Dear ladies and gentlemen:

　Looking back at 2008, our global economy was struck by the U.S. credit crunch that spread throughout every corner of the earth, and the slowdown of economic expansion triggered stock market crashes throughout the world. The International Monetary Fund (IMF) estimated growth rates of merely 1% for U.S., European, and Japanese economies; as a result the export volumes of emerging markets, represented primarily by China and India, decreased sharply and China's economic growth fell below 10% for the first time in 5 years. Global economy continued its downward correction as we entered 2009; the IMF forecasted a decrease in the global economic growth rate from the previous year's 3.7% to 2.2% for the year 2009. Based on past experience, a global economic grow rate below 3% indicates worldwide recession; this is especially true for the U.S. and other developed countries who suffered tremendous damage from the sub-prime crisis. We shall witness substantial setbacks in economic activities in 2009 as the economic growth rates for the U.S, Eurozone, Japan, and Britain were estimated at -0.7%, -0.5%, -0.2%, and -1.3%, respectively. The main driving forces behind the emerging market economies are exports, which depend heavily on demands from developed countries, and are therefore unlikely to ride through the storm unharmed. The IMF also estimated the economic growth rate of emerging market economies to fall from last year's 6.6% to 5.1%.

As far as the local economy is concerned, The Directorate General of Budget, Accounting, and Statistics, Executive Yuan, announced on 18 Feb 2009 that Taiwan's economic growth rate for 2008 had fallen sharply from previous year's 5.7% to 0.12%; this was the lowest since 2001 and was contributed by the falling of both domestic and foreign demands. Retail consumption had fallen substantially to -2.1% as rising unemployment suppressed consumers' willingness to spend; this marked the first setback ever since official income statistics were produced. Although the government was actively promoting public infrastructure, investors' confidence was lost due to the fall of corporate earnings without signs of recovery. The growth of private sector investments fell sharply from the previous year's 0.5% to -2%. The global recession also dragged down export growth from the previous year's 5.9% to -0.1%.

The Directorate General of Budget, Accounting, and Statistics, Executive Yuan, forecasted the annual growth of the domestic economy at -2.97% for 2009, of which -2.93% was contributed by domestic demands. The basis of this forecast were the stagnant local economy, the low wage growth that suppressed private spending, and major cutbacks in corporate investments due to reduced earnings. In terms of net foreign demands, The Directorate-General forecasted a contribution from net exports of merely -0.03%; this was much lower than the previous year's 2.17% because our main export counterparties such as the U.S. and Europe are encountering economic recessions.

The company's net interest revenue for 2008 amounted to NT$$3.966 billion and non-interest net revenue accumulated to NT$4.13 billion, producing total net revenues of NT$8.096 billion; operating expenses amounted to NT$6.707 billion, bad debts amounted to NT$5.113 billion, and income tax amounted to NT$68 million, producing a consolidated net loss after tax of NT$3.792 billion and after tax loss per share of NT$1.75. The financial turmoil had impacted financial markets all over the world; other peer financial holding companies also reported substantially lower earnings in their latest years in comparison with 2007. After tax profits across 14 financial holding companies were reduced by approximately NT$117.7 billion in aggregate and we could not avoid such a disaster. Revenues from loans and wealth management sectors of our subsidiary, Jih Sun International Commercial Bank, reduced substantially following a series of interest rate cuts by The Central Bank, rising credit risk concerns, and falling investors' confidence. Jih Sun International Commercial Bank had also made additional loan loss provisions totaling NT$5.113 billion in light of rising bad debt risks, resulting in an after tax net loss of NT$3.797 billion; this was the main contributor to the consolidated net loss of the entire financial holding company for the year 2008. The following are summaries of our performance and strategies for each of the company's four major business groups:

1. Individual Financial Services Group

　　The growth of our consumer banking businesses became tough due to unfavorable government policies imposed and the contraction of the overall economy. Mortgage loans remained the primary product of our consumer banking sector in 2008, and priority was given to quality customers and properties in metropolitan districts. Although the government had initiated a series of rapid interest rate cuts during the fourth quarter, the company however maintained its vigilant business strategy. On one hand we had responded to market changes by adjusting our product structure and increasing revenues from risk-adverse products, thereby creating revenues of more than NT$9 million from the sale of insurance product complements, and added value to customers' mortgage loans; on the other hand the implementation of risk management policies and the relentless collection efforts of our front line staff enabled us to continue improving our asset quality. Business objectives for our consumer banking sector in 2009 are as follows:

