Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — H1 2019 Earnings Presentation
28 slides from Boc Hong Kong (holdings)'s earnings presentation, Aug 30, 2019
Slide 1: 2019 Interim Results
2019 Interim Results 30 August 2019 1
Slide 2: Disclaimer and the New Reporting Basis
Disclaimer and the New Reporting Basis 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
Slide 3: Agenda
Agenda Strategy Review Financial Performance Outlook 3
Slide 4: Strategy Review
Strategy Review Op SR Be res (12 He) A PR ZS BOC HONG KONG (HOLDINGS) LIMITED
Slide 5: Solid Operating Results and Stable Financial Indicators
Solid Operating Results and Stable Financial Indicators Profit attributable to equity holders of the Company and other Return on Average equity instrument Shareholders’ Equity Total Capital Ratio holders HK$ 17.9bn 12.53% 23.00% +2.2% 5
Slide 6: Strengthening Foundation for Growth by Enhancing Local Market Commitment
Strengthening Foundation for Growth by Enhancing Local Market Commitment Mid-to-high end customers: +7.8% Personal Sustained leading position in new residential mortgage loans market Banking Active mobile banking customers: +20.6% Ranked the top syndicated loans arranger in HK and Macao, Corporate a
Slide 7: Focus on Customers, Makes Living Easier across GBA
Proactively Developing the GBA Market and Strengthening Featured Cross-border Services Focus on Customers, Makes Living Easier across GBA Mid-to-high end cross-border customers +12.8% GBA Account Opening BOCHK All Attestation Services Weather GBA Strategy Fund Shenzhen-HK Business Registration Conne
Slide 8: Solid Growth in SEA Business to Enhance Synergies and Quality
Solid Growth in SEA Business to Enhance Synergies and Quality 中國香港 Hong Kong, China Pre-provisions net operating income Customer deposits 老撾 Laos 菲律賓 Philippines +22.8% +6.7% 泰國 HK$1.39bn HK$51.0bn Thailand 柬埔寨 Cambodia 越南 Vietnam Customer loans NPL ratio 文萊 馬來西亞 Malaysia Brunei +12.9% 1.27% HK$44.9
Slide 9: Reinforcing Stronger Corporate Culture to Foster Sustainable Development
Reinforcing Stronger Corporate Culture to Foster Sustainable Development Experience Innovation Staff Products Customers Incentive Services Training Responsi- bility Develop- ment Perfor- Care Integrity mance Core Values Professio- Financial Prudence nalism Inclusion Livelihood Risk Control Innovatio
Slide 10: Financial Performance
Op SR Be res (12 He) A PR ZS BOC HONG KONG (HOLDINGS) LIMITED Financial Performance 10
Slide 11: Constant Expansion of Deposit Base
Constant Expansion of Deposit Base Customer Deposits Grew by 6.3% Deposit Market Share Steadily Improved HK$m Expanded by 1,897,995 2,018,236 0.64 ppt Deposit Market Share 14.85% 56.0% 55.4% 2018.12 2019.06 Time and Other Deposits CASA 11
Slide 12: Solid Growth in Customer Loans
Solid Growth in Customer Loans Customer Loans Grew by 6.7% Loan Market Share Constantly Increased HK$m Expanded by 522,867 Loans for use in HK - +6.1% 0.26 ppt corporate Loan Market Share 369,035 Loans for use in HK - individuals +5.7% 12.90% 380,119 Loans for use +5.6% outside HK 80,517 Trade finan
Slide 13: Margin Improvements amid a Steady Trend
Margin Improvements amid a Steady Trend Net Interest Income Rose by 12.2% Net Interest Margin Climbed amid a Steady Trend HK$m 1H2018 2H2018 1H2019 1.56% 1.70% 1.69% 21,109 1.70% 1.71% 1.71% 18,810 1.67% 1.61% 1.50% 1H2018 1H2019 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 *Included the funding income
Slide 14: Sequential Rebound in Net Fee Income
Sequential Rebound in Net Fee Income HK$m 6,476 6,046 8,666 4,836 8,120 1,712 6,852 1,623 901 Net Fee and Commission Income 3,122 2,122 2,717 Credit related business - loan commissions Investment and Insurance 3,832 3,829 3,780 Traditional business - non-credit related 1H2018 2H2018 1H2019 14
Slide 15: Healthy Cost Efficiency
