Thank you for waiting. The meeting will begin shortly. Good afternoon, ladies and gentlemen. Welcome to joining us for First Financial Holding second quarter 2024 webcast investor conference. We will start with the presentation, which includes the snapshot, financial highlights, and operating results. Then we will invite Ms. Annie Lee, our EVP and IR Head, to proceed to the Q&A session. You can type your questions at the bottom box of the webcast, either in English or Chinese is okay. The presentation material will be put on our IR website. Also, we will provide one-year replay service for your convenience. I will hand over the microphone to Ms. Yating Chang to start the presentation.
Thank you, Keith. Hello. Good Friday afternoon, everyone. For the first half 2024 earnings results, in group, we reported a profit growth with a record contribution from First Bank. In bank, the first half featured robust fee income and heated mortgage business. Eyes are now in further momentum. We will start by walking you through this presentation before we enter Q&A. In page five, we look at what First Financial Holding has delivered year to June. We reported a net income of TWD 13.7 billion, up by 4.3% year-on-year. EPS was 0.98. Under the hood, bank subsidiary reported its best ever half year profits. It was TWD 12.8 billion. Other subs together posted a net income of TWD 1.2 billion. Net profits at bank was driven up by 4.4% year-on-year for two major reasons.
One, core fee income was able to offset a decline in net interest income and a decrease in swap gains. Two, credit costs was trimmed down and normalized after First Bank offloaded its impaired CRE loans. As to growing the loan book, mortgage and large corporate lending led the annual growth of 8.1%. SME loans saw a pickup of 3.9%, and U.S. dollar lending was still soft in light of high U.S. interest rate environment. Before moving on to discuss financial numbers, we would like to report a group milestone on efforts towards environmental sustainability. This June, Science Based Targets initiative has validated our net zero targets. We commit to reduce Scope 1 and Scope 2 greenhouse gas emissions by 63% before 2035 from the baseline year of 2022. Our Scope 3 finance emissions targets cover 17% of total lending and investments. Back to financial numbers in page seven.
Key figures for the group during the first half 2024 are highlighted in right table. ROE was 10.92%. ROA was 0.6%. Book value per share was TWD 18.13. Group CAR was at 122.45%. Double Leverage Ratio stood at 112.43%. The pie chart in the left shows bank subsidiary accounts for over 9/10 of the group's profits. In page eight, key elements of group's consolidated P&L statement are listed in the bar chart. For the first half 2024, First Group's consolidated revenue was TWD 36 billion, up by 2.5% year-on-year. Credit charge and insurance reserve together was about TWD 3.3 billion. It was down by 23% year-on-year. The increase in revenue and decrease in charge and reserve made up for the 9% climb in overall operating expenses. Net net, the bottom line grew 4.3% to TWD 13.7 billion.
In page nine, keys of net income are given in graphs for the same period this year and last year. Now let's turn to Bank's operating results. Starting on Bank's return on equity in page 11. It was 9.92% during the first half 2024, on back of a net income of TWD 12.8 billion. Pre-tax profit discussion is in next page. Pre-tax profit was supported by a 38% jump in fee and a 32% fall in net provisioning for impaired loans. This offset a 7% decrease in gains on financial products and an 8% increase in operating expenses. Net interest saw a decline of 2% due to funding cost pressure. At the same time, total loan grew about 8.1% year-on-year to TWD 2.5 trillion. Further breakdown on loan is in page 13. In the end of June, mortgage outstanding, large corp lending, and SME loan balance all reached new heights.
Mortgage demand and large corp needs were again the key drivers. Mortgage has an annual growth rate of 14%. Large corp has about 20%. As Central Bank tightens credit this June to cool down housing markets, mortgage volume is to go down as months goes on. On the other hand, we see economic activities broadening out across industries and various types of companies beyond AI-related fields. We are looking for mid-single-digit growth in corporate and SME loans. Softening FX lending continued. FX lending demand will largely depend on how and how far U.S. Fed cuts rate and what's the neutral rate. Quarter-by-quarter loan breakdown is available on page 14. Large corp and SME lending improved during past quarter. It was a mix of capital investments, seasonal effects, and working capital needs pushing up the growth. Readings for interest-earning assets are on page 15.
