Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2009 Earnings Presentation
30 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 23, 2010
Slide 1: 2009 Annual Results
Solid Foundations for Sustainable Growth 2009 Annual Results 2010.03.23
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: Management Team
Management Team Mr. Gary He Vice Chairman & Chief Executive Mr. David Lam Deputy Chief Executive Mr. Yingxin Gao Executive Director & Deputy Chief Executive Mr. Chengwen Zhuo Chief Financial Officer Mr. David Wong Deputy Chief Executive 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook 3
Slide 5: Key Performance Highlights
Key Performance Highlights Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: Operating Environment
Operating Environment Operating environment remained challenging despite signs of recovery Market interest rates stayed low amid ample liquidity Intense competition in the local banking sector amid muted market demand Strong local stock and property markets spurred by stabilizing economy 5
Slide 7: 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 8: Business Highlights
Business Highlights Captured business opportunities and grew our franchise in a tough market Strong loan growth with solid loan quality, outperforming subdued market performance Encouraging fees income growth driven by stock brokerage, loans and credit card Life insurance business saw notable
Slide 9: 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 10: Strong Capital Position
Strong Capital Position Proactive capital management ensures competitiveness and resilience Capital Capital Adequacy Adequacy Ratio Ratio Well capitalized with solid Tier 1 Tier 2 Tier 1 ratio of 11.64% Successful issue of 16.17% 16.85% US$1.6bn Sub-Notes in 5.21% February 2010, qualified 5.31%
Slide 11: Solid Loan Quality
Solid Loan Quality Sound risk management and customer optimisation translate into solid loan quality Classified Classified or or Impaired Impaired Loan Loan Ratio Ratio Further improvement in classified or impaired loan -12 bps YoY ratio by 12 bps to 0.34% Maintain prudent risk management to ens
Slide 12: Financial Results
Financial Results Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 13: Condensed Income Statement
Condensed Income Statement Solid earnings growth amid challenging operating environment HK$ 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 24: Segmental Performance
Segmental Performance Operating Operating Income Income by by Segments Segments HK$ m Personal: Leading performance 25,526 26,055 in residential mortgage and 471 stock brokerage 8, 057 6, 404 Corporate: Strong loan growth and enhanced business 8, 211 8, 187 capabilities to provide Total Solution
Slide 25: 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
Slide 26: Outlook
Outlook Oh She ee ra (32 AR) A BR ZS BOC HONG KONG (HOLDINGS) i
Slide 27: Outlook – Operating environment
Outlook – 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 inter
Slide 28: Strategic Focus
Strategic Focus Well-positioned Well-positioned to to capture capture emerging emerging opportunities opportunities in in China China and and the the region region Strengthen our RMB Clearing Bank in Bancassurance model Hong Kong and enhance our market share Consolidate our market leadership i
Slide 29: Management Focus
Management Focus Maintain Maintain solid solid financial financial strength strength to to capture capture business business opportunities opportunities and and sustain sustain growth growth Leverage our core strengths to grasp emerging opportunities from economic recovery in the region Invest j
Slide 30: 2009 Annual Results
Solid Foundations for Sustainable Growth 2009 Annual Results 2010.03.23
BOC Hong Kong (Holdings) — FY2009 Earnings Presentation on 6ix