In 2022, as the world gradually decided to coexist with Covid, prevailing factors including geopolitical risk, the global spread of inflation, and sagging international trade volumes set the stage for the global economy to enter a prolonged post-Covid recuperation period. The Group has nevertheless sought to strengthen its operating resilience on its solid foundation by actively creating new post-pandemic growth momentum; internally, the Group will combine core business with ESG factors, and continue to focus on innovation in financial technology and manpower training; externally, it will actively comply with government policy, and influence customers and industry to reduce carbon emissions and pursue sustainable development. Thanks to the concerted efforts of the Group's employees, our assets surpassed NT$4.16 trillion in 2022, and consolidated earnings reached NT$67.756 billion; net earnings after tax totaled NT$20.596 billion, which represented annual growth of 4.34% and set a new record, while consolidated ROE and ROA were 9.18% and 0.52%, respectively, and the earnings per share after tax was NT$1.56.

The use of the power of financial markets to promote corporate sustainable development has become a core value in international financial development policies. To incorporate ESG (environmental, social and governance) into its corporate culture with the management philosophy of "Building Ethical Governance for a Sustainable Future," FFHC established the CSR Committee in 2011, but this committee was renamed the ESG Committee in 2022. The ESG Committee has six trans-company groups working under it, namely, "Corporate Governance","Responsible Finance", "Sustainable Financial Products and Services", "Employee Care", "Environmental Sustainability", and"Community Engagement". ESG performance indicators were incorporated into the performance evaluation of subsidiaries to accelerate our progress in promoting sustainable development.

FFHC continued to strengthen climate change governance in response to business risks in the finance industry brought forth by climate change. The Responsible Finance, Sustainable Financial Products and Services, and Environmental Sustainability Working Groups of the ESG Committee are tasked with identifying potential climate change risks and opportunities. The groups use the Climate-Related Financial Disclosures Recommendations published by the Task Force on Climate-Related Financial Disclosures (TCFD)to check and identify the operation risks and opportunities of the Company due to climate change, establish mitigation measures, set short-, medium- and long-term goals, follow up on KPI results, and report implementation results to the Board of Directors. The Group has also performed scenario analysis of climate risk cases, has quantified the financial impact of climate-related risks, and continues to publish reports in accordance with the 2021 recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). The Group further received a Level-5+ audit statement—the highest grade—from the British Standards Institution (BSI), and presented a report concerning the results of climate change risk assessment, mitigation measures, and state of implementation to the Group's highest management level, the Financial Holding Board of Directors. We have submitted action plans on the basis of risk impact and opportunity assessment for different industries and assets types, performed scenario analysis for major carbon emitters, incorporate climate risk management in business processes, and rely on control of risk indicators and targets to constantly adjust business strategies and strengthen climate governance. Our subsidiary First Bank is a signatory to the Equator Principles (EPs) In addition, four taskforces under the Green Finance Committee: "Sustainable Lending," "Sustainable Investment," "Climate-related Financial Disclosure (TCFD)" and "Carbon Disclosure," incorporate climate-related risks into the company's overall risk assessment framework and convene quarterly meetings to give the Committee a report on implementation progress.

Responding to the net zero carbon trend, First Financial Holdings was selected as a member of the Financial Supervisory Commission's "Coalition of Movers and Shakers on Sustainable Finance" in 2022, and adopted the Partnership for Carbon Accounting Financials' (PCAF) financial carbon inventories and SBTi (Science Based Target initiative) carbon reduction pathways. First Financial Holdings and its subsidiaries have completed greenhouse gas inventories of all business locations in Taiwan and abroad, and since 2023 has complied with the Science Based Targets (SBT) for carbon reduction, which seek to control warming to under 1.5°C. Annual reduction targets of 4.2% of emissions during the baseline year (2021) have been set for the Group's Scope 1 and Scope 2 emissions, and the proposals of the Partnership for Carbon Accounting and Financials (PCAF) and SBTi have been adopted. Carbon emissions inventories employing the PCAF's methodology have been conducted of investment financing positions, and short-, mid-, and long-term carbon reduction targets for major investment financing business have been set on the basis of inventory results. It is expected that we will issue science-based targets (SBT) for carbon reduction at the end of 2024.

In addition, since 2009, the Group has introduced many green financing programs, promoted sustainable development, and supported industries in transitioning into a low-carbon economy. As of the end of 2022, cumulative approved domestic and foreign green financing projects reached NT$193.07 billion. The Group also launched sustainability-linked loans offering preferential interest rates to companies whose environmental performance indicators had improved compared with the previous year. As of the end of 2022, a cumulative total of NT$106.5 billion in approved sustainability-linked loans had been granted to 69 clients. We also provide funds needed for programs to improve the environmental effectiveness of pollution controls, green transportation, green building/green factory, and energy and resource conservation. By steering companies' and investors' investments into green, sustainable industries, we are helping Taiwan's industry speed up its progress toward the goal of net zero emissions. We have also introduced ESG-concept funds and sustainable development bonds, which are used to help companies develop renewable energy, such through development of solar and wind power generating facilities. We are encouraging companies and investors to invest in clean energy industries, which will promote progress toward the goal of net zero carbon emissions; Additionally, First Consulting raised and managed a green energy fund of NT$780 million and First Venture Capital also invested NT$333 million in the construction of solar power plants with a total installed capacity of approximately 66.5MW. Once the power plants are completed, they are expected to reduce carbon emissions by 66,500 tons CO2e each year.

