Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2021 Earnings Presentation
35 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 30, 2021
Slide 1: 2021 Interim Results
2021 Interim Results oh ER rs (42 AR) A PR BOC HONG KONG (HOLDINGS) LIMITED y 30 August 2021
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: Strategy Review, Financial & Business Results, Outlook
01 02 03 Strategy Review Financial & Business Results Outlook
Slide 4: Strategy Review
PERS (12) ARAB] BOC HONG KONG (HOLDINGS) LIMITED : © Va Strategy Review
Slide 5: Operating profit before impairment allowances rebounded HoH
Operating profit before impairment allowances rebounded HoH* HK$13.6bn HK$mn Profit after taxation -17.4% 21,154 YoY 16,973 17,468 8.42% Return on average shareholders’ equity +2.9% HoH HK$0.447 Interim dividend per share 1H2020 2H2020 1H2021 *After excluding the impact of disposal gain of debt secu
Slide 6: Personal Banking, Corporate Banking, Financial Markets
Personal Banking Corporate Banking Financial Markets Mid to high-end customers: Cemented market-leading position: Captured market opportunities, Wealth management income: +33% HK/Macao syndicated loan, RMB transaction volume for clients: Asset under management: +18% IPO receiving bank business +34%
Slide 7: Cross-border Remittance & Payment, Financial Intermediation, Wealth Management Connect
Cross-border Remittance & Payment Financial Intermediation Remittance amount under A/C Opening service Support customers’ cross-border business +142% with total transactions +119% needs, with GBA loans +8% Launched GBA Youth Card to provide young people with integrated services Wealth Management Con
Slide 8: Southeast Asian entities
Laos Myanmar Customer deposits Customer loans Thailand Philippines Cambodia Vietnam HK$ 62.6bn HK$ 55.5bn +9.4% YTD +2.6% YTD Malaysia Brunei Net operating income NPL ratio Indonesia HK$ 1,289mn 1.75% -1.2% YoY -0.15pp YTD Remark: Customer deposits, customer loans and net operating income represent
Slide 9: RMB deposits, RMB loans, RMB clearing
+27.6% +14.1% +23.6% RMB clearing RMB deposits RMB loans transaction volume* • Appointed Managing Director of RMB Business and established a flexible organisation to steer RMB business development • Strengthened intra-group collaboration to expand business scenarios for offshore RMB financing, payme
Slide 10: Enhance digital infrastructure, expand digital application, enrich digital service scenarios
Enhance digital infrastructure Expand digital application Enrich digital service scenarios ▪ Mobile banking: registered customers ▪ Newly launched online WM services such ▪ Launched online real-time property +7.8%; transaction volume +60% as RM Chat, online investment, online valuation API with cumu
Slide 11: Green financing, caring for society, social recognition
Green/Sustainable loans: +1.6x Green deposits: took HK$1.9bn Launched BOCHK All-Weather ESG Multi-Asset Fund, the first ESG fund with RMB share class in Hong Kong market Green financing Successfully issued a total of RMB1.5bn of Sustainable and Smart Living themed green bonds Approx. 30% market shar
Slide 12: Financial & Business Results
02 Financial & Business Results
Slide 13: Operating Environment Weighed on Earnings
Operating Environment Weighed on Earnings Profit after taxation HK$13.6bn HK$m 1,222 447 13,591 184 7 485 16,161 (3,564) (1,351) 1H2020 Net Net fee Other Impairment Operating Net gain/(loss) Taxation 1H2021 interest income non- allowances expenses from disposal & others of/fair value income* interes
Slide 14: Enhanced Deposit Mix
Enhanced Deposit Mix Customer deposits* up 5.2% Increase in market share* HK$m 2,295,051 2,182,594 Market share* 15.21% CASA* Up 0.22 ppt Balance: 68.8% +8.3% 66.8% 2020.12 2021.06 Time and other deposits Current and saving Deposit market share deposits* (CASA) * Adjusted for IPO-related impact 14
Slide 15: Solid Customer Loan Growth
Solid Customer Loan Growth Customers loan* up 6.1% Increase in market share* Loans for use in HK – 588,494 corporate* +9.1% Market share* 13.99% Loans for use in HK - 468,957 up 0.23 ppt individuals +3.8% 448,465 Loans for use outside HK +1.9% Trade financing 83,850 +26.1% HK$m 2020.12 2021.06 Loan
Slide 16: Stabilising Margin Levels
Stabilising Margin Levels Margin* impacted by market interest rates Steady AIEA Growth 1H20: 1.50% 2H20: 1.16% 1H21: 1.10% HK$m 2,977,664 2.0% 2,823,333 2,651,178 1.5% 1.61% +12.3% YoY 1.39% 1.0% 1.17% 1.16% 19,818 1.11% 1.09% 0.5% 16,556 16,254 0.0% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 1H20 2H20 1H21 Net
Slide 17: Strong Net Fee Income Growth
Strong Net Fee Income Growth Net fee income up 22.5% YoY Growth efforts paid off HK$m 6,657 Drove wealth business growth 5,435 5,407 Mid to high-end customers +18% YoY 1,793 1,389 921 Inv. & insurance commissions +26.4% 3,014 3,441 2,722 Traditional business underpinned by 2,687 2,782 2,882 economic
Slide 18: Good Operating Efficiency
