Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — Investor Presentation (May 2010)
32 slides from Boc Hong Kong (holdings)'s investor presentation, May 2010
Slide 1: Solid Foundations for Sustainable Growth
Solid Foundations for Sustainable Growth BOC Hong Kong May 2010 Stock code : 2388 HK
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 Operating Environment Strategic Focus Performance Highlights Outlook 2
Slide 4: Operating Environment
Operating Environment Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 5: Operating Environment
Operating Environment Clearer signs of global economic recovery but possible headwinds from governments existing stimulus measures Better economic outlook in the Mainland and Hong Kong provides growth potential for the Hong Kong banking sector Intense market competition and low interest rates
Slide 6: Strategic Focus
Strategic Focus CH Sie ee res (458 fie) a PR ZS BOC HONG KONG (HOLDINGS) i
Slide 7: 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 leadership in offshore Accelerate the growth of RMB business our Mainland business r
Slide 8: Strong Franchise and Fundamentals
Strong Franchise and Fundamentals 1 Leading banking group in Hong Kong with the largest branch network 2 Strong personal banking business underscored by leading position in customer deposits and mortgages 3 Leading corporate banking business with unique position to capture rapid growth in Chin
Slide 9: Enhancing Our Business Platform
Enhancing Our Business Platform To enhance our franchise and business capabilities for long-term sustainable growth Consolidation Consolidation of of Mainland Mainland operation operation zCompleted z Completed consolidation consolidation of of BOCHK’s BOCHK’s Mainland Mainland branches branches
Slide 10: Deepening Collaboration with BOC
Deepening Collaboration with BOC To provide more comprehensive services to our customers and enhance customer wallet share Asia Asia Pacific Pacific Syndication Syndication Loan Loan Centre Centre zA z A proven proven success success leveraging leveraging BOCHK’s BOCHK’s expertise expertise in i
Slide 11: Expanding Our Leading RMB Business
Expanding Our Leading RMB Business Well-positioned to capture the opportunities from the expanding scope of offshore RMB business Appointed Appointed as as RMB RMB Clearing Clearing Bank Bank in in Hong Hong Kong Kong since since 2003 2003 Dominating Dominating market market share share in i
Slide 12: 2009 Performance Highlights
2009 Performance Highlights
Slide 13: Performance Overview
Performance Overview Strong financial position provided us greater business flexibility Captured quality growth opportunities in a tough market Further strengthened core competitiveness and deepened customer relationship Maintained market lead and enlarged market share in major business areas
Slide 14: Strong Capital Position
Strong Capital Position Proactive capital management ensures competitiveness and resilience Capital Capital Adequacy Adequacy Ratio Ratio Well Well capitalized capitalized with with solid solid Tier 1 Tier 2 Tier Tier 11 ratio ratio of of 11.64% 11.64% 16.85% Successful Successful issue issu
Slide 15: Advances to Customers
Advances to Customers Broad-based loan growth Significantly outperforming the market HK$ m 31.12.2009 31.12.2008 % 31.12.2009 31.12.2008 %Change Change Loans for use in HK - corporate 224,261 188,774 ↑ 18.8 Loans for use in HK - individual 157,133 147,823 ↑ 6.3 Residential mortgages* 127,208 116,303
Slide 16: Solid Loan Quality
Solid Loan Quality Sound risk management and customer optimisation translated into solid loan quality Classified Classified or or Impaired Impaired Loan Loan Ratio Ratio Further Further improvement improvement inin classified classified or or impaired impaired -12 bps YoY loan loan ratio ratio
Slide 17: Net Fees and Commission Income
Net Fees and Commission Income Strong growth in fees income driven by increase in stock brokerage and loans commissions HK$ m 2009 2008 % 2009 2008 %YoY YoY Investment and insurance fee income Securities brokerage (Stockbroking) 3,638 2,380 ↑ 52.9 Securities brokerage (Bonds) 39 259 ↓ 84.9 Funds dis
Slide 18: Key Financial Highlights
Key Financial Highlights 2009 2008 Change Change 2009 2008 YoY HK$m YoY Net operating income before impairment allowances 26,055 25,526 ↑ 2.1% Operating profit before impairment allowances 13,914 16,755 ↓ 17.0% Profit attributable to shareholders 13,725 3,343 ↑ 310.6% Earnings per share (HK$) 1.2981
Slide 19: Outlook
Outlook Oh She ee ra (32 AR) A BR ZS BOC HONG KONG (HOLDINGS) i
Slide 20: Our Vision and Strategy
Our Vision and Strategy Our Vision To become a premier financial services group with an extensive base in Hong Kong, a solid presence in Mainland China and strategic foothold in Asia Strategy Strengthen our overall leading position in Hong Kong’s banking sector Diversify our sources of revenue
Slide 21: Management Focus
Management Focus Maintain solid financial strength to capture business opportunities and sustain growth Leverage our core strengths to grasp emerging opportunities from economic recovery in the region Invest judiciously in accordance with strategic priorities to enhance Bank’s competitiveness
Slide 22: Appendix: 2009 Annual Results Highlights
Appendix : 2009 Annual Results Highlights Investor Relations Contact : E-mail : investor_relations@bochk.com Website : www.bochk.com
Slide 23: Condensed Income Statement
Condensed Income Statement Solid earnings growth amid challenging operating environment HK$ m 2009 2009 2008 2008 % %YoY YoY Net interest income 17,932 20,157 ↓ 11.0 Net fees and commission income 6,508 5,179 ↑ 25.7 Other operating income 1,615 190 ↑ 750.0 Net operating income before impairment allo
Slide 24: Net Interest Income
Net Interest Income Net interest income dropped mainly due to lower NIM NIM decline moderated into 2H09 2009 2009 2008 2008 % %YoY YoY HK$ m Interest income 21,684 35,281 ↓ 38.5 Interest expense 3,752 15,124 ↓ 75.2 Net interest income 17,932 20,157 ↓ 11.0 Average interest-earning assets 1,060,961 1,
Slide 25: Non-interest Income
Non-interest Income Non-interest income increased due to higher fees income & improved performance of BOC Life HK$ m 2009 2009 2008 2008 % %YoY YoY Net fees and commission income 6,508 5,179 ↑ 25.7 Other operating income - Banking operation 2,086 2,127 ↓ 1.9 Net trading income 1,486 1,914 ↓ 22.4 Net
Slide 26: Core Operating Expenses
Core Operating Expenses Maintained prudent cost management throughout the year Core Core Operating Operating Expenses* Expenses* Number Number of of Branches Branches HK$ m 8,863 (286) (272) 8,002 Others 305 296 1,594 1,380 1,018 Depreciation 992 1,160 Premises and 1,076 Equipment End-Dec 08 End-Dec
Slide 27: 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 2009 2009 2008 2008 % %YoY YoY Advances to customers Individual assessment - New allowances (391) (813) ↓ 51.9 - Releases 150 83 ↑ 80.7 -
Slide 28: Loan Quality
Loan Quality Classified or impaired loan ratio fell to 0.34% Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn -12 bps YoY +1.4 0.46 -0.2 0.34 -1.0 -0.5 2.1 1.8 End-Dec 08 End-Dec 09 End- Dec 08 Downgrade Upgrade
Slide 29: Condensed Balance Sheet
Condensed Balance Sheet Maintained prudent approach in balance sheet management HK$ m 31.12.2009 31.12.2009 31.12.2008 31.12.2008 % % Change Change Total assets 1,212,791 1,147,244 ↑ 5.7 Cash and balances with banks and other financial institutions 160,788 153,269 ↑ 4.9 Placements with banks and oth
Slide 30: Customer Deposits
Customer Deposits Balancing deposit growth and funding cost control with further improvement in mix HK$ m 31.12.2009 31.12.2009 31.12.2008 31.12.2008 % %Change Change Demand deposits and current accounts 65,440 46,042 ↑ 42.1 Saving deposits 495,512 377,273 ↑ 31.3 Time, call and notice deposits 281,3
Slide 31: Securities Investments
Securities Investments Proactive management of our banking book investments Significant reduction in US RMBS exposure 31.12.2009 31.12.2009 31.12.2008 31.12.2008 % %Change Debt Debt securities securities by bycredit credit rating HK$ m Change rating Sovereign 76,824 84,435 ↓ 9.0 1% 4% Public Sector
Slide 32: Mainland Business
Mainland Business Enhanced Mainland platform with strong loan growth in 2H09 HK$ m 2009 2009 2008 2008 % % YoY YoY Operating income 962 990 ↓ 2.8 Operating expenses 566 434 ↑ 30.4 Operating profit before impairment 396 556 ↓ 28.8 Profit before taxation 478 475 ↑ 0.6 Deposits Deposits from from custo
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