Loan-to-deposit ratio slightly dipped and was about 70%. TWD loan-to-deposit ratio was up a little, which is close to 80%. FX loan-to-deposit ratio was down a bit to 42.5%. Spread and NIM remained unchanged, 1.2% for spread and 70 basis points for NIM. Taking swap gains into account, adjusted NIM was 104 basis points. Swap gains was about TWD 6.8 billion for the first half 2024, a drop of 5% from TWD 7.1 billion for the same period last year. Next page. Here comes more data on spread. Quarterly average lending rates, quarterly average deposit rates, together with their spreads are provided for TWD loan and USD loans. In page 17, deposit data is provided. Total deposit was about TWD 3.6 trillion by end of June 2024, up by about 8% year-on-year.
CASA ratio for TWD pool held up at 63% during the first half. Circling back to loan portfolio, loan concentration data is on page 18. Mortgage details is on page 19. In page 19, monthly new mortgage volume reflects the year's vibrant housing market. In the upper left graph, data on new mortgage loan-to-value ratio, the average mortgage loan-to-value ratio, and the average mortgage yield has been trending up. The data, again, evidenced the hot home-buying demand unlocked by government-sponsored programs, coupled by elevated home prices. Breakdown of mortgage by property location is given in the pie chart. The proportion is the same as previous reporting. Now we'll elaborate more on fee revenue. Fee accounts for nearly 20% of Bank's net revenue.
In page 19, it shows for the first half 2024, total fee jumped 38% year-on-year and accumulated to about TWD 6 billion. For the period, wealth management business delivered about TWD 3.5 billion, up by 41% year-on-year. We expect the good performance to carry out into the second half. In view of investors' mindset of searching for safe yields in the context of uncertainty sentiments on stock markets after all-time highs, rampant debates on soft landing or mild recession in U.S. economy, and the prolonged tensions and conflicts in geopolitics and the U.S. presidential elections. As to loan-related fee, it contributed about TWD 1.7 billion, including one-off revenue of TWD 0.56 billion recorded in the first quarter. Page 21 provides quarter-by-quarter fee breakdown in further details. Specifically, wealth management fee was broken down into three sub-lines to review.
A gentle reminder, excluding one-off loan related fee of TWD 0.56 billion, the overall fee income during the second quarter this year was up by about 5% when compared to the previous quarter. Turning to page 22, bank's operating expenses. It was up by about 8% year-on-year to TWD 13.7 billion. The increase was due to a salary hike for employees. For the first half, Cost-to-Income ratio was 44.18%. Regarding asset quality of the bank, coverage and NPL ratios are in next page. Coverage ratio was up to 745.24%. NPL ratio was 0.18%. NPL ratios on personal loans, mortgage, large corp lending, and SME financing remained steady as showcased in the bottom graph. Finally, we brief on bank's overseas operations on page 24. For the first half of 2024, after CRE losses is behind us, profits from overseas operations returned to a usual level.
It accounts for 24% of bank's overall pre-tax profits. Contributions from overseas operations totaled TWD 3.7 billion year to June. One more page. Bank's capital strength in page 25. Bank's core was 13.87%.
Q1 was 11.96%. CET1, for your note, was 10.37%. Now, back to Keith.
Okay. Thanks, Yating. Now, we will go on to the QA session. Right now, we found Peggy from Morgan Stanley has raised several questions, we will answer all the questions one by one. First of all, it's about the questions related to our NIM and our currency swap gains. Peggy would like to know, because everybody expected that the Fed will have the rate cut in the second half, what's the impact on NIM? If we say provided NIM sensitivity impact if every 25 basis points rate cut from Fed, what will be the impact for our NIM?
