Boc Hong Kong (holdings) Limited · HKEX:2388

Boc Hong Kong (holdings) — FY2021 Earnings Presentation

36 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 29, 2022

  1. Slide 1: Annual Results

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  2. 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

  3. Slide 3: Strategy Review, Financial & Business Results, Outlook

    Strategy Review Financial & Business Results Outlook

  4. Slide 4: Strategy Review

    PERS re (12 AR) A PR AB] BOC HONG KONG (HOLDINGS) LIMITED

  5. Slide 5: Steady Business Progress with Solid Financial Indicators

    Steady Business Progress with Solid Financial Indicators Profit after Taxation Total Assets Annual DPS HK$25.0bn HK$3.64tn HK$1.130 7.7% 0.7% 52.0% ROE ROA Payout Ratio 5

  6. Slide 6: Deepened Local Market Development to Consolidate Market Leadership

    Deepened Local Market Development to Consolidate Market Leadership Mid to high-end customers: HK/Macao syndicated loans: RMB transaction volume for clients: AUM: for 17 consecutive years iGTB online transaction volume for Private Wealth customers: IPO receiving bank business: treasury business: AUM:

  7. Slide 7: Capturing Key Market of the Greater Bay Area through Enhanced Cross-border Service Capabilities

    Capturing Key Market of the Greater Bay Area through Enhanced Cross-border Service Capabilities in Southbound and Northbound account by number of customers and openings clearing amounts Cumulative number of new accounts: Provided professional financing solutions including mortgage loan, secured prop

  8. Slide 8: Refining Regional Strategy to Unlock Southeast Asia’s Market Potential

    Refining Regional Strategy to Unlock Southeast Asia’s Market Potential Laos Officially opened Customer Deposits Customer Loans Officially opened Myanmar HK$ bn HK$ bn Cambodia Philippines +16.4% +2.1% Thailand Vietnam Net Operating Income Non-Performing Loans Malaysia Brunei HK$ bn HK$ bn +8.3% NPL

  9. Slide 9: Tapping Market Opportunities to Strengthen RMB Franchise

    Tapping Market Opportunities to Strengthen RMB Franchise 27.7% 21.5% +26.6% RMB deposits RMB loans RMB clearing value market share in HK market share in HK growth* in HK Established a Launched Supported the Manila Branch officially to steer launched came online RMB business , between , and at BOC Ma

  10. Slide 10: Deepening Digital Transformation through Persistent Innovation

    Deepening Digital Transformation through Persistent Innovation Enhancing the Deployment of Deepening Scenario Construction Promoting Smart Operations Digital Technologies Mobile banking: Customers Refined scenarios for public services, First bank to launch a mobile account opening Transaction volume

  11. Slide 11: Innovating Green Finance to Meet Customer Needs

    Innovating Green Finance to Meet Customer Needs Green and Sustainable Loans Launched HK’s 1st green mortgage scheme, 1st green deposit scheme for personal +3.1X customers, and 1st RMB ESG fund First bank to collaborate with HKQAA’s New Green Deposits “Green Loan e-Assessment” platform, and introduce

  12. Slide 12: Promoting BOC Values by Fulfilling Corporate Responsibilities

    Promoting BOC Values by Fulfilling Corporate Responsibilities Strongly supported the financial relief programmes initiated by the HKSAR Government and HKMA Introduced new financial support initiatives, providing of credit resources to assist local SME customers Stood together with society to fight t

  13. Slide 13: Financial & Business Results

    PERS re (12 AR) A PR AB] BOC HONG KONG (HOLDINGS) LIMITED Financial & Rusiness Reciults

  14. Slide 14: Breakdown of Profit after Taxation

    Breakdown of Profit after Taxation HK$m 28,468 24,999 (-9.4%) (+9.5%) (-42.6%) (+0.4%) (-20.8%) (-85.9%) (-2.4%) （-12.2%） 2020 Net Net Fee Other Operating Impairment Revaluation Taxation 2021 Profit after Interest Income Non- Expenses Allowances Loss of & Others Profit after Taxation Income* Interes

