Hi there, investors. It's 5:30. We'll begin the earnings call today. Welcome to 2025 E.SUN Financial Holding fourth quarter earnings call. My name is Martin. I'm IR of E.SUN Bank. I will be the moderator today. Together with me in the meeting room, we have our Deputy CFO, Sarah, and also my colleagues, Bernard and Ruby. First of all, we would like to invite Sarah to give us the opening speech.
Hi, dear investors. E.SUN delivered a strong performance in 2025, marking a record high in net profit for the same period. Solid growth across all core businesses, coupled with high single-digit growth in overseas profit. Net income set a new record high, growing at a rate of 12.1% year-over-year. Wealth management net income also achieved a record high, in which bancassurance grew by 23.2%. Recently, we announced the financial results for January. Growth rate of net profit for the first month was 32.9%. Net fee income continued to grow. We are optimistic about our performance this year and expecting to achieve good results. With effective cost management, the CI ratio decreased to 47.7% for the full year. E.SUN will continue to strictly control growth rates of expenses to a single-digit level this year. For overseas expansion, overseas branches and subsidiaries continuing to post solid profit growth.
In 2026, E.SUN plans to open the Mumbai branch in India and the Osaka representative office in Japan, further enhancing its Asia Pacific service network. At the AGM held on January 23rd this year, our shareholders approved the proposed merger with Mercuries Life Insurance, which is still subject to regulatory approval. Upon completion, our total assets are expected to increase from TWD 4.5 trillion to approximately TWD 6.1 trillion, positioning E.SUN among the top five listed financial holding companies in Taiwan. Following the division of our asset management subsidiaries in 2025, our life insurance business is also expected to join the group this year. This will complete our diversified earnings engine of core banking, insurance, securities, venture capital, and asset management, further strengthening our market engine platform to support long-term growth in Asia and beyond. Lastly, E.SUN's outstanding performance has been recognized by international institutions.
In 2025, we are named Forbes Taiwan Best Bank for the fifth consecutive years, participating in the United Nations Climate Change Conference, which is called for the fourth consecutive year. We are invited to serve as the Asia Chair of the Nature Investment Coalition, which meant NIC. Looking ahead, we will continue to deliver long-term value to our shareholders. Thank you for your attention.
Okay. Thank you, Sarah. Right now I will have my colleague Bernard to walk you through the financial review of fourth quarter 2025 of E.SUN Financial Holding Company. Bernard.
Dear investors, I will now take you through an overview of E.SUN Financial Holding Company. On slide four, at the fourth quarter, the total assets of Financial Holding Company amounted to TWD 4.5 trillion, while E.SUN Bank's total assets were TWD 4.4 trillion. For the key financial indicators, the book value of Financial Holding Company is TWD 60.85 per share. The double leverage ratio is 115.04%, and the FHC CAR ratio is 126.66%. For the physical channel, domestically, E.SUN Bank runs 140 branches around Taiwan. For the overseas channels, we run 35 overseas sites in 11 countries and regions. The security branches remain the same as 17. On slide five is the business and financial review of the fourth quarter of 2025. For the financial performance, net revenue of FHC was TWD 91.8 billion, which grew by 20.5% year-over-year. Net profit was TWD 34.3 billion, which grew by 31.2% year-over-year.
The financial holding EPS was TWD 2.12, ROE 13.04%, ROA was 0.8%. For the subsidiaries, E.SUN Bank net profit was TWD 32.7 billion, which grew by 33%. Move on the business development. The loan balance reached TWD 2.63 trillion, which grew by 12.6%, in which corporate loans grew by 18.1%. SME loans grew by 11.8%, Retail loans grew by 7.6%. The deposit balance grew by 12.9% year-over-year. Net income was TWD 31.6 billion, which grew by 12.1% and reached a record high. For the wealth management fee was TWD 50.4 billion, grew by 40.3%, also set a record high. In terms of asset quality, E.SUN remains sound. NPL ratio at 15 basis points and coverage ratio at 826%. As a business highlight, the EGM approved the proposed acquisition of Mercuries Life Insurance, pending regulatory approval.
