Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2023 Earnings Presentation
34 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 28, 2024
Slide 1: BOC Hong Kong (Holdings) Limited Annual Results
oP SR re (18 AR) A BR SB] BOC HONG KONG (HOLDINGS) LIMITED Annual Results
Slide 2: Disclaimer
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, project, target, may or will, o
Slide 3: Agenda
Agenda Strategy Review Financial & Outlook Business Results
Slide 4: Strategy Review
PAR re (18 RR) BRAG] BOC HONG KONG (HOLDINGS) LIMITED Strategy Review
Slide 5: Continued Increase in Shareholder Returns with Highest Operating Profit since IPO
Continued Increase in Shareholder Returns with Highest Operating Profit since IPO HK$42.6bn 10.60% +21.9% +2.10ppt HK$32.7bn HK$1.672 / +23.2% +26.1% 54.0% / +1.0ppt 5
Slide 6: Deeply Penetrating the Local Market while Enhancing Core Competitiveness
Deeply Penetrating the Local Market while Enhancing Core Competitiveness #1 in cumulative number of new HK/Macao syndicated loans ranked #1 for 19 Continued to strengthen the status as a residential mortgage loans consecutive years market-maker for HKD and RMB Market leader in IPO main receiving ban
Slide 7: Supporting Mutual Market Access Scheme Development while Cultivating GBA Business Opportunities
Supporting Mutual Market Access Scheme Development while Cultivating GBA Business Opportunities Cross-boundary Wealth GBA Account Opening GBA Tech Firms Management Connect Customer Base Customer base grew by 70% Total no. of customers rose by 80% Funds remitted surged by 3.5x GBA Loans under both So
Slide 8: Leveraging Collaborative Advantages to Enhance Cohesive Regional Operations
Leveraging Collaborative Advantages to Enhance Cohesive Regional Operations Actively served Belt and Road cooperation and Chinese enterprises’ “Going Global”, facilitated collaboration among BOC’s entities in the Asia Pacific region and completed a number of syndicated loans Strong growth in RMB tra
Slide 9: Enriching Offshore RMB Service Scenarios to Accelerate Business Development
Enriching Offshore RMB Service Scenarios to Accelerate Business Development +182% +127% RMB480tn / +25% RMB Customer RMB Cross-border HK’s RMB Clearing Volume* Accounted for over 70% Loans Settlement Volume of the Global Offshore Total Maintained market leadership in RMB loans and deposits, Supporte
Slide 10: Driving Integration of Business and Technology to Enhance Digital Financial Service Capabilities
Driving Integration of Business and Technology to Enhance Digital Financial Service Capabilities Focused on home purchasing, education and health scenarios, highest daily Open API usage: >310k, +13% Mortgage applications through “Home Expert” app accounted for: 60% BoC Pay customers: +20.8%, BoC Bil
Slide 11: Innovating Green Financial Services to Gather New Momentum for Sustainable Development
Innovating Green Financial Services to Gather New Momentum for Sustainable Development Confirmed target of carbon-neutrality in operations by 2030 and issued first Task Force on Climate-related Financial Disclosures (TCFD) report +86.9% +19.9% Assisted the HKSAR Government in issuing the world's fir
Slide 12: Financial & Business Results
Financial & Business Results
Slide 13: Continued Growth in Deposits
Continued Growth in Deposits Deposit Growth Outpaced the Market Sustained Leading Position in Market Share HK$m + 5.3% 2,503,841 2,377,207 15.23% Market Share 51.7% 47.4% 2022.12 2023.12 Time and Other Deposits Deposit Market Share Current and Saving Deposits (CASA) CASA Ratio 13
Slide 14: Market Outperformance in Loan Growth
Market Outperformance in Loan Growth Loan Growth Outperformed the Market Further Gains in Market Share HK$m Total: 1,702,302 / +3.3% Loans for Use in HK - 683,604 16.19% Market Share Corporates +6.6% Loans for Use in HK - 569,559 Individuals +7.2% Loans for Use 401,448 outside HK -5.3% Trade Financi
Slide 15: Continual Increase in Net Interest Income
Continual Increase in Net Interest Income 27bps Expansion in Net Interest Margin 28.8% Growth in Net Interest Income HK$m 2022: 1.36% 2023: 1.63% HK$m 3,334,799 1.72% 1.68% 1.65% 1.62% 3,104,952 1.54% 1.50% 1.19% 54,487 14,495 15,004 1.08% 13,062 13,121 42,303 11,638 11,867 +28.8% +7.4% 8,520 9,083
Slide 16: Increased Contribution from Traditional Fee Businesses
Increased Contribution from Traditional Fee Businesses 17.5 % Income Growth in Non-credit Related Net Fee Income Fell amid a Weak Market Traditional Fee Businesses - 6.5% HK$m 9,800 Credit Card Business +22.0% 9,167 Retail cardholder spending +23.0% 6,838 Merchant acquiring volume +28.8% 5,820 3,993
Slide 17: Market-leading Cost Efficiency
Market-leading Cost Efficiency Satisfying Core Requirements Consistently Outperformed the Market while Focusing on Key Initiatives in Cost-to-income Ratio HK$m 16,950 48.0% 16,607 38.8% 31.3% 10,725 25.4% 9,946 Total Operating Expenses Staff Costs 2022 2023 2022 2023 Market Average BOCHK Market data
Slide 18: Manageable Asset Quality Risk
