2017 Interim Results. August 2017

Transcription

1 2017 Interim Results August 2017

2 Disclaimer The materials used in this press conference are being furnished to you for your information only. No representation or warranty, express or implied, is made by the Company or its connected person, or any of their respective directors, officers, employees, advisers or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. This presentation may contain the Company s opinions on, and plans and expectations in the future. Any such prospects and forward-looking statements are based on the current plans, estimation or expectation. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that these expectations will be achieved or will prove to have been correct, and hence they do not constitute a substantial commitment of the Company The data and opinion contained herein are based on the information as of 30 June 2017, which are subject to change without notice. Such data and opinion have not been, and will not be, updated to reflect any developments which may occur after 30 August No reliance should be placed on the data contained herein which is based on the information as of 30 June 2017 or the prospects and forward-looking statements which do not guarantee the future performance of the Company. You may be liable for any unauthorized leakage of the information which may have a material effect on the share price and the interest of the Company and the shareholders. 1

3 1 Key Achievements 2 Business Overview 3 Future Outlook

4 Key Achievements in Steady growth of business in scale and quality Focused on sharpening our strength in distressed asset management business Actively participated in SOE reform, assisted in industrial restructuring, and served real economy in more depth Rapid growth of investment and asset management business with increasing profit contribution Smooth integration with NCB and continuously strengthened group synergy Optimized assets and liabilities management and enhanced risk management 3

5 1 Steady Growth of Business in Scale and Quality (RMB mm, except data per share and ratios) 6/30/2017 or 6/30/2016 or % Change Total assets 1,295,566 1,174, % Equities attributable to the Company s shareholders 142, , % Total income 60,610 45, % Profit before tax 12,058 10, % Net profit attributable to shareholders 8,882 8, % EPS % Cost-to-income ratio 22.6% 22.5% 0.1ppts ROAA (1) 1.6% 2.1% 0.5ppts ROAE (2) 14.8% 15.5% 0.7ppts CAR 17.18% 19.38% 2.2ppts (1) Represents the percentage of net profit for the period (including profit attributable to non-controlling interests) in the average balance of total assets as at the beginning and the end of the period. NCB has been consolidated into the consolidated financial statements of the Group since May 30, This figure was the return on average assets excluding the effect of the consolidation of NCB. (2) Represents the percentage of profit attributable to the equity holders for the period in the average balance of equity attributable to the equity holders of the Company as at the beginning and the end of the period. 4

6 2 Focused on Sharpening Our Strength in Distressed Asset Management Business Steadily Growing Income from Distressed Asset Management Income Breakdown by Segment from Distressed Asset Management Total Income from Distressed Asset Management Income from Traditional Distressed Assets 4,212 17,597 2,222 16,413 Income from Restructured Distressed Assets 8,559 8,645 Net Gain on DES Assets Disposal and Dividend Income 4, ,623 2, ,379 Net Gain on Disposal of DES Assets Dividend Income 5

7 3 Leveraged Our Strength to Serve Real Economy through Key Projects Participate in the mixed-ownership reform of SOEs Involve in the asset restructuring and disposal of non-core business of central SOEs Facilitate the industrial upgrade as well as the mergers and restructurings of large enterprises Actively participate in market-oriented DES for the deleveraging initiatives of SOEs 6

8 4 Rapid Growth of Investment and Asset Management Business with Increasing Profit Contribution Income from Principal Investments: 60.7% Total Committed Capital of Private Funds : 11.0% Pre-tax Profit Pre-tax Profit as % of Total (1) Pre-tax ROAE 6, % 26.0% 10.8% 1, % (1) Pre-tax profit from the investment and asset management segment as a percentage of total pre-tax profit of the Group; total pre-tax profit of the Group already includes elimination among segments 7

9 5 Smooth Integration with NCB and Strengthened Group Synergy Smooth Integration with NCB Achievement of Group Synergy (RMB bn) Total assets ROAE (1) % Cross-selling Revenue: RMB1.75 bn NCB 6.70% 16% Number of Clients: 1,201 Dec-15 Jun-15 Dec-16 Jun % Number of Projects: 1,183 NCB China 3.86% Aggregate Business Scale: RMB182.3 bn Dec-15 Jun-16 Dec-16 Jun-17 银行 NCB has achieved rapid growth by capitalizing on the Group s strength in integrated financial services. The Group has improved the synergistic operation to drive the joint development of various platforms (1) Annualized data 8

10 6 Optimized Assets and Liabilities Management and Enhanced Risk Management Comprehensive Management to Enhance Risk Control System Further improve risk management policy to form a risk appetite transmission mechanism Optimize risk pricing system and enhance asset allocation capabilities Strengthen process-wide risk control and enhance risk system evaluation Strict control of new risks and mitigate existing risks to ensure asset quality Accelerate establishment of IT system in risk management to promote computerized risk management Enhanced Assets and Liabilities Management to Improve Resources Allocation Efficiency Improve capital management capabilities by establishing an assets and liabilities management mechanism Achieve comprehensive capital management to boost the financing efficiency within the Group Enhance the Group s liquidity management to optimize financing structure Complete USD bond and financial bond issuance and effectively control the funding cost 9

11 6 Optimized Assets and Liabilities Management and Enhanced Risk Management (Cont d) Balance of Interest Bearing Liabilities Breakdown of Interest Bearing Liabilities 868, ,258 Financial assets sold for repurchase 1.9% Amount due to brokerage clients 2.7% Amount due from FIs 17.6% Borrowing fund 1.5% Bond payable 0.9% As of Dec 2016 Borrowing 51.9% Deposit taking 23.6% 12/31/2016 6/30/2017 Interest Rate of Borrowings 12/31/2016 6/30/2017 Fixed interest rate 1.67% % 2.10% % Floating interest rate 1.35% % 1.40% % Financial assets sold for repurchase 1.5% Amount due to brokerage clients 2.4% The amount due from FIs 20.4% Deposit taking 21.5% Borrowing fund 1.4% As of Jun 2017 Bonds payable 0.6% Borrowing 52.2% 10

12 1 Key Achievements 2 Business Overview 3 Future Outlook

13 Business Overview by Segment Total Assets Breakdown by Segment Pre-tax Profit Breakdown by Segment 2.3% 16.1% 2.4% 40.5% As of Dec % 39.8% As of Jun % 1H % 44.8% 22.1% 81.5% 20.5% Distressed Asset Management Investment and Asset Management Financial Services Total Assets: RMB1,175 bn Total Assets: RMB1,296 bn Pre-tax Proft: RMB11 bn Pre-tax Profit: RMB12 bn Pre-tax ROAE 30.0% 26.0% 14.4% 10.1% 19.2% 15.6% 2.0% 1.7% Distressed Asset Management Investment and Asset Management Financial Services Group Note: Percentage calculation does not include elimination among segments 12

14 1 Distressed Asset Management Distressed Debt Assets Optimize and Upgrade Distressed Asset Management Business to Steadily Expand Business Scale Net Balance of Distressed Debt Assets Acquisition Cost of Distressed Debt Assets 302,790 69,193 72, , , % 173, % 36, % 44, % 117, % 129, % 32, % 28, % FI distressed assets NFE distressed assets FI distressed assets NFE distressed assets 13

15 1 Distressed Asset Management Traditional Distressed Assets Solid Performance Resulted from Consistently Improving Asset Disposal Capabilities Acquisition Amount of Traditional Distressed Assets (1) Income from Traditional Distressed Assets (1) 28,073 26,414 4,212 2,222 Net Balance of Traditional Distressed Assets (1) IRR (1) 107, % 16.7% 93,764 12/31/2016 6/30/2017 Note: IRR is the discount rate that make the cash income from disposal of traditional distressed assets and cost and expense incurred from the asset to be zero (1) The first segment data 14

16 1 Distressed Asset Management Restructured Distressed Assets Improved Efficiency and Quality, Optimization in Incremental Assets Mix and Steady Increase of Acquisition Scale Lease and commercial service Construction and 2.5% building 3.1% Transportation, wharehousing and postal 4.4% Wholesales and retails 5.6% Mining 11.1% Lease and commercial service 3.4% Other industry Construction and 7.6% building 2.2% Transportation, warehousing and postal 3.1% Wholesales and retail 5.7% Manufacuturing 12.8% Mining 14.0% Manufacturing 10.9% Industry Breakdown As of Dec 2016 As of Jun 2017 Other industry 8.1% Real estate 52.4% Real estate 53.2% Acquisition Scale of Restructured Distressed Assets 46,437 41,120 Net Balance of Restructured Distressed Assets 195, , /12/ /6/30 15

17 1 Distressed Asset Management Restructured Distressed Assets More Proactive and Comprehensive Risk Control to Maintain Asset Quality Impaired Assets Ratio Impaired Assets Coverage Ratio Annualized Return on Monthly Average Balance 205% 203% 2.13% 10.6% 1.78% 8.7% 12/31/2016 6/30/ /31/2016 6/30/

18 1 Distressed Asset Management Debt to Equity Swap (DES) Constant business breakthrough laying the foundation for future development Book Value Breakdown by Type Dividend Income and Net Gain on DES Assets Disposed and Exit Multiple 3.8x 1.8x Listed DES, 11, % 3.8x 1.9x As of Dec 2016 Unlisted DES, 29, % 4, Total book value of RMB40.5bn 2, ,623 2,379 Listed DES, 16, % As of Jun 2017 Unlisted DES, 29, % Net Gain on Disposal Dividend Income Total book value of RMB45.5bn Exit multiple for all DES Assets (1) Exit multiple for unlisted DES Assets (1) (1) Net gain on disposal of DES Assets and acquisition cost of DES Assets disposed (net of allowance for impairment, if any); Excluding dividend income 17

19 2 Investment and Asset Management Continuously Improving Performance in Principal Investments with Further Expansion in Scale of Private Funds Balance of Principal Investments Total Committed Capital of Private Funds (RMB bn) (RMB bn) /31/2016 6/30/ /31/2016 6/30/2017 Income from Principal Investments Total Paid-in Capital of Private Funds (RMB bn) (RMB bn) /31/2016 6/30/2017 Capital from Third Parties 18