Okay. We have made some calculation about the potential rate cut from our U.S. dollars portfolio. Actually, the adjusted NIM I mean, for the lending spread, including the potential adjusted swap that every 25 basis point cut would impact a drop about 0.5 basis point of our NIM. It implies that because of lower LDR for our U.S. dollars lending portfolio, which now stands for less than 42%-43%, the actual impact from the U.S. rate cut would be minimum. The major drag will be for the potential swap gains going into next year. The swap gains may not be so juicy like it did last year and this year. It implies that the actual impact for NIM would be pretty much minimum.
However, due to the size of the rate cut is still ongoing, that we have to further roll out our projection for the potential rate cut, not just in this year, but going into next year. I just highlight that for the 25 basis point U.S. dollars rate cut would only impact our NIM around just 0.5 basis points. Very minimum. However, the impact for the swaps will be much more significant in case that the rate cut is much more aggressive than people projected. The drag on the swap will be much more substantial, maybe somewhere around 20%-30% lower than this year's range. Actually, for this year's swap gains, we have already had some projection around just about 15% lower than last year level.
We would be able to reach around TWD 13 billion this year, which is higher than our original projection at the beginning of the year because the actual rate cut is later than most people projected, also the size of the rate cut is quite meaningful for our further projection. For next year, the swap gains contraction would pretty much subject to how far that the rate cut would go on. For the moment, based on current calculation, the impact for the rate cut would pretty much reflect on the swap gains, which may be about 20%-30% impact.
Okay. Thanks, Annie. Let me reprise what Annie just said. Annie said every 25 basis points for the Federal rate cut, it will impact about 0.5 basis points for our NIM. This is for one year loan.
Yeah.
Yeah. That's not just to the end of this year.
Yeah.
Which means if even there is a rate cut in the coming month, at the end of the impact for the NIM should be even less than 0.5.
Yeah, that's right.
Okay.
Thank you. Thank you for the clarification.
Okay.
I would just like to highlight that the major impacts will be for future swap gains. That will be much more meaningful next year. Let me put it this way. Actually, for this year, we are still able to reach about TWD 1 billion swap gains for this year. Total gains for the whole year around TWD 13 billion that I just mentioned. For next year, if this rate cut continues to be in place, then the implication for further contraction for the swaps will still pretty much have to be revised further down. But it is still not confirmed that how far this rate cut would go and how fast it would move up.
We just say that maybe next year, the contraction for the swap would be, let's say, 20%-30% per month, and it will reflect less swap gains, and that will be definite next year.
Okay. Thank you. I think there are coming more questions related to the NIM question. We will answer the NIM question.
First
first now. Because Annie has already answered also for the full year target, our swap gains. Peggy also likes to know what's our currency swap gains for the first half 2024.
For the first half, we have made TWD 6.8 billion for the first half. Up to July, I mean, for the first seven months, we are able to fit about TWD 8.2 billion. It means that we actually reach about more than TWD 1.3 billion-TWD 1.4 billion for the second quarter until recently. This influence of the rate cut will be gradually factor in into our swap portfolio. Pretty much because that we have already had a substantial portfolio in this swap transaction. Even though the rate cut will be most people's projections, but the impacts would be gradually translate into the actual P&L account, not immediately or overnight. That's why we still managed to meet the target that for this year, the swap gains can still maintain around TWD 13 billion. It means that we can still have around TWD 1 billion per month until the end of this year.
Okay. The full year target is TWD 13 billion. What's the adjusted NIM-
Okay
-for this year?
For this revised swap gains that we actually slightly revised down our NIM projection, maybe just one or two basis points lower to 1.03%-1.04%. The major reason for this would be we are still witness a very strong loan demand for this year. The new lending actually helped to make up some of the losses on this swap gains contraction. The revised down NIM could be quite slightly or minimum, just one or two basis points lower than our original projection around 1.05%. Very, very minimum. One to two basis points only.
