Together with its subsidiary Shanghai Commercial Bank Ltd. (SCB) in Hong Kong, SCSB manages total consolidated assets of US$ 22.4 billion and capital of US$ 452 million, and has a shareholder's equity of US$ 1.45 billion as of year end 2004. As of 2004, it also manages over US$3 billion of private wealth and achieved FX transactions volume of USD70 billion.

We employ over 3,600 staff and operate 106 branches worldwide. In Taiwan, we operate 59 branches and employ over 1900 staff. Through SCB, we operate 42 branches in Hong Kong, 5 branches overseas (London, New York, San Francisco, Los Angeles, and Shenzhen) and 1 representative office in Shanghai.

SCSB is the only Taiwanese bank with a full Greater China network, and is the first bank in Taiwan to receive approval in 2002 from the government to conduct direct remittances with financial institutions in China. The Bank operates the largest volume of remittances from Taiwan to China and is reputed to offer the “fastest possible remittance between Taiwan and China.”

SCSB's mission is to be “one of the best Chinese operated Banks across the Taiwan Strait”, by innovating and developing world class financial services and committing itself to practicing the highest standards of professionalism and management practices, and by placing customer needs first.

Compared with other private banks, SCSB's initial capital of 80,000 Yuan was very small and so was affectionately coined the “little Shanghai Bank”. Under Founder Chen's leadership, however, the “little Shanghai Bank” soon catapulted in growth to become by 1934, the foremost private bank in foreign exchange and fifth-ranked commercial bank in China. Starting with only 4 employees in 1915, by 1934 the bank grew to 2700 staff and 111 branches across China.

Mr. Chen recognized the importance of innovation whose spirit he felt was essential to the heart of a modern, competitive bank. He was at times, a contrarian, challenging the conventional wisdom and practices of his time. He emphasized long-term returns when others sought short-term returns. At a time when others shied away from servicing small accounts, he made them the cornerstone of the Bank's operations. In an effort to promote the idea of savings, the Bank developed and distributed to the public “one dollar savings boxes”. To encourage and facilitate the process of making deposits, contrary to the practices of the time, SCSB accepted both cash and silver ingots and waived handling charges. The Bank was an early pioneer of small-and-medium enterprise financing. Through small-sum credit-loans, individuals were given the means to finance small businesses and to address urgent personal funding needs for weddings, funerals, education costs. Credit-based lending tools such as “Rail negotiation loans” and “warehouse mortgages” served as alternative sources of funding.

In addition to promoting savings, and securing and dispersing much needed financial capital, SCSB served as a conduit for remitting and exchanging money abroad. To address the needs of its customers wishing to conduct business abroad at a time when travel support networks did not exist, in 1924, SCSB established a Travel Division (in 1927 this became the China Travel Service Company which by 1936 had over 100 branches worldwide) which served as an important transport and foreign capital network for Chinese customers conducting business abroad. In addition to providing Chinese customers with on-the-ground travel and lodging support services, this agency issued remittances and travelers cheques, becoming one of the first platforms for foreign exchange operations in the region. The bank was also the first to issue industry-specific loans such as “agricultural loans” and “salt industry loans” as well as one of the first banks to consolidate its teller services into a one-stop shop for customers in the 1930s. Integrated teller services were not available at other banks until 1977, when the (Taiwanese) Ministry of Finance mandated the “experimental branch system” to foster efficiency.

Contributions During World War II and Resumption of Business in Taiwan
During World War II, SCSB played an important role in stabilizing the monetary system in its time and raising needed funds. Mr. Chen represented the government and played an important role in negotiating loan terms with the U.S.A., effecting the Silver Agreement of 1936, the Tung Oil Loan Agreement of 1939, and the Tien Tin Loan Agreement of 1940. After the war, under Mr. Chen's leadership, SCSB re-opened its head office in Taiwan, the only private bank from the Mainland to do so at the time. The Bank officially resumed operations in Taipei in June 1965 with total capital of New Taiwan Dollars 15 million and 29 employees.

New Era of Dynamism and Expansion
In 1983, Mr. Hung-Ching Yung was appointed vice-chairman. In 1991, Mr. Yung succeeded Chairman Mr. Chu Ju-Tang who took over from Founder Chen when he passed away in 1976 as the third Chairman of SCSB.

