Hi, investors. Welcome to the earnings call of E.SUN Financial Holding Company 2023 third quarter. I'm Qi Wei, I'll be the moderator today. Also in the meeting room with me are my colleagues, Mr. Anthony Cheng, Mr. Alex Chiu, and the host of today, Vice CFO of E.SUN, Mr. David Tai.
Welcome, everyone.
At the beginning, I will spend a few minutes to walk you through the presentation of the third quarter earnings. On the first page, the page number is number two, the FHC summary on the total assets, both of the asset of Financial Holding Company and the bank. The growth of year-to-date is 3%, maintaining a very stable growth. On the key financial numbers, the book value per share is TWD 14.58. There is a significant increase compared with the end of 2023. On distribution channel, there is no change on the domestic and overseas branching. On page three is a financial review of E.SUN in the third quarter. For the first nine months, E.SUN's net revenue was TWD 48.2 billion, and the net profit was TWD 15.9 billion, which was a 36% growth. EPS was at TWD 1.04 per share. ROE is 9.96%, and ROA is 0.6%.
On the bank, we also have a very good growth at nearly 30% in net profit. On business operation, our loan balance, there is a very stable growth by 4.6% year-on-year, and the loan balance exceeded TWD 2 trillion . I also want to note that since the founding of E.SUN, we spent first 23 years to exceed the first trillion NT dollars in our loan balance, which happened in 2015. We spent another eight years to surpass TWD 2 trillion milestone. That's what you can see. It's like a flywheel, and the flywheel is spinning faster and faster. On the SME loan, the growth rate is 8%, consumer loan is 5.3%. On the second bullet is the net fee income, which is a business highlight of E.SUN in this quarter. It was reported TWD 15.8 billion, which was a 8.3% increase.
In the third quarter alone, the net fee income was TWD 5.6 billion. This is a record high of any single quarter in E.SUN in net fee income. The main contributor is the wealth management fee income, which was TWD 6.9 billion, a 13.8% growth, and credit card fee income was 14.86% growth. I also want to note that the wealth management fee income, this is the sixth consecutive quarter that we maintain a positive growth in wealth management fee income. As you can see, the growth momentum is quite strong. On the next section is the business highlight of E.SUN. On honors and recognitions, we are the biggest winner of the Wealth Magazine in Taiwan Financial Awards, including the winning of Sustainable Finance Award.
We are the winner for the seventh consecutive year, also a winner in FinTech Innovative Application, the most influential trust service, and the most recommended by domestic clients. We also are the winner of the Triple A Awards presented by The Asset, also the most recommended retail bank by The Asian Banker. This year, E.SUN also held the E.SUN ESG Initiative. This is the third consecutive year for E.SUN to hold this very meaningful event, to invite 157 companies to respond to the ESG commitment, and they collectively to reduce 1.57 million tons of carbon emission by 2025. E.SUN is the front runner and leader in ESG, and we will continue to make more commitment in ESG. On next page is the financial performance for the past five years. The net profit is TWD 15.9 billion, and EPS is TWD 1.04 per share.
On next page is the breakdown of net income of financial holding companies and the subsidiaries. That's what you can see on the left-hand side. The bank represents 86% of our net income. On the right-hand side, what you can see, both the security and the Venture Capital has a very solid growth in this year. Next page is the net profit breakdown of E.SUN. On net revenue, we grew by 20%, and on operating expenses, we grew by 16.4%. On the net profit, the growth rate was 36%. On the operating expenses, the growth rate is a little bit higher than what we expected because there are a few reasons causing the growth in operating expenses, first of all, is the capital raising that happened in the first quarter, and there is an employee subscription cost associated with the capital raising.
The amount is TWD 400 million. Also, there is a sales tax associated with the interest income. The tax base is the growth interest income. Because there is a growth in our loan volume, and the interest rate is much higher than the previous years, the sales tax of the interest income also increased, and the amount is about TWD 470 million. Also, the credit card business is going very well this year, so there's also some cash rebates associated with the growth in credit card consumption. All of the three reasons lead to the increase in operating expenses this year. On next page is the net revenue breakdown. The NII, net interest income, represents 44%, followed by net fee income is 32.7%, and fixed income and others represent 22.9%. That's what you can see on the right-hand side.
Net fee income grew by 8.3% this year. We expect to reach double-digit growth, 10% by the full- year in net fee income. The next page is the breakdown of net fee income. The total net fee income is TWD 15.8 billion. Wealth management accounts for 43.4%, followed by credit card, which was 33.5%, and brokerage is 12.6%. On the right-hand side, the two main fee income drivers are both performing very well this year. The credit card growth rate was 14.6%, and the wealth management is 13.8%. Next page, we use four graphs to illustrate our market position on credit card. On active card, the market share is 13.4%, and the card consumption is 13%. There is some drop in the market share in credit card consumption because of the market competition. It's very fierce.
Our credit card consumption growth volume is 15.2% year-on-year. We still continue to maintain a very robust growth in credit card business. On the next page is the deposit and loan structure. On total deposit, its year-to-date growth was 2.3%, of which the time deposit growth rate was 25% and the foreign currency deposit was -10%. This is because that we're trying to optimize our funding cost and our deposit structure. On total loans, the year-to-date growth rate is 3.7%, of which the corporate loan grew by 3.2%. SME loans grew by 5.8%. Foreign currency loans dropped by 2.9%. The foreign currency loan, the reason for the drop is because of the high rising interest rate on U.S. dollar. Our clients are more hesitant to borrow in U.S. dollars.
