Boc Hong Kong (holdings) Limited · HKEX:2388

Boc Hong Kong (holdings) — H1 2007 Earnings Presentation

31 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 23, 2007

  1. Slide 1: 2007 Interim Results

    2007 Interim Results 23 August 2007

  2. 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

  3. 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. Peter Liu Chief Information Officer 2

  4. Slide 4: Agenda

    Agenda „Key Performance Highlights „Financial Results „Outlook 3

  5. Slide 5: Key Performance Highlights

    EMCO AEE HEIN 20 PNR Key Performance Highlights Oh SR ee re (12 AR) APR By BOC HONG KONG (HOLDINGS) LIMITED J

  6. Slide 6: Strong Operating Results

    Strong Operating Results Net NetOperating OperatingIncome Income Operating OperatingProfit Profit before beforeLoan LoanImpairment ImpairmentAllowances Allowances before beforeLoan LoanImpairment ImpairmentAllowances Allowances HK$ m HK$ m % YYooYY .77% ++1144. YYooYY % .55% ++1144. 12,060 8,642 10,

  7. Slide 7: ROE & ROA

    ROE & ROA ROE ROE ROA ROA --00..331 --00..002 1pppp Y 2pppp Y YooY Y YooY Y 17.32% 1.59% 1.57% 17.63% 1.53% 16.69% 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 2006 2H 2006 1H 2007 1H 2006 2H 2006 1H 2007 ROE before impairment allowances ROA before impairment allowances 18.75% 17.3

  8. Slide 8: Record High Interim Profit & Dividend

    Record High Interim Profit & Dividend Profit ProfitAttributable Attributableto toShareholders Shareholders Dividend Dividendper perShare Share HK$ m HK$ % YYooYY 3% ++55..3 % YYooYY 7% ++66..7 7 ,4 6 6 7,093 6,914 0.428 0.401 1900年 1月 1日 1900年 1月 2日 1900年 1月 3日 1H 2006 2H 2006 1H 2007 1H 2006 1H 200

  9. Slide 9: Operating Environment

    Operating Environment External External „ Buoyant economy driven by z Private consumption underpinned by favourable labour market conditions z Growth in export of goods and services z Financial market boom fueled by robust stock trading and IPO activities z Revived property market „ Higher HIBORs, n

  10. Slide 10: Encouraging Income Growth

    Encouraging Income Growth Net Net Interest Interest Income Income Net Net Fees Fees & & Commission Commission Income Income HK$ m HK$ m % YYooYY Y YooYY .77% .55% ++1188. ++4499. % 8,903 2,632 8,332 1,761 1,956 7,503 1H 2006 2H 2006 1H 2007 1H 2006 2H 2006 1H 2007 9

  11. Slide 11: Other Business Highlights

    Other Business Highlights „ Robust growth in loans and advances (+13.2%) (Excluding (Excluding IPO IPO financing: financing: +8.7%) +8.7%) z Both SME loans loans and and Trade finance recorded double-digit growth double-digit growth „ Growth in customer deposits (+15.9%) (Excluding (Excluding IPO IP

  12. Slide 12: Further Improvement in Asset Quality

    Further Improvement in Asset Quality Classified Classified and and Impaired Impaired LLoan oan Ratio Ratio fell fell to to 0.41% 0.41% 0.57% 0.43% 0.41% (Ex-IPO financing) End-Dec 2006 End-Jun 2007 Note : Classified and impaired loans represent loans which are either classified as “substandard”, “do

  13. Slide 13: Sound Capital Strength

    Sound Capital Strength CAR CAR maintained maintained at at healthy healthy level level of of 14.29% 14.29% Restated as per Basel II Basel I* 15.72% 14.29% 13.93% 1900年 1月 1日 1900年 1月 2日 End-Dec 2006 End-Jun 2007 Note : Capital adequacy ratio at 30 June 2007 is calculated in accordance with the Banki

  14. Slide 14: Financial Results

    Financial Results naseiemamag GO. BOC HONG KONG (HOLDINGS) LIMITED He x —

  15. Slide 15: Condensed Income Statement

    Condensed Income Statement Strong operating results driven by both net interest income and net fees and commission income HK$ m 1H 1H2007 2007 2H 2H2006 2006 1H 1H2006 2006 % %YoY YoY % %HoH HoH Net interest income 8,903 8,332 7,503 ↑ 18.7 ↑ 6.9 Net fees and commission income 2,632 1,956 1,761 ↑ 49.

  16. Slide 16: Key Financial Ratios

    Key Financial Ratios Change Change Change Change 1H 1H2007 2007 2H 2H2006 2006 1H 1H2006 2006 YoY HoH ROE before impairment YoY HoH allowances 20.05% 17.39% 18.75% ↑ 1.30pp ↑ 2.66pp ROE 17.32% 16.69% 17.63% ↓ 0.31pp ↑ 0.63pp ROA before impairment allowances 1.78% 1.57% 1.66% ↑ 0.12pp ↑ 0.21pp ROA 1.

