Dear investors, welcome to the earnings call of E.SUN Financial Holding Company for the year 2023 second quarter. The time is 8:00 A.M, we will start now. At the beginning, I would like to invite Executive VP, and Deputy CFO of E.SUN, Ms. Sarah Chen. She will give us a short opening note, we will start to discuss the result of our second quarter.
Hi, I'm Sarah Chen, the Deputy CFO. Dear investors, thank you for joining our investor conference. For the first half, E.SUN Financial Holding Company reported highest quality earnings in history. E.SUN Financial Holding Company's net profits grew by 48.9% with an ROE of 10.06%. E.SUN Bank grew by 51%. E.SUN Securities and E.SUN Venture Capital's net profit grew by 8.1% and 52.1% respectively. We deliver a good performance in the first six months, we will carry on our good work. Fee income was robust growth in both wealth management and credit cards. For credit cards, fees grew by 13% and have double-digit growth for the fourth quarter in a row. The main driver is overseas travel and consumption, which increased by 80% YoY. Wealth management fee in the first half is 9% YoY growth. Momentum has improved significantly than the second half of 2022.
E.SUN issued the largest ESG-related structured product under Wealth Management 2.0 for high net-wealth customers. Updated to July, wealth management fee is 13% YoY growth, we expect wealth management to deliver mid-teen for full- year. In response to the recent global economic slowdown, Taiwanese corporations are also acting prudently to deal with the cycle and inventory level. E.SUN provides corporate clients with financial total solutions, including loans, FX hedging, flow business, and ESG advisory for SMEs. The total loan growth was 4.8%. The ESG-related loans now account for 35.1% of corporate loans. Lastly, I would like to address E.SUN's strategy. We focus on overseas expansion, high net-wealth customers, risk management, and ESG. We will work hard to create more value for all shareholders, we are confident E.SUN will have a good performance this year. Thank you very much.
Thank you, Sarah, for the opening. Before we get into the presentation, I would like to introduce my colleagues also joining this call, Mr. Anthony Cheng and also Mr. Alex Chiu. I'm Chiwei . I will be the moderator of this earnings call today. Please flip to page three for the summary of E.SUN Financial Holding Company. On total assets, in June, the asset of the h olding company was TWD 3.56 trillion. For the bank, it was TWD 3.53 trillion, both demonstrated a more than 2% growth year-to-date. On the key financial numbers, on book value per share, we grew substantially to TWD 14.76 per share, it is largely due to the rights offering in March, and also the contribution of our profit this year. On double- leverage ratio and the CAR ratio, we still maintain a very benign level.
Operating sites, we have 139 branch in Taiwan. Overseas, we added one branch in Fukuoka, Japan. This is the 31st overseas operating site of E.SUN, and also the second branch of E.SUN in Japan. Next page is the business and financial review for the first half. For the first half, the financial holding company revenue was TWD 31.3 billion, and profit was a 48.9% growth. We also set a record high for the first quarter. The EPS was TWD 0.72 per share. ROE was above 10%. Also for the banks, the net profit grew by 51%, and it is largely contributed by the growth of overseas profit, which contribute to 33.2% of the total profit. Next section is business operation. Fee income grew by 3.1% year-on-year.
Among which, credit card grew by 13%, it is mainly because of the growth of overseas spending with the lift of international travel ban. Many people started to travel overseas, also contribute significantly to the credit card spending. Wealth management, we had a pretty good performance in the first half. The fee income was TWD 4.4 billion. The growth was 9%. As of July, the fee income for wealth management continued to grow to 13%. We have a very good year in wealth management, and we will continue to carry on this growth momentum for the rest of the year. For the other income, including FX, fixed income, and other revenue, it was TWD 7.2 billion, the growth was very significant.
It is mainly because of we have a good trading strategy to capture the opportunities in the first half, also the robust customer flow also contribute to the transaction income coming from structured instruments, currency forward, and currency swap. All of these transactions, they contribute to a very stable and also risk-free profit for E.SUN. The loan and deposit, we try to optimize our loan deposit structure and to enhance our interest rate spread. The loan growth, it was a moderate growth of 4.8%. The SME loan growth, it was 6.2%. I also would like to especially mention the ESG loan now accounts for 35% of the total corporate loan. The asset quality was very sound and very benign. The NPL ratio was 0.17%.
Some of our business highlight for the first half and the second quarter, as I just mentioned, Fukuoka branch, we opened the second branch in Japan and also the 31st overseas branch of E.SUN, and we will continue to leverage our platform in Japan and to enhance the business cooperation between Japan and Taiwan in the private sector or the public sector. E.SUN also, in this quarter, we announced to form a technology advisory committee, we invited experts from different areas including AI, digital empowerment, and e-commerce. We hope that this committee, they will give us a lot of very valuable advice when it comes to development of fintech and also technology. ESG, E.SUN Financial Holding was very honorably ranked by this corporate governance evaluation to be named top 5% among all the listed companies in Taiwan.