Healthy Cost Efficiency Operating Expenses Increased by 7.4% Cost to Income Ratio at 25.8% HK$m 2Q17: 4Q17: 114 7,528 41.9% 4Q18: 404 40.7% 2Q18: 37.3% 38.7% 203 （205） 7,012 Industry Average 26.2% 25.4% 25.8% BOCHK 1H2018 Staff Premises Depre- Others 1H2019 1H2017 2H2017 1H2018 2H2018 1H2019 costs &
Slide 16: Steady Performance of Risk Indicators
Steady Performance of Risk Indicators Benign Asset Quality Solid Liquidity Position 227.4 % 227.5% 169.8% 193.3% 150.8% 140.4% 0.22% 0.19% 0.20% 124.4% 118.8% 119.2% 2018.06 2018.12 2019.06 1H2018 2H2018 1H2019 Provision Classified or Impaired Coverage Ratio Loan Ratio Average LCR NSFR 16
Slide 17: Outlook
Outlook Op SR Be res (12 He) A PR ZS BOC HONG KONG (HOLDINGS) LIMITED 17
Slide 18: Outlook: Opportunities and Challenges
Outlook Opportunities Challenges Opportunities from B&R Initiative Uncertainties in China-US trade friction Development plan for the GBA Loosening monetary policy worldwide New measures to boost local economy by HKSAR government Downward pressure on HK economy 18
Slide 19: Second Half Priorities
Second Half Priorities Maintain Solid Operations to Achieve Long Term Sustainable Development Capture business opportunities in Hong Kong, Greater Bay Area and Southeast Asia Facilitate fintech innovation and enhance digitalisation progress Adopt refined asset and liabilities management and stringen
Slide 20: Appendices
Appendices Op SR Be res (12 He) A PR ZS BOC HONG KONG (HOLDINGS) LIMITED 20
Slide 21: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 1H2019 1H2018 Change Net interest income 19,903 18,539 7.4% Net fee and commission income 6,046 6,476 -6.6% Other non-interest income 3,220 2,599 23.9% Net operating income before impairment allowances 29,169 27,614 5.6% Oper
Slide 22: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates 1H2019 1H2018 Average balance Average yield Average balance Average yield Assets HK$m % HK$m % Balances and placements with banks and 353,996 1.87% 456,406 1.95% other financial institutions Debt securities investments and other debt instruments 869,063 2.
Slide 23: Fee and Commission Income
Fee and Commission Income HK$m 1H2019 1H2018 Change Investment and Insurance 2,717 3,122 -13.0% Securities brokerage 1,093 1,705 -35.9% Funds distribution 464 552 -15.9% Insurance 1,160 865 34.1% Traditional business - non-credit related 3,780 3,832 -1.4% Credit card business 1,635 1,734 -5.7% Bills
Slide 24: Operating Expenses
Operating Expenses HK$m 1H2019 1H2018 Change Staff costs 4,264 4,061 5.0% Premises & equipment expenses 652 857 -23.9% Depreciation 1,402 998 40.5% Others 1,210 1,096 10.4% Total operating expenses 7,528 7,012 7.4% 2019.06 2018.12 Change Full-time staff headcount 13,964 14,084 -0.9% 24
Slide 25: Customer Deposits
Customer Deposits HK$m 2019.06 2018.12 Change Demand deposits and current accounts 217,317 207,812 4.6% Saving deposits 900,580 854,117 5.4% Time, call and notice deposits 900,326 833,867 8.0% Structured deposits 13 2,199 -99.4% Total deposits from customers 2,018,236 1,897,995 6.3% CASA 1,117,897 1
Slide 26: Advances to Customers
Advances to Customers HK$m 2019.06 2018.12 Change Loans for use in Hong Kong - industrial, commercial and financial 522,867 492,712 6.1% Property development 134,293 126,328 6.3% Property investment 50,528 50,223 0.6% Financial concerns 26,710 21,239 25.8% Stockbrokers 2,407 1,171 105.6% Wholesale a
Slide 27: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2019.06 2018.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers Pass 1,340,752 3,921 - 1,344,673 1,254,766 5,019 - 1,259,785 Special mention 2,629 2,584 - 5,213 1,934 3,133 - 5,
Slide 28: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total Total loans and O/W: for use in Debt securities sheet HK$m Subtotal exposure advances Chinese Mainland and others exposure Central government, central government-owned 262,187 79,178 62,125 324,312 39,180 363,492 entities and th
BOC Hong Kong (Holdings) — H1 2019 Earnings Presentation on 6ix