To create a low-carbon city in response to the government's green energy policy, FFHC led by example by establishing a "Green Building Certification Program" team in 2010. As of the end of 2022, we have refurbished 31 existing buildings, which have all received the Green Building Mark from the Ministry of the Interior (including Diamond class for 28 buildings, Bronze class for one building, and Certified for two buildings). Two newly constructed buildings have obtained the Gold-class Green Building Mark. Our London branch passed green building mark certification conducted by Britain's Building Research Establishment in 2021. Through these green buildings, we reduced annual carbon emissions by 2,878 tons CO2e in 2022.

In addition, FFHC has constructed 20 solar-powered branches yielding an annual carbon reduction of 130.68 tons CO2e; Between 2015 and 2022, we purchased green electricity and carbon credits, reducing carbon-generated power consumption by a total of 5,060,900 kWh, and set a target of producing and using 210 MWh of renewable energy in 2022. We are continuously increasing our use of renewable energy and have implemented environmental sustainability policies. We have installed solar power facilities and ecological hydroponic green roofs with rainwater harvesting on our Wanhua, Huashan, and Changan branch buildings, creating zero carbon aquaponic farms that generate solar power, harvest rainwater, and grow fish and vegetables. These branches tangibly support the three concepts of production, life, and ecology, and generated 4,476 kWh of power in 2022, which was equivalent to a reduction in carbon emissions of 2.28 tons CO2e. Our Wanhua Branch has been certified by the Environmental Protection Administration as an "Environmental Education Facility." We have also introduced environmental financial education courses in the four core areas of energy conservation and carbon reduction in green buildings, climate change risk management, green loans and loan review, and green consumer finance. We held 27 environmental education sessions for enterprises, government agencies, and schools in 2022, with a total of 718 people participating; We are actively promoting urban renewal and the accelerated rebuilding of hazardous old buildings by providing "Preferential Loans for Accelerating the Reconstruction of Dangerous and Old Urban Buildings," and have also introduced a self-renewal reconstruction program for a sea sand building in Taipei's Beitou District. After nearly a decade of active coordination, the building was finally demolished in September 2022, which was followed by the start of construction of a new building. The new building will have four underground floors and 15 aboveground floors, and the 65 landlords do not need to provide reconstruction funds. Because First Bank has approved full financing for the project, it will provide the funds needed for reconstruction, which will create NT$2.69 billion in value for the landlords, beautify the area, and improve the living environment. We had completed a cumulative total of 203 urban renewal financing cases as of the end of 2022, and the total approved amount reached NT$147.46 billion. In particular, 105 of these projects involved silver-class Green Building Mark certification or above. The projects benefited 3,157 households, and furthered the government's goal of environmentally-friendly cities with low carbon emissions.

We have responded to the United Nations' sustainable development goals by providing financial services to disadvantaged groups and remote areas. FFHC actively promotes inclusive finance and has expanded financing services for domestic small and medium enterprises. As of the end of 2022, outstanding loans to SMEs reached NT$930 billion, and our market share has topped all domestic banks for 13 consecutive years. We continue to support loans for small and micro enterprise, loans for young entrepreneurs and start-ups, micro entrepreneur loans, and micro loans for female entrepreneurs, and a total of 6,498 beneficiaries have received NT$12.92 billion in loans via these programs; We also launched the "Micro Enterprise e-Services" online loan application platform enabling small and micro enterprises to quickly obtain start-up loans and operating capital; 6,059 applications were made in 2022. We have responded to our aging society by launching a "LOHAS retirement section" providing the "e-First Smart Wealth Management" retirement financial management service. Through this service, the cumulative trust assets of elderly customers and persons with disabilities reached NT$18.51 billion. We provided a cumulative total of 213 "Comfort Loan" reverse mortgage loans up to the end of 2022, and these loans had a total approved amount of approximately NT$1.393 billion.

To keep pace with the rapid evolution of FinTech, adapt to changes in economic activities caused by the pandemic, and attract young customers, First Bank's iLEO digital accounts have now been made available to minors over the age of 7 who hold an ID card. This makes First Bank the first financial institution in Taiwan to provide comprehensive online accounts to adults, minors, and sole proprietors. The iLEO digital account users had exceeded 1.15 million by the end of 2022, with an annual growth rate of 41.4% in 2022. These constitute the fifth largest digital account in Taiwan; the number of "iLEO APP" downloads reached 758,000, and had an annual growth rate of 7.6%; we have also introduced the full-function robot teller "e," which uses AI technology. As of the end of 2022, the "e" robot teller had been used 755,633 times, and had a response accuracy rate of 98.9%; in the area of corporate loans, we have also introduced "Smart (GIS) Dispatching" and the "Customer Intelligence Gathering Management Graphics Platform," which use a big data patent analysis model to present customer locations and business intelligence in visual form on mobile devices. These functions will enhance the ability of sales personnel to develop corporate customers and complete cases. We also jointly introduced the "AI Home Loan Trial Price Calculation Service" in conjunction with the Taiwan Housing Group; this service uses an API approach to transmit home data (such as address, floor area, etc.) to the bank's system, which can then perform smart price appraisal calculations allowing customers to obtain needed one-stop information with the press of a button. As of the end of 2022, the AI Home Loan Trial Price Calculation Service had been used 673 times, which resulted in the arrangement of 121 home loan consulting session and the approval of 3 home loans.

FFHC has relied on the Group's resources and employees to actively support public interest activities. We use the four major public interest strategies of "concern for society," "artistic and cultural creativity," "sports and competition," and "green concern" to help resolve social and environmental issues by provision of subsidies for such services as breakfast for elementary schools in remote areas, financial support for disadvantaged schoolchildren, cultivation of talented athletes, support for food banks, and free exhibition and performance platforms for disadvantaged groups and artists. We held 151 public interest activities in 2022 and provided NT$96.38 million in support. We have also issued the World Card, Leezen Card, Living Green Card, Yilan Card, Taoyuan Card, and other green and public interest credit cards, and donate a certain amount of the spending using these cards to environmental conservation and social welfare initiatives. We encourage cardholders to engage in sustainable consumption, and the cumulative donations from these credit cards has reached NT$773 million as we work with employees, suppliers, and customers to benefit the public interest. We introduced the ESG Podcast channel in 2023. Hosted by the well-known entertainer Ken, this channel features actor Chen Chu-sheng and the workplace illustrator "i'm mark" engaging in fun, illuminating conversations introducing new ESG knowledge to the public, and helping us construct a sustainable ecosystem.

To create a friendly and safe workplace, the Group has established an appealing gender-equal work system and workplace environment, which focuses on seven aspects: corporate culture, organizational structure, salary and benefits, education and training, work-life balance, child birth measures, and workplace safety. The ratio of female employees in both managerial and non-managerial roles in the Group is higher than that of men, and female managers have higher average salaries and compensation than their male counterparts. To help employees in maintaining a work-life balance, FFHC provides several benefits and leave regulations that exceed the minimum benchmark set by labor laws; these include 44 days of paid personal leave, sick leave, and family care leave, we also provide 14 days of marriage leave. To address social issues arising from the low birthrate in Taiwan, we significantly increased employees’ childbirth allowances in 2017, and also increasing the marriage allowance by NT$30,000. We subsequently further increased childbirth subsidies to NT$100,000 for the first child and NT$150,000 for the second child and every child thereafter. As of the end of 2022, we had provided subsidies for the birth of 1,452 babies. Starting in 2022, we have provided 58 days of maternity leave and 8 days of prenatal checkup/paternity leave. In 2023 we began offering 2 days of assisted reproduction leave allowing female colleagues to receive invasive artificial reproductive therapies while receiving their full salaries. All of these allowances and subsidies are better than what is prescribed in law, and have realized our vision of a happy workplace. We have also been included in the Bloomberg Gender-Equality Index (GEI).

FFHC delivered an outstanding ESG performance in 2022, and we won many important domestic and foreign ESG awards. Apart from receiving the National Council for Sustainable Development's (NCSD) National Sustainable Development Award-Corporate Category, we also won the "Best ESG Award—Excellence Award" in the Taiwan Banking and Finance Best Practice Awards and were also rated as a top 5% listed company in the Corporate Governance Evaluation of the Taiwan Stock Exchange Corporation for the eighth consecutive time. We have been selected as a constituent stock in the "World Index" and the "Emerging Market Index" of the Dow Jones Sustainability Indices (DJSI) for five and seven consecutive years, respectively. We received the highest grade of "A" on the CDP climate change questionnaire, and are the sole member of the domestic financial industry to have received a grade of "A" four times. We were also ranked in the Leadership Level in the CDP questionnaire for five consecutive years, and were chosen by the Financial Supervisory Commission as a member of the "Coalition of Movers and Shakers on Sustainable Finance".

Looking ahead to the future, FFHC will continue to advance its adoption of digital finance and forge alliances with companies in other industries; it will respond to Taiwan's aging population and low birthrate by cultivating specialists in meeting seniors' financial needs, strengthening the sustainable financial DNA and international vision of the Group's personnel, promoting localized and specialized services, keeping up with global ESG trends, creating a financial ecosystem benefiting all, and realizing inclusive finance. We will also join forces with our supply chain and customers to map out a new net zero future, while enhancing our long-term value as the "No. 1 Brand in Sustainable Finance".