BANK OF CHINA LIMITED

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document. BANK OF CHINA LIMITED (a joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 3988) Report for the First Quarter ended 2013 The board of directors (the Board ) of Bank of China Limited (the Bank ) is pleased to announce the unaudited results of the Bank and its subsidiaries (the Group ) for the first quarter ended 31 March This announcement is made by the Bank pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. I. BASIC INFORMATION 1.1 Corporate information Stock name Stock code Listing venue Stock name Stock code Listing venue Securities name Securities code Listing venue (A Share) Shanghai Stock Exchange Bank of China 3988 (H Share) The Stock Exchange of Hong Kong Limited (A-Share Convertible Bonds) Shanghai Stock Exchange Secretary to the Board of Directors FAN Yaosheng ( ) Contact address 1 Fuxingmen Nei Dajie, Beijing, China, Telephone (86) Facsimile (86) bocir@bank-of-china.com 1

2 1.2 Key financial data and performance indicators Key financial data and performance indicators for the Group prepared in accordance with International Financial Reporting Standards ( IFRS ) Items Unit: RMB million (unless otherwise stated) As at 2013 As at 31 December 2012 Change (%) Total assets 13,242,378 12,680, Capital and reserves attributable to equity holders of the Bank 864, , Net assets per share (RMB) Items Three-month period ended 2013 Three-month period ended 2012 Change (%) Operating income 105,452 94, Profit for the period 41,619 38, Profit attributable to