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, September 2010
Slide 1: Solid Foundations for Sustainable Growth
Solid Foundations for Sustainable Growth BOC Hong Kong September 2010
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 2010 Interim Results Highlights Strategic Focus Outlook 2
Slide 4: 2010 Interim Results Highlights
2010 Interim Results Highlights
Slide 5: 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 4
Slide 6: 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 7: Key Financial Highlights
Key Financial Highlights HK$m 1H2010 1H2009 2H2009 1H2010 1H2009 2H2009 % %YoY YoY % %HoH HoH Net operating income before impairment allowances 12,541 13,028 13,027 ↓ 3.7 ↓ 3.7 Operating profit before impairment allowances 8,007 8,834 5,080 ↓ 9.4 ↑ 57.6 Profit attributable to shareholders 7,190 6,69
Slide 8: Strong Capital Position
Strong Capital Position Strong capital position supports sustainable growth Capital Capital Adequacy Adequacy Ratio Ratio Total Total Assets Assets Tier 1 Tier 2 HK$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 7
Slide 9: Strategic Focus
Strategic Focus CH Sie ee res (458 fie) a PR ZS BOC HONG KONG (HOLDINGS) i
Slide 10: Strategic Focus
Strategic Focus Well-positioned to capture emerging opportunities in China and the region Strengthen our RMB Clearing Bank in Bancassurance model Hong Kong and enhance our market share Consolidate our market Enhance the business leadership in offshore RMB business En platform of our r h Main
Slide 11: Development of Offshore RMB Market
Development of Offshore RMB Market Offshore RMB business scope has been expanding in an incremental and orderly manner zDec 2003 : BOCHK appointed as the RMB Clearing Bank in HK by PBOC 2010 zFeb 2004 : Introduction of RMB business in HK, including deposit-taking, 2009 remittance, currency conversio
Slide 12: 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 13: Outlook
Outlook Oh She ee ra (32 AR) A BR ZS BOC HONG KONG (HOLDINGS) i
Slide 14: Delivering Sustainable Growth
Delivering Sustainable Growth BOCHK BOCHK has has demonstrated demonstrated sustainable sustainable growth growth through through the the years years Total Total Assets Assets Gross Gross Loans Loans HK$ bn HK$ bn % - Classified or impaired loan ratio 1,500 1,302 600 571 1,213 515 1,147 1,068 460 92
Slide 15: Management Focus
Management Focus Proactive Proactive and and balanced balanced approach approach for for quality quality growth growth Maintain financial strength to capture business opportunities and sustain growth Adopt proactive approach to ensure good balance of growth and risk-adjusted return Further str
Slide 16: Appendix: 2010 Interim Results Highlights
Appendix : 2010 Interim Results Highlights Investor Relations Contact : E-mail : investor_relations@bochk.com Website : www.bochk.com
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: Loan Quality
Loan Quality Sound risk management and customer optimisation translated into solid loan quality Classified Classified or or Impaired Impaired Loan Ratio Migration Migration of of Classified Classified Loans Loans Loan 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 24: 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 25: 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 26: 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 27: 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 28: 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
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