Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2007 Earnings Presentation
32 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 25, 2008
Slide 1: 2007 Annual Results
Delivering Growth, Quality and Excellence 2007 Annual Results 2008.03.25
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 Key Performance Highlights Financial Results Outlook 2
Slide 4: Key Performance Highlights
de Key Performance Highlights Oh She ee rae (9 A) PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 5: Strong Growth in Operating Results
Strong Growth in Operating Results Net NetOperating OperatingIncome Income Operating OperatingProfit Profit before beforeImpairment ImpairmentAllowances Allowances before beforeImpairment ImpairmentAllowances Allowances HK$ m HK$ m Y YooYY .99% % ++2277. YooYY Y .11% % ++3322. 27,254 19,481 21,309 1
Slide 6: Record High Profit Attributable to Equity Holders & Dividend Per Share
Record High Profit Attributable to Equity Holders & Dividend Per Share Profit ProfitAttributable Attributableto toEquity EquityHolders Holders Dividend Dividendper perShare Share HK$ m HK$ % YYooYY .33% ++1100. Y YooYY 9%% ++77..9 15,446 14,007 0.915 0.848 1905年 6月 28日 1905年 6月 29日 2006 2007 2006 20
Slide 7: ROE & ROA
ROE & ROA ROE ROE ROA ROA p p YYooYY 388pp ++00..3 --0 0.0 .033pppp Y YooY Y 17.40% 17.02% 1.56% 1.53% 1905年6月28日 1905年6月29日 1905年6月28日 1905年6月29日 2006 2007 2006 2007 ROE before impairment allowances ROA before impairment allowances 17.92% 21.95% 1.61% 1.89% 6
Slide 8: Operating Environment
Operating Environment External External Robust economy – 4th consecutive year of above trend GDP growth driven by z Investment z Domestic consumption and external trade z Financial market boom fueled by robust stock trading, IPO activities and capital inflow z Low unemployment rate z Revived prope
Slide 9: Strong Growth in Core Earnings
Strong Growth in Core Earnings Net Net Interest Interest Income Income Net Net Fees Fees & & Commission Commission Income Income HK$ m HK$ m % YYooYY .55% ++2222. YY YYoo 8..88% % 6 ++6 8 19,395 6,274 6,274 15,835 3,717 3,717 2006 2007 2006 2007 8
Slide 10: Other Business Highlights
Other Business Highlights Broad -based increase in loans and advances (+ Broad-based 19.0%) (+19.0%) z Significant z Significant growth growth in in SME SME loans loans (+32.2%) (+32.2%),, Trade Trade finance finance (+43.9%) (+43.9%) and and Main land lending Mainland lending (+60.9%) (+60.9%) S
Slide 11: Further Improvement in Loan Quality
Further Improvement in Loan Quality Classified Classified or or Impaired Impaired LLoan oan Ratio Ratio fell fell to to 0.4 4% 0.44% 0.57% 0.44% End-Dec 2006 End-Dec 2007 Note : Classified or impaired loans follow the definitions set out in the Banking (Disclosure) Rules and represent loans which ar
Slide 12: Healthy Capital Strength
Healthy Capital Strength CAR CAR maintained maintained at at healthy healthy level level of of 113.08% 3.08% Total Total Core Core 15.72% 14.91% 13.08% 12.23% 1905年6月28日 1905年6月29日 1905年6月28日 1905年6月29日 End-Dec 2006 End-Dec 2007 End-Dec 2006 End-Dec 2007 Notes: 1. Capital adequacy ratios at end-Dec
Slide 13: Financial Results
| i Financial Results Oh She ee rae (9 A) PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 14: Condensed Income Statement
Condensed Income Statement Strong operating results driven by growth in both net interest income and net fees and commission income HK$ m 2007 2007 2006 2006 % %YoY YoY Net interest income 19,395 15,835 ↑ 22.5 Net fees and commission income 6,274 3,717 ↑ 68.8 Other operating income 1,585 1,757 ↓ 9.8
Slide 15: Key Financial Ratios
Key Financial Ratios Change Change 2007 2007 2006 2006 YoY YoY ROE before impairment allowances 21.95% 17.92% ↑ 4.03pp ROE 17.40% 17.02% ↑ 0.38pp ROA before impairment allowances 1.89% 1.61% ↑ 0.28pp ROA 1.53% 1.56% ↓ 0.03pp Net interest margin 2.07% 1.90% ↑ 0.17pp Non-interest income ratio 28.84% 2
Slide 16: Higher Net Interest Income and Enhanced NIM
Higher Net Interest Income and Enhanced NIM Improved NII driven by growth in average interest-earning assets and widened net interest margin HK$ m 2007 2007 2006 2006 % %YoY YoY Interest income 46,056 40,271 ↑ 14.4 Interest expense 26,661 24,436 ↑ 9.1 Net interest income 19,395 15,835 ↑ 22.5 Average
Slide 17: Strong Growth in Net Fees and Commission Income
Strong Growth in Net Fees and Commission Income Growth in investment and insurance fee income driven by significant increase in stock brokerage and asset management fee HK$ m 2007 2007 2006 2006 % %YoY YoY Investment and insurance fee income Securities brokerage (Stockbroking) 3,560 1,383 ↑ 157.4 Se