  17. Slide 17: Higher Net Interest Income and Enhanced NIM

    Higher Net Interest Income and Enhanced NIM Improved NII driven by rising market interest rates, increase in average interest-earning assets and effective asset-liability management 1H 1H2007 2007 2H 2H2006 2006 1H 1H2006 2006 % %YoY YoY % %HoH HoH HK$ m Interest income 21,484 20,868 19,403 ↑ 10.7 ↑

  18. Slide 18: Growth in Net Fees and Commission Income

    Growth in Net Fees and Commission Income Growth in investment and insurance fee income driven by phenomenal increase in stock brokerage and asset management fee Net Net Fees Fees and and Commission Commission Income Income 1H 1H 2007 2007 2H 2H 2006 2006 1H 1H 2006 2006 % %YoY YoY % %HoH HoH HK$ m I

  19. Slide 19: Steady Rise in Non-interest Income

    Steady Rise in Non-interest Income Strong growth in net fees and commission income offset by decline in other operating income Non-interest Income Non-interest Income 1H 1H2007 2007 2H 2H2006 2006 1H 1H2006 2006 % %YoY YoY % %HoH HoH HK$ m Net fees and commission income 2,632 1,956 1,761 ↑ 49.5 ↑ 34

  20. Slide 20: Effective Cost Management

    Effective Cost Management Stable cost-to-income ratio YoY Higher operating expenses due to HR and IT investments Operating Operating Expenses Expenses Branch Branch Number Number HK$ m 3,587 3,418 302 (287)* (287)* 304 (289)* (289)* 2,971 564 519 Others 348 451 373 D epreciation 323 494 417 374 P re

  21. Slide 21: Release of Loan Impairment Allowances

    Release of Loan Impairment Allowances Lower net loan impairment release as recoveries and releases reduced New collective assessment allowances increased as loan portfolio expanded HK$ m 1H 1H 2007 2007 2H 2H 2006 2006 1H 1H 2006 2006 % % YoY YoY % % HoH HoH Loan impairment release/(charge) Individu

  22. Slide 22: Continued Improvement in Asset Quality

    Continued Improvement in Asset Quality Classified and impaired loan ratio dropped to record low of 0.41% (Excluding IPO financing: 0.43%) Classified Classified and and Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn 0.57 +0.3 -0.1 0.41 -0.

  23. Slide 23: Condensed Balance Sheet

    Condensed Balance Sheet Total assets expanded on the back of strong deposits growth and IPO funds 30.06.2007 30.06.2007 31.12.2006 31.12.2006 % % Change Change HK$ m Total assets 1,047,095 928,953 ↑ 12.7 Cash and balances with banks and other financial institutions 122,768 105,236 ↑ 16.7 Placements

  24. Slide 24: 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 30.06.2007 30.06.2007 31.12.2006 31.12.2006 % %Change Change Loans Loans by bycurrency currencymix mix Loans for use in HK - co

  25. Slide 25: Higher Customer Deposits

    Higher Customer Deposits Strong deposits growth with sharp increase in demand deposits boosted by active IPO activities 30.06.2007 31.12.2006 % Deposits Deposits by bycurrency currencymix 30.06.2007 31.12.2006 %Change Change mix HK$ m Demand deposits and current accounts 115,443 30,979 ↑ 272.6 Savin

  26. Slide 26: Profit Contribution by Business Segment

    Profit Contribution by Business Segment Solid growth in Retail and Corporate business segments Decline in Treasury due to lower net trading income Segment contribution to Operating profit before impairment pre-tax profit HK$ m HK$ m 417 .7% +32 (4.5%) 4,188 -14 .8% .4 % 3,156 +21 2,22 2,221 2,606 (2

  27. Slide 27: Mainland Business

    Mainland Business Strong growth in operating profit before impairment Total advances and customer deposits improved with strong growth in RMB advances (+42.8% YTD) Combined Combined profit profit and and loss loss account account of of 14 14 Mainland Mainland branches branches HK$ m 1H 1H 2007 2007

  28. Slide 28: Outlook

    Outlook naseiemamag GO. BOC HONG KONG (HOLDINGS) LIMITED He * —

  29. Slide 29: Outlook

    Outlook „ Robust local economy driven by domestic demand „ Keen competition in both local and offshore businesses „ Strong China economy despite further tightening measures „ Cautious to the resurgence of financial market volatility and rising operating costs 28

  30. Slide 30: Business focuses

    Business focuses „ To accelerate China business expansion following the completion of the incorporation of NCB China which is scheduled to commence operation before the end of the year „ To maintain our lead in core businesses and to expand the high-yielding loans e.g. SMEs high-yielding SMEs,, trad

  31. Slide 31: 2007 Interim Results

    2007 Interim Results 23 August 2007

BOC Hong Kong (Holdings) — H1 2007 Earnings Presentation on 6ix