(I) Deepen customer relationship; explore value-added services to existing products
(II) Strengthen asset structure; increase risk-adverse revenues
(III) Establish distribution channels; explore new forms of commercial opportunities
(IV) Enhance the effectiveness of risk management; improve asset quality
(V) Employ and retain talented employees; enforce successor training

Following a sudden downturn of the global economy in 2008, the consumption power of the public was reducing, and the domestic credit card market had shrunken rapidly as a result. The Bank's credit card sector was also affected. As a response to the changing environment, The Bank had realigned its business strategies toward product segmentation and promoting installment businesses with retail partners. Installment purchases at retail partners had grown against the declining trend by 63% compared to the previous year. Card loyalty was also one of our business focuses. Our discount scheme with National Petroleum Corporation started in July 2008, and with other automobile benefits such as daily five-time fuel reward points and Dodohome parking, the card usage rate increased by 3% while our market share of issued cards rose to 1.35%. Our credit card business strategies for 2009 are as follows:

(I)Strengthen our main product lines and capture seasonal consumption.
(II) Introduce high-yield financial products; enhance revenues and the asset quality of revolving credit.
(III) Guide customers to make payments via low-cost channels and reduce operating costs.
(IV) Stimulate active card usage with continuous consumption schemes; eliminate dormant card accounts.
(V) Widen distribution channels for insurance products to increase fee income.
(VI) Focus on promoting high-yield installment businesses.

2. Corporate Financial Services Group

　　Jih Sun Bank's Corporate Banking sector had always focused on customer relationships and risk management as its core business values. In 2008 The Bank introduced its "Customer Relationship Management" concept which focuses on collecting and analyzing customers' consumption behaviors for a more effective grasp over market changes while facilitating our marketing strategies. The Bank also targets high value customers as priority and provides customized, automated and networked banking services that minimize the operating costs of both companies; thereby creating win-win solutions between the financial holding company and its customers. Solutions for risk management enhancements include the continuous development of customer-based risk and value systems. These enhancements include the credit grading model, post-lending management and monitoring, customers risk-grading and industry risk analysis. Our goal is to achieve flexible risk-based pricing and risk control over the various changes in our business environment. Our major achievements in 2008 are listed below:

3. Wealth management Group

　　The 2008 financial crisis struck the global economy in an unprecedented scale that shook the wealth management market. However, from the product perspective, The Company continued its introduction of marketable products and services that delivered customers' needs in an attempt to boost the productivity of its sales force; in terms of customers, we have deepened our relationships through product innovation and quality services that delivered higher customer satisfaction; in terms of internal processes, we have re-modeled our operating procedures while actively introducing new products and services; and as for personnel development, our solid training and education shall effectively raise the efficiency and productivity of our employees. Our major achievements are listed below:

For balanced development of our wealth management sector, a "telemarketing team" was established under the personal banking unit of our wealth management segment to serve customers' needs for insurance products.

The 2009 business plans for the Wealth Management Group are summarized below:

4. Investment and Proprietary Trading Group

　 In 2008 our Investment and Proprietary Trading Group adhered to its principles over balanced risk and return, and maximized its returns under limited risks through accurate forecasts, active trading, efficient transaction processes, and improved market competitiveness.

The main focus of our banking services was satisfying the needs of customers across various business segments. Our goal was to raise customers' revenue contribution through bank-wide business planning and supported by good working capital management, maintenance of adequate liquidity reserves, flexible funding strategies, and appropriate financial investments that maximize The Company's profitability.

The main focus of our Securities Proprietary Trading Division was searching for profitable prospects while maintaining stability, and earn profits from the trading of bonds as well as other related products. The domestic share market has turned bearish under a worldwide recession; our Proprietary Trading Division shall lower its investment positions and hedge using financial derivatives whenever necessary. Overall speaking we still delivered an above-average performance compared to our peer competitors; we shall continue trading our existing positions flexibly and adhere to the various risk indicators to preserve our profit stability.

The 2009 business plans of our Investment and Proprietary Trading Group are stated below:

The following are the latest credit ratings on The Company and its subsidiaries; rated by Fitch Ratings on 14 Nov 2008:

　　With our ultimate corporate spirit of delivering top quality services, we shall raise customers' trust, actively seek to improve business profitability, and thereby create shareholders' value. The business strategies of Jih Sun Financial Holding Company for the coming year are detailed below: