Boc Hong Kong (holdings) Limited · HKEX:2388
Boc Hong Kong (holdings) — FY2008 Earnings Presentation
31 slides from Boc Hong Kong (holdings)'s earnings presentation, Mar 24, 2009
Slide 1: 2008 Annual Results
Fortifying our Foundations in a Challenging Environment 2008 Annual Results 2009.03.24
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. Raymond Lee Executive Director & Chief Financial Officer Mr. Yingxin Gao Executive Director & Deputy Chief Executive Mr. Alex Cheung Chief Risk 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 Intensified financial crisis and global economic downturn posed an unusually challenging operating environment Global financial system under severe strain, particularly in the second half of 2008 More apparent signs of deterioration in local economy in 2H08 with rising un
Slide 7: Management Focus in 2008
Management Focus in 2008 To fortify the Group’s financial strength amid a highly challenging and volatile environment Strong Strong Capital Capital Position Position Proactive Proactive Risk Risk Management Management Effective Effective Cost Cost Control Control Tier 1 Tier 2 16.17% Classified or i
Slide 8: Key Financial Highlights
Key Financial Highlights Change Change 2008 2008 2007 2007 YoY YoY HK$m Net operating income before impairment allowances 25,526 27,254 ↓ 6.3% Operating profit before impairment allowances 16,755 19,481 ↓ 14.0% Profit attributable to shareholders 3,343 15,446 ↓ 78.4% Earnings per share (HK$) 0.3162
Slide 9: Solid Core Performance
Solid Core Performance Continued to grow our franchise in traditional banking businesses Solid ● Broad-based increase in loans and advances (+11.5%) Solid Loan ● Maintained leadership in residential mortgage and Loan Growth Growth loan syndication ● Strong deposit franchise with total customer Stron
Slide 10: Other Business Highlights
Other Business Highlights Maintained Maintained leadership leadership in in RMB RMB banking banking business business in in Hong Hong Kong Kong z No. z No. 11 in in local local RMB RMB deposits-taking business; deposits-taking business; RMB RMB deposits deposits +58.5% +58.5% z Extended z Extend
Slide 11: Financial Results
Financial Results Ch She ee ra (92 A) A PR 2 BOC HONG KONG (HOLDINGS) LIMITED
Slide 12: Condensed Income Statement
Condensed Income Statement Operating performance affected by market environment Bottom-line dragged by securities impairments HK$ m 2008 2008 2007 2007 % %YoY YoY Net interest income 20,157 19,395 ↑ 3.9 Net fees and commission income 5,179 6,274 ↓ 17.5 Other operating income 190 1,585 ↓ 88.0 Net ope
Slide 13: Net Interest Income
Net Interest Income NII increased driven by growth in average interest-earning assets NIM declined as widened net interest spread was offset by lower contribution of net free fund HK$ m 2008 2008 2007 2007 % %YoY YoY Interest income 35,281 46,056 ↓ 23.4 Interest expense 15,124 26,661 ↓ 43.3 Net inte
Slide 14: Net Fees and Commission Income
Net Fees and Commission Income Lower fees income due to drop in investment related fee income while traditional banking businesses continued to grow HK$ m 2008 2008 2007 2007 % %YoY YoY Investment and insurance fee income Securities brokerage (Stockbroking) 2,380 3,560 ↓ 33.1 Securities brokerage (B
Slide 15: Non-interest Income
Non-interest Income Non-interest income declined due to lower investment related fees income and operating loss of BOC Life HK$ m 2008 2007 2008 2007 % %YoY YoY Net fees and commission income 5,179 6,274 ↓ 17.5 Other operating income - Banking operation 2,127 1,691 ↑ 25.8 Net trading income* 1,914 1
Slide 16: Operating Expenses
Operating Expenses Core operating expenses* well contained thanks to disciplined cost control Operating Operating Expenses Expenses Number Number of of Branches Branches HK$ m 8,771 (288) (286) 7,773 304 305 2,149 1,372 Others 787 992 Depreciation 958 1,076 End-Dec 2007 End-Dec 2008 Premises and Equ
Slide 17: Net (charge) / reversal of Impairment Allowances
Net (charge) / reversal of Impairment Allowances Net charge of loan impairment recorded as new allowances increased Securities investments provisions increased as financial crisis intensified HK$ m 2008 2008 2007 2007 % % YoY YoY Advances to customers Individual assessment - New allowances (813) (33
Slide 18: Loan Quality
Loan Quality Classified or impaired loan ratio rose mildly to 0.46% Classified Classified or or Impaired Impaired Loan Migration Migration of of Classified Classified Loans Loans Loan Ratio Ratio % HK$ bn +1.7 0.44 0.46 -0.1 -0.8 -0.4 -0.1 1.8 2.1 End-2007 Downgrade Upgrade Collection Write-off Othe
Slide 19: Condensed Balance Sheet
Condensed Balance Sheet Total assets expanded on the back of higher customer and inter-bank deposits as well as subordinated liabilities HK$ m 31.12.2008 31.12.2008 31.12.2007 31.12.2007 % % Change Change Total assets 1,147,244 1,067,637 ↑ 7.5 Cash and balances with banks and other financial institu
Slide 20: Advances to Customers
Advances to Customers Broad-based growth with double-digit increase in corporate loans for use in HK, credit card advances and loans for use outside HK HK$ m 31.12.2008 31.12.2008 31.12.2007 31.12.2007 % %Change Change Loans Loans by bycurrency currencymix mix Loans for use in HK - corporate 188,774
Slide 21: Customer Deposits
Customer Deposits Moderate deposits growth with improved deposit mix HK$ m Deposits Deposits by bycurrency currencymix mix 31.12.2008 31.12.2008 31.12.2007 31.12.2007 % %Change Change Demand deposits and current 9% accounts 46,042 40,499 ↑ 13.7 4% Saving deposits 377,273 286,653 ↑ 31.6 Time, call an
Slide 22: Securities Investments
Securities Investments De-risking our securities portfolio with sovereign related investments increased to 25% of total 31.12.2008 31.12.2008 31.12.2007 31.12.2007 % %Change Change Debt Debt securities securities by bycredit credit rating rating HK$ m Sovereign 84,435 19,413 ↑ 334.9 2% 3% Public Sec
Slide 23: Segmental Performance – Personal Banking
Segmental Performance – Personal Banking Personal Banking negatively affected by narrower deposit spread and sluggish investment environment Operating Operating income income Business highlights : Other operating income Net interest income Maintained market leadership in residential property marke
Slide 24: Segmental Performance – Corporate Banking
Segmental Performance – Corporate Banking Corporate Banking achieved good operating results and business development; pre-tax profit dropped due to higher loan allowances Operating Operating income income Other operating income Business highlights : Net interest income 7% YoY Maintained market lea
Slide 25: Segmental Performance – Treasury
Segmental Performance – Treasury Treasury achieved strong growth in operating results Pre-tax loss due to rising impairment allowances Operating Operating income income Business highlights : Other operating income Net interest income Higher net interest income thanks to improved spread on 33% YoY
Slide 26: Mainland Business
Mainland Business Good progress in expanding Mainland Business Operating profit before impairment improved if excluding exchange loss HK$ m % 2008 2008 2007 2007 % YoY YoY Operating income 990 854 ↑ 15.9 Operating expenses 434 280 ↑ 55.0 Operating profit before impairment 556 574 ↓ 3.1 Operating pro
Slide 27: Outlook
Outlook Oh She ee ra (32 AR) A BR ZS BOC HONG KONG (HOLDINGS) i
Slide 28: Outlook – Operating environment
Outlook – Operating environment Global financial markets will remain extremely difficult and highly volatile while extensive government measures are introduced to deal with the economic downturn Underlying economies around the world may continue to shift with unpredictable magnitude and pace L
Slide 29: Our Focus
Our Focus Fortifying our strengths and mitigating risks Building on financial strength : maintain a strong balance sheet with healthy capital base, sound liquidity position and strong deposit base Mitigating risks : fortify risk management to further reduce risks and threats Streamlining costs
Slide 30: Our Focus
Our Focus Growing on core strengths and new opportunities Realign our strategies in a new environment and build on our strong franchise in traditional banking businesses Enhance our business capabilities and operating efficiency to better position for market recovery Further enhance collaborat
Slide 31: 2008 Annual Results
Fortifying our Foundations in a Challenging Environment 2008 Annual Results 2009.03.24
BOC Hong Kong (Holdings) — FY2008 Earnings Presentation on 6ix