The impact for our adjusted NIM for the coming quarter, we think it's minimal. From the following question, Eric Shih from KGI, also like to know more about our swap gains. He wants to know what's our target for the 2025.
I just mentioned that it will be, let's say, 20%-30% contraction for this year's level. My formula will be for next year, maybe for the first half, it will be, let's say, TWD 800 million-TWD 900 million per month. Going into the second half, it will be lower than TWD 600 million-TWD 700 million. This will come up with around just TWD 10 billion something, TWD 10 billion swap gains. It still have to be further roll out based on the actual rate cut in the U.S.
I think Annie has answered the NIM related questions very clearly already. If any of you have further questions related to NIM, you can raise your questions again at the bottom of the box. Now we will move on to next topic. Let's from the second one. What's the target of our loan book growth? For the full year. Do we change any of our targets?
We're still having a quite strong demand from our mortgage lending and also a rising demand for the SME sectors, thanks to the recovery of the economy. The other weakening part will be the FX lending due to the delay of the U.S. rate cut. We have seen that the loan demand for FX lending still remains quite subdued. For this year as the mortgage lending for the second half may maintain its momentum around 12%. The major reason behind this would be because we have already granted those credit line for the new home buyers in the first half. When they continue to draw down the approved credit line, this would sustain our mortgage lending going into the second half of this year. If the mortgage lending would see some meaningful slowdown, it will be move on to next year.
It means that we have to fulfill the commitment for those already applied for the credit line for the mortgage lending in the first half. This will be the reason that we do not revise our mortgage lending going into the second half of this year. However, as I just mentioned that the FX lending still remain not very strong. For the whole year, our total loan book growth may be able to sustain around 5.5%-6%, after we have booked quite a strong growth around 8% in the first half. Yeah.
Okay.
Total lending, our growth projection still maintain 5.5%, and the mortgage lending for the whole year still maintain about 12% after we booked 13% in the first half. We revised down our FX lendings from about 4%-5%, now down to 1%-2% due to the delay of the rate cut.
Okay.
The SME lending, we are now still project around 4%.
Okay. Let me conclude the projection. For total loan book.Y eah. We still maintain at about 5%-5.5% growth. For the breakdown, we have just a little bit. For the mortgage, it's about 12% growth for full year. For FX, it's down to only 1%-2% growth for full year, YoY. The SME is about a 4% growth YoY.
Yeah. It implies that the similar momentum in the first half of this year. Yeah.
Okay. Peggy also wants to know that CBC has a tightening policy for our mortgage. She originally wants to know if any impact for our mortgages book. As Annie answered, it should not minimal impact for this year, right?
Yeah. Well, even though the CBC has already tightened the lending standards or guidance for most banks. As I just explained, we have to honor our commitment to the already approved credit for the mortgage borrower. We would not revise now our mortgage lending. The actual impact will be for next year's mortgage growth, particularly after the higher base period this year. Definitely for next year's mortgage lending, we'll see some slowdown anyway.
Okay.
Yeah. I mean, not for this year, but for next year.
Okay.
We can still maintain our lending momentum to the mortgage. There is no problem because we're not breaching any ceiling for this property lending at the moment. Our ceiling restriction for the so-called Banking Act Article 72-2, that we still have some room to fulfill our mortgage lending. We still have room to lend.
Okay. Annie, just answer the question Peggy also want to ask follow-up, because she wants to know how much amount we still have.
How much amount. This is quite a dynamic. The actual level now we have is around 27.4%. It implies that we can still attract more deposit to fill the demand for the lending for mortgage. The actual ceiling now, we are maintaining at 27.4%, still have room. We are not at the top lender anyway. Maybe among the top five, but not at the top. We still have room because we can continue to attract deposits to fill the property lending, including mortgage.
I think it is very clear. Let us move to next topic. Let us talk about the fee income, because we know that First, the fee income's momentum is still strong for first half. What is the major driver for the fee income, and is it sustainable for second half?