Both E.SUN Bank and E.SUN Securities were both recognized in fair treatment of customers by the regulator, Financial Supervisory Commission. We continue to deliver good results in ESG, and we will continue to put more effort into corporate governance. On page five, this is the financial performance of E.SUN for the trailing five years. As what you can see, we have a very stable and very good year for the net profit. On ROE, we deliver more than 10% ROE for this year. For page six, it is the net income of holding company and subsidiaries. On the left-hand side, our bank contributed to 88.7% of the total profit of the financial holding company. On the right-hand side, as what you can see, the bank growth rate was 51%. On Venture Capital, the growth rate was more than 50%. On Securities, the growth rate was 8%.
Across the board, all of our subsidiaries deliver very good results for the first half. On the next page is the net profit breakdown. The net revenue growth rate was 21.9%. Operating expenses, the growth rate was 13.3%. On the net profit, the net growth rate was 48.9%. I also want to talk about the operating expenses. The growth rate was more than 10%, and it is mainly because a few reasons. First is we had a rights offering in the first quarter, and there is some cost associated with that because the subscription of the new rights among the employees. There is some cost associated with that activity. Also on credit card, as we just saw, we have a very robust growth on credit card fee income and also the credit card consumption. There's also some marketing expenses associated with that growth.
These two reasons are the main two reasons that contribute to the operating expenses growth in the first half. On next page is the revenue breakdown. In the first half, the net revenue was TWD 31.3 billion. The net interest income accounts for 44.7%, followed by fee income was 32.3%, and other income was 23%. On the right-hand side, the net fee income, it was a 3% growth year-on-year, and we expect on the second half, we will continue to have very good performance in the fee income sector. Also on the other income, as was just discussed earlier, we had very good performance in the first half, and the growth was very significant. The next page is the fee income. The total fee income, it was TWD 10.1 billion, which comprise wealth management, 43.8%, followed by credit card, 33%. Brokerage and others, it was 11.9%.
As what you can see on the right-hand side, the two main sources of net fee income, credit card and wealth management, both performed very well in the first half. We expect the growth momentum will continue to carry on for the rest of the year. On page 10, we try to use four graphs to illustrate the competitive landscape of credit card markets in Taiwan. On active cards and cards consumption, the two most important indicators for credit card, E.SUN maintain top three in market position in Taiwan. On active card, our market share was 12.4%. On card consumption, the market share was 13.5%, especially the card consumption in the first half, the growth rate was 33.6%, and it is mainly due to the overseas spending, and also, we had a very successful campaign in paying your income tax by credit card.
That campaign also allow E.SUN to draw a lot of valuable VIP customers, and to have them to become customers of E.SUN. Also, I want to note on the left bottom corner, the per card spending. The per card spending for the first half of this year, it was more than TWD 10,000 per month. This is another indicator to show this year the credit card performance was very good. On the next page 11, it is a chart of deposit and loan structure. On total deposit, the balance was TWD 2.9 trillion. The growth was mainly coming from the time deposit. The year-to-date growth rate was 22%. The foreign currency deposit declined by 9.5%.
It is mainly because we try to optimize our deposit structure and to replace the high interest rate deposit by lower interest rate deposit, and we can discuss that later in more detail. On total loan balance, it was nearly TWD 2 trillion. The year-to-date growth was 1.4%, among which the corporate loan growth rate was 0.8%. SME loan was 2.1%. Foreign currency loan decreased by 4%, mainly because the high interest rate on U.S. dollar deters our clients from borrowing more money in U.S. dollar. Going forward, we will continue to drive more growth in corporate loans, especially in foreign currency loans. On consumer loan, the growth rate was 2%. On mortgage loan, it was also 2%. On secured personal loan, it was a decline of 5.9%. On page 12, it is the deposit structure of E.SUN.
On LDR, loan-to-deposit ratio, the foreign currency LDR raised by nearly 2% in the first half. Our LDR for foreign currency was 35%. For the NT dollar LDR, it dropped to 48.7%. On the deposit structure, that's what you can see on the right-hand side. The NT dollar demand deposit. The cost-out now the ratio is about 57.8%. The foreign currency deposit now accounts for nearly 35% of our total deposits. Next page is graphs of our loan portfolio breakdown. As of June, the loan balance was TWD 1.9 trillion. As what you can see on the pie chart, we have a very balanced break between corporate and consumer. The leading sector was SME, which accounts for 26.8%, and the large corporate, it was 22%. On the consumer side, the mortgage accounts for 25.4%, followed by secured personal loans, accounts for 18.7%.
