Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2019 Earnings Presentation
31 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 27, 2020
Slide 1: 2019 Annual Results
2019 Annual Results 27 March 2020
Slide 2: Disclaimer and the New Reporting Basis
Disclaimer and the New Reporting Basis 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
Slide 3: Agenda
Agenda Strategy Review Outlook Financial Performance 3
Slide 4: Strategy Review
© PHFe Ew ERA Strategy Review ll I ip i ms So)
Slide 5: Solid Operating Results and Stable Financial Indicators
Solid Operating Results and Stable Financial Indicators Profit for the Year HK$ 34.1bn +4.3% Return on Average Shareholders’ Equity 11.51% Total Capital Ratio 22.89% 5
Slide 6: Solidifying a Market Leading Position by Enhancing Local Market Commitment
Solidifying a Market Leading Position by Enhancing Local Market Commitment • No. of mid-to-high end customers: +20.9% • Market leader in new mortgage loans by no. of cases Personal • RMB life insurance business outpaced market for 9th Banking consecutive year • Top syndicated loans arranger in HK an
Slide 7: Refining Southeast Asian Business Layout to Enhance Service Capabilities
Refining Southeast Asian Business Layout to Enhance Service Capabilities BOCHK Pre-provisions Customer loans net operating income Vietnam Philippines Laos 16.4% 26.7% Thailand HK$2.81bn HK$50.4bn Customer deposits Non-performing loan ratio 18.3% 1.51% Malaysia HK$56.6bn At manageable level Brunei Ca
Slide 8: Leading Financial Innovation in the GBA and Strengthening Cross-border Services
Leading Financial Innovation in the GBA and Strengthening Featured Cross-border Services Cross-border mid-to-high Applicants for Cross-border end customers attestation service mortgage service +26.8% ＞90k Launched ★Corporate Banking★ ★Asset Management★ To support the development needs of infrastruct
Slide 9: Building Core Competency Through Digitalisation to Facilitate Business Transition
Building Core Competency Through Digitalisation to Facilitate Business Transition Payment-led Transformation Livelihood, Payments, Consumptions, Transportation, Cross-border, Education, Charity Open API Opened up >90 APIs No. of Partners>130 FINTECH Omnichannel Services Integrated Corporate Banking’
Slide 10: Building Core Competency Through Digitalisation to Facilitate Business Transition
Building Core Competency Through Digitalisation to Facilitate Business Transition Public Services Consumer Spending Full coverage of bill payments such as Partnering with chain retailers, including F&B brands, supermarkets, convenience water, electricity, gas, rates and tax stores, bookshops and res
Slide 11: Establishing an ESG Governance Framework to Foster Green and Sustainable Development
Establishing an ESG Governance Framework to Foster Green and Sustainable Development E nvironmental • Acted as green consultant and actively helped corporate customers to issue green bonds • Growth in green and sustainable development loan balance: 8 times S ocial • Donated net proceeds from sales o
Slide 12: Financial Performance
© PHFe Ew ERA Financial Performance Mmm ll I ip i ms So)
Slide 13: Constant Expansion of Deposit Base
Constant Expansion of Deposit Base Customer Deposits Grew by 5.9% Deposit Market Share Steadily Improved HK$m 2,009,273 Market Share: 14.56% 1,897,995 Expanded by 0.35 ppt Balance: +4.2% 56.0% 55.1% 2018 2019 Time and Other Deposits Current and Saving Deposits Deposit Market Share (CASA) 13
Slide 14: Solid Growth in Customer Loans
Solid Growth in Customer Loans Customer Loans Grew by 10.2% Loan Market Share Constantly Increased Loans for use in HK - 515,548 Market Share: 12.97% corporate +4.6% Expanded by 0.33 ppt Loans for use in HK - 409,186 individuals +17.2% Loans for use 395,385 outside HK +9.8% Trade financing 75,764 +1
Slide 15: Margin Improvements amid a Steady Trend
Margin Improvements amid a Steady Trend Net Interest Income Rose by 8.4% Net Interest Margin Increased by 6 bps HK$m 43,087 2018: 1.63% 2019: 1.69% 39,760 1.71% 1.72% 1.70% 1.71% 1.67% 1.66% 1.61% 1.50% 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 *Including the funding income or cost of FX swa
Slide 16: Stabilising Performance in Net Fee Income
Stabilising Performance in Net Fee Income Stabilising Performance in Net Fee & Steady Fee Income Growth Commission Income in Traditional Businesses HK$m 11,312 10,919 Insurance +36.5% Loan commissions +2.4% Others +0.8% Securities brokerage Credit Payment services +5.1% Cards 4,873 4,836 Trust & cus
