Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2022 Earnings Presentation
34 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 30, 2023
Slide 1: 2022 Annual Results
2022 Annual Results 30 March 2023
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
Slide 3: Agenda
Agenda Strategy Review Financial & Outlook Business Results
Slide 4: Strategy Review
© of Be (8M) PS Strategy Review
Slide 5: Significant Earnings Enhancement with Steady Increase in Shareholder Returns
01 Significant Earnings Enhancement with Steady Increase in Shareholder Returns Awards and Recognition HK$ 29.0bn HK$ 1.357 The Asian Banker The Strongest Bank in Hong Kong and Asia Pacific +16.2% +20.1% Asiamoney Best Chinese Bank for the Greater Bay Area Profit after Taxation Dividend per Share As
Slide 6: Strengthening Integrated Service Capability through Supporting Hong Kong’s Economic Development
02 Strengthening Integrated Service Capability through Supporting Hong Kong’s Economic Development Personal Financial Banking Markets #1 in new residential mortgage loans for 4 consecutive years Pre-tax profit of treasury business: +46% Corporate % of mortgage application made online: +44 ppt RMB tr
Slide 7: Cementing Our Leading Advantages in the GBA by Promoting Financial Connectivity
03 Cementing Our Leading Advantages in the GBA by Promoting Financial Connectivity Cross-boundary Wealth GBA Financial Bond Connect Management Connect Account Opening Intermediation Stock Connect Number of accounts opened & Leading position in Cumulative number of GBA corporate loans: +4.7% Southbou
Slide 8: Enhancing Development Quality by Deepening Regional Integration
04 Enhancing Development Quality by Deepening Regional Integration HK$ 69.9bn HK$ 52.4bn +13.8% +0.4% Customer Deposits Customer Loans HK$ 3.23bn 2.49 % +27.6% +0.10ppt Net Operating Income Non-performing Loan Ratio RMB transaction volume of SEA entities’ treasury business: +65% Number of mid to hig
Slide 9: Capturing Opportunities to Accelerate RMB Business Development through Collaboration
05 Capturing Opportunities to Accelerate RMB Business Development through Collaboration +26% Cementing Business Edges Enhancing Service Capabilities Cross border RMB settlement volume Leading market share in RMB loans and deposits First to launch an e-CNY experience in Hong Kong; in Hong Kong Su
Slide 10: Reinforcing Technological Foundations by Advancing Digital Transformation
06 Reinforcing Technological Foundations by Advancing Digital Transformation Strengthening Technological Infrastructure Construction of smart platform , data platform and open platform Completed the building of cloud platform structure Enhancing Customer Experience Deepening Scenario Construction Fa
Slide 11: Making Solid Achievements in Sustainability while Driving Low-carbon Transformation
07 Making Solid Achievements in Sustainability while Driving Low-carbon Transformation ESG Finance + 155% Green and Sustainable Loans + 31% New Green Deposits + 26% ESG Bond Investments Carbon-neutral Operations Youth Development Charitable Activities 11
Slide 12: Financial & Business Results
Financial & Business Results
Slide 13: Restored Growth in Profit after Taxation
08 Restored Growth in Profit after Taxation HK$m 9,423 887 29,038 (2,360) (1,437) (200) (1,076) 24,999 (1,198) (+28.6%) (-19.9%) (+21.3%) (+8.8%) (+9.3%) (+469.9%) (+23.0%) (+16.2%) 2021 Net Net Fee and Other Operating Impairment Net Loss from Taxation 2022 Profit after Interest Commission Non- Expe
Slide 14: Solid Expansion in Customer Deposits
09 Solid Expansion in Customer Deposits Customer Deposits up 2.0% Continuous Gains in Market Share HK$m 2,331,155 2,377,207 Market Share 15.40% +0.15 ppt 65.3% 51.7% 2021.12 2022.12 Deposits Market Share Time and Current and Saving CASA Ratio Other Deposits Deposits (CASA) 14
Slide 15: Loan Growth Outperformed the Market
10 Loan Growth Outperformed the Market Customer Loans up 3.2% to HK$1.65tn Steady Increase in Market Share HK$m Loans for Use in HK - 641,206 Corporates +10.2% Market Share 15.11% +0.93 ppt Loans for Use in HK - 532,501 Individuals +6.2% Loans for Use 423,924 Outside HK -4.1% Trade Financing 51,879
Slide 16: Strong Rebound in Net Interest Margin
11 Strong Rebound in Net Interest Margin QoQ Expansion in Net Interest Margin* Rapid Growth in Net Interest Income 2021:1.09% 2022: 1.36% HK$m 3,106,367 3,015,219 1.65% 1.54% +3.0% 1.19% 42,367 1.11% 1.09% 1.11% 1.06% 1.08% 32,944 +28.6% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 2021 2022 Net Interest
Slide 17: Continuous Headwinds Dampened Net Fee Income
12 Continuous Headwinds Dampened Net Fee Income Net Fee Income Weakened Improved Half-on-Half Performance in 2H22 by Market Conditions HK$m 11,872 -19.9% 9,512 Insurance +26.1% 5,900 6,157 5,820 Credit Card Business +20.5% 4,338 2,746 2,547 Trust and Custody Services +12.0% Currency Exchange +41.4%
Slide 18: Steady Improvement in Cost Efficiency
