Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2010 Earnings Presentation
28 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 26, 2010
Slide 1: 2010 Interim Results
2010 Interim Results 2010.08.26
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. Yingxin Gao Executive Director & Deputy Chief Executive Mr. Chengwen Zhuo Chief Financial Officer Mr. David Wong Deputy Chief Executive 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook and Strategy 3
Slide 5: Key Performance Highlights
Key Performance Highlights Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: Operating Environment
Operating Environment Despite improvement in global economy, operating conditions remained challenging Interest rates stayed low Intensified competition from local banking sector affected margins Further relaxation of offshore RMB business created good business opportunities 5
Slide 7: Performance Overview
Performance Overview Balanced approach to capture quality growth Proactive business and risk management to deliver quality growth Good progress in strategic focuses to capture emerging opportunities Strong financial strength to support business development 6
Slide 8: Leading Role in RMB Business
Leading Role in RMB Business z Appointed as the Clearing Bank to provide RMB cashnotes services for the Taiwan region Jul 2010 z Sole bookrunner & lead managing bank of first RMB Corporate Bond z Launched first RMB Life Insurance Product Jun 2010 z Conducted 34 cross-border RMB trade settlement tran
Slide 9: Business Highlights
Business Highlights Maintained growth momentum in core businesses Loans Loans Deposits Deposits Total Total Fee Fee Income Income Investment & Insurance % - Classified or impaired loan ratio Traditional banking business HK$ bn + 11.0% YTD HK$ bn + 5.7% YTD HK$ m + 15.4% YoY 893 571 844 4,481 515
Slide 10: Key Financial Highlights
Key Financial Highlights HK$m 1H2010 1H2009 2H2009 1H2010 1H2009 2H2009 % %YoY YoY % %HoH HoH Net operating income before impairment allowances 12,541 13,028 13,027 ↓ 3.7 ↓ 3.7 Operating profit before impairment allowances 8,007 8,834 5,080 ↓ 9.4 ↑ 57.6 Profit attributable to shareholders 7,190 6,69
Slide 11: Strong Capital Position
Strong Capital Position Strong capital position supports sustainable growth Capital Capital Adequacy Adequacy Ratio Ratio Total Total Assets Assets Tier 1 Tier 2 HK$bn + 7.4% YTD 16.17% 16.85% 5.21% 1,302 4.84% 1,213 11.33% 11.64% End-Jun 10 End-Dec 09 End-Jun 10 End-Dec 09 10
Slide 12: Financial Results
Financial Results Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 13: Condensed Income Statement
Condensed Income Statement Profit attributable to shareholders improved YoY and HoH HK$ m 1H2010 1H2010 1H2009 1H2009 2H2009 % 2H2009 %YoY YoY % %HoH HoH Net interest income 8,964 9,014 8,918 ↓ 0.6 ↑ 0.5 Net fee and commission income 3,397 2,947 3,561 ↑ 15.3 ↓ 4.6 Other operating income 180 1,067 54
Slide 14: Net Interest Income
Net Interest Income Stable net interest income Growth in average interest earning assets offset NIM pressure HK$ m 1H2010 1H2010 1H2009 1H2009 2H2009 2H2009 % %YoY YoY % %HoH HoH Interest income 10,671 11,331 10,353 ↓ 5.8 ↑ 3.1 Interest expense 1,707 2,317 1,435 ↓ 26.3 ↑ 19.0 Net interest income 8,9
Slide 15: Net Fee and Commission Income
Net Fee and Commission Income Solid fee income contribution underpinned by broad-based growth in traditional banking businesses HK$ m 1H2010 1H2010 1H2009 1H2009 2H2009 2H2009 % %YoY YoY % %HoH HoH Investment and insurance fee income Securities brokerage (Stockbroking) 1,506 1,625 2,013 ↓ 7.3 ↓ 25.2
Slide 16: Non-interest Income
