Boc Hong Kong (holdings) Limited · HKEX:2388

Boc Hong Kong (holdings) — FY2016 Earnings Presentation

30 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 31, 2017

  1. Slide 1: A Century of Services, Always With You: 2016 Annual Results

    A CENTURY OF SERVICES ALWAYS WITH YOU 2016 Annual Results 2017.03.31 Mobile access QR code for 2016 Annual Results Announcement

  2. 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

  3. Slide 3: New Reporting Basis in this Presentation

    New Reporting Basis in this Presentation ► The disposal of Nanyang Commercial Bank, Limited (“NCB”) was completed on 30 May, 2016 ► The acquisition of Bank of China (Malaysia) Berhad (“BOC Malaysia”) was completed on 17 October, 2016 ► The Sale and Purchase Agreement for the disposal of Chiyu Bankin

  4. Slide 4: Management Team

    Management Team Mr Yue Yi Vice Chairman & Chief Executive Mr Li Jiuzhong Executive Director and Chief Risk Officer Mr Lin Jingzhen Deputy Chief Executive Mr Yuan Shu Deputy Chief Executive Mr Zhong Xiangqun Chief Operating Officer Mdm Sui Yang Chief Financial Officer Mrs Ann Kung Deputy Chief Execut

  5. Slide 5: Agenda

    Agenda 1 Strategy Review 2016 1 2 Financial Performance 2016 1 3 Outlook and Business Focus in 2017 1 4

  6. Slide 6: Strategy Review 2016

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  7. Slide 7: Record Earnings since IPO as result of Effective Strategy Implementation

    Record Earnings since IPO as result of Effective Strategy Implementation Attributable profit growth outpacing peers YoY Capital strength further enhanced 105.7% 22.35% 17.51% 17.86% 16.80% 15.80% BOCHK Peer 1 Peer 2 Peer 3 2012.12 2013.12 2014.12 2015.12 2016.12 Record high attributable profit Stabl

  8. Slide 8: Expedite Regional Development by Capitalising on B&R and Other National Strategy Opportunities

    Expedite Regional Development by Capitalising on B&R and Other Important National Strategy Opportunities 9 January, 2017 Completed the Acquisition of BOC 20 December, 2016 Thailand 28 February, 2017 Signed Asset Brunei Branch officially Purchase Agreements for the commenced operations acquisition of

  9. Slide 9: Market Share Gains with Loan and Deposit Growth Outperforming the Sector

    Market Share Gains with Loan and Deposit Growth Outperforming the Sector Customer loans Customer deposits HK$ bn HK$ bn 973.1 +11.7% 1,507.5 +9.8% 871.1 1,373.3 [Market*:6.5%] [Market*:9.1%] 2015.12 2016.12 2015.12 2016.12 Share in local loan market* up 0.5ppt Share in local deposit market* up 0.08p

  10. Slide 10: Significant Achievements in Branch Network Transformation

    Significant Achievements in Branch Network Transformation with Streamlined Structure and Workflows Pre-Transformation Post-Transformation* Achievements** • Offered comprehensive services • With specialised corporate team to to corporate customers provide comprehensive services to Full Service Region

  11. Slide 11: Steady Growth from Eight Key Business Platforms

    Steady Growth and Increased Operating Profit Contributions from Eight Key Business Platforms Enhanced product penetration No. of customers up over 40%; and satisfactory growth in loans up over 70%; average no. of mid-to-high end Private average AUM up over 50% customers (+13.6% YoY) Credit card Bank

  12. Slide 12: Breakthroughs in FinTech Established Market Leading Position

    Breakthroughs in FinTech Established Market Leading Position Product Crossover • Internet Banking users Innovation up 10.2% • Application of • Mobile Banking customers Blockchain in property • Establishment of FinTech up 16.1% valuation Collaboration Centre with • iService 24-Hour Video • Corporate

  13. Slide 13: Effective Risk Management with Indicators Within Reasonable Range

    Effective Risk Management with Indicators Within Reasonable Range Stable asset quality Low credit cost Classified or impaired loans ratio 0.10% 0.69% 0.72% 0.06% 0.23% 0.20% 2015.12 2016.12 2015 2016 BOCHK Market average Remark: Net charge of loan impairment allowances/average customer loan balance

  14. Slide 14: Financial Performance 2016

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  15. Slide 15: Robust Profit Growth and Capital Enhancement

    Robust Profit Growth and Capital Enhancement Attributable profit up 105.7% YoY Total capital ratio up 4.5ppt HK$ m 55,503 22.35% 17.64% 17.69% 17.86% 12.83% 12.89% 26,982 2015 2016 CET1 capital ratio Tier 1 capital ratio Total capital ratio 2015.12 2016.12 Adjusted profit up 6.8%* YoY Significant RO