13 Steady Improvement in Cost Efficiency Satisfying Basic Needs and Resource Market-beating Cost-to-Income Ratio Allocation for Key Strategies 54.7% 50.9%* Implementing low-carbon operations E-statement accounted for 75% of total number of bank statements 33.5% 31.3% Ensuring strategic resource allo
Slide 19: Asset Quality Outperformed the Market
14 Asset Quality Outperformed the Market Manageable NPL Risk Largely Stable Credit Cost HK$m 1.38% 2,021 2,545 2022 1,340 0.15% 0.89% (816) 0.53% 1,249 1,966 0.27% 2021 1,182 0.12% (465) 2021.12 2022.12 Net Charge of Impairment Allowances Market Average BOCHK Credit Cost - Advances and Other Account
Slide 20: Healthy Capital and Liquidity Position
15 Healthy Capital and Liquidity Position Capital Sufficiency Enhanced by Steady Increase in Liquidity Positive Earnings Growth Total 21.56% 163.75% Capital Ratio +0.12 ppt 154.33% Tier 1 19.34% 136.99% Capital Ratio +0.23 ppt 130.81% 129.77% 125.06% 125.37% 120.42% CET 1 17.55% Capital Ratio +0.25
Slide 21: Outlook
Outlook
Slide 22: 2023 Outlook
16 2023 Outlook Challenges Opportunities Upbeat outlook for Mainland GDP growth Slowing global economic growth Deepened national opening-up policies Increasingly complicated Prominent “super-connector” role for geopolitical environment Hong Kong aided by border reopening Promising outlook on economi
Slide 23: Key Tasks
17 2023 Outlook Pursue steady implementation of ESG Deepen local market development, strategy with a focus on culture and care for service optimisation and retail talent banking transformation Strive for new business development in Build a new regional operating the GBA by deepening collaboration an
Slide 24: Appendices
Appendices
Slide 25: Income Statement and Balance Sheet Summary
Income Statement and Balance Sheet Summary Income statement summary (HK$m) 2022 2021 Change Net interest income* 42,367 32,944 28.6% Net fee and commission income 9,512 11,872 -19.9% Other non-interest income* 5,053 4,166 21.3% Net operating income before impairment allowances 56,932 48,982 16.2% Op
Slide 26: Average Balances and Average Interest Rates
Average Balances and Average Interest Rates (HK$m) / % 2022 2021 Assets Average balance Average yield Average balance Average yield Balances and placements with banks 403,002 1.07% 383,631 0.82% and other financial institutions Debt securities investments and other debt instruments 1,043,987 1.75% 1
Slide 27: Fee and Commission Income
Fee and Commission Income HK$m 2022 2021 Change Loan commissions 2,547 2,746 -7.2% Securities brokerage 2,491 3,743 -33.4% Credit card business 1,991 2,141 -7.0% Insurance 1,257 1,529 -17.8% Payment services 724 751 -3.6% Trust and custody services 723 764 -5.4% Funds distribution 541 724 -25.3% Bil
Slide 28: Operating Expenses
Operating Expenses HK$m 2022 2021 Change Staff costs 9,946 9,542 4.2% Premises & equipment expenses 1,273 1,232 3.3% Depreciation and amortisation 3,001 3,039 -1.3% Others 3,624 2,594 39.7% Total operating expenses 17,844 16,407 8.8% 2022.12 2021.12 Change Full-time staff headcount 14,832 14,553 1.9
Slide 29: Customer Deposits
Customer Deposits HK$m 2022.12 2021.12 Change Total deposits from customers 2,377,207 2,331,155 2.0% CASA 1,229,804 1,521,328 -19.2% Demand deposits and current accounts 236,115 327,234 -27.8% Savings deposits 993,689 1,194,094 -16.8% Time, call and notice deposits 1,147,403 809,827 41.7% 29
Slide 30: Advances to Customers
Advances to Customers HK$m 2022.12 2021.12 Change Loans for use in Hong Kong - industrial, commercial and financial 641,206 581,799 10.2% Property development 171,614 166,208 3.3% Property investment 91,525 78,125 17.2% Financial concerns 25,197 23,392 7.7% Stockbrokers 1,110 3,070 -63.8% Wholesale
Slide 31: Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification
Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2022.12 2021.12 HK$m Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Advances to customers 1,599,790 40,164 8,724 1,648,678 1,561,306 33,457 4,321 1,599,084 Pass 1,596,110 31,210 - 1,627,320 1,558,267 25,
Slide 32: Non-bank Mainland Exposures
Non-bank Mainland Exposures On-balance sheet exposure Off-balance Total HK$m Total loans and O/W: for use in Debt securities Subtotal sheet exposure exposure advances Mainland and others Central government, central government- owned entities and their subsidiaries and 272,016 69,934 97,432 369,448 2
Slide 33: Loan Exposure to Mainland Property Companies
Loan Exposure to Mainland Property Companies -5.4% HK$bn ■ As at the end of 2022, loans to Chinese real-estate (CRE) developers amounted to HK$100.1bn, down 5.4% from the end of 2021; accounting for 6.1% of Group’s total loans, down 0.6ppt. 105.8 100.1 ■ The property corporate customers in Mainland
Slide 34: BOC Life Business Development
BOC Life Business Development HK$m 2022 2021 Change MOODY’S A1 Value of new business (VNB) 1,374 1,041 +32.0% STANDARD A VNB Margin 15.8% 10.1% +5.6 pp &POOR’S Leading position in overall market and #1 in RMB insurance* Leading position maintained in e-channel and QDAP sales Overall market e-channel
BOC Hong Kong (Holdings) — FY2022 Earnings Presentation on 6ix