Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2008 Earnings Presentation
34 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 28, 2008
Slide 1: 2008 Interim Results
2008 Interim Results 28.8.2008
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. Raymond Lee Executive Director & Chief Financial Officer Mr. Yingxin Gao Executive Director & Deputy Chief Executive 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
Ny i A if .. iF Key Performance Highlights Oh She Be ra (9 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: Solid Operating Performance
Solid Operating Performance Net NetOperating OperatingIncome Income Operating OperatingProfit Profit before beforeImpairment ImpairmentAllowances Allowances before beforeImpairment ImpairmentAllowances Allowances HK$ m HK$ m YYooYY % .44% YYooYY ++1166. % .11% ++1155. 15,194 14,039 10,839 9,951 8,64
Slide 7: Interim Profit and Dividend Per Share
Interim Profit and Dividend Per Share Profit ProfitAttributable Attributableto toEquity EquityHolders Holders Dividend Dividendper perShare Share HK$ m HK$ --55..11% %YYooY Y YYooYY % 3% ++22..3 7,980 7,466 7,088 0.438 0.428 1900年1月1日 1900年1月2日 1900年1月3日 1H 2007 2H 2007 1H 2008 1H 2007 1H 2008 EPS (
Slide 8: Return on Equity
Return on Equity ROE ROE before before impairment impairment allowances allowances ROE ROE Y YooYY 1..1 1 33pppp ++1 --22..2 233ppp pYYooY Y 24.01% 17.68% 17.32% 21.18% 20.05% 15.09% 1900年1月1日 1900年1月2日 1900年1月3日 1900年1月1日 1900年1月2日 1900年1月3日 1H 2007 2H 2007 1H 2008 1H 2007 2H 2007 1H 2008 7
Slide 9: Return on Assets
Return on Assets ROA ROA before before impairment impairment allowances allowances ROA ROA p p YYooYY 055pp --00..2 ++00..0 255ppp pYYooY Y 1.98% 1.78% 1.83% 1.57% 1.50% 1.32% 1900年1月1日 1900年1月2日 1900年1月3日 1900年1月1日 1900年1月2日 1900年1月3日 1H 2007 2H 2007 1H 2008 1H 2007 2H 2007 1H 2008 8
Slide 10: Operating Environment
Operating Environment Challenging environment led by z Global financial market volatilities z Escalating inflationary pressure z Oil price hike Tightening macro measures in the Mainland Declining stock trading volume and property transactions Lower market interest rates and widened Prime-HIB
Slide 11: Solid Growth in Core Earnings
Solid Growth in Core Earnings Net Net Interest Interest Income Income Net Net Fees Fees & & Commission Commission Income Income HK$ m HK$ m % YYooYY . 1 1 % % YooY Y Y .66% ++1100. ++1122. 10,492 3,642 10,029 2,899 8,903 2,632 1H 2007 2H 2007 1H 2008 1H 2007 2H 2007 1H 2008 10
Slide 12: Other Business Highlights
Other Business Highlights Broad -based increase Broad-based increase in in loans loans and and advances advances (+15.1%) (+15.1%) z Solid z Solid growth growth in in Trade Trade finance finance (+30.5%), (+30.5%), SME SME loans loans (+16.1%) (+16.1%) and and Main land lending Mainland lending
Slide 13: Further Improvement in Loan Quality
Further Improvement in Loan Quality Classified Classified or or Impaired Impaired LLoan oan Ratio Ratio fell fell to to 0.3 4% 0.34% 0.44% 0.34% End-Dec 2007 End-Jun 2008 Note : Classified or impaired loans follow the definitions set out in the Banking (Disclosure) Rules and represent loans which ar
Slide 14: Solid Capital Strength
Solid Capital Strength CAR CAR maintained maintained at at healthy healthy level level of of 113.87% 3.87% Total Total Core Core 13.87% * 12.23% 13.08% 11.51% 1900年1月1日 1900年1月2日 1900年1月1日 1900年1月2日 End-Dec 2007 End-Jun 2008 End-Dec 2007 End-Jun 2008 *Total capital included the issue of €660 million
Slide 15: Financial Results
Financial Results Oh She Be ra (9 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 16: Condensed Income Statement
Condensed Income Statement Strong operating performance Bottom-line negatively affected by securities impairment HK$ m 1H 1H2008 2008 2H 2H2007 2007 1H 1H2007 2007 % %YoY YoY % %HoH HoH Net interest income 10,029 10,492 8,903 ↑ 12.6 ↓ 4.4 Net fees and commission income 2,899 3,642 2,632 ↑ 10.1 ↓ 20.
Slide 17: Key Financial Ratios
Key Financial Ratios Change Change Change Change 1H 1H2008 2008 2H 2H2007 2007 1H 1H2007 2007 YoY YoY HoH HoH ROE before impairment allowances 21.18% 24.01% 20.05% ↑ 1.13pp ↓ 2.83pp ROE 15.09% 17.68% 17.32% ↓ 2.23pp ↓ 2.59pp ROA before impairment allowances 1.83% 1.98% 1.78% ↑ 0.05pp ↓ 0.15pp ROA 1.
