hin Leong case, probably you all know this case. It will cost about 10 basis points if we provided 100%.
So for this year, the baseline would be 30 basis points of credit cost, plus the COVID-19 impact. So we add up 10 basis points more for buffer. So overall, we see the credit cost will be 40 basis points -- around 40 basis points for this year.
For cost-income ratio since the decline of the top line that we just mentioned, so cost-income ratio, we anticipate will be about 60%. So that's the brief update about the outlook guidance for the bank.
On Life side, the guidance -- outlook guidance will be pretty much the same as we get less time.
So now we can start the Q&A section.
[Operator Instructions] Your first question is coming from Edwin Liu, HSBC.
May I ask, first of all, about the recurring yield? I see that it has decreased a bit. May I get the latest guidance of the management about the recurring yield trend? So that's my first question.
And second is on the cost of liability. I see that the improvement has slowed down gradually. May I know the reason behind? And what do you forecast, the cause of liability level at end of this year?
The spread between recurring yield and cost of liability is getting slightly bigger than last year, although the recurring year dropped 14 basis points Y-o-Y. And the -- but the cost of liability for last year -- the first quarter of last year is 3.6% and dropped to 3.4% for the first quarter of this year. So we expect the spread between recurring year and the cost of liability could be -- keep the pace.
Okay. Maybe I can follow up with a question on the bank. May I get an idea about the bank's overseas earnings, in particular, the earnings contribution from Mainland China and Southeast Asia in terms of the percentage of your overall bank earnings?
The earning contribution from China, if we look at last year, it is still small. But this year, we foresee it will be growing to 8% for this year. And for Southeast Asia, because of the Hin Leong case, in our forecast, we assume we will provide 100%. So for Southeast Asia, this year, it will be a negative earning.
What if -- without the Hin Leong case?
It will be -- the exposure is TWD 90 million -- sorry, USD 90 million. So it's about TWD 2.7 billion.
And the next question is coming from Gurpreet Sahi of Goldman Sachs.
A couple of questions, please. First is this 10 basis points credit cost guidance outside of Hin Leong, so COVID-19 impact. How does the management come to the 10 basis points impact? Can you talk more regarding the assumptions behind it and predominantly where it is coming from?
And second one is regarding the operating expense, how much of the operating expense outcome in the first quarter being lower was because of the ESOP, so the stock option, employee stock option plan. So if you adjust for that, where should the cost-to-income ratio would have been in the first quarter?
For the 10 basis points more for the buffer is -- actually, we have reviewed all the early warning cases one by one globally. So that's the expected loss that we estimate. So except for Hin Leong, we also see some potential risk from Japan. Because of the 2020 Olympic games, so our TSB subsidiary, they had done some loans on the hotel industry. Because at that time, the outlook of the hotel industry was quite good because the Olympic Games. But due to the COVID-19 impact, it turns out to be a negative outlook. It's not a good business now. So we do see some potential risk on this side. And actually, the 10 basis point is the aggregate of the -- all the individual cases that we estimate altogether.
And for the OpEx in first quarter, because the share price decreased in March, I mean the CTBC share price, so the cost of -- so ESOP, employee stock option program, the cost of ESOP was lower. And the impact of this item will be about TWD 1.3 billion. So that's why the C/I ratio in first quarter is relatively lower than BAU.
And the next question is coming from Jemmy Huang of JPMorgan.
Two questions from me. First one is on the bank. If you look at your Slide 45, the bank P&L, just trying to think about why the long-term investment income actually declined from a positive TWD 310 million in first quarter last year to minus TWD 360 million this year, because I think trading is not included here, and then lottery-related expenses should be in other income. So what's the key reason behind the swing on the long-term investment income here?
And the second question is on cost of liability for Taiwan Life. I think it looks like very likely, the policy reserving rates will be revised down in July. So if we take into account the new measures that will be implemented in the second half of this year, I think originally we are talking about we expect cost of liability to decline by about 22 basis points in year-on-year this year. I'm not sure whether there will be additional positive impacts because of the new measures.
Regarding the long-term investment income turned negative in first quarter, that's because the LH investment, the investment that we have in Thai -- in Thailand, and the bank or the group, LH Group, their investment -- because the volatility of the equity market, so their investment -- there is some mark-to-market loss of their investment. So that's why we recognized 36% of it. So that's the reason for long-term investment turned negative.
May I -- you mentioned about the new measures. What do you mean?
