Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2005 Earnings Presentation
29 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 18, 2005
Slide 1: 2005 Interim Results
2005 Interim Results 18.8.2005
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 Attendees Attendees Title Title Mr. Gary He Vice Chairman and Chief Executive Mr. David Lam Deputy Chief Executive Mr. Raymond Lee Chief Financial Officer Mr. Yingxin Gao Deputy Chief Executive Mr. Alex Cheung Chief Risk Officer Mr. Peter Liu Chief Information Officer 2
Slide 4: Agenda
Agenda Key Performance Highlights Financial Results Outlook and Strategic Focus 3
Slide 5: Key Performance Highlights
ih fifths. 5 St Ch Eh Be ee (32 x) A BR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 6: Higher Attributable Profit and Dividend
Higher Attributable Profit and Dividend Profit ProfitAttributable Attributableto toShareholders Shareholders Dividend Dividendper perShare Share HK$ mm HK$ % YYooYY YYooYY .99 % % ++1166. ++22..55 % 6,522 0.328 6,382 5,581 0.320 1H2004 2H2004 1H2005 1H2004 1H2005 5
Slide 7: Strong Foundation, Growing Operating Results
Strong Foundation, Growing Operating Results % 1H2005 1H2005 2H2004 2H2004 1H2004 1H2004 Pre-provision profit (HK$'m) 5,549 4,996 5,356 ROE 18.39 19.66 18.19 ROA 1.61 1.63 1.48 NIM 1.59 1.54 1.56 Non-interest income ratio 28.74 27.44 31.33 Cost to income ratio 32.53 36.23 33.24 Classified impaired l
Slide 8: Operating Environment
Operating Environment GDP ↑↑ 6.0% GDP 6.0% 1Q2005 1Q2005 Robust economy Active commercial and residential property market Increased credit demand from both corporates and individuals Market interest rates rebounded in 2Q2005 1H2005 1H2005 Average Average1M 1M HIBOR 2.02% HIBOR 2.02% 7
Slide 9: Business Growth (1)
Business Growth (1) Broad-based loan growth from large corporates, retail customers, SMEs and trade finance Strong performance of China-related business 8
Slide 10: Business Growth (2)
Business Growth (2) Leading position maintained in mortgage, syndicated lending, personal Rmb services in HK Optimization of customer structure and expansion of high-value customer base 9
Slide 11: Financial Results
ih fifths. 5 St Ch Eh Be ee (32 x) A BR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 12: New Accounting Standards
New Accounting Standards With effect from 1 January 2005, the Group is required to prepare its financial statements in accordance with new and revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards. Due to the change in accounting standards, certain 2004 comparative figur
Slide 13: Condensed Profit and Loss Account
Condensed Profit and Loss Account Increased operating income, investment property revaluation gain and strong recoveries contributed to net profit growth 1H2005 1H2005 2H2004 2H2004 1H2004 1H2004 % %YoY YoY % %HoH HoH HK$ mm Net interest income 5,861 5,684 5,509 ↑6 ↑3 Non-interest income 2,364 2,150
Slide 14: Financial Impacts Arising from Adoption of New Accounting Standards
Financial Impacts Arising from Adoption of New Accounting Standards HKFRS HKFRS Comparable Comparable 1H2005 1H2005 impacts impacts 1H2005 1H2005 1H2004 1H2004 % %YoY YoY HK$ mm Net interest income 5,861 39 5,900 5,509 7.1% Non interest income 2,364 (132) 2,232 2,514 -11.2% Operating income 8,225 (9
Slide 15: Higher Net Interest Income and Improved NIM
Higher Net Interest Income and Improved NIM Improved NIM and NII resulting from higher market interest rate and active asset and liability management HK$ mm 1H2005 1H2005 2H2004 2H2004 1H2004 1H2004 Interest income 10,065 8,374 7,304 Interest expense 4,204 2,690 1,795 Net interest income 5,861 5,684
Slide 16: Other Operating Income
Other Operating Income Equity funds and structured notes more popular among customers Lower income from stockbroking Other Other Operating Operating Income Income Wealth Wealth Management Management Income Income HK$ mm HK$ mm 2,514 2,364 141 804 2,150 121 40 662 135 175 624 746 557 505 74 127 58 85