Slide 18: Higher Net Interest Income
Higher Net Interest Income NII increased driven by growth in average interest-earning assets Stable NIM as widened net interest spread was offset by lower contribution of net free fund HK$ m 1H 1H2008 2008 2H 2H2007 2007 1H 1H2007 2007 % %YoY YoY % %HoH HoH Interest income 18,105 24,572 21,484 ↓ 15.
Slide 19: Net Fees and Commission Income
Net Fees and Commission Income Improved business mix with growth in traditional fee income including loan commissions, RMB business, currency exchange, trust services and credit cards HK$ m 1H 1H2008 2008 2H 2H2007 2007 1H 1H2007 2007 % %YoY YoY % %HoH HoH Investment and insurance fee income Securit
Slide 20: Strong Rise in Non-interest Income
Strong Rise in Non-interest Income Higher non-interest income driven by growth in net fees income and other income of the Banking operation HK$ m 1H 1H2008 2008 2H 2H2007 2007 1H 1H2007 2007 % %YoY YoY % %HoH HoH Net fees and commission income 2,899 3,642 2,632 ↑ 10.1 ↓ 20.4 Other operating income -
Slide 21: Effective Cost Management
Effective Cost Management Costs well contained albeit continued investment in HR and IT Operating Operating Expenses Expenses Branch Branch Number Number HK$ m (288)* (288)* (289)* (289)* 4,355 304 305 4,088 853 3,418 631 O th e rs 414 480 519 541 495 D e p re c ia tio n 373 End-Dec 2007 End-Jun 200
Slide 22: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Mild net charge of loan impairment as recoveries and release reduced Further impairment charges were made against asset-backed securities HK$ m 1H 1H2008 2H 2H2007 1H 1H2007 % % YoY % Advances to customers 2008 2007 2007 YoY % HoH HoH Individual asses
Slide 23: Further Improvement in Loan Quality
Further Improvement in Loan Quality Classified or impaired loan ratio declined to 0.34% Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn +0.5 0.44 -0.1 0.34 -0.4 -0.1 -0.1 1.8 1.6 End-2007 Downgrade Upgrade Colle
Slide 24: Condensed Balance Sheet
Condensed Balance Sheet Total assets further expanded on the back of higher customer deposits and strong growth in RMB deposits placed from peer banks HK$ m 30.06.2008 30.06.2008 31.12.2007 31.12.2007 % % Change Change Total assets 1,127,168 1,067,637 ↑ 5.6 Cash and balances with banks and other fin
Slide 25: Broad-based Growth in Advances to Customers
Broad-based Growth in Advances to Customers Broad-based growth with double-digit increase in corporate loans for use in HK, trade finance and loans for use outside HK HK$ m 30.06.2008 30.06.2008 31.12.2007 31.12.2007 % %Change Change Loans Loans by bycurrency currencymix mix Loans for use in HK - co
Slide 26: Higher Customer Deposits
Higher Customer Deposits Moderate deposits growth, outpaced the market HK$ m Deposits Deposits by bycurrency currencymix mix 30.06.2008 30.06.2008 31.12.2007 31.12.2007 % %Change Change Demand deposits and current 5% accounts 40,907 40,499 ↑ 1.0 11% Saving deposits 295,502 286,653 ↑ 3.1 Time, call a
Slide 27: Subprime Exposure Significantly Reduced
Subprime Exposure Significantly Reduced Proactive management of our portfolio with significant reduction in net exposure HK$ m Exposure reduction in 1H08 was mainly due to 12,813 disposals and repayments -6 9 .8% Impairment allowances Ho H of HK$450 million were provided for the 4,118 outstandin
Slide 28: Profit Contribution by Business Segment
Profit Contribution by Business Segment Steady growth in Corporate Banking; Solid performance in Treasury Decline in Personal segment due to lower net interest income Operating profit before impairment Pre-tax profit HK$ m 697 HK$ m (8.3%) -17 .0% 6.4% % +7 +9.3 3,958 2,965 3,592 1,809 (35.2%) 2,983
Slide 29: Mainland Business
Mainland Business Operating profit before impairment improved if excluding exchange loss Total advances and customer deposits improved significantly with RMB deposits almost doubled (YTD) HK$ m % 1H 1H 2008 2008 1H 1H 2007 2007 % YoY YoY Operating income 405 351 ↑ 15.4 Operating expenses 187 115 ↑ 6
Slide 30: Outlook
NG | SeeennGeeE ETS os
Slide 31: Outlook – Challenging operating environment
Outlook – Challenging operating environment Deterioration in global economic and financial conditions has become more severe and prolonged Turmoil in financial markets, slower growth in the US and rising inflation are adversely affecting growth prospects for Hong Kong China economy remains sol
Slide 32: Business focuses
Business focuses Managing our growth with prudence Financial strength : maintain healthy capital base and strong liquidity position Cost control : implement effective initiatives to counteract inflationary risks and invest in accordance with our strategic priorities while managing cost increases
Slide 33: Business focuses
Business focuses Focus on long-term quality growth long-term Strengthen our leading positions in core businesses Enhance cross-selling and penetration through customer segmentation and innovative product offering Closely collaborate with BOC to capture emerging business opportunities for mutua
Slide 34: 2008 Interim Results
2008 Interim Results 28.8.2008
BOC Hong Kong (Holdings) — H1 2008 Earnings Presentation on 6ix