Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2011 Earnings Presentation
26 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 29, 2012
Slide 1: Sustainable Growth on Solid Foundations: 2011 Annual Results
Sustainable Growth on Solid Foundations 2011 Annual Results 2012.03.29
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. Gao Yingxin Executive Director & Deputy Chief Executive Mr. Zhuo Chengwen Chief Financial Officer Mr. David Wong Deputy Chief Executive Mr. Jason Yeung Deputy Chief Executive 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook and Strategy 3
Slide 5: Key Performance Highlights
Qsate fignm y “w BANK OF CHINA RE ee fe FG AFR MR B BOC, A CENTURY OF GLOBAL SERVICES Key Performance Highlights Ch Sie ae ree (42 A) A BR ZS BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: 2011 Operating Environment
2011 Operating Environment Hong Kong and Chinese economies continued to see respectable growth Global financial markets were highly volatile, particularly in the second half Low interest rates, intense competition and inflation remained the key operating challenges Further expansion of offsh
Slide 7: Performance Overview
Performance Overview Delivered another year of record results with strong financial position Consistent strategy underpinned sustainable performance and safeguarded solid foundations Proactive management to optimise balance sheet mix for better profitability and risk profile Continued to inves
Slide 8: Key Financial Highlights
Key Financial Highlights Net Operating Income before Operating Profit before Profit Attributable to Impairment Allowances Impairment Allowances * the Equity Holders * HK$m + 12.1% YoY HK$m +28.2% YoY HK$m + 26.1% YoY ( ) – EPS (HK$) 30,846 17,924 22,984 16,196 20,430 27,508 (1.532) (1.932) 2010 2011
Slide 9: Sustaining Quality Growth
Sustaining Quality Growth Strong Deposit Base Healthy Loan Growth Solid Loan Quality HK$ bn + 11.6% YTD Classified or impaired HK$ bn + 14.1% YTD loan ratio 1,027 1,147 613 699 0.14% 0.10% End-Dec 10 End-Dec 11 End-Dec 10 End-Dec 11 End-Dec 10 End-Dec 11 Stable LDR Sound Liquidity Loan-to-deposit ra
Slide 10: Strong Capital Position
Strong Capital Position Capital Adequacy Ratio Dividend Per Share Tier 1 Tier 2 HK$ + 22.2% YoY 16.14% 16.90% 4.85% 4.39% 1.188 0.972 11.29% 12.51% End-Dec 10 End-Dec 11 2010 2011 Standardised FIRB Approach Adoption Adoption of of FIRB FIRB commencing commencing 2011 2011 provides provides aa so
Slide 11: Financial Results
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Slide 12: Condensed Income Statement
Condensed Income Statement Record high profits driven by core businesses and new business opportunities Contribution from local RMB business also increased HK$ m 2011 2011 2010 2010 % %YoY YoY Net interest income 21,979 18,734 ↑ 17.3 Net fee and commission income 7,833 7,044 ↑ 11.2 Other operating i
Slide 13: Net Interest Income
Net Interest Income Net interest income increased driven by volume growth NIM was down YoY but improved in the second half HK$ m 2011 2011 2010 2010 % %YoY YoY Interest income 31,931 23,449 ↑ 36.2 Interest expense 9,952 4,715 ↑ 111.1 Net interest income 21,979 18,734 ↑ 17.3 Average interest earning
Slide 14: Non-interest Income
Non-interest Income Satisfactory growth in net fee income and net trading gain but offset by investment losses amid the weak financial markets in 2H11 HK$ m 2011 2011 2010 2010 % %YoY YoY Net fee and commission income 7,833 7,044 ↑ 11.2 Fee and commission income Securities brokerage 2,782 3,338 ↓ 16
Slide 15: Operating Expenses