On consumer loan, the growth rate was 4.2%, of which mortgage loan, the growth rate was 4.1%, and unsecured personal loan, it dropped by 7.6%. Next page is the deposit structure. On the left-hand side, the loan-to-deposit ratio on our NT dollar LDR is 85%. The blended is 68%, and the foreign currency was 36%. On the right-hand side is the deposit structure. Our CASA rate in TWD is 57.4%. The foreign currency deposit, there was a decline of 12.5% year-on-year. Right now, the foreign currency deposits account for about 34.3% of the total deposits. Next page is the loan portfolio breakdown. The total loan of E.SUN is nearly TWD 2 trillion. There is a very balanced break between corporate and the consumer.
What you can see on the right-hand side, we have a flat growth on large corporate, 8% growth in SME, 4.5% growth in mortgage. On unsecured personal loan, there is a drop by 10%. Secured personal loan, there is a growth of 12.5%. On NIM and spread, in this quarter, we maintained a very stable NIM at 1.3%, as what we indicated in the previous quarter earnings call. We expect the NIM level will continue to be flattish by the year-end. On quarterly interest spread, it dropped by 3 basis points, even though the loan yield increased by 4 basis points, but the funding cost also grew by 7 basis points. There was a drop in the interest rate spread by 3 basis points. We expect the spread will continue to be flattish till the fourth quarter, till the year-end.
Next page is the asset quality. The overall NPL ratio is 17 basis points, and coverage ratio is more than 700%. Next page is the asset quality by product category. On corporate side, the NPL ratio is 17 basis points, and the mortgage was 5 basis points. Next page is the track record of E.SUN's asset quality. As you can see, we always can maintain a very benign, very good asset quality. Next page is the cost income ratio. As of the third quarter, the CI ratio is the 58.7%. We are not quite satisfied with the level of the CI ratio, and we will continue to implement some cost-saving tactics to maintain the CI ratio at a more comfortable level. On capital adequacy ratio for the financial holding company, it was 138%.
The bank BIS ratio, it was 15.48%, of which the Tier 1 ratio is 12.89%, the CET1 ratio is 11.35%. On the last page is a picture of the ESG Initiative that we held in September of 2023. We will try to gather some of the very good companies in Taiwan to promote the awareness of ESG through the collective efforts with the client. More than 150 companies participated in this very meaningful event. The total revenue of all of these participating companies, more than TWD 5 trillion, so it's a very sizable scale, and very good company to join us in this very meaningful event. Collectively, they commit to reduce 1.57 million tons of carbon by 2025, and we try to make positive impact on decarbonization through providing ESG consultation, engagement, and sustainable financial products.
This is all of the presentation today, we can get into the Q&A section. Please enter your question in the dialogue box, we will answer your question. Thank you.
Okay, we have the first question. It was about our deposit goal. We indicated that the annual growth target for deposit is 5%-6%. Do we still plan to maintain that target?
As of the third quarter, the year-to-date growth rate is 2.3% on our deposit. On a year-on-year basis, it's about 4%. I think it is achievable in the remaining one quarter to reach 5%-6% of the growth rate in deposit.
The second question is about the credit card fee income. Do we still maintain a growth target of 12%-15%?
Indeed, yes.
As of the third quarter, the growth rate of the credit card fee income is nearly 15%. In the first quarter, it is traditionally the shopping season. We are quite positive that we can maintain a very strong growth rate in credit card fee income. Thank you.
We have the next question. It's about the trading gain. How many percent of the trading gain is coming from swap transaction? We will invite David to answer this question.
Hi, everyone. Basically, our trading gain comes from three parts. The first part is the commercial flow. It is just like some FX flow from our retail client and our corporate client. The second part is for our traders' trading gain. The third part is come from the FX swap. FX swap, as we know that this year the United States, they hiked 21 times, 21 quarters interest rate. The difference between Taiwanese dollar, its interest rate, and U.S. dollar is very high. Swap can contribute a lot for our trading gain. Right now, maybe around half of our trading gain is coming from FX swap. Thank you.
Okay, we have the next question. If the Fed starts to cut interest rates in 2024, shall we expect E.SUN to record decent mark-to-market gain?
Hi, this is David again. For the mark-to-market gain, if Fed do start to cut rates in 2024, because some of our portfolio is fixed rate, we may have received some mark-to-market gains from the Fed to cut rates.
Okay. Thank you, David. The next question is, does the mark-to-market gain have higher sensitivity with the 10-year yield or two-year yield? Please, David.
Because our foreign currency investment duration is around three to four years, our sensitivity is more focused on the short term.
Thank you, David. We have the next question about the wealth management fee income. The wealth management, the bancassurance sale is strong this year and the fund sale is flattish. How do you see the growth momentum in the fourth quarter?
To answer this question, first of all, I would like to provide a breakdown of the fee income. Among the three categories, the mutual fund contributed about 36% of fee income. Bancassurance contributed about 46%. Other financial products, which include overseas fixed income products and structured notes represent about 18%. Among these three product category, the bancassurance demonstrated a very strong fee income growth of 25% this year. This is followed by more than 30% growth in the previous year. For the two consecutive year, we continue to have very strong growth in bancassurance sales.
On overseas debt and structured notes, the relevant fee income growth is also very good, 36%. On mutual funds, the growth rate is weaker. It's about maybe 2% or 3% minus . We are quite positive judging from the recent feedback from our financial consultants. We expect the growth rate of fund sales will be positive for the full- year. We are also very happy to see that our overseas platform, which includes our Hong Kong and Singapore, the fee income from wealth management, the growth rate is also 50%, five, zero. The growth momentum from overseas is quite strong. We are very optimistically estimate that the overall wealth management fee income will be 15% growth for the full- year. Thank you.
This is the final call for additional question.
If you still have any question for E.SUN, please fill in your question in the dialogue box. If there is no additional question, we will call it a day. Thank you for your participation in the earnings call of E.SUN today. We hope to see you soon in our next earnings call. Thank you. Bye-bye.