Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2004 Earnings Presentation
24 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 19, 2004
Slide 1: 2004 Interim Results
2004 Interim Results 19 August 2004
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: Agenda
Agenda Market Analysis & Key Performance Highlights Financial Results and Operating Performance Strategic Focus and Outlook in 2004 2
Slide 4: Market Analysis & Key Performance Highlights
Market Analysis & Key Performance Highlights
Slide 5: Operating Results
Operating Results Profit Attributable to Shareholders increased by 85.3% Dividend per Share increased by 64.1% Profit Profit Attributable Attributable to to Shareholders Shareholders Dividend Dividend per per Share Share HK$ mm HK$ Y Yo HoH 1 % 1 2 .7 % 64. / Y oY % 85.3 5,581 0.32 0.32 4,951 0.20 3
Slide 6: Operating Environment in 1H2004
Operating Environment in 1H2004 Broad-based economic recovery Improved credit Rebound in property market environment Employment situation improved Ample interbank liquidity Persistently low Average 1-month HIBOR fell to 0.11% in 1H2004 HIBOR from 1.36% in 1H2003 Low deposit rates Strong
Slide 7: Stronger Foundations - Key Achievements
Stronger Foundations - Key Achievements 60% of Special Committee’s recommendations completed Corporate Governance Appointment of Chief Operating Officer Business Increased contribution from non-interest income Structure Captured new growth potential outside Hong Kong 134% growth in wealth
Slide 8: Stronger Foundations - Key Achievements (Cont'd)
Stronger Foundations - Key Achievements (Cont’d) Maintained leading position in local syndicated lending Continued de-risking strategy Corporate Banking Improved loan quality, strong collection and recovery Gradual enhancement of SME portfolio Maximized opportunity from interest rate hike
Slide 9: Higher ROE & ROA
Higher ROE & ROA 1H2004 2H2003 1H2003 % ROA 1.48 1.32 0.82 ROE 18.19 16.70 10.56 NIM 1.56 1.75 1.89 Non-interest incom e ratio 31.33 25.27 25.49 Cost to incom e ratio 33.24 35.18 30.52 NPL ratio 4.11 5.78 7.80 Loan to deposit ratio 54.69 51.38 54.89 Average liquidity ratio 34.64 37.76* 37.93 Capital
Slide 10: Financial Results and Operating Performance
Financial Results and Operating Performance
Slide 11: Profit and Loss Account
Profit and Loss Account Increase in non-interest income and provision write-back offset the fall in net interest income, resulting in a significant increase in operating profit 1H2004 1H2004 2H2003 2H2003 1H2003 1H2003 HoH HoH YoY YoY HK$ mm % % Operating income 8,023 8,417 8,836 (4.7) (9.2) Operati
Slide 12: Balance Sheet
Balance Sheet Managed balance sheet to position for rising interest rates 30.6.2004 31.12.2003 % % change change HK$ mm Total assets 752,017 762,587 -1.4% Cash and short-term funds 126,705 134,106 -5.5% Inter-bank placements 78,753 78,240 0.7% CDs held 18,837 18,776 0.3% Investments in securities 16
Slide 13: Narrowing Net Interest Margin
Narrowing Net Interest Margin Challenging environment with low interest rate, intense competition and weak loan demand 1H2004 2H2003 1H2003 Challenges Challenges HK$ mm Significant fall Interest incom e 7,304 8,401 9,358 in HIBOR (1H04: Interest expense 1,795 2,111 2,774 0.11%; 1H03: Net interest
Slide 14: Strong Growth in Income from Wealth Management
Strong Growth in Income from Wealth Management Other Other Operating Operating Income Income Income Income from from Wealth Wealth Management Management HK$ mm HK$ mm . 7% HoH 1 % YoY / 1 133.7 / 18. 2% HoH 175 YoY 11.6% 141 129 Sale of funds 224 56 127 Life insurance 259 662 Stockbroking 651 248 82
Slide 15: Maintained Low Cost to Income Ratio through Disciplined Cost Controls
Maintained Low Cost to Income Ratio through Disciplined Cost Controls Increased operational efficiency and disciplined cost management Operating Operating Expenses Expenses Branch Branch Number Number HK$ mm 35.2% 33.2% 30.5% 320 304 302 567 432 401 322 289 293 309 423 346 June 2003 Dec 2003 June 20
Slide 16: Write-Back of Provisions
Write-Back of Provisions Lower classified loan formation, strong collection and recovery reflecting continuous improvement in loan quality Credit Credit charge charge and and NPL NPL ratio ratio HK$ mm 1H2004 2H2003 1H2003 Specific provisions - new provisions (811) (1,297) (2,537) - releases 1,327 2
Slide 17: Strong Growth in Mortgages and Overseas Lending
Strong Growth in Mortgages and Overseas Lending Strong growth in residential mortgage and overseas lending offset by large collections and write-offs 30.6.2004 31.12.2003 % change HK$ mm Loans for use in HK - corporate 149,360 157,660 -5.3% Loans for use in HK - individual 123,421 119,390 3.4% Resid
Slide 18: Significant Improvement in Asset Quality
Significant Improvement in Asset Quality NPL ratio further declined to 4.1% NPL NPL // Classified Classified Loans Loans Ratio Ratio Asset Asset Quality Quality % NPL 30.6.2004 31.12.2003 7.8 7.8 HK$ mm Classified loan ratio General Provisions 5,415 5,406 Specific Provisions 3,410 5,507 5.8 5.8 NPLs
Slide 19: Satisfactory Performance in Mainland Branches
Satisfactory Performance in Mainland Branches Organic growth driven by significant increase in loans Combined Combined profit profit and and loss loss account account of of 14 14 Mainland Mainland branches branches Classified Classified loan loan ratio ratio 1H04 2H03 1H03 HoH YoY HK$ mm % % 451 bps
Slide 20: Strategic Focus and Outlook
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Slide 21: Our Vision, Mission and Values
Our Vision, Mission and Values We have set out clear vision and key strategies Vision To be customer’s premier bank Build customer satisfaction and Customers provide quality and professional services Mission Offer rewarding career opportunities Staff and develop staff commitment Create value and del
Slide 22: Strategies Remain Intact Targeting on Revenue Growth
Strategies Remain Intact Targeting on Revenue Growth Unleash Grow consumer Target SMEs China credit and wealth and trade business management finance potential Solidify our leading market positions in traditional retail and corporate banking businesses Optimise asset and liability structure in a risi
Slide 23: Outlook – 2H2004
Outlook – 2H2004 Challenging operating environment Strive to resume top-line growth Credit environment remains good 22
Slide 24: 2004 Interim Results
2004 Interim Results 19 August 2004
BOC Hong Kong (Holdings) — H1 2004 Earnings Presentation on 6ix