  15. Slide 15: Improvement in Deposit Structure

    Improvement in Deposit Structure Customer Deposits up 6.8% Continual Increase in Market Share HK$m 2,331,155 Market Share 15.25% 2,183,709 up 0.25 ppt CASA Balance: +4.3% XX% 64.0% 71.0% Deposits Market Share 2020.12 2021.12 Time and Current and Saving Average Other Deposits Deposits (CASA) CASA Rat

  16. Slide 16: Balanced Growth in Customer Loans

    Balanced Growth in Customer Loans Customer Loans up 6.8% Consistent Gains in Market Share HK$m Loans for Use in HK - 581,799 Corporate +7.8% Market Share 14.18% Loans for Use in HK - 501,406 up 0.42 ppt Individuals +11.0% Loans for Use 442,268 Outside HK +0.5% Trade Financing 73,611 +10.7% Loans Mar

  17. Slide 17: Stabilising Net Interest Margin

    Stabilising Net Interest Margin Margin*Fell in Line with Market Rates Continuous AIEA Growth 2020: 1.33% 2021: 1.09% HK$m 2.0% 1.61% 3,015,219 1.5% 1.39% 1.17% 1.16% 2,737,726 1.11% 1.09% 1.11% 1.06% +10.1% 1.0% 36,374 32,944 0.5% 0.0% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 2020 2021 NIM* 1M LIBOR

  18. Slide 18: Resilient Net Fee Income Growth

    Resilient Net Fee Income Growth 淨利 Net 息Income Fee 收 入 增up 長9.5% X % YoY Broad-Based Income Growth 11,872 HK$m 10,842 Funds Management +23.8% 2,746 2,310 Bills Commissions +5.4% Securities Brokerage 6,157 Others +4.9% 5,736 Trust and Custody Services +10.9% Loan Commissions XX% +18.9% 5,469 5,900 In

  19. Slide 19: Market-leading Cost Efficiency

    Market-leading Cost Efficiency Stable Operating Expenses Market-Beating Cost-to-Income Ratio HK$m (3) (1) (17) 51.7% * 81 16,407 16,347 46.8% 33.5% 30.0% 2020 Staff Premises & Depre- Others 2021 Costs Equipment ciation 2020 2021 & Amorti- sation Market Average BOCHK Data source: Hong Kong Monetary A

  20. Slide 20: Consistently Solid Asset Quality

    Consistently Solid Asset Quality Steady and Sound NPL Ratio Steady Decline in Credit Cost HK$m 0.16% 229.64% 0.12% 228.58% 2,489 1,966 0.27% 0.27% 837 1,249 XX% 754 898 1,182 (465) 2020.12 2021.12 2020 2021 Net Charge 20 of Impairment Allowances - Advances and Other Accounts NPL Ratio NPL Coverage R

  21. Slide 21: Capital and Liquidity Positions Exceeded Regulatory Requirements

    Capital and Liquidity Positions Exceeded Regulatory Requirements Stable Capital Levels Enhanced Liquidity Ratios Total 21.44% 140.72% Capital Ratio - 0.66ppt 134.15% 131.87% Tier 1 19.11% 126.44% Capital Ratio -0.56ppt 120.31% 121.70% CET 1 17.30% Capital Ratio -0.45ppt 2H20 1H21 2H21 2020.12 2021.1

  22. Slide 22: Outlook

    PERS re (12 AR) A PR AB] BOC HONG KONG (HOLDINGS) LIMITED 2077 Outlook

  23. Slide 23: 2022 Outlook

    2022 Outlook Rapidly Evolving International Political Further Development of the GBA Landscape & Lingering Pandemic Situation & Launch of Northern Metropolis Blueprint Uneven Global Economic Recovery World’s Largest Free Trade Zone with Weakening Growth Momentum Formed as RCEP Takes Effect Challenge

  24. Slide 24: Bridge China and the World for the Common Good

    Bridge China and the World for the Common Good Building a First-Class Key Tasks Regional Banking Group Maintain stability while seeking progress Committed to strict risk management Capture market opportunities Enhance quality of development 24