Over the last 20 years, the Bank has dramatically expanded its offerings and improved the quality of services. It has formed partnerships with 1,200 corresponding banks worldwide and has aggressively set up ATMs machines and ATM centers, cyber banking networks and phone customer service centers, increasing offering solution to our customers. In 1988, SCSB was the first to launch a campaign to partner with 7-11 convenience stores, increasing the number of 24-hour ATM access points for customers. It was one of the first to see the opportunity for expanding an offshore business unit and the first bank to issue affiliate cards.

At the same time, the Bank centralized its functions, by developing operation centers and regional center systems, consolidating approval and processing centers, and streamlining its operations and reorganized its functions into 5 different business units: corporate banking, consumer banking, bills and bonds business, treasury marketing and trust & wealth management. The Bank consolidated its foreign exchange business, in which it is still considered a leader. Foreign Exchange Operations for the consolidated entity grew from less than US$ 3 billion in 1986 to over US$70 billion as of year end 2004.

In effect, the Bank modernized its operations and management practices, reaffirming its commitment to recruiting, developing and retaining top talent by implementing performance-based compensation schemes. It also greatly invested in developing distinctive risk management systems. The Bank has always placed substantial emphasis on asset quality. In 2004, the NPL ratio was less than 1%, among the lowest in the industry.

Honors and Mentions Received:
By the early 1990s, SCSB's efforts and successes were applauded by leading finance journals and rating agencies. “The Banker” a leading British finance journal, for the first time ranked the Bank as one of the world's top 800 in 1990. (By 2004, this ranking would jump to 298, placing SCSB among the world's top 300 banks.) In 1997 the Bank was the first in Taiwan to receive from “Euromoney” a “ααα” rating, ranking it #1 among 450 banks in forty newly emerging markets for profitability and management. In 1998, SCSB was recognized by Euromoney the “Best Bank in Taiwan” and the Standard and Poor's backed “Taiwan Ratings Corporation” gave in its first rating to the Bank, a twA+ long-term rating and a twA-1 short-term rating. In 2001, SCB was rated number one Retail Internet Banking Sites by The Asian Banker and the bank's Corporate Internet Banking won the “IT Excellence Awards 2002” by the Hong Kong Computer Society in 2003.

In 2004, a record earnings year, the Bank ranked #1 among 49 local banks in EPS before tax. Non-performing loan ratios dropped to less than 1%. In 2004, Offshore Business Units (OBUs) and FX operations ranked 3rd in Taiwan in terms of operations.

In the first half of 2005, on the road to another record earnings year in which the Bank was acknowledged for having the highest earnings per share among local banks. It was also a year in which it was awarded the “ISO9001:2000 for overall quality management system and “ISO10006:2003” for quality management system in project management, the first Asian bank to do so.

Future Outlook
Time flies like an arrow, and the year 2005 witnesses the ninetieth anniversary of the establishment of SCSB and the fortieth anniversary of resumption of operation in Taiwan. In these past forty years since its relocation to Taiwan, SCSB has been dedicated to fast growth of the financial industry in Taiwan and has contributed to economic prosperity of Taiwan. It went through the test of liberalization and globalization and has faced the challenge of financial reform. In the last decade, the Bank has survived the impact of the Asian financial crisis, the 921 earthquake, SARs and the challenge of increasing non-performing loans after burst of the dotcom boom. It has kept pace with reforms in an increasingly competitive Taiwan financial institution landscape. Today, SCSB has never been more competitive, keeping pace with the time, seeking innovation, and carrying out reform and restructuring to provide customers with innovative services and products and maximizing shareholders' value through modern and flexible operations. Having enjoyed 2 consecutive record earnings years, today SCSB stands strong, enjoying a Bank of International Settlements (BIS) ratio of more than 10%. It is a regional leader in foreign exchange and trade finance.

As it has undergone its rich and varied past, SCSB will continue to deliver valuable and innovative services to its customers. It remains committed to its core values and to reinventing itself to keep pace with the time. As it was in 1915, it will be poised to seize new opportunities in a rapidly changing industry and world.