Slide 18: Strong Rise in Non-interest Income
Strong Rise in Non-interest Income Higher non-interest income driven by strong growth in net fees and commission income HK$ m 2007 2006 % 2007 2006 %YoY YoY Net fees and commission income 6,274 3,717 ↑ 68.8 Other operating income - Banking operation 1,691 1,791 ↓ 5.6 Net trading income* 1,013 1,567
Slide 19: Effective Cost Management
Effective Cost Management Cost-to-income ratio improved further due to strong income growth Operating Operating Expenses Expenses Branch Branch Number Number HK$ m (288)* (288)* (287)* (287)* 304 302 7,773 6,558 1,372 1,015 787 Others 671 958 D epreciation 868 Dec 2006 Dec 2007 Premises and *Branche
Slide 20: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Lower net loan impairment release as recoveries and release reduced Impairment charges were provided on our asset-backed securities HK$ m Advances to customers 2007 2006 2007 2006 % % YoY YoY Individual assessment - New allowances (330) (647) ↓ 49.0 -
Slide 21: Further Improvement in Loan Quality
Further Improvement in Loan Quality Classified or impaired loan ratio declined to 0.44% Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn +1.2 0.57 -0.1 0.44 +0.1 -1.1 -0.3 2.0 1.8 End-2006 Downgrade Upgrade Colle
Slide 22: Condensed Balance Sheet
Condensed Balance Sheet Total assets further expanded on the back of strong deposits growth HK$ m 31.12.2007 31.12.2007 31.12.2006 31.12.2006 % % Change Change Total assets 1,067,637 928,953 ↑ 14.9 Cash and balances with banks and other financial institutions 159,065 105,236 ↑ 51.2 Placements with b
Slide 23: Broad-based Growth in Advances to Customers
Broad-based Growth in Advances to Customers Broad-based growth with double-digit increase in corporate loans for use in HK, trade finance and loans for use outside HK HK$ m 31.12.2007 31.12.2007 31.12.2006 31.12.2006 % %Change Change Loans Loans by bycurrency currencymix mix Loans for use in HK - co
Slide 24: Higher Customer Deposits
Higher Customer Deposits Solid deposits growth with widened total deposits spread HK$ m Deposits Deposits by bycurrency currencymix mix 31.12.2007 31.12.2007 31.12.2006 31.12.2006 % %Change Change Demand deposits and current accounts 40,499 30,979 ↑ 30.7 10% Saving deposits 286,653 256,653 ↑ 11.7 21
Slide 25: Subprime Exposure Significantly Reduced
Subprime Exposure Significantly Reduced Proactive management of our portfolio with significant reduction in net exposure HK$ m -6 Exposure reduction in 7. 2H07 was mainly due 9% Ho to disposals and 15,809 H repayments 12,813 Impairment allowances of HK$1,253 million were provided for the 4,118 o
Slide 26: Profit Contribution by Business Segment
Profit Contribution by Business Segment Satisfactory growth in operating profit for all segments with strong growth in Personal segment Operating profit before impairment Pre-tax profit HK$ m .6% 1,156 +58 HK$ m (6.1%) 8,246 .6% +13 17 .7% + 3,315 8,129 5,729 5,448 5,199 5,043 (17.3%) (42.5%) 4,628
Slide 27: Mainland Business
Mainland Business Strong growth in operating profit before impairment Total advances and customer deposits improved significantly with RMB advances doubled (YoY) Combined Combined profit profit and and loss loss account account of of Mainland Mainland Business Business HK$ m 2007 2007 2006 2006 % %
Slide 28: Outlook
Outlook | i Oh She ee rae (9 A) PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 29: Outlook
Outlook Increasing uncertainty in global credit market Increasing and US economy; resurgence of financial market volatility due to risk of credit crisis Moderate growth in China economy despite Moderate tightening measures Stable growth in HK economy benefiting from Stable closer economic i
Slide 30: Our Focuses
Our Focuses Growing on a stronger foundation To further enhance our business platform To through Relationship -Product-Channel model Relationship-Product-Channel To establish a solid presence in China by To expanding our branch network and providing comprehensive products and services To cap
Slide 31: Our Strengths
Our Strengths Building on our strengths Reinforcing our leading market positions in Reinforcing our core businesses Capitalizing on our valuable customer base Capitalizing and franchise Sustaining solid financial strength with healthy Sustaining capital base and strong liquidity position
Slide 32: 2007 Annual Results
Delivering Growth, Quality and Excellence 2007 Annual Results 2008.03.25
BOC Hong Kong (Holdings) — FY2007 Earnings Presentation on 6ix