Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2009 Earnings Presentation
28 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 27, 2009
Slide 1: 2009 Interim Results
2009 Interim Results 27.08.2009
Slide 2: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer This presentation and subsequent discussions may contain forward-looking statements that involve risks and uncertainties. These statements are generally indicated by the use of forward- looking terminology such as believe, expect, anticipate, estimate, plan, proj
Slide 3: Management Team
Management Team Mr. Gary He Vice Chairman & Chief Executive Mr. David Lam Deputy Chief Executive Mr. Yingxin Gao Executive Director & Deputy Chief Executive Mr. Chengwen Zhuo Chief Financial Officer Mr. Alex Cheung Chief Risk Officer Mr. David Wong Deputy Chief Executive 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook 3
Slide 5: Key Performance Highlights
Key Performance Highlights Oh She ee rae (9 A) PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: 1H09 Operating Environment
1H09 Operating Environment Overall operating environment remained challenging Impact of financial crisis appeared subsiding, especially into 2Q09 Stabilizing economic environment boosted rebound in local stock and property markets 5
Slide 7: Performance Overview
Performance Overview Maintained strong financial position on the back of our effective measures Captured business opportunities and further enhanced our franchise by leveraging our core strengths Good balance between risk management and business growth 6
Slide 8: Strong Financial Position
Strong Financial Position Well Well Capitalized Capitalized Highly Highly Liquid Liquid Tier 1 Tier 2 Liquidity remained solid at 16.17% 16.10% 39.70% 5.31% 4.86% 42.47% 39.70% 10.86% 11.24% Dec 2008 Jun 2009 1H 2008 1H 2009 Solid Solid Loan Loan Quality Quality Disciplined Disciplined Cost Cost Con
Slide 9: Key Financial Highlights
Key Financial Highlights Change Change 1H2009 2H2008 1H2009 1H2008 Change 2H2008 1H2008 YoY Change HoH HK$m YoY HoH Net operating income before impairment allowances 13,028 11,487 14,039 ↓ 7.2% ↑ 13.4% Operating profit before impairment allowances 8,834 6,804 9,951 ↓ 11.2% ↑ 29.8% Profit attributabl
Slide 10: Solid Core Performance
Solid Core Performance Captured business opportunities in a tough market leveraging our core strengths Solid ● Loans grew 3.3% amidst weak market demand Solid Loan ● Corporate loans for use in HK achieved an Loan Growth Growth impressive growth of 13% ● Strong deposit franchise with 1.6% growth in S
Slide 11: Strong Franchise
Strong Franchise Personal Personal Banking Banking zStrong z Strong deposit deposit franchise franchise and and distribution distribution network network zLeading z Leading position position in in residential residential mortgages mortgages & & retail retail stock stock brokerage brokerage busin
Slide 12: Financial Results
Financial Results Oh She ee ra (32 WR) A BR ZS BOC HONG KONG (HOLDINGS) ae
Slide 13: Condensed Income Statement
Condensed Income Statement Both operating income and bottom-line performance improved significantly from 2H08 HK$ m 1H2009 1H2009 2H2008 2H2008 1H2008 1H2008 % %YoY YoY % %HoH HoH Net interest income 8,929 10,128 10,029 ↓ 11.0 ↓ 11.8 Net fees and commission income 2,947 2,280 2,899 ↑ 1.7 ↑ 29.3 Othe
Slide 14: Net Interest Income
Net Interest Income Net interest income declined mainly due to lower NIM 1H2009 1H2009 2H2008 2H2008 1H2008 1H2008 % %YoY YoY % %HoH HoH HK$ m Interest income 11,993 17,176 18,105 ↓ 33.8 ↓ 30.2 Interest expense 3,064 7,048 8,076 ↓ 62.1 ↓ 56.5 Net interest income 8,929 10,128 10,029 ↓ 11.0 ↓ 11.8 Ave
Slide 15: Net Fees and Commission Income
Net Fees and Commission Income Moderate YoY growth in income despite slowdown in business activities Strong growth in stock brokerage and loans commissions HK$ m 1H2009 1H2009 2H2008 2H2008 1H2008 1H2008 % %YoY YoY % %HoH HoH Investment and insurance fee income Securities brokerage (Stockbroking) 1,
Slide 16: Non-interest Income
Non-interest Income Non-interest income improved mainly due to lower operating loss of BOC Life HK$ m 1H2009 1H2009 2H2008 2H2008 1H2008 1H2008 % %YoY YoY % %HoH HoH Net fees and commission income 2,947 2,280 2,899 ↑ 1.7 ↑ 29.3 Other operating income - Banking operation 1,380 531 1,596 ↓ 13.5 ↑ 159.