Slide 17: Operating Expenses under Control
Operating Expenses under Control Slight increase in operating expenses and Improved cost-to-income ratio Operating Operating Expenses Expenses Branch Branch Number Number HK$ mm 300 298 2,838 2,667 2,676 (283)* (285)* 503 401 415 O th e rs 292 293 286 Dec 2004 Jun 2005 D e p re c ia tio n *Branches
Slide 18: Strong Recoveries and Loan Impairment Release
Strong Recoveries and Loan Impairment Release Improved asset quality, higher collateral value and strong recoveries resulted in a reversal of loan impairment allowances HK$ mm 1H2005 1H2005 2H2004 2H2004 1H2004 1H2004 Loan im pairm ent release/(charge) - New allow ances (796) - - - Releases 1,123 -
Slide 19: Significant Improvement in Asset Quality
Significant Improvement in Asset Quality Classified impaired loan ratio declined to historic low of 1.89%* Classified Classified Impaired Impaired Loan Loan Ratio Ratio Migration Migration of of Classified Classified Impaired Impaired Loans Loans % HK$ bn --22. 4.12 .2233 +1.0 ppp pttY YooY Y -0.9 2
Slide 20: Condensed Balance Sheet
Condensed Balance Sheet Enhanced asset mix with strong loan growth and diversified securities portfolio HK$ mm 30.06.2005 31.12.2004 % 30.06.2005 31.12.2004 %Change Change Total assets 813,335 796,776 ↑ 2.1 Cash and short-term funds 113,792 102,647 ↑ 10.9 Inter-bank placements 60,196 107,581 ↓ 44.0
Slide 21: Broad-based Loan Growth
Broad-based Loan Growth Substantial growth in SMEs, trade finance, residential mortgage and loans for use outside HK HK$ mm 30.06.2005 30.06.2005 31.12.2004 31.12.2004 % %Change Change Loans for use in HK - corporate 156,225 148,034 + 5.5 Loans for use in HK - individual 132,531 124,687 + 6.3 Reside
Slide 22: Deposits from Customers
Deposits from Customers Savings deposits shifted to time deposits amid the rising interest rate environment Types Types of of Deposits Deposits Deposits Deposits by by Currency Currency Mix Mix 5.1% 4.7% 38.1% 11% 47.0% 20% 57.2% 47.9% 69% Dec 2004 Jun 2005 Fixed & Structured Savings Demand HKD USD
Slide 23: Business Segment Contribution
Business Segment Contribution Retail Banking contribution increased as deposit spread widened Operating Operating Income Income Segment Segment Contribution Contribution to to Pre-tax Profit Pre-tax Profit Retail 25% HK$ mm 11% Treasury 879 11% 75% 39% 856 45% 3,071 Corporate 22% 55% 3,117 78% 39% N
Slide 24: Mainland Branches Continued to Deliver Good Results
Mainland Branches Continued to Deliver Good Results Substantial growth in loans and operating profit Combined Combined profit profit and and loss loss account account of of 14 14 Mainland Mainland branches branches 1H 1H2005 # 2005# 1H 1H2004 2004 % %Change Change HK$ mm Operating income 206 127 + 6
Slide 25: Outlook and Strategic Focus
ih fifths. 5 St Ch Eh Be ee (32 x) A BR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 26: Outlook for Hong Kong Economy and Banking Sector
Outlook for Hong Kong Economy and Banking Sector Economic upturn likely to continue, creating higher demand for banking and financial services Enormous potential for expanding the scope of China- related business and hence more opportunities for banks HKD interest rates expected to rise with U
Slide 27: Strategic Focus (1)
Strategic Focus (1) Corporate Banking Focus on widening loan spread Maintain and grow market share in corporate lending Expand SME loans and trade finance Retail Banking Maintain mortgage market share with enhanced yield Grow other consumer lending Expand wealth management product of
Slide 28: Strategic Focus (2)
Strategic Focus (2) China-related Business Enrich product line to offer comprehensive cross- border banking services Cooperate more closely with BOC to increase business volume and expand customer base Positioned to maintain leadership and benefit from possible opening of RMB banking service
Slide 29: 2005 Interim Results
2005 Interim Results 18.8.2005
BOC Hong Kong (Holdings) — H1 2005 Earnings Presentation on 6ix