For the first half, we managed to reach nearly 40% growth for both wealth management and other fee revenue, which pretty much can become attributed to a very booming and bullish capital market in the first half, particularly for the strong tech sector and also a very solid macro that helped to boost the demand. The rationale behind our strong fee revenue, particularly for the wealth management, was mainly driven by a lot of high-net-worth customers that they actually would like to lock into some, what we call the investment-grade bond that will help them to lock in a higher yield with quality in investment portfolio. That really drove up the demand for the overseas bond investments. That would also help us to generate a decent fee revenue, because this can be part of a very solid source for the fee revenue.
The other source for the wealth management would be that the bank insurance products, particularly for some inheritance-related products, was quite popular among our customers because we actually serve a lot of the SME owner or those high-net-worth customers that they would like to translate their wealth from generation to generation. The bank insurance products can be a good tool to help them to waive those tax burden or other trust projects that help them to transfer the wealth to the next generation. These two products are quite key to help us drive up the whole momentum for fee revenue. We would see this demand should continue going into the second half, because currently the rate gap between Taiwan and U.S. still remains pretty substantial.
The demand for the two products that I just mentioned will maintain its momentum going into the second half of this year. We would see for the whole year's fee revenue target, we will target 30% growth for the whole year projection, that it will still maintain quite intact for the fee revenue to grow a high double-digit growth at around 30%, after 40% growth in the first half.
Okay. The full year fee income, our target is 30% growth YoY. Let's move to next topic because there are several questions still related to NIM, but we will answer the NIM questions at the end of the session. We will go on for our credit cost first. Peggy said that she found that our second quarter credit cost was lower. What's the reason behind that second quarter?
Well, the truth is that we have charged most of the delinquent loans until the end of first quarter. As most of the CRE exposure has been written off, there is no more fresh influx going into the second quarter, which will be maybe have some link to a stabilized property market in the overseas or major markets. In fact, in the second quarter, our influx for one quarter dropped to just TWD 1 billion after we've written off more than TWD 5.5 billion last year in the overseas market. That pretty much helped to ease the influx that dragged down our total P&L in the prior two years. I must say that we charge off the major losses in the overseas CRE, which helped to ease the burden for our further loan growth going forward.
The main reason would be there's no more significant CRE losses going forward after we charge most of the legacy pool.
Okay. The following up questions for that. What are our management team's opinion about our asset quality in second half, and also what's our target for the credit cost for the full year?
We will maintain the target credit cost around 15 basis points for the whole year. There's no any revision. Yeah.
Okay. There is no change for our predictions for our credit cost, 15 basis points for 2024?
Yeah.
Okay. Eric Shih wants to know, can Annie offer our FX currency bond position size, duration, and unrealized gains?
I don't think I have these figures at hand. What I remember would be Okay. For foreign currency portfolio, it accounts for around 60% of the total fixed income portfolio. Duration, no, I don't think I get the figure and the unrealized gain. Can I get back to you after I check the figures? Okay?
Okay, Erica, we will get back to you after the meeting. Okay. We will go back to the NIM questions because we found several investors that have the interest.
Yeah. There is no answer about.
Yeah, about our.
NIM contraction.
Okay. Several investors, they just didn't hear clearly that our predictions for our full year adjusted NIM prediction. It's around 1.03%- 1.05%. That's for our prediction for the full year adjusted NIM.
Yes.
And-
Correct.
Okay. For the first half, adjusted NIM is about 1.05%. First half.
Yeah.
The full year should be dragged down a little bit, but the first half is 1.05%. Tina from the Yuanta likes to know Because Annie just said the rate cut from Fed will impact the NIM, and do we also calculate any other scenario? There should be maybe lower the currency swap gains, we have our more opportunity to put our money invested to the FX loans.
There should be maybe lower swap gains.
Yeah.
What under those
Scenario
yeah.
Okay.