On the policy reserving rate on talking about...
Yes. Okay. Okay. You mean, currently, the policies sold in the market almost are crediting rate type. Actually, although the reserving rate decreased 25 basis points to 50 basis points. But when we calculate the cost of liability, we use the crediting rate as our number to calculate the cost of liability. So although the reserving rate declined, we don't expect to have much impact on our cost of liability. The major impact for our cost of liability is that about market year. If the market year going down, then we will decline our -- we will lower our cost of liability also.
Yes. But I guess my question is, basically, the crediting rate cannot be lower than the policy reserving rate, even for the increased sensitive products. So I think what you mean is that you don't really expect at the current interest rate environment, the crediting rate that you declare will still be quite in line with your original expectation. Is that a fair statement?
Yes. Especially for your status, we still have the room to decline to lower the crediting rate.
Yes. But -- okay. So basically, you're still targeting 22 basis points decline on cost of liability for this year?
Yes.
[Operator Instructions] And the next question is coming from Chung Hsu of Crédit Suisse.
I just want to ask about the insurance business, the EV. I noticed you changed your investment assumptions for 2020 via 2019. Just wondering if you provide a single rate equivalent rate for 2020.
3.98%.
3.98%. Can I get that for 2019?
2019. For last year, it's 4.33%.
4.33%?
4.33%, yes.
Okay. And just one more question. I don't see any investment return assumption for new business. So I assume you will use the same rate for new business and VIF.
We used -- for NTD, we use the same rate. For U.S. dollar, we use the same rate separately. But the product mix may be different. So for VNB, the equivalent rate is 4.21% due to we have higher -- we have more U.S. dollar policy.
So if I understand it correct, it's 2.41%. That is the single rate equivalent for new business this year.
Pardon?
It's 2-point -- what was that? Was it 2.41%?
4.21% for new business.
4.21%.
4.21% for VNB. And for last year, also for VNB is 4.45%.
What? So if I understand it correct, are you seeing higher rate for new business than VIF?
No. The number is -- the dip is caused by the product mix. For new business, we have almost 65%, 70% coming from USD policy. For NTD -- for USD, we use the same investment year assumption for EV, and for VNB, but the mix is different.
I see. So just last question then. For the value in force, what percentage of it is U.S. dollar?
For new business?
No. For your back book dip, VIF.
40%, 40%.
40%?
Yes.
And next, we'll have from [ Roger Huan ] from GIC for questions.
Justine, can I just ask a question for -- regarding the hedging cost for this year? I mean I noticed that NTD has been a bit strong. So just wondered, had some views regarding hedging costs for the rest of the year?
Yes. For the hedging cost, the full year budget is around 1%.
Excuse me, Roger, do you have more to add?
No.
And the next question is coming from Edwin Liu of HSBC.
I just have 2 follow-up questions, one is on your proposed issuance. You have made your announcement about the issuance for senior and also subordinated debt. Can you give us more color on what kind of use would that be? Do you use to inject capital into your bank or Taiwan Life or other purposes?
Second question is on your dividend. I think your payout ratio was lower this year, reason being you want to preserve more capital. May I know if next year, economic outlook is more clear, would you return to sort of normal level of the payout ratio?
I'll answer the dividend question first. Yes, we do look at the 3 to 5 years, our dividend -- our capital plan and dividend is part of that. So if the COVID-19 thing will end this year, and next year, everything go back to normal. Yes, our dividend level will go back to the normal level, which is 50% payout and also a 4% to 5% of dividend yield.
And regarding the debt, our Board meeting approved the limit of TWD 450 -- sorry, TWD 45 billion of debt, which includes TWD 10 billion of sub debt and TWD 35 billion of debt. We don't have plan to inject this money to our -- any subsidiaries, including Taiwan Life. The main purpose is -- for sub debt is to enhance our capital -- efficient capital level -- capital adequacy for holding company. And the overall TWD 45 billion we'll use to pay back our debt currently. Currently, we have one debt that will be matured this year. And the other is like commercial paper because the price of commercial paper now is quite close to the 5-year debt. So that's why we want to lock in the low price of debt. And so we use the total TWD 45 billion to pay back the debt now. I hope that answers your question.
[Operator Instructions] There appear to be no further questions at this point. And we thank you for all your questions, and that will be the end of the conference. We thank you for your participation in CTBC Financial Holding Co.'s Conference Call. You may now disconnect. Goodbye.