After completion, E.SUN's total assets are expected to reach TWD 6.1 trillion, ranking among the top five listed FHC in Taiwan. On slide six, we use chart to illustrate our financial performance. As you can see in the upper part of the slide, the net profit and the EPS both set a record high for four years 2025, ROE and ROA are all the best performance in the past five years. Moving to slide seven, we present the net income of the FHC and its subsidiaries. As you can see on the left-hand side, the pie chart shows that E.SUN Bank remains the main contributor of the FHC, which contributes to nearly 92% of the total profit, the growth momentum for the E.SUN Bank is very strong.
As you can see on the right-hand side, the growth rate of the E.SUN Bank is nearly 33% year-over-year. On the next slide is the net income breakdown. Again, E.SUN follows the golden rule of the growth. The net profit growth is larger than the net revenue growth, increase is larger than the operating expense growth, driven by effective cost control. The operating expense only grew by 11.9% year-over-year. On slide nine shows the revenue breakdown of the FHC. As you can see on the left-hand side, the pie chart shows our net revenue. The net interest income accounts for 44.6% of the total net revenue, the net fee income accounts for 34%, and the other income accounts for nearly 21%. On the right-hand side, you can see that all revenue sectors deliver a very decent growth.
On slide 10 shows the net fee income breakdown of the financial holding company. The pie chart shows wealth management accounts for nearly 49% of the net fee income. On the right-hand side, you can see the growth rate of wealth management was 40.3%, which was after a third consecutive year of double-digit growth. We still deliver a very decent growth in the wealth management business. On slide 11, present the capital adequacy ratio of all FHC and bank. Both maintain its capital ratio at a very adequate level. The CAR ratio of FHC is 126.6%, and tier one ratio of the bank is 13.03%. Moving on to subsidiaries, first, we take a look at the E.SUN Bank. On slide 13, present the deposit and loan structure of E.SUN Bank.
The total deposit grew by 12.9% year-over-year, in which the foreign currency deposit grew by 12.6%, the total loan grew by 12.5% year-over-year, in which the foreign currency loans grew by 19%. If we denominated the foreign currency deposit and loans in US dollar, the foreign currency deposit and loan grew by 60.9% and 23.9% respectively. On slide 14 shows the loan portfolio breakdown of E.SUN Bank. E.SUN has very diverse loan structure with our largest corporate loan, SME loan, mortgage loan, and security personal loan are all accounts for around 20%-25%. On the right-hand side, you can see across all the loan categories, we had very decent growth in 2025. On slide 15, we would like to highlight the SME loan and the foreign currency loan of E.SUN Bank.
E.SUN Bank maintain the largest SME loan balance among Taiwan's private banks, driven by stable growth. For the foreign currency loan, as just mentioned, if we denominated in the US dollars, the foreign currency loan is still very strong. On slide 16 is the overseas development of E.SUN Bank. The overseas branches and the subsidiaries net profit grew by 9.5% and contribute 26.4% of total net profit, the loan balance grew by nearly 20.5%. For the overseas network, E.SUN will establish the Mumbai branch in India and Osaka representative office in Japan. On slide 18, the NIM and spread. E.SUN NIM has remained at a very flat level in the past quarters, around 1.28%-1.32%. On right-hand side, you can see that the spread has been improved over the past few quarters. It's all thanks to the wealth management of cost funding control.
As the green line shows, we have lowered our deposit rate over the past years. On slide 19 is the wealth management fee income breakdown. The bancassurance accounts for 40.1% of the total wealth management fee income, and mutual funds account for 33.2%. On the right-hand side, you can see the bancassurance growth rate was 23.2% for the full year, making the third consecutive years of double-digit growth and reflecting a strong performance. On slide 20 is the credit card business breakdown. We have 53, 41,000 active cards, and the market shares was around 30%, and card consumption hit a record high of TWD 665 billion. The gross fee growth, income growth grew by nearly 8% year-over-year. On slide 21 is the asset quality of E.SUN Bank. E.SUN maintains sound asset quality with the NPL ratio at 15 basis points in 2025, and the coverage ratio is 826.4%.
The credit cost is 23 basis points. On page 22 is the asset quality compared to the market. E.SUN maintains sound asset quality with the NPL ratio in line with the market average. On page 23 is Cost-to-Income ratio. Thanks to the very well management of the cost control, now E.SUN Bank Cost-to-Income ratio is 47.7%, which has been improved since 2022 from nearly 13%. Next is about E.SUN Financial Holding Company of other subsidiaries. First, on slide 25 is E.SUN Securities. In Q4, the stock trends upwards, driving positive year-over-year earnings growth. ROE is 25%, which ranks top one among securities under FHC. Both net revenue and net profit delivers a positive growth. On slide 26, you can see the performance of E.SUN Asset Management.