  25. Slide 25: Appendices

    PERS re (12 AR) A PR AB] BOC HONG KONG (HOLDINGS) LIMITED. Appendices

  26. Slide 26: Income statement summary (HK$m)

    Income statement summary (HK$m) 2021 2020 Change Net interest income* 32,944 36,374 -9.4% Net fee and commission income 11,872 10,842 9.5% Other non-interest income* 4,166 7,258 -42.6% Net operating income before impairment allowances 48,982 54,474 -10.1% Operating expenses (16,407) (16,347) 0.4% Pr

  27. Slide 27: Average balance and yield of assets and liabilities

    (HK$m) / % 2021 2020 Assets Average balance Average yield Average balance Average yield Balances and placements with banks 383,631 0.82% 351,515 0.88% and other financial institutions Debt securities investments and other debt instruments 1,015,239 1.26% 849,401 1.76% Advances to customers and other

  28. Slide 28: Net fee and commission income breakdown

    HK$m 2021 2020 Change Securities brokerage 3,743 3,567 4.9% Loan commissions 2,746 2,310 18.9% Credit card business 2,141 1,859 15.2% Insurance 1,529 1,272 20.2% Trust and custody services 764 689 10.9% Payment services 751 740 1.5% Funds distribution 724 767 -5.6% Bills commissions 623 591 5.4% Saf

  29. Slide 29: Operating expenses

    HK$m 2021 2020 Change Staff costs 9,542 9,461 0.9% Premises & equipment expenses 1,232 1,235 -0.2% Depreciation and amortisation 3,039 3,040 0.0% Others 2,594 2,611 -0.7% Total operating expenses 16,407 16,347 0.4% 2021.12 2020.12 Change Full-time staff headcount 14,553 14,915 -2.4% 29

  30. Slide 30: Total deposits from customers

    HK$m 2021.12 2020.12 Change Total deposits from customers 2,331,155 2,183,709 6.8% CASA 1,521,328 1,459,261 4.3% Demand deposits and current accounts 327,234 310,226 5.5% Savings deposits 1,194,094 1,149,035 3.9% Time, call and notice deposits 809,827 724,448 11.8% 30

  31. Slide 31: Loans for use in Hong Kong breakdown

    HK$m 2021.12 2020.12 Change Loans for use in Hong Kong - industrial, commercial and financial 581,799 539,633 7.8% Property development 166,208 132,966 25.0% Property investment 78,125 64,768 20.6% Financial concerns 23,392 24,110 -3.0% Stockbrokers 3,070 1,656 85.4% Wholesale and retail trade 27,28

  32. Slide 32: Advances by stage and credit quality

    2021.12 2020.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,561,306 33,457 4,321 1,599,084 1,470,492 23,378 3,994 1,497,864 Pass 1,558,267 25,138 - 1,583,405 1,466,646 20,352 - 1,486,998 Special mention 3,039 8,319 - 11,358 3,846 3,026 - 6,872 Substandard

  33. Slide 33: Mainland-related on-balance sheet exposure

    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 287,742 81,299 103,530 391,272 28,052 419,324 entities and their subsidiaries and joint ventures

  34. Slide 34: Exposure by customer type and asset quality

    As of 31 December 2021, customer loan exposure to industries (incl. trading, retail, aviation, tourism(incl. hospitality), F&B, entertainment) severely affected by COVID-19 amounted to HK$140.9bn, accounting for 8.81% of total loans, a decrease of HK$10.05bn and 1.27ppt from 31 December 2020, respec

  35. Slide 35: Private Banking

    Mid to high-end Private Banking Private Wealth BOC Wealth Management customers +9.8% +7.8% +1% +5% +52% +35% +15% +2% Customers AUM Customers AUM Customers AUM Customers AUM Customers 2020 2021 AUM 2020 2021 35

  36. Slide 36: BOC Life insurance results

    HK$m 2021 2020 Change MOODY’S A1 Standard new premiums 10,284 11,344 -9.4% Profit before tax 1,023 854 19.8% STANDARD A Total assets 197,906 179,865 10.0% &POOR’S #3 in the life insurance market and remained #1 in RMB insurance Leading position maintained in e-channel and QDAP sales Overall market E

BOC Hong Kong (Holdings) — FY2021 Earnings Presentation on 6ix