Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2024 Earnings Presentation
33 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 29, 2024
Slide 1: 2024 Interim Results
2024 Interim Results 29 August 2024
Slide 2: Disclaimer
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, project, target, may or will, o
Slide 3: Agenda
Agenda Financial & Business Results Strategy Review Outlook
Slide 4: Strategy Review
Strategy Review
Slide 5: Solid Growth in Operating Results and Continued Increase in Shareholder Returns
Solid Growth in Operating Results and Continued Increase in Shareholder Returns Operating Profit ROE Profit Attributable to Interim Dividend HK$25.1bn Equity Holders 12.39% +15.2% YoY HK$20.0bn +1.58ppt YoY HK$0.570 per share +17.9% YoY +8.2% YoY 5
Slide 6: Enhancing Service Quality and Efficiency while Deepening Local Market Development
Enhancing Service Quality and Efficiency while Deepening Local Market Development #1 in cumulative number of new residential HK/Macao syndicated loans ranked Number of customers conducting online mortgage loans for 5 consecutive years #1 for 19 consecutive years transactions increased steadily YoY M
Slide 7: Leveraging Financial Collaboration to Consolidate GBA Business Advantages
Leveraging Financial Collaboration to Consolidate GBA Business Advantages Launched “Cross-boundary WMC 2.0” service Sustained leading market positions Loans granted under the “Innovation & Technology and Talent Financing Southbound and Northbound customers rose 50% YTD, Scale of Swap Connect busines
Slide 8: Refining Product and Service Portfolios and Promoting Collaborative Development in the Region
Refining Product and Service Portfolios and Promoting Collaborative Development in the Region Customer Customer Net Operating Non-performing Deposits Loans Income Loan Ratio Remained focused on Belt and Road cooperation and “Going Global” projects, as well as regional large corporates Actively led a
Slide 9: Strengthening RMB Business Foundations while Supporting Offshore Market Development
Strengthening RMB Business Foundations while Supporting Offshore Market Development +32% +17% RMB 374tn/+95% RMB Customer RMB Customer HK’s RMB Clearing Volume* Accounted for Loans Deposits ~80% of the Global Offshore Total RMB clearing volumes of BOC Malaysia and the Manila Branch grew by 71% and 2
Slide 10: Deepening Digital Transformation to Drive High-quality and Sustainable Development
Deepening Digital Transformation to Drive High-quality and Sustainable Development Focused on home purchasing, education and health scenarios, with highest daily Open API usage exceeding 400,000, up 30% Over 180,000 cumulative downloads of “Home Expert” app BoC Pay customers up 9%, BoC Bill settleme
Slide 11: Writing the Next Chapter for Green Finance and Nurturing New Drivers for Sustainable Development
Writing the Next Chapter for Green Finance and Nurturing New Drivers for Sustainable Development Green & Sustainable Number of ESG ESG Bond Development Loans Funds Investments Acted again as joint global coordinator for the HKSAR Government's issuance of global multi- currency digital green bonds Ap
Slide 12: Financial & Business Results
Financial & Business Results
Slide 13: Consistently Favourable Operating Results
Consistently Favourable Operating Results HK$m 3,829 86 583 (269) 20,463 (912) (130) (806) 18,082 (+15.3%) (+1.8%) (+62.3%) (+3.4%) (+78.0%) (+78.3%) (+22.6%) (+13.2%) 1H23 Net Net Fee & Other Operating Impairment Net Loss from Taxation 1H24 Profit after Interest Commission Non- Expenses Allowances
Slide 14: Market Outperformance in Loans and Deposits
Market Outperformance in Loans and Deposits Market Share in Deposits Rose to 15.71% Market Share in Loans Expanded to 16.46% HK$m HK$m 2,649,697 Loans for Use in HK - 673,816 2,564,722 2,503,841 Corporates -1.4% Loans for Use in HK - 581,835 Individuals +2.2% Loans for Use 394,024 47.4% 44.2% 45.5%
Slide 15: Satisfactory Growth in Net Interest Income
Satisfactory Growth in Net Interest Income YoY Increase in Net Interest Margin Continual Growth in Net Interest Income HK$m 1H23: 1.56% 2H23: 1.70% 1H24: 1.61% HK$m 3,580,673 1.72% 1.68% 1.62% 1.61% 1.62% 3,226,086 1.50% 14,495 15,004 14,520 28,817 YoY 14,297 13,121 24,988 +11.0% 11,867 YoY +15.3% 1
Slide 16: Steady Rebound in Fee Income
Steady Rebound in Fee Income + 1.8% 5,000 HK$m 4,914 4,253 + 17.6% 3,506 3,563 3,332 1,550 1,662 1,466 1,386 1,352 947 1H23 2H23 1H24 Net Fee and Commission Income Non-Credit Related Business: Traditional Fee Services Investment and Insurance-Related Businesses Credit-Related Business: Loan Commissi
Slide 17: Consistently Healthy Cost Efficiency
Consistently Healthy Cost Efficiency Satisfying Basic Needs and Consistently Outperforming the Prioritising Key Strategies Market in Cost-to-income Ratio HK$m 70 (40) (34) 38.8% * 273 8,121 38.1% 7,852 25.5% 23.0% 1H23 Staff Premises & Depre- Others 1H24 1H23 1H24 Costs Equipment ciation & Amorti- M
