Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2012 Earnings Presentation
25 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 23, 2012
Slide 1: 2012 Interim Results
2012 Interim Results 2012.08.23
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. Gao Yingxin Executive Director & Deputy Chief Executive Mr. Zhuo Chengwen Chief Financial Officer Mr. David Wong Deputy Chief Executive Mr. Jason Yeung Deputy Chief Executive 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook and Strategy 3
Slide 5: Key Performance Highlights
Qt enw t w BANK OF CHINA RE ee fe FG AFR MR B BOC, A CENTURY OF GLOBAL SERVICES Key Performance Highlights Ch Sie ae ree (45 AR) ABR ZS BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: Operating Environment
Operating Environment Hong Kong and China experienced slower pace of economic growth Renewed volatility entered global financial markets amid worsening Eurozone crisis Low interest rates, intense competition and slower economic activities were the key operating challenges Relaxed regulations
Slide 7: Performance Overview
Performance Overview Achieved new highs in core income and profits Strong financial position remained intact Proactive management on assets and liabilities improved profitability and contained risks Broad-based income growth driven by solid expansion of core businesses and offshore RMB business
Slide 8: Key Financial Highlights
Key Financial Highlights % %YoY YoY 1H2012 1H2012 1H2011* 1H2011* % %YoY YoY HK$m (ex- (ex-Lehman*) (ex-Lehman*) Net operating income before impairment allowances 18,165 15,126 ↑ 20.1 Operating profit before impairment allowances 12,774 13,133 ↓ 2.7 ↑ 24.0 Profit attributable to the equity holders 1
Slide 9: Quality Growth and Solid Financial Position
Quality Growth and Solid Financial Position Solid Deposit Base Healthy Loan Growth Benign Loan Quality HK$ bn +3.4% YTD HK$ bn + 6.8% YTD Classified or impaired loan ratio 1,147 1,185 0.10% 0.10% 699 747 End-Dec 11 End-Jun 12 End-Dec 11 End-Jun 12 End-Dec 11 End-Jun 12 Steady LDR Sound Liquidity Str
Slide 10: Financial Results
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Slide 11: Condensed Income Statement
Condensed Income Statement Encouraging growth in core income and profits* Broad-based growth and prudent cost control HK$ m 1H2012 1H2012 1H2011 1H2011 % %YoY YoY 2H2011 2H2011 % %HoH HoH Net interest income 12,619 10,205 ↑ 23.7 11,774 ↑ 7.2 Net fee and commission income 4,102 3,986 ↑ 2.9 3,847 ↑ 6.
Slide 12: Net Interest Income
Net Interest Income Net interest income increased driven by notable NIM improvement HK$ m 1H2012 1H2012 1H2011 1H2011 % %YoY YoY 2H2011 2H2011 % %HoH HoH Interest income 17,772 15,156 ↑ 17.3 16,775 ↑ 5.9 Interest expense 5,153 4,951 ↑ 4.1 5,001 ↑ 3.0 Net interest income 12,619 10,205 ↑ 23.7 11,774 ↑
Slide 13: Non-interest Income
Non-interest Income Moderate growth in net fee income despite lower stock brokerage income Net trading gain also increased HK$ m 1H2012 1H2012 1H2011 1H2011 % %YoY YoY 2H2011 2H2011 % %HoH HoH Net fee and commission income 4,102 3,986 ↑ 2.9 3,847 ↑ 6.6 Fee and commission income Securities brokerage
Slide 14: Operating Expenses
Operating Expenses Maintaining disciplined cost control Core cost-to-income ratio among the lowest in the local industry Core Core Operating Operating Expenses* Expenses* Number Number of of Branches Branches HK$ m + 11.7% YoY 5,831 5,391 294 299 4,828 1,090 960 (266) (267) 663 Others 864 722 614 78
Slide 15: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Modest net charge of loan impairment HK$ m 1H2012 1H2012 1H2011 1H2011 % %YoY YoY 2H2011 2H2011 % %HoH HoH Advances to customers Net (charge)/reversal of allowances before recoveries - individual assessment (5) 42 ↓ --- (54) ↓ 90.7 - collective assess
Slide 16: Loan Quality
Loan Quality Formation of new classified loans remained at a low level Migration Migration of of Classified Classified Loans Loans HK$ bn +0.37 -0.01 -0.25 -0.07 0.71 0.75 End-Dec 11 Downgrade Upgrade Collection Write-off End-Jun 12 15
Slide 17: Condensed Balance Sheet
Condensed Balance Sheet Decline in asset size due to lower RMB funds of the clearing bank business Balance sheet mix optimised for better profitability and risk profile HK$ m End-Jun 12 End-Jun 12 End-Dec 11 End-Dec 11 % % Change Change Cash and balances with banks and other financial institutions 1
Slide 18: Customer Deposits
Customer Deposits Solid expansion of deposit base Flexible deposit strategy with cautious funding cost control HK$ m End-Jun 12 End-Jun 12 End-Dec 11 End-Dec 11 % % Change Change Demand deposits and current accounts 73,966 77,440 ↓ 4.5 Saving deposits 524,722 504,868 ↑ 3.9 Time, call and notice depo
Slide 19: Advances to Customers
Advances to Customers Successfully seized quality growth opportunities amid slower loan demand in the market HK$ m End-Jun 12 End-Jun 12 End-Dec 11 End-Dec 11 % % Change Change Loans for use in HK - corporate 245,527 237,557 ↑ 3.4 Loans for use in HK - individual 215,066 206,983 ↑ 3.9 Residential mo
Slide 20: Securities Investments
Securities Investments Further optimised investment mix with focus on safety and liquidity while maximising return HK$ m End- End-Jun 12 End-Jun 12 End- End-Dec 11 End-Dec 11 % %Change Change Sovereign 128,551 145,205 ↓ 11.5 Public Sector 39,239 43,252 ↓ 9.3 Corporate entities 54,484 41,576 ↑ 31.0 B
Slide 21: Segmental Performance
Segmental Performance Operating Operating Income Income by by Segments Segments HK$ m 18,165 Personal: Solid growth in mortgages, funds and bonds 570 15,126 sales and credit card business 423 5,291 Corporate: Enhanced service 3,145 capabilities and product innovation drove strong growth 5,785 6,
Slide 22: Mainland Business
Mainland Business Operating income increased mainly driven by net interest income Strengthened deposit base and improved loan structure Operating Operating Income Income Operating Operating Expenses Expenses HK$ m + 32.7% YoY HK$ m + 28.7% YoY 660 876 376 484 1H2011 1H2012 1H2011 1H2012 Deposits Dep
Slide 23: Outlook and Strategy
Qt enw t w BANK OF CHINA RE ee ae FG FR MR BOC, A CENTURY OF GLOBAL SERVICES Outlook and Strategy Ch Sie ae ree (45 AR) ABR ZS BOC HONG KONG (HOLDINGS) LIMITED
Slide 24: Outlook and Strategy
Outlook and Strategy Well-positioned for sustainable growth on the back of our solid financial strengths and enhanced competitiveness Overall market environment in the near term will remain challenging Proactive risk management to contain risks and guard against market volatilities Continue to
Slide 25: 2012 Interim Results
2012 Interim Results 2012.08.23
BOC Hong Kong (Holdings) — H1 2012 Earnings Presentation on 6ix