Scenario of what our 2025 NIM
NIM's direction.
Direction.
Yeah.
This is a tough question because nobody knows how far that the Federal Reserve will cut rate. All right. I'll just try my best to describe the picture of how our NIM will look like. In fact, the swap gains will definitely contract lower than this year level. The lending to FX loan will be higher than this year. The thing is that, we will see that the loan growth for FX lending will be gradual, but the swap gains may be quite imminent. It still have to see that how the market will react when the Federal Reserve cut rate. For the scenario that if most borrower would project the U.S. rate would continue to drop, so they would not tap into the bank to borrow U.S. dollars immediately because the cost of U.S. dollar fund is still quite high.
They can use swap transaction to fund their U.S. dollars demand. This will be a trade-off between FX lending and the swap gains, if you know what I mean. If most people would see that the actual funding cost of U.S. dollars would continue to drop. If the borrower would need the U.S. dollars funding, maybe they can continue to apply for the swap gains to fund their U.S. dollars demand. This will be a progressive scenario that our swap gains will gradually move down. The FX lending NII would gradually improve, we would see how that would further migrate to actual, more back to normal lending picture. I guess I have to wait until we actually witness the rate cut in U.S. and then we can have further projection.
This scenario that I just described maybe can give you some hint. Yes. These two top line definitely would have some growth and contract, it will be mild and gradual. Okay?
Okay.
I cannot have actual figures for you, but this will be the scenario. This swap gains or FX loan growth would not be changed overnight. It will gradually migrate. All right? The figures, sorry, I have no actual projection can give you some hint because we have to see actually how Fed's rate cuts. Would it be aggressive or just very gradual? It would actually be subject to how Fed moves. Okay.
Okay. Thanks, Annie, and thanks, Tina, for asking a tough question to answer. We have another question from Yunju from Yuanta. Because she said First Financial has been chosen as the D-SIB bank. The dividend policy everybody knows is being constrained. She'd like to know now, we said our cash dividend policy was about 50% something. When will be the time that the cash dividend go back to 60% above?
All right. This is a must answer question. Above 60%. Next year, I suppose we will have to meet the D-SIB that would deter us from being generous to distribute our cash dividends. We actually have mentioned about that until the year after next one. Until 2026, we may have the chance to lift up our payout ratio up to 60% after we get the approval for the IRB model for the regulators, that it will help us to improve our coverage to the regulatory requirements level. For the 60% of the payout ratio, we'll have to wait for one more year until maybe in the middle of 2026. Yeah. Maybe not next year. Next year, I project we may have to still maintain around 50%. Yeah. That will be maybe what we can actually achieve. Yeah. 50%.
50%. Okay. We have a question from Gabriel from Goldman. He'd like to know our mortgage policy about the Xin Qing'an Qiqiubi. I don't know. He was wondering why should we not be worried about that there are the mortgage, which was not just for personal living, I mean for investor.
You mean the debt service ability of type home buyers buying multiple properties?
You mean, one person to buy not only one house?
Okay. You mean the debt service level for this mortgage borrower? We have quite a credit policy for our mortgage lending. In fact, including all the property lending as we had suffered substantial losses in the early 2000s, in the prior cycles. Actually, we normally would impose quite restricted lending standards on the mortgage related underwriting policy, including mortgage. First, we would choose those, let's say, quality collateral. It implies that we would see how this collateral is a quality one. It means that this would help us to lower the potential losses when we are forced to foreclose or dispose this collateral. The second one will be, we are quite focused on the actual income level for this borrower, not just look into the collateral itself.
We have to stick to the so-called debt to their income level and throughout what would be their actual debt level that would be less than, let's say, one third of their per month income, not just for the collateral. This is for the income control. The third one will be, we have some data source to track with this for the investment purpose, or it's for the homeowners. I mean, for the household occupied property. That would help us to lower the risk that should the property prices drop, that we may suffer from the losses for the property losses. We also are quite keen to maintain the LTV guidance, that our current LTV average around less than 65%. This will be a historical risk appetite cases. This would help us to also reduce the risk associated with this cyclical property market.