20 3 Financial Services Enhanced Efficiency in Asset Allocation in Financial Services Segment and Strengthened Group Synergies Total Income of Financial Subsidiaries (1) Positive Growth Momentum of Financial Subsidiaries 27,088 Revenue from Bank 5,454 18,836 2,606 Revenue from Life Insurance 18,319 12,688 Pre-tax Profit of Financial Subsidiaries (1) 1,541 1,271 Revenue from Securities, Futures and Fund Management 1,977 1,819 (1) NCB related data include financial data of the Company prior and post the merger of NCB at May ; Exclude data related to Cinda Property and Casualty Insurance ( Cinda PCIC ) as all administrative approval processes have completed, the Company has publicly transferred 1.23 bn shares of Cinda PCIC, i.e. 41% stakes, and has obtained approval from CIRC at Apr. 13,

21 3 Financial Services Significant Improvement in NCB Financial Performance with Solid Business Foundation Total Assets of NCB Pre-tax Profit of NCB (RMB bn) ,291 1,619 12/31/2016 6/30/2017 1H2916 NPL Ratio of NCB Capital Adequacy Ratio of NCB (1) 0.39% 0.57% 16.19% 1.88% 18.59% 1.76% 3.77% 14.31% 13.06% 12/31/2016 6/30/ /31/2016 6/30/2017 Core Tier 1 CAR AT1 CAR Tier 2 CAR (1) Total capital ratio=(tier1 capital +tier2 capital) net risk-weighted assets 20

22 1 Key Achievements 2 Business Overview 3 Future Outlook

23 China Cinda s Potential Business Opportunities Background Steadily growing economy, deepening structural adjustment, and improving quality and efficiency of economic development Amid deepening supply-side structural reform, the mission of financial sector is to serve real economy, deepen financial reform and control financial risk Target Markets and Business Opportunities Excellent opportunities for distressed asset management business arises from prevention and mitigation of financial risk Stabilized distressed assets from banking sector s off-balance sheet indicates the upgrade of traditional distressed asset business Industrial restructuring, economic development and increasing demand of asset restructuring in real economy shows more opportunities in restructured distressed asset business In-depth SOE reform especially SOE s deleveraging brings growing investment opportunities in DES and equity from Enhanced implementation of the three strategies - One Belt, One Road, integration of Beijing-Tianjin-Hebei, and Yangtze River Economy Belt triggers rising demand for financial services and effective investment Diversification of real economy and need of convenient financial services leads to more business opportunities to the financial services sector 22

24 Focus in 2H2017 Continue serve growth to our Improve Enhance to strengthen reform and innovation, optimize business structure, facilitate transformation and improve quality and efficiency of business Further develop distressed asset management business surrounding distressed entity and distressed assets to real economy Closely follow latest trend and market conditions, focus on both incremental and existing assets to drive the of DES business Leverage core business to discover special situation investments opportunities and increase asset allocation equity Promote differentiated, specialized and professional development of branches and subsidiaries to strengthen competitiveness asset and liability management, optimize liabilities structure and enhance liquidity management comprehensive risk management to achieve balance among risk, return and capital 23

25 Appendix

26 Financial Summary Income from distressed debt assets classified as receivables Change Fair value changes on distressed debt assets 4,170 2, % (1) Represents the ex-ncb ROAA as NCB has been consolidated into the Group s financial statement since May 30, If considering NCB, the ROAA for the periods of 6M2016, 2016 and 6M2017 are 1.8%, 1.69% and 1.39% respectively and 2017/6/30 and 2016/12/31 Change 8,645 8, % Cash and bank balances 14,262 17,368 (17.9%) Financial asset at fair value through profit or loss 164, , % Investment income 7,416 10,455 (29.1%) Available-for-sale financial assets 254, , % Net premium earned 17,514 12, % Financial assets classified as receivables 214, , % Commission and fee income 2,077 1, % Loans and advances to customers 296, , % Revenue from sales of inventories 5,788 2, % Others 351, , % Interest income 9,812 6, % Total assets 1,295,566 1,174, % Others 5,188 1, % Borrowings 512, , % Total 60,610 45, % Due to customers 211, , % Insurance costs (18,140) (12,782) 41.9% Bonds issued 200, , % Employee benefits (2,541) (2,373) 7.1% Others 210, ,869 (3.8%) Impairment losses on assets (3,942) (1,920) 105.3% Total liabilities 1,133,971 1,026, % Interest expense (15,635) (10,520) 48.6% Total equities 161, , % Others (8,417) (5,949) 41.5% Total (48,675) (33,544) 45.1% Key ratios Equity attributable to equity holders of shareholders 142, , % ROAA (annualized) (1) 1.6% 2.1% Profit before tax 12,058 10, % ROAE (annualized) 14.8% 15.5% Profit for the period 8,562 7, % Cost-to-income ratio 22.6% 22.5% Profit attributable to shareholders 8,882 8, % CAR 17.2% 19.4% 25