Operating Expenses Operating expenses prudently managed Core cost-to-income ratio among the lowest in the local industry Core Core Operating Operating Expenses* Expenses* Number Number of of Branches Branches HK$ m + 12.3% YoY 10,659 294 294 9,495 1,954 (268) (266) 1,806 1,277 Others 1,131 1,390 Dep
Slide 16: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Net charge of loan impairment due to increase in loan balance and refinement of assessment parameters HK$ m 2011 2011 2010 2010 % %YoY YoY Advances to customers Net (charge)/reversal of allowances before recoveries - individual assessment (12) 149 ---
Slide 17: Loan Quality
Loan Quality Formation of new classified loans at a low level Migration Migration of of Classified Classified Loans Loans HK$ bn +0.50 -0.03 -0.43 -0.20 0.87 0.71 End-Dec 10 Downgrade Upgrade Collection Write-off End-Dec 11 16
Slide 18: Condensed Balance Sheet
Condensed Balance Sheet Growth in total assets supported by the expansion of core businesses Optimised balance sheet mix for better profitability and risk profile HK$ m End-Dec 11 End-Dec 11 End-Dec 10 End-Dec 10 % % Change Change Cash and balances with banks and other financial institutions 278,795
Slide 19: Customer Deposits
Customer Deposits Solid expansion of deposit base driven by USD and RMB deposits HK$ m End-Dec 11 End-Dec 11 End-Dec 10 End-Dec 10 % % Change Change Demand deposits and current accounts 77,440 70,453 ↑ 9.9 Saving deposits 504,868 528,035 ↓ 4.4 Time, call and notice deposits 563,643 428,545 ↑ 31.5 St
Slide 20: Advances to Customers
Advances to Customers Sustained healthy and broad-based loan growth with focus on quality and profitability HK$ m End 11 End -Dec 11 End-Dec -Dec 10 End-Dec 10 % % Change Change Loans for use in HK - corporate 237,557 206,947 ↑ 14.8 Loans for use in HK - individual 206,983 180,140 ↑ 14.9 Residential
Slide 21: Securities Investments
Securities Investments Proactive investment strategy to optimise portfolio mix and return HK$ m End- End-Dec 11 End-Dec 11 End- End-Dec 10 End-Dec 10 % %Change Change Sovereign 145,205 119,124 ↑ 21.9 Public Sector 43,252 41,018 ↑ 5.4 Corporate entities 41,576 29,579 ↑ 40.6 Banks and other FIs 195,56
Slide 22: Segmental Performance
Segmental Performance Operating Operating Income Income by by Segments Segments HK$ m 30,846 Personal: Solid growth in 27,508 409 mortgages, funds sales and 771 credit card business 7,376 5,941 Corporate: Enhanced cross- border service capabilities drove strong growth 9,360 11,943 Treasury: Pr
Slide 23: Mainland Business
Mainland Business Strengthened deposit base and improved asset mix Loan-to-deposit ratio was lowered to 70% Operating Operating Income Income Operating Operating Expenses Expenses HK$ m + 42.2% YoY HK$ m + 36.5% YoY 1,506 1,059 912 668 2010 2011 2010 2011 Deposits Deposits from from Customers Custom
Slide 24: Outlook and Strategy
Qt enw t w BANK OF CHINA RE ee ae FG FR MR BOC, A CENTURY OF GLOBAL SERVICES Outlook and Strategy Ch Sie ae ree (42 A) A BR ZS BOC HONG KONG (HOLDINGS) LIMITED
Slide 25: Outlook and Strategy
Outlook and Strategy A clear focus on driving quality growth and maintaining a strong financial position amid market challenges Build on our core competencies and solid fundamentals to capture emerging opportunities Maintain proactive risk management and enhance internal control mechanism to gua
Slide 26: Sustainable Growth on Solid Foundations: 2011 Annual Results
Sustainable Growth on Solid Foundations 2011 Annual Results 2012.03.29
BOC Hong Kong (Holdings) — FY2011 Earnings Presentation on 6ix