Good Operating Efficiency Flattish operating expenses Cost to income ratio outperformed market HK$m * (14) (27) 49.2% 5 29 42.0% 30.3% 26.4% 7,589 7,582 Staff Premises & Depre- Others 1H2020 1H2021 1H2020 ciation 1H2021 costs equipment & amorti- sation Market average BOCHK Data source: Hong Kong Mon
Slide 19: Solid Asset Quality
Solid Asset Quality Manageable asset quality risk Prudent level of provisions HK$m HK$m 0.32% 0.18% 0.15% 0.16% 0.27% 10,200 9,172 1,311 1,178 1,197 408 72 429 733 229.64% 200.91% 831 682 504 67 -40 2020.12 2021.06 1H2020 2H2020 1H2021 Net charge of impairment allowances NPL provision coverage ratio
Slide 20: Adequate Capital and Liquidity
Adequate Capital and Liquidity Sufficient capital Sound liquidity positions 134.15% Total 19.79% 131.87% capital ratio 120.31% 121.70% - 2.31ppt Tier 1 17.61% capital ratio - 2.06ppt CET 1 15.95% capital ratio - 1.80ppt Average LCR Average NSFR 2020.12 2021.06 2H2020 1H2021 *Negative impact from IPO
Slide 21: Outlook
BOC HONG KONG (HOLDINGS) LIMITED © PHF8 BH ARAS Outlook
Slide 22: Outlook: economic recovery, Mainland growth, GBA, ASEAN
Divergent economic recovery due to the Solid growth of Mainland economy evolving global pandemic development with high-level opening-up Volatile financial markets driven Orderly implementation in GBA by potential shift in monetary construction alongside deepened policies of major economies mutual ma
Slide 23: Strategic Goals & Values, Work Priorities
Strategic Goals & Values Work Priorities 23
Slide 24: Appendices
PERS (12) ARAB] BOC HONG KONG (HOLDINGS) LIMITED Appendices
Slide 25: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 1H2021 1H2020 Change Net interest income 15,942 18,636 -14.5% Net fee and commission income 6,657 5,435 22.5% Other non-interest income 2,451 4,672 -47.5% Net operating income before impairment allowances 25,050 28,743 -12.8%
Slide 26: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates (HK$m) / % 1H2021 1H2020 Assets Average balance Average yield Average balance Average yield Balances and placements with banks and 385,213 0.80% 305,597 1.09% other financial institutions Debt securities investments and other debt instruments 970,458 1.27%
Slide 27: Fee and Commission Income
Fee and Commission Income HK$m 1H2021 1H2020 Change Securities brokerage 2,189 1,567 39.7% Loan commissions 1,793 1,389 29.1% Credit card business 996 924 7.8% Insurance 734 713 2.9% Funds distribution 518 442 17.2% Payment services 374 358 4.5% Trust and custody services 374 322 16.1% Bills commiss
Slide 28: Operating Expenses
Operating Expenses HK$m 1H2021 1H2020 Change Staff costs 4,389 4,384 0.1% Premises & equipment expenses 579 550 5.3% Depreciation and amortisation 1,515 1,529 -0.9% Others 1,099 1,126 -2.4% Total operating expenses 7,582 7,589 -0.1% 28
Slide 29: Customer Deposits
Customer Deposits HK$m 2021.06 2020.12 Change Total deposits from customers 2,682,440 2,183,709 22.8% CASA 1,967,144 1,459,261 34.8% Demand deposits and current accounts 776,366 310,226 150.3% Saving deposits 1,190,778 1,149,035 3.6% Time, call and notice deposits 715,296 724,448 -1.3% Total deposit
Slide 30: Advances to Customers
Advances to Customers HK$m 2021.06 2020.12 Change Loans for use in Hong Kong - industrial, commercial and financial 743,681 539,633 37.8% Property development 155,058 132,966 16.6% Property investment 83,542 64,768 29.0% Financial concerns 25,558 24,110 6.0% Stockbrokers 111,359 1,656 6624.6% Wholes
Slide 31: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2021.06 2020.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,709,615 30,261 5,077 1,744,953 1,470,492 23,378 3,994 1,497,864 Pass 1,706,445 26,463 - 1,732,908 1,466,646 20,
Slide 32: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total HK$m (* Adjusted for IPO-related impact) Total loans and O/W: for use in Debt securities Subtotal sheet exposure exposure advances Mainland and others Central government, central government-owned 295,205 85,092 96,753 391,958 43
Slide 33: Loan Exposure to Vulnerable Sectors
Loan Exposure to Vulnerable Sectors As of 30 June 2021, customer loan exposure to industries (incl. trading, retail, aviation, tourism(incl. hospitality), F&B, entertainment) severely affected by Covid-19 amounted to HK$162.8bn, accounting for 10.24% of total loans, an increase of HK$11.9 bn and 0.1
Slide 34: Wealth Business Development
Wealth Business Development Private Banking Private Wealth Wealth Management Enrich Banking +4.5% +22.8% +40.1% +42.3% +10.7% +9.0% +22.7% +14.0% YoY YoY YoY YoY YoY YoY YoY YoY Customers AUM Customers AUM Customers AUM Customers AUM ▪ Provided exclusive service to mid to high-end wealth management
Slide 35: BOC Life Business Development
BOC Life Business Development HK$m Standard new premium 1H2021 6,286 1H2020 5,442 Change 15.5% MOODY’S A1 Profit before tax 513 392 30.9% STANDARD A 164,982 15.2% Total assets 190,041 (2020.06) &POOR’S (2021.06) 179,865 5.7% (2020.12) Rose to 2nd in the market Top RMB insurance business and E-Channe
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