Slide 17: Operating Expenses
Operating Expenses Core operating expenses* well contained on the back of disciplined cost control measures Operating Operating Expenses Expenses Number Number of of Branches Branches HK$ m 4,683 (286) (280) 4,088 4,194 305 303 1,518 Others 631 904 480 496 Depreciation 512 495 End-Dec 2008 End-Jun 2
Slide 18: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Net reversal of loan impairment allowances as release increased Lower securities investments provisions as capital markets stabilized HK$ m Advances to customers 1H2009 1H2009 2H2008 2H2008 1H2008 1H2008 % %YoY YoY % %HoH HoH Individual assessment - N
Slide 19: Loan Quality
Loan Quality Classified or impaired loan ratio fell to 0.37% Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn 0.46 +0.5 0.37 -0.2 -0.4 -0.2 2.1 1.8 End-2008 Downgrade Upgrade Collection Write-off End-June End-Dec
Slide 20: Condensed Balance Sheet
Condensed Balance Sheet Maintained prudent approach in balance sheet management HK$ m 30.06.2009 30.06.2009 31.12.2008 31.12.2008 % % Change Change Total assets 1,146,150 1,147,244 ↓ 0.1 Cash and balances with banks and other financial institutions 113,032 153,269 ↓ 26.3 Placements with banks and ot
Slide 21: Advances to Customers
Advances to Customers Loan growth outperformed market driven by strong growth in corporate loans for use in HK HK$ m 30.06.2009 31.12.2008 % 30.06.2009 31.12.2008 %Change Change Loans for use in HK - corporate 213,386 188,774 ↑ 13.0 Loans for use in HK - individual 147,886 147,823 ↑ 0.0 Residential
Slide 22: Customer Deposits
Customer Deposits Recorded moderate deposit growth with further improvement in mix HK$ m 30.06.2009 30.06.2009 31.12.2008 31.12.2008 % %Change Change Demand deposits and current accounts 59,520 46,042 ↑ 29.3 Saving deposits 450,060 377,273 ↑ 19.3 Time, call and notice deposits 311,397 379,262 ↓ 17.9
Slide 23: Securities Investments
Securities Investments Maintained prudent investment strategy Continued reduction in US RMBS exposure 30.06.2009 30.06.2009 31.12.2008 31.12.2008 % %Change Change Debt Debt securities securities by bycredit credit rating rating HK$ m Sovereign 73,057 84,435 ↓ 13.5 5% 2% Public Sector 23,286 23,474 ↓
Slide 24: Segmental Performance
Segmental Performance Operating Pre -tax profit Pre-tax profit Operating income income HK$ m ( % of total) HK$ m ( % YoY) 5,067 909 (-13.6%) (11%) 3,841 3,746 2,216 (-6.4%) (-14.7%) (27%) 2,218 2,184 1,197 832 (26%) 2,849 2,644 2,914 2,935 (36%) Personal Corporate Treasury Personal Corporate Treasur
Slide 25: Mainland Business
Mainland Business Enhanced Mainland platform through network expansion and consolidation HK$ m 1H2009 1H2009 1H2008 1H2008 % % YoY YoY Operating income 466 405 ↑ 15.1 Operating expenses 237 187 ↑ 26.7 Operating profit before impairment 229 218 ↑ 5.0 Profit before taxation 308 236 ↑ 30.5 Remark: High
Slide 26: Outlook
Outlook
Slide 27: Outlook and Strategy
Outlook and Strategy Solid financial strength provides flexibility to grasp business opportunities despite market uncertainties Remain focused on fortifying our financial strengths and risk management Grow on our core strengths and enhance our franchise 9 Enhanced business capabilities to better
Slide 28: 2009 Interim Results
2009 Interim Results 27.08.2009
BOC Hong Kong (Holdings) — H1 2009 Earnings Presentation on 6ix