Slide 18: Manageable Asset Quality Risk
Manageable Asset Quality Risk Stable Non-performing Loan Ratio Strengthening Provision Base HK$m 1.79% * 1,080 2,067 1.56% 1H24 412 0.25% 575 1.05% 1.06% 1,066 1,225 1H23 588 0.14% (429) 2023.12 2024.06 Net Charge of Impairment Allowances - Advances and Other Accounts Market Average BOCHK Credit Cos
Slide 19: Solid Capital and Liquidity Levels
Solid Capital and Liquidity Levels Solid Capital Levels Enhancement in Liquidity 250.58% Total 22.17% Capital Ratio 223.79% +0.99 ppt 207.12% 193.47% Tier 1 20.05% Capital Ratio +1.03 ppt 138.67% 137.28% 140.36% 140.96% CET 1 20.05% Capital Ratio +1.03 ppt 3Q23 4Q23 1Q24 2Q24 2023.12 2024.06 NSFR (Q
Slide 20: Outlook
OreeeeEyenes Outlook
Slide 21: Second Half Outlook
Second Half Outlook • Global political and economic landscape is expected to undergo fresh changes • Uncertainties persist in the direction of monetary policy changes among major economies Challenges • Ongoing challenges for banks in balancing business growth with effective risk management • Chinese
Slide 22: Key Priorities in the Second Half
Key Priorities in the Second Half Develop capital-light products Refine regional management Promote steady and prudent Enhance collaboration as new growth drivers mechanism and tap new market RMB internationalisation and integrated operations opportunities and connectivity schemes Quantify transform
Slide 23: Appendices
PSR re (2) ARS] BOC HONG KONG (HOLDINGS) LIMITED Appendices
Slide 24: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 1H2024 1H2023 Change Net interest income* 28,817 24,988 15.3% Net fee and commission income 5,000 4,914 1.8% Other non-interest income* 1,519 936 62.3% Net operating income before impairment allowances 35,336 30,838 14.6% Ope
Slide 25: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates (HK$m / %) 1H2024 1H2023 Assets Average balance Average yield Average balance Average yield Balances and placements with banks 627,359 1.81% 376,321 2.07% and other financial institutions Debt securities investments and other debt instruments 1,280,523 3.9
Slide 26: Fee and Commission Income
Fee and Commission Income HK$m 1H2024 1H2023 Change Loan commissions 1,352 1,466 -7.8% Credit card business 1,229 1,185 3.7% Securities brokerage 962 952 1.1% Trust and custody services 431 380 13.4% Payment services 364 345 5.5% Insurance 360 327 10.1% Funds distribution 323 254 27.2% Currency exch
Slide 27: Operating Expenses
Operating Expenses HK$m 1H2024 1H2023 Change Staff costs 5,351 5,078 5.4% Premises & equipment expenses 733 663 10.6% Depreciation and amortisation 1,436 1,476 -2.7% Others 1,193 1,170 2.0% Less: Costs directly attributable to insurance contracts (592) (535) 10.7% Total operating expenses 8,121 7,85
Slide 28: Customer Deposits
Customer Deposits HK$m 2024.06 2023.12 Change Total deposits from customers 2,649,697 2,503,841 5.8% CASA 1,206,787 1,187,479 1.6% Demand deposits and current accounts 230,597 216,366 6.6% Savings deposits 976,190 971,113 0.5% Time, call and notice deposits 1,431,501 1,314,203 8.9% Structured deposi
Slide 29: Advances to Customers
Advances to Customers HK$m 2024.06 2023.12 Change Loans for use in Hong Kong - industrial, commercial and financial 673,816 683,604 -1.4% Property development 169,324 188,115 -10.0% Property investment 94,174 95,384 -1.3% Financial concerns 19,034 16,506 15.3% Stockbrokers 2,294 1,196 91.8% Wholesal
Slide 30: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2024.06 2023.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,654,945 27,461 18,097 1,700,503 1,662,596 21,046 17,797 1,701,439 Pass 1,653,100 18,442 - 1,671,542 1,659,557 1
Slide 31: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total HK$m Total loans and O/W: for use in Debt securities sheet exposure exposure Subtotal advances Mainland and others Central government, central government-owned entities and their subsidiaries and joint ventures 264,147 57,461 80
Slide 32: Loan Exposure to Property Companies
Loan Exposure to Property Companies As at end of June 2024, commercial real-estate (CRE) related loans to corporates amounted to HK$351.6bn, down 4.3% from the end of 2023; accounting for 20.7% of Group’s total loans, down 0.9ppt Loan for use in HK, Mainland, SEA and other regions accounted for 75%,
Slide 33: BOC Life Business Development
BOC Life Business Development HK$m 1H2024 1H2023 Change MOODY’S A1 Standard new premium 11,100 6,208 +78.8% STANDARD A Value of new business (VNB) 1,600 1,050 +52.4% &POOR’S Rose to #2 in overall market, ranked #1 in RMB insurance (1Q24) Leading position maintained in e-channel and QDAP sales Overal
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