All of this can be part of the measures that mitigate the risk associated with the potential property downside. I must say that the exposure that we have now, we also concentrate on the areas in the metropolitan cities, like in the northern part of Taiwan, where the liquidity of the property market is much more secure than the rest part of other areas. All these measures would help us to avoid the potential losses on the property downside.
Okay. We have questions coming in, and one is from Tina. She'd also like to follow up the mortgage-related questions that because the government seems to have some kind of tightened policies, will this issue, the mortgage tighten policy, will be continued to next year or even the year after next?
Yes, supposedly. Currently, we have tightened a bit for our lending standards for the mortgage lending. One reason is that because the mortgage represents a lower margin product apart from the so-called risk. I must highlight that we prefer to shift the resources to other products like SME or FX lending, because those products can offer us a higher margin or other source of revenue. Yes, I think our tightening for the mortgage lending would continue until next year and maybe two years later. Yeah.
Okay. It might be continued. The question's from Tina. She was wondering that because the write-backs for the first half sounds very good for our company, do we expect even more, some more cases for the write-backs in the second half?
Yeah. After we wrote off huge losses on the overseas CRE, we continued to write back those provisions, the losses that we had to recover some of the losses that we charged off. Up to end of July, we have recovered for about TWD 1.8 billion-TWD 1.9 billion recovery. Up to end of the year, we will continue to recover those NPL. Most of that will be from the disposal of the collateral. The good thing is that the wholesale recovery ratio is up to 80%. As I mentioned in the prior conference that we actually have charged off excessive NPL, which will help us to recover in the coming quarters. Going into next year, as most of our overseas CRE exposure are secured by collaterals, we will continue to recover all this NPL in the overseas market.
It would be up to, let's say, TWD 1.5 billion for next year, hopefully. Yeah.
Okay. Also another question from Tina. She also like to know, because she said she doesn't miss listening. She said, how many cases for the one-off fee income this year so far?
That one was the fee revenue from Taiwan High-Speed Rail, which was TWD 580 million.
Yeah.
Taiwan High-Speed Rail.
Maybe TWD 560 million or TWD 580 million.
80?
60.
60.
Yeah.
Okay.
Around the figure.
TWD 560 million.
Yeah. Okay.
Okay.
Also another question from Eric Shih. He'd like to know if the management team expected the CBC to raise the required reserve rate?
Any tightening measure in the third quarter. Well, I suppose that the press actually report that the Central Bank Governor has already called a meeting to ask most of the lenders in here to propose their tightening measure for mortgage lending. I see if we submit our plan that we would self-governing our lending, it may not be that the Central Bank Governor may not impose further restriction on this reserve requirements or other restrictive measure because there are a lot of complaints in the market now. I don't see that there's further measures will be taken by the Central Bank to tighten the market, because banks already set a brake to lower our lending to mortgage. Most bankers are aware that there's a risk in the market. We should stop here for a while. For this year, we cannot set a brake immediately.
next year, yes, definitely. Mortgage lending will be softened. Yeah.
Okay. I think there is no more questions coming in. We don't expect so many questions coming in today, thank you so very much for participating our meeting.
Okay. Maybe in the end, I just finalize or conclude our discussion this year. This year, the momentum for the lending is pretty much beyond our imagination, that the very booming property market, especially for the mortgage, was a surprise for banks. Still, because this will be the actual loan demand from the markets that we have to fill the demand of the borrowers. When we go into next year, it will be much more normalized due to the still-growing economy and the recovered exporting sectors. The best thing is the U.S. dollar strength will be lower, and that the bank lending strategy will be back to more normalized to corporate sector instead of this year's mortgage lending book. Okay?
Okay. Thank you, Annie.
Thank you. See you next quarter.
Okay, see you. Bye bye.
Bye.