Manageable Asset Quality Risk Better-than-average NPL Ratio Maintaining a Solid Provisions Foundation HK$m 3,891 6,419 1.56% 1.40% 2023 2,475 0.38% 53 1.05% 0.53% 2,021 2,545 2022 1,340 0.15% (816) 2022.12 2023.12 Net Charge of Impairment Allowances - Advances and Other Accounts Market Average BOCHK
Slide 19: Solid and Improving Capital and Liquidity Position
Solid and Improving Capital and Liquidity Position Solid Capital Level Enhancement in Liquidity 207.12% Total 193.47% 21.18% 189.68% 188.89% Capital Ratio -0.34 ppt Tier 1 19.02% Capital Ratio -0.28 ppt 134.51% 138.67% 137.28% 131.56% CET 1 19.02% Capital Ratio +1.51 ppt 1Q23 2Q23 3Q23 4Q23 2022.12
Slide 20: Outlook
PAR re (18 RR) BRAG] ING (HOLDINGS) LIMITED BOC HONG KO! Outlook
Slide 21: 2024 Outlook
2024 Outlook Consolidated and enhanced economic Weakened momentum in recovery with focus on High-quality global economic recovery Development in Chinese Mainland Construction of “Eight Centres” in Risks emerging from monetary policy Hong Kong and enhancements to uncertainty among major economies Mut
Slide 22: Seeking Progress while Maintaining Stability
Seeking Progress while Maintaining Stability Promote steady and prudent Enrich capital-light products Refine regional management mechanism RMB internationalisation and Enhance collaboration for new growth drivers and tap new market opportunities connectivity schemes and integrated operations Quantif
Slide 23: Appendices
PSR re (2) ARS] BOC HONG KONG (HOLDINGS) LIMITED Appendices
Slide 24: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 2023 2022 Change Net interest income* 54,487 42,303 28.8% Net fee and commission income 9,167 9,800 -6.5% Other non-interest income* 1,844 2,112 -12.7% Net operating income before impairment allowances 65,498 54,215 20.8% Ope
Slide 25: Impacts of HKFRS 17
Impacts of HKFRS 17 2022 HKFRS 17 2022 Income statement summary (HK$m) (HKFRS 4) Adjustments (HKFRS 17) Net interest income* 42,367 (64) 42,303 Net fee and commission income 9,512 288 9,800 Other non-interest income* 5,053 (2,941) 2,112 Net operating income before impairment allowances 56,932 (2,717
Slide 26: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates (HK$m / %) 2023 2022 Assets Average balance Average yield Average balance Average yield Balances and placements with banks 430,345 2.03% 403,002 1.07% and other financial institutions Debt securities investments and other debt instruments 1,208,912 3.37% 1
Slide 27: Fee and Commission Income
Fee and Commission Income HK$m 2023 2022 Change Credit card business 2,430 1,991 22.0% Loan commissions 2,413 2,547 -5.3% Securities brokerage 1,826 2,491 -26.7% Trust and custody services 790 723 9.3% Payment services 714 724 -1.4% Insurance 651 912 -28.6% Bills commissions 481 514 -6.4% Funds dist
Slide 28: Operating Expenses
Operating Expenses HK$m 2023 2022 Change Staff costs 10,725 9,946 7.8% Premises & equipment expenses 1,394 1,273 9.5% Depreciation and amortisation 2,919 3,001 -2.7% Others 2,721 3,624 -24.9% Less: Costs directly attributable to insurance contracts (1,152) (894) 28.9% Total operating expenses 16,607
Slide 29: Customer Deposits
Customer Deposits HK$m 2023.12 2022.12 Change Total deposits from customers 2,503,841 2,377,207 5.3% CASA 1,187,479 1,229,804 -3.4% Demand deposits and current accounts 216,366 236,115 -8.4% Savings deposits 971,113 993,689 -2.3% Time, call and notice deposits 1,314,203 1,147,403 14.5% Structured de
Slide 30: Advances to Customers
Advances to Customers HK$m 2023.12 2022.12 Change Loans for use in Hong Kong - industrial, commercial and financial 683,604 641,206 6.6% Property development 188,115 171,614 9.6% Property investment 95,384 91,525 4.2% Financial concerns 16,506 25,197 -34.5% Stockbrokers 1,196 1,110 7.7% Wholesale an
Slide 31: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2023.12 2022.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,662,596 21,046 17,797 1,701,439 1,598,549 40,164 8,724 1,647,437 Pass 1,659,557 16,721 - 1,676,278 1,594,869 31
Slide 32: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total HK$m Total loans and O/W: for use in Debt securities Subtotal sheet exposure exposure advances Mainland and others Central government, central government-owned 266,158 57,019 81,944 348,102 23,154 371,256 entities and their subs
Slide 33: Loan Exposure to Property Companies
Loan Exposure to Property Companies As at end of 2023, commercial real-estate (CRE) related loans to corporates amounted to HK$367.4bn, down 1.3% from the end of 2022; accounting for 21.6% of Group’s total loans, down 1.0ppt Loan for use in HK, Mainland, SEA and other regions accounted for 77%, 16%,
Slide 34: BOC Life Business Development
BOC Life Business Development HK$m 2023 2022 Change MOODY’S A1 Standard new premium 11,567 8,713 +32.7% STANDARD Value of new business (VNB) 1,884 1,374 +37.1% A &POOR’S VNB Margin 16.3% 15.8% +0.5 pp Leading position in overall market and #1 in RMB insurance Leading position maintained in e-channel
BOC Hong Kong (Holdings) — FY2023 Earnings Presentation on 6ix