On the right-hand side is the year-on-year comparisons across every sector of our loan book. Next page 14, is the graph of our NIM and spread trend. In this quarter, we did not have any movement on our NIM. We still stay at 1.3% for the NIM. On the quarterly interest rate spread, we expanded the spread by 3 basis points, and it is mainly because the loan yield continuing to rise, and also we implement a lot of deposit optimization treatment to contain our funding cost at a moderate level. On the next page is the asset quality. The NPL ratio was 0.17%. The coverage ratio is 690%. Next page is the asset quality by product line. On the corporate NPL, it was 19 basis points, and on the mortgage, it was only 4 basis points. Next page is a time series of our NPL performance.
Asset quality has been an advantage and strength of E.SUN, we will continue to maintain very good asset quality going forward. The next page is the cost-to-income ratio. The CI ratio for E.SUN was 57.3%. In the second quarter, we had some increase in operating expenses. Going into the second half, we will try to contain the growth of operating expenses, and for the full- year target, we want to lower CI ratio from the current level to 55%. Next page is the capital adequacy ratio. For the financial holding company, it was 138%. For the BIS ratio, we had a rights offering to inject TWD 14 billion into our bank, which enhanced our CET1 and Tier 1 of the bank. Now, the CET1 ratio of the bank was 12.95%, and the total BIS ratio was 15.55%.
E.SUN Bank is very well capitalized, the strength of our capital is very strong. Next page is some of our achievement in ESG. In this year, we obtained the ISO certification for the carbon- neutral ATM, we are the first bank in Taiwan to have this initiative, we will try to realize more carbon- neutral operations across different sectors of our business. We also sponsor a documentary production, this is the documentary related to the biodiversity. On the S, E.SUN was included by Bloomberg Gender-Equality Index, and we will continue to improve gender equality at E.SUN among our employees. On the G, governance, we are rated by corporate governance evaluation for the eighth time to be ranked top five among all the listed companies in Taiwan.
The next page is some of our honors and recognition by international ESG institutes, we will continue to maintain our leadership, continue to work closely with our clients, and to make greater good for our society and the world. This is all what I have for the presentation. Now we can head into the Q&A section. Dear investors, if you have any question for E.SUN Bank, E.SUN Financial Holding, please fill your question into the question box, and we will start our discussion later. Thank you.
Okay. We have our first question about the wealth management fee income. For the first half, the growth of fee income was 9%. What is the full- year guidance for the wealth management fee income growth for the full- year?
Yeah. For the full- year, I think the wealth management business, it started slow in the first quarter because the market volatility and the investment sentiment was not very strong at the beginning. However, in the second half, our clients started to regain their confidence in investment. As you can see, we have very strong result in the second half and also in the first half Sorry, in the second quarter in the first half. For the full- year, we are very positive about our wealth management fee income. We forecast the full- year of fee income will somewhere between 15%-20% growth. It is mainly because of a few reasons. First is, we are approved by the regulator to be one of the banks to have the Wealth Management 2.0, which aims at the wealth management of the VIP customers.
We also roll out a series of new products targeting on the needs of those VIP customers. For example, issued the first ESG related structured bonds for the high-net-worth customers under the policy of Wealth Management 2.0 program, and the issued amount is the largest in the market right now. Yes. Secondly, we also did some financial planning. This year, in the first quarter, we have added more financial consultants, and they are dedicated for the banc assurance selling. The amount of the financial planner is about 120 employees, and that would be deployed to all the branches island-wide. I think in the first half, our banc assurance sales has grown significantly, and so far our product breakdown has been more even between the banc assurance and investment- type of products.
For the product breakdown, our insurance is accounted for 46% of the wealth management fee income. Total wealth management fee income. The rest would be the investment type of the products, including mutual fund sales and also fixed income and others products. Mutual fund sales accounts for about 34% of the wealth management fee income. The other financial products, including structured notes and overseas bonds, account for about 20% of the wealth management fee income. Another new product or new service that I want to mention is the GRACE. This is a system that we just rolled out this year. The full name is called Global Rebalancing Advisory Core Engine. Global Rebalancing Advisory Core Engine. Advisory Core Engine. Mainly, this is an efficient tool that allows our financial consultants to produce their advisory pitch book for our customers in a shorter time.
