Chairman's Message

2022 was a year of challenges and opportunities. While we have gradually learned to live with COVID-19, the war between Russia and Ukraine broke out at the beginning of the year. The expanding of the war not only gave rise to humanitarian issues, but also caused the issue of energy security to the forefront of the political agenda due to the shortage of oil and gas supplies caused by the war. Major European countries were forced to restart coal-fired power generation or extend the service life of their nuclear power plants after prioritizing "energy security" and "affordability". While global carbon reduction efforts are being hampered, extreme climate disasters are still being reported around the world, with droughts, floods, hurricanes and heat waves occurring more frequently and at a higher level than ever before. Floods in Pakistan flooded nearly one-third of the country, Hurricane Ian displaced tens of thousands of people, and extreme high temperatures caused droughts and reduced agricultural production around the world, further increasing pressure on food prices and security. Global citizens are facing a critical decision point due to political turmoil and rapid climate change, challenging the governments and corporations' commitment to carbon reduction and climate action. However, because of such challenges, it is the most urgent and priority task to accelerate the transformation to clean energy, to reduce the dependence on fossil fuel and to diversify renewable energy sources.

The financial sector, as a provider of capitals, has a key role to play in climate action, and it is the responsibility of KTB to take a more proactive role and work with businesses and other stakeholders to mitigate environmental impacts. In addition to 'climate' being a top priority in sustainable development, we are aware that the impact of 'sustainable development' on other areas is also growing, and to this end, we are focusing our efforts on the following aspects:

Planning climate change strategies and implementing environmental management policies

In response to climate change, KTB has became a supporter of Task Force on Climate-related Financial Disclosure(TCFD) in July 2021, and will refer to the TCFD framework to make disclosures in four areas: governance, strategy and risk management, indicators and targets. We also continue to deepen our disclosures, develop strategies and refine climate risk management based on our analysis, and improve the knowledge and understanding of climate-related opportunities and risks among our stakeholders. We became an official member of the Equator Principles Association by the end of 2022. By incorporating judgment, assessment and control of environmental and social risks into the credit process, we are working with our customers to shift to a more sustainable and low-carbon economy. In addition to our financial impact, in 2022, we have successfully achieved our carbon, electricity and water reduction targets made in 2017, and have again developed short-, medium- and long-term plans to achieve "2050 net zero emissions" through four strategies.

Deeply developing local community care measures, and focusing on diversity and human rights equality

The COVID-19 accelerated the use of digital services, but it also highlighted specific social issues, such as: fewer jobs, demand for childcare, more women lost their jobs than men, aging workforce, and what is the irreplaceable value of human beings as the application of artificial intelligence expands further? As a local enterprise in Tainan, KTB has been listed in the Bloomberg Gender Index for three consecutive years (2021-2023) by taking “local caring” as the starting point and actively constructing gender equality and other friendly mechanisms, and in October 2022, KTB launched the “KTB Babies" program to provide stepped fertility incentive - "the more children you have, the higher the monthly subsidy" - in the hope that employees can "give birth and raise children with peace of mind" and promote long-term local prosperity. On the social front, the three bases are "academic education," "caring for the disadvantaged," and "humanities and arts." Through the efforts of our branches, we work with government agencies and local organizations to promote anti-fraud, financial education, energy conservation initiatives, and festivals and other local diversified activities. We believe that digital technology could improve working efficiency and give us more time to show "warmness" and "flexibility", which is our value.

Strengthening corporate governance and deepening sustainable development goals

In 2022, which is full of uncertainties and insecurity, the importance of corporate governance and risk management is even more evident. Based on the stable development, our company has been awarded the top 5% of the Taiwan Stock Exchange's Corporate Governance Evaluation for the fifth consecutive year (2018- 2022), and ranked at 10% in the industry category - Finance and Insurance. We are recognized by Newsweek's World's Most Socially Responsible Banks 2022 award and TCSA Sustainability Report 2022, Category 1 Gold Level for Financial and Insurance. The Bank is highly recognized by the authorities and the public for its governance and management. In terms of sustainable development goals, the company's mission is to realize the "local touch", and the eight goals of SDG4 Quality Education, SDG5 Gender Equality, SDG7 Affordable and Clean Energy, SDG8 Decent Work and Economic Growth, SDG10 Reduced Inequality, SDG12 Responsible Consumption and Production, SDG13 Climate Action, and SDG16 Peace, Justice and Strong Institutions are all notable highlights, reflecting the company's sincere and down-to-earth spirit and its responsibility as a business operator.

We sincerely thank you for you to accompany the KTB for 75 years. KTB will continue to walk alongside and grow with you with global thinking and local actions, just like the phoenix tree rooted in excellence and thriving in enthusiasm.