Slide 17: Cost Efficiency Outperformed the Market Average
Cost Efficiency Outperformed the Market Average Operating Expenses Increased by 9.6% Healthy Cost to Income Ratio HK$m 16,667 244 38.70% 38.00%* 815 722 27.88% 28.52% 15,206 (320) 2018 Staff Premises & Depre- Others 2019 2018 2019 costs equipment ciation Market Average BOCHK Market data source：HKMA
Slide 18: Stable Performance in Asset Quality
Stable Performance in Asset Quality Stable Asset Quality Sound Credit Quality of Personal Loans Residential mortgage loans - Delinquency and rescheduled loan ratio BOCHK 0.01% Market Average 0.03% 0.19% 0.23% Card advances - charge-off ratio BOCHK 1.40% Market Average 1.57% 2018 2019 Classified or I
Slide 19: Solid Capital and Liquidity Positions
Solid Capital and Liquidity Positions Steady Capital Ratios Sufficient Liquidity 183.00% Total 22.89% Capital Ratio 156.57% 146.53% - 0.21 ppt 142.85% Tier 1 19.90% 121.36% 119.15% 118.00% Capital Ratio + 0.14 ppt 116.47% CET 1 17.76% Capital Ratio + 0.28 ppt 1Q2019 2Q2019 3Q2019 4Q2019 2018 2019 Av
Slide 20: Outlook
03 Outlook 20
Slide 21: Outlook: Challenges and Opportunities
Outlook Challenges Opportunities • COVID-19 pandemic • Outline Development Plan for the GBA • Low interest world • Regional economic integration of Southeast Asia • Global financial markets volatility • HKSAR Government’s expansive fiscal policy 21
Slide 22: 2020 Priorities
2020 Priorities Development Initiatives: • Hong Kong: establish new edges through digital transformation • Southeast Asia: strengthen collaboration to improve growth quality • Greater Bay Area: promote interconnectivity to enhance first mover-advantage • Adhere to stringent risk management principle
Slide 23: Appendices
op SR ae re (12 AR) APR A BOC HONG KONG (HOLDINGS! LIMITED. Appendices
Slide 24: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 2019 2018 Change Net interest income 40,523 39,501 2.6% Net fee and commission income 10,919 11,312 -3.5% Other non-interest income 7,002 3,722 88.1% Net operating income before impairment allowances 58,444 54,535 7.2% Operat
Slide 25: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates (HK$m) / % 2019 2018 Assets Average balance Average yield Average balance Average yield Balances and placements with banks and other financial institutions 341,707 1.82% 416,376 1.90% Debt securities investments and other debt instruments 864,637 2.36% 783
Slide 26: Fee and Commission Income
Fee and Commission Income HK$m 2019 2018 Change Credit card business 2,975 3,441 -13.5% Loan Commissions 2,675 2,613 2.4% Securities brokerage 2,113 2,769 -23.7% Insurance 2,111 1,546 36.5% Funds distribution 901 929 -3.0% Payment services 716 681 5.1% Bills commissions 700 739 -5.3% Trust and custo
Slide 27: Operating Expenses
Operating Expenses HK$m 2019 2018 Change Staff costs 9,364 8,642 8.4% Premises & equipment expenses 1,542 1,862 -17.2% Depreciation 2,881 2,066 39.4% Others 2,880 2,636 9.3% Total operating expenses 16,667 15,206 9.6% Full-time staff headcount 14,668 14,084 4.1% 27
Slide 28: Customer Deposits
Customer Deposits HK$m 2019.12 2018.12 Change Demand deposits and current accounts 207,013 207,812 -0.4% Saving deposits 900,009 854,117 5.4% Time, call and notice deposits 902,251 833,867 8.2% Structured deposits - 2,199 -100% Total deposits from customers 2,009,273 1,897,995 5.9% CASA 1,107,022 1,
Slide 29: Advances to Customers
Advances to Customers HK$m 2019.12 2018.12 Change Loans for use in Hong Kong - industrial, commercial and financial 515,548 492,712 4.6% Property development 137,663 126,328 9.0% Property investment 49,073 50,223 -2.3% Financial concerns 28,353 21,239 33.5% Stockbrokers 815 1,171 -30.4% Wholesale an
Slide 30: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2019.12 2018.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,388,453 4,213 3,217 1,395,883 1,256,700 8,152 2,383 1,267,235 Pass 1,385,770 1,592 - 1,387,362 1,254,766 5,019
Slide 31: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total Total loans and O/W: for use in Debt securities sheet Subtotal exposure HK$m advances Chinese Mainland and others exposure Central government, central government-owned 250,003 75,875 60,792 310,795 43,519 354,314 entities and th
BOC Hong Kong (Holdings) — FY2019 Earnings Presentation on 6ix