Non-interest Income Non-interest income decreased mainly due to lower net trading income HK$ m 1H2010 1H2009 2H2009 % %YoY % 1H2010 1H2009 2H2009 YoY %HoH HoH Net fee and commission income 3,397 2,947 3,561 ↑ 15.3 ↓ 4.6 Other operating income - Banking operation 544 1,295 791 ↓ 58.0 ↓ 31.2 Net tradi
Slide 17: Operating Expenses
Operating Expenses Maintained prudent cost management Operating expenses increased YoY from a lower base in 1H09 Operating Operating Expenses Expenses Number Number of of Branches Branches HK$ m 7,947 293 (269) 296 (272) 3,968 Others 4,534 4,194 Depreciation End-Jun 2010 End-Dec 2009 878 904 522 556
Slide 18: Net reversal / (charge) of Impairment Allowances
Net reversal / (charge) of Impairment Allowances Net reversal of impairment allowances due to improved loan quality and write-back of securities provisions HK$ m 1H2010 1H2009 1H2010 1H2009 2H2009 2H2009 % %YoY YoY % %HoH HoH Advances to customers Individual assessment - Net reversal/(charge) of all
Slide 19: Loan Quality
Loan Quality Sound risk management and customer optimisation translated into solid loan quality Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn -11 bps YTD 0.34 0.23 +0.17 -0.03 -0.40 -0.19 1.77 1.32 End-Jun 201
Slide 20: Condensed Balance Sheet
Condensed Balance Sheet Robust growth in total assets with increased balances in higher yielding assets HK$ m 30.06.2010 30.06.2010 31.12.2009 31.12.2009 % % Change Change Total assets 1,302,176 1,212,791 ↑ 7.4 Cash and balances with banks and other financial institutions 169,554 160,788 ↑ 5.5 Place
Slide 21: Advances to Customers
Advances to Customers Maintained strong growth momentum and continued to optimise business structure HK$ m 30.06.2010 31.12.2009 % 30.06.2010 31.12.2009 %Change Change Loans for use in HK - corporate 256,389 224,261 ↑ 14.3 Loans for use in HK - individual 160,792 157,133 ↑ 2.3 Residential mortgages*
Slide 22: Customer Deposits
Customer Deposits Effective deposit strategy to support the growth of our business HK$ m 30.06.2010 30.06.2010 31.12.2009 31.12.2009 % %Change Change Demand deposits and current accounts 67,122 65,440 ↑ 2.6 Saving deposits 473,492 495,512 ↓ 4.4 Time, call and notice deposits 351,597 281,369 ↑ 25.0 S
Slide 23: Securities Investments
Securities Investments Proactive investment strategy to optimise portfolio mix amid market volatility 30.06.2010 30.06.2010 31.12.2009 31.12.2009 % %Change Debt Debt securities securities by bycredit credit rating HK$ m Change rating 1% Sovereign 93,557 76,824 ↑ 21.8 Public Sector 37,739 34,529 ↑ 9.
Slide 24: Segmental Performance
Segmental Performance Operating Operating Income Income by by Segments Segments HK$ m Personal: Steady growth in 12,541 13,028 13,027 mortgage. Encouraging 216 255 performance in credit cards 210 2,658 business 2,376 3,746 Corporate: Robust growth on 4,346 solid customer relationship and 4,459 3
Slide 25: Mainland Business
Mainland Business Continued to enhance business platform to drive growth HK$ m 1H2010 1H2010 1H2009 1H2009 2H2009 2H2009 % %YoY YoY % %HoH HoH Operating income 521 466 496 ↑ 11.8 ↑ 5.0 Operating expenses 284 237 329 ↑ 19.8 ↓ 13.7 Operating profit before impairment 237 229 167 ↑ 3.5 ↑ 41.9 Profit bef
Slide 26: Outlook and Strategy
Outlook and Strategy Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 27: Outlook and Strategy
Outlook and Strategy Proactive Proactive and and balanced balanced approach approach for for long-term long-term sustainable sustainable growth growth Maintain financial strength to capture business opportunities and sustain growth Adopt proactive approach to ensure good balance of growth and ri
Slide 28: 2010 Interim Results
2010 Interim Results 2010.08.26
BOC Hong Kong (Holdings) — H1 2010 Earnings Presentation on 6ix