  16. Slide 16: Steady Loan Growth with Resilient Pricing

    Steady Loan Growth with Resilient Pricing Loans for use in HK - industrial, commercial and Loans for use in HK – industrial, commercial and financial up 31.9% financial HK$ bn 973.1 20% 871.1 374.9 28% 284.2 288.5 241.8 266.5 237.6 5% 14% 78.6 72.1 1% 1% 1% 14% 9% 2015.12 2016.12 7% Property develop

  17. Slide 17: Significant Improvement to CASA Mix and Decreased Deposit Costs

    Significant Improvement to CASA Mix and Decreased Deposit Costs Strong CASA growth at 16.4% Average deposit rate down 18bps HK$ HK$ bn bn +16.4% 969.0 0.75% 0.57% 832.3 2015.12 2016.12 2015 2016 Improved deposit structure Good results achieved through with CASA up 3.7ppt in the mix effective deposit

  18. Slide 18: Steady Net Interest Income Growth with Margins Recovery

    Steady Net Interest Income Growth with Margins Recovery Market interest rates Net interest income HK$ m 25,428 10.0% 25,176 1M CNY 9.0% HIBOR 8.0% 7.0% 6.0% 2015 2016 5.0% 1Y CNY 2016 Net interest margin at 1.32% 4.0% HIBOR 1.56% 3.0% 1M SHIBOR 2.0% 1.36% 1.35% 1.0% 1M LIBOR 1.29% 1M HIBOR 0.0% 04-2

  19. Slide 19: Satisfactory Non-interest Income Growth and Cost-to-income Ratio

    Satisfactory Non-interest Income Growth and Cost-to-income Ratio Non-interest income up 8.8% YoY with ratio Fee and commission income enhanced to 39.1% HK$ m 37.3% 39.1% HK$ m 3,726 18,000 40.0% Credit cards 3,702 16,000 1,180 35.0% 3,255 14,000 1,135 30.0% Securities brokerage 1,954 12,000 2,597 4,

  20. Slide 20: Solid Asset Quality and Prudent Provisioning Policy

    Solid Asset Quality and Prudent Provisioning Policy Stable classified or impaired loan ratio Net charge of loan impairment allowances HK$ m HK$ m 0.10% 0.06% 1,994 1,955 806 694 537 589 412 0.23% 0.20% 31 -143 -136 2015.12 2016.12 2015 2016 Classified or impaired loan Individually assessed Collectiv

  21. Slide 21: Outlook and Business Focus in 2017

    Outlook and Business Focus in 2017

  22. Slide 22: 2017 Outlook: A Mixture of Opportunities and Challenges

    2017 Outlook：A Mixture of Opportunities and Challenges Opportunities ► Increasing banking opportunities from supply-side reform, industry upgrades and technology innovation prioritised by Chinese government annual work report emphasising stability and growth ► A new stage of economic integration of

  23. Slide 23: Business Focus in 2017

    Business Focus in 2017 ► Expand and strengthen corporate banking business by capitalising on Southeast Asia opportunities and deepening local market penetration ► Drive cross-border business development by leveraging BOC Group’s advantages on the Mainland and in Hong Kong ► Propel Southeast Asia bus

  24. Slide 24: Q&A Session

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  25. Slide 25: Appendix

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  26. Slide 26: Condensed Income Statement

    Condensed Income Statement Restated % 2016 HK$ m 2015 Change Net interest income 25,428 25,176 1.0 Net fee and commission income 10,541 11,273 (6.5) Other operating income 5,785 3,732 55.0 Net operating income before impairment allowances 41,754 40,181 3.9 Net charge of impairment allowances (578) (

  27. Slide 27: Non-interest Income

    Non-interest Income HK$ m Restated % 2016 2015 Change Fee and commission income Credit card business 3,702 3,726 (0.6) Securities brokerage 1,954 3,255 (40.0) Loan commissions 3,500 3,239 8.1 Insurance 1,630 1,467 11.1 Funds distribution 735 901 (18.4) Bills commissions 631 561 12.5 Payment services

  28. Slide 28: Condensed Balance Sheet

    Condensed Balance Sheet Restated HK$ m % Change 31.12.2016 31.12.2015 Cash and balances with banks and other financial institutions 229,073 225,985 1.4 Placements with banks and other financial institutions 70,392 62,661 12.3 Securities investments 659,523 564,075 16.9 Advances and other accounts 99

  29. Slide 29: Advances to Customers

    Advances to Customers Restated HK$ m % Change 31.12.2016 31.12.2015 Loans for use in HK - corporate 374,891 284,241 31.9 Loans for use in HK - individual 288,524 266,472 8.3 Residential mortgages* 218,426 207,178 5.4 Credit card advances 13,819 13,834 (0.1) Trade finance 72,121 78,593 (8.2) Loans fo

  30. Slide 30: Customer Deposits

    Customer Deposits Restated HK$ m % Change 31.12.2016 31.12.2015 Demand deposits and current accounts 172,427 130,958 31.7 Saving deposits 796,571 701,304 13.6 Time, call and notice deposits 535,078 538,478 (0.6) Structured deposits 3,425 2,571 33.2 Total deposits from customers 1,507,501 1,373,311 9

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