Business Plan

Jih Sun Financial Holding

Since inception, we have successfully integrated our subsidiaries, including Jih Sun Securities, Jih Sun International Commercial Bank, Jih Sun International Insurance Agency. In the efforts to shore up our financial structure, improve our capital adequacy ratio, and expand business operations, we formed alliance with Shinsei Bank of Japan in May 2006. The alliance sets a new milestone of cross-border partnership for domestic banks. Choosing Shinsei Bank as our strategic investment partner, we bring in funds and are able to draw on its experience in management and its innovative techniques to enhance our competitiveness as we aspire to develop into a full-fledged financial holding company.

Focusing on serving target customers and operating under the framework of four functional business groups, Jih Sun Financial Holding aspires to develop business, create optimum performance and maximize stockholders' value. The operating directions for the four business groups in 2007 are summed up as follows:

1.	Restructuring asset portfolio and improving business structure
	Restructuring the asset portfolio of consumer banking and corporate banking. For example, for Consumer Financial Service Group, identify core quality customers to develop niche and differentiation; for Corporate Financial Service Group, help transform lower-contribution customers into high-contribution customers through the Migration Program.
2.	Focusing on customer relations and develop e-business
	Focusing on core corporate and consumer banking customers by creating CRM platform and vigorously developing wealth management business. In the development of e-business, we plan to integrate the B2C application systems of respective business group (e.g. online trading, web-ATM) in a systemic manner, construct the reinvestment IT system, develop and maintain open systems, including online trading, voice trading, and AP e-trading systems, maintain and manage intranet and website to let customers get accustomed to our electronic platform and win their loyalty.
3.	Integrating group channeling and enlarging service network
	Sharing group resources and integrating channels of the subsidiaries; taking the position of wealth creation, undertaking cross-selling with the setup of a wealth management call center to raise the market shares of respective group business, enhance channel efficiency and optimize the operational synergy.
4.	Meeting product demands and seeking steady return
	Stepping up the R&D of financial products to offer more wealth management options and create complete product lines to satisfy the one-stop shopping needs of customers and increase sources of income. In addition, constructing integrative risk management system, fortifying the risk-free business to facilitate the construction of stop-loss mechanism and platform, and achieve steady return.
5.	Strengthening collection mechanism and expediting the recovery of bad debt
	Strengthening the consumer and corporate banking collection mechanisms by integrating the collection system; for consumer banking, setting up a bad debt collection team to speed up the recovery of past due accounts so as to reduce bad debt and lower the NPL ratio.
6.	Perfecting the rating mechanism to better control the operational risk
	In the aspect of risk management framework and mechanism, constructing related mechanism and systems in compliance with the major provisions of Basel II in the hope to harness the management of market, credit and operational risks with scientific risk management techniques that will help stabilize the financial structure and strengthen the company makeup.
7.	Decreasing the cost of fund and improving operating efficiency
	Increasing the share of demand deposit and lowering the cost of fund, streamlining the operating processes through operating efficiency, decrease of indirect expense and centralized operation to reduce operating costs and improve efficiency.
8.	Shoring up financial structure and create profit for the holding company
	mproving NPL ratio by actively strengthening the capital structure of the company and subsidiaries, increasing coverage ratio, and replenishing operating funds; respective business group will actively challenge the operating targets set, increase income, create profits and operate with prudence.

Business plans for the year

Jih Sun Financial Holdings
Following the incorporation of Jih Sun Financial Holdings Co. Ltd, subsidiaries including Jih Sun Securities Co. Ltd, Jih Sun International Commercial Bank, and Jih Sun International Insurance Co. Ltd were merged. The business strategies of Jih Sun Financial Holdings for 2008 are as follow:

(1)	Strengthen financial structure and improve overall profitability Raise additional funds for working capital needs while improving the company's financial structure. Continuing our control over the overdue loan ratio and explore new business opportunities. Plan for the optimal allocation of assets and businesses to achieve the highest profitability on a group level.
(2)	Integrate cross-selling capabilities and execute effective marketing. Establish common performance indicators (such as the promotion ambassador KPI) to strengthen collaboration within the group, stimulate cross-selling and capitalize the synergy of a financial holding company. Execute effective marketing activities based on cost effectiveness analyses; satisfy the company's target profitability and customers' needs to achieve a win-win situation.
(3)	Improve sales performance and increase fee income. Continually increase profit contribution from less risky activities. Increase the weight of commission income from securities and banking segments by focusing on our Wealth Management and the establishment of sub-brokerage ordering platforms etc.
(4)	Increase returns from less risky assets and exercise preventive risk management Exercise preventive risk management with the adaptation of the Basel II accord, which subsequently reduces losses from risky assets. Concentrate on the development of less risky businesses such as secured lending etc, which subsequently improves overall asset quality.
(5)	Explore e-commerce opportunities and segment niche customers Actively explore the utilization of e-commerce platforms to lower manual operating costs. Segment niche customers based on their demands using technologies such as data mining; design differentiated services and products to meet the needs of niche customers.
(6)	Product innovation and achieve customer satisfaction Develop new products to meet the needs of customers based on their different characteristics. Focus on raising customer satisfaction through internal campaigns such as Service Ambassador, Surveys etc.
(7)	Raise operating efficiency and increase cost effectiveness Actively reduce our costs of risk, credit, and operations. Lower internal operating costs with more automations, higher productivity, improved workflow, and standardized operating procedures.
(8)	Establish overseas platforms and raise our brand image Explore overseas businesses with the establishment of overseas platforms such as JS Cresvale Securities International Ltd., OBU etc. Raise brand image, brand awareness, and eventually corporate value through marketing campaigns.

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