Domestic fund AUM reached TWD 92.3 billion, and discretionary managed AUM reached TWD 106.9 billion, representing a combined growth of 24% compared with year and that year. Next, we will introduce E.SUN Financial Holding Company's development strategy. On slide 28, E.SUN aims to become the best performing and most respected company. In an era of FHC 2.0, E.SUN has established a complete subsidiary platform with total assets reaching approximately TWD 6 trillion. On slide 29, we illustrate the horizontal integration of the FHC across three major business. As shown on the left-hand side, this includes credit and corporate banking business, investment business, and wealth management service.
Credit and investment business are asset intensive, making risk management critical. While asset management has a light asset business model, but still plays a strategic role within the group. On slide 30, E.SUN is building an FHC-level customer-oriented service model to create a closed-loop ecosystem.
In terms of the second line of defense and foundational infrastructure, we are establishing group-wide risk management and human resource planning under an FHC mindset. Next, on slide 21, we provide example of cross-subsidiary collaboration. These include cooperation between E.SUN Bank and E.SUN Asset Management to offer these diversified products to high net worth clients under the Asia Asset Management Center. Collaboration between E.SUN Bank and insurance to distribute insurance products through bancassurance channels. Cooperation between insurance and E.SUN Asset Management to launch investment-linked insurance products. These strategic initiatives are all built on a strong foundation of sustainability, which I will highlight on the next slide. On slide 32, you can see E.SUN sustainability efforts. E.SUN FHC was recognized as the number one large enterprise for three consecutive years at the CommonWealth Magazine Excellence in Corporate Social Responsibility Award. In addition, E.SUN received the Jade Award, the highest distinction.
We will continue our efforts to lead in ESG. That concludes the fourth quarter presentation. We will now move on the Q&A session. Thank you.
Hi, investors. We start to answer the questions that were given. First, we have a question, it's about the growth guidance for this year. Can you give us the growth guidance across the different product lines, including loan deposits, fee, and OpEx growth?
Well, we think for the loan and deposit balance, it's expected to grow by 10% under this currency rate level. But for foreign currency loans and foreign currency deposits, the growth rate will be higher than the domestic loans and deposits. For wealth management income, it's expected to grow by 15%, which is still a double-digit growth. For the OpEx, the growth rate will be only single digits. The performance of this year will still be very good.
We have the second question. Can the management give us the trend of NIM and spread for the year 2026?
Well, for the NIM of this year, we expect it to increase by four to five basis points . This is under the assumption that Central Bank in Taiwan will keep interest rates flat and U.S. Fed will cut interest rates two to three times in the second half of this year. We will continue to lower our funding costs and enhance our asset yields to achieve the NIM. Thanks.
Now we have the third question. It is about the progress of the merger of Mercury. As what we guided earlier, after we announced the acquisition deal, we expect the acquisition will complete in the third quarter. That is the timeline that we have for this acquisition to complete in the third quarter. Its implication on the capital and financial. In the second half of 2025, Mercury has already raised more than $17.5 billion in the dollar through capital raising and the issuance of sub-debt. Now the capital ratio is already very close to RBC 200%. Going forward, with the support of E.SUN, we think we can fully support the capital needs of Mercury. Given that the profit of last year is TWD 34 billion. Subtract the legal reserve 10%, and also add the retained earnings from the previous year is TWD 8.3 billion.
The total amount is TWD 39 billion. Assuming that we distribute a better dividend payout than the previous year, ranging from TWD 1.3 to TWD 1.4 a share, the total amount will bring to around TWD 20 billion or TWD 21 billion, which leaves E.SUN about TWD 18 billion. That is the capacity E.SUN has to fulfill the capital raising for Mercury. However, for Mercury, the capital replenishment plan will be taken in a progressive manner. The TWD 18 billion is totally sufficient for the capital needs for Mercury. We are very confident that the ICS capital ratio for Mercury will come back to a healthy level, which is above 100% ICS ratio by year 2026. By year 2027, we further want to improve the ICS ratio to 125% above. Thank you.
Thank you, investors. It seems like we have answered all the questions in queue. If you still have any questions, please don't hesitate to email or contact the investor relations of E.SUN. Thank you for participating in the earnings call today with us. Thank you. Bye-bye.