It used to take about two hours to produce a pitch book for our customers. With this system, we can shorten that time for preparation to 15 to 20 minutes. It will help our financial consultants to serve more customers in a more efficient way, given that on average, each of our financial consultants need to cover 250 clients on average. If they can do their job more efficiently, it will greatly help our financial consultants to do their job better. It also can help us to transform our business model from product push to portfolio management. Because in the past, if they needed to take such amount of time to prepare the pitch document for our customers, then they will not have too much time to understand what their customer truly needs. Their approach will be more product push.
Now, with the help of this GRACE system, they can spend more time on understanding their customers and to develop more in-depth dialogue with their customers, and also can help them to transform to a more customer-centric and portfolio management-centric approach. This is our answer to the wealth management question. Thank you.
We have a few more questions coming in from investors. The first question is: Where can loan growth come from during the second half? In the first half, we have a quite moderate loan growth. The year-to-date loan growth was around 2%. We still guide 7% or 6%-8% loan growth for the full- year, which means we are quite positive about the loan growth in the second half of the year. Mainly, the loan growth will be coming from a few sources. First is ESG- related loans.
E.SUN has been very proactively engaging our customers in ESG, we found that many of our customers, they are highly concerned about the ESG and the potential opportunity or threat to their business. They have a lot of interest and a lot of demand in having those ESG- related loans or green loans. This is the main source of the loan growth in the second half. Another very important driver is the loan coming from our overseas operation. In the first half, the main growth driver for the loan is already from our overseas operation. In the second half, the momentum will continue to carry on. The second question is about tax rate. Why is tax rate higher this year? For the income tax, the first half, the income tax amount was TWD 2.7 billion. The year-on-year growth was TWD 556 million.
The growth rate was 26%. It is mainly because the growth of our pre-tax earning. That makes the income tax to raise. The third question is the rate sensitivity. What is the sensitivity to rate cut by the Fed and CBC?
Well, we think the economic situation in the U.S. is still very resilient, and as Chairman Powell said, maybe they will keep the interest rate for a longer- term at higher levels. Maybe the timing for the Fed for the rate cut maybe will be after Q2 2024, or maybe longer. Even in CBC in Taiwan, the core CPI in Taiwan is still very high, we do not believe the CBC will cut rates very soon. The high rate will last for a longer period. We think maybe the chance for the rate cut is very small. Even the rate cut, because we will still keep the interest rate for a period of time, so it will not hurt our interest income very immediately.
Thank you. The next question is about E.SUN's China exposure. What is your China exposure and the exposure related to the real estate sector? The regulator, they ask all the banks in Taiwan to monitor our China exposure, the main indicator is the China exposure as a percentage of book value. E.SUN maintain the ratio level at 32%, compared with what it was one year ago, it was 48%. There was a significant drop in China exposure as a percentage of book value. Also, on the risk in China, as of now, we do not see noticeable risk in our portfolio. It is mainly our choice of clients. We can divide our clients in China into three categories. First is Taiwanese corporates, and mainly we would target to choose the cash-rich clients, and also the listed company in Taiwan Stock Exchange.
For this part of the Taiwanese corporate, we have a better understanding into their operation and more visibility into their operation. This is the type one of our clients. The second category is the foreign companies, which means they are not Chinese companies, or they are not Taiwanese companies, and they are the foreign companies who invest in Taiwan, or some of them are the companies invested by foreign PE funds. For this part of customer segment, their asset quality are also quite good. The category three is the Chinese companies. For the choice of Chinese companies, we mainly choose the industry leaders or the SOEs, state-owned enterprises. This part of the customer segment only accounts for 23% of the entire China exposure. Of course, asset quality-wise, they are also very good and very strong.
We are quite comfortable with our loan book- to- China exposure. This is on the loan side. On the investment side, we have zero concerns about our investment portfolio. For example, the bond investment is mainly made to the state-owned enterprises, for example, like China Development Bank. The credit rating is sovereign rating. We are very comfortable about our investment portfolio and loan portfolio in China. We have the next question. It is about our investment portfolio. Can you give us some color about your investment portfolio?
Well, for the whole investment portfolio, over 90% will enjoy the rating of A -. About the accounting purpose, such as P&L, OCI, and AC. For the AC, position is around over 40%, and the average duration is around 2.4 years. I think the main reason is that because the market situation is still volatile, maybe, as we previously mentioned, the interest rate will be kept at a higher level. We closely monitor and manage the whole duration of our investment portfolio. As we mentioned, the interest rate is still at high levels, we probably will take the chance to establish some portfolio, locking the interest rate there and get the potential capital gain. That is one of our achievements for our investment portfolio.
Thank you, Sarah. Okay, thank you, investors. It seems like we have answered all of our questions for this evening, thank you so much for participating in the earnings call with us today. We hope to speak with you soon. Bye-bye