Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2003 Earnings Presentation
21 slides from Boc Hong Kong (holdings)'s earnings presentation, Sep 5, 2003
Slide 1: 2003 Audited Interim Results Presentation
Solid Operating Performance in a Challenging Environment 2003 Audited Interim Results Presentation 5 September 2003
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 1H2003 Financial Results and Operating Performance Outlook and Strategic Focus 2
Slide 4: Key Performance Highlights
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Slide 5: Key Interim Results Highlights (1)
Key Interim Results Highlights (1) Solid growth in operating profit, impact of property revaluation loss fully reflected Operating Operating Profit Profit Profit Profit Attributable Attributable to to Shareholders Shareholders (HK$ mm) (HK$ mm) 5.5% 4,470 -11.8% 4,236 3,415 3,012 1H02 1H03 1H02 1H03
Slide 6: Key Interim Results Highlights (2)
Key Interim Results Highlights (2) Achieved EPS of HK$ 28.5 cents (1H 02: HK$ 32.3 cents) Increased interim dividend to HK$ 19.5 cents (1H 02: HK$ 18.3 cents) Achieved ROE of 10.6% and ROAA of 0.82% Increased other operating income by 12.0% to HK$2.3 billion Reduced cost-to-income ratio to
Slide 7: Managing Change
Managing Change Modify board composition and enhance high level control Develop bank-wide Vision, Mission & Core Values to embed corporate culture change Recruit world class management personnel, including Chief Operating Officer and Director of Risk Prioritise and implement incremental impr
Slide 8: Overall Business Strategy: Diversification & Capitalise on Opportunities
Overall Business Strategy Diversification & Capitalise on Opportunities Increase revenue from retail lending Expand our China business to contribute up to 10% of total revenues in the medium term Focus on profitability and asset quality of corporate loans Exit high risk lending 7
Slide 9: Business-Driven Strategies
Deliveries Business-Driven Strategies Reorganise middle and back offices to support front office business strategies Middle and back office management has to be business driven Align IT projects with business strategies and ensure early delivery of revenue generating IT projects 8
Slide 10: Financial Results and Operating Performance
Financial Results and Operating Performance
Slide 11: Profit & Loss Account
Profit & Loss Account Solid growth in operating profits; Impact of property revaluation loss fully reflected 30 30 Jun Jun 2003 2003 30 30 Jun Jun 2002 2002 % % Change Change (HK$ mm) Operating Income 8,836 8,901 (0.7) Operating Expenses (2,697) (2,899) (7.0) Operating Profit before Provisions 6,139
Slide 12: Balance Sheet
Balance Sheet Shifting to More Efficient Asset Mix; Robust Capital Position with Prudent Capital Adequacy Ratio (HK$ mm) 30 30 Jun Jun 2003 2003 31 31 Dec Dec 2002 2002 Total Assets 735,494 735,536 Inter-bank Placements & Short-term Funds 186,518 195,234 Securities Investments 167,636 158,633 Advanc
Slide 13: Key Financial Ratios
Key Financial Ratios (%) 30 30 Jun Jun 2003 2003 31 31 Dec Dec 2002 2002 30 30 Jun Jun 2002 2002 ROE 10.6 12.5 13.0 ROAA 0.82 0.94 0.94 Cost to Income Ratio 30.5 33.3 32.6 NPL Ratio 7.8 8.0 9.0 Loan / Deposit 54.9 53.4 52.0 Average Liquidity Ratio 37.9 41.2 41.3 Capital Adequacy Ratio 14.7 14.0 14.7
Slide 14: Net Interest Margin
Net Interest Margin Challenging environment with intense competition, weak loan demand and low market interest rate (HK$ mm) 30 30 Jun Jun 2003 2003 30 30 Jun Jun 2002 2002 Challenges Challenges Interest Income 9,358 10,958 Narrowing of spreads on Interest Expense 2,744 4,067 lending Fall in Net
Slide 15: Solid Growth in Other Operating Income
Solid Growth in Other Operating Income Other Other Operating Operating Income Income Fees Fees from from Wealth Wealth Management Management Non-Interest (HK$ mm) 357% increase in Income/Total fees from (HK$ mm) 18.2% 25.5% Income (%) distribution of life 344 22.6% 291 insurance products Well-re
Slide 16: Achieving Cost Efficiency Gains
Achieving Cost Efficiency Gains Continued progress in staff and branch reduction Operating Operating Expenses Expenses Reduction Reduction in in Premises Premises and and Equipment Equipment Costs Costs Branch Network Rationalisation (HK$ mm) Cost- Cost-to- to-Income Ratio 358 32.6% 319 305 30.5% 2,
Slide 17: Prudent Provision Charges and Coverage
Prudent Provision Charges and Coverage Charges Charges for for Bad Bad & & Doubtful Doubtful Debts Debts Asset Asset Quality Quality 1H 30 30 Jun Jun 31 31 Dec Dec 1H 2003 2003 1H 1H 2002 2002 2003 2003 2002 2002 Specific Provisions General Provisions 6,197 6,363 New Provisions 2,537 3,289 Specific
Slide 18: Continue to Improve Asset Quality
Continue to Improve Asset Quality Achieved an NPL ratio of 7.80% NPL NPL Ratio Ratio Write off of HK$1.7 billion (%) Lower NPL origination 8.97 7.99 7.80 Delinquency and rescheduled loans ratio of residential mortgages improved from 1.75% to 1.51% Delinquency ratio of credit card advances fe
Slide 19: Outlook and Strategic Focus
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Slide 20: Looking Forward
Looking Forward Increasing fee income due to cross-selling of high ROE products Revenue Revenue Enhancement Enhancement Products include credit cards, insurance products, investment funds, treasury products, trade services, cash management, syndicate loans Decreasing operating expenses due to
Slide 21: 2003 Audited Interim Results Presentation
End 2003 Audited Interim Results Presentation 5 September 2003
BOC Hong Kong (Holdings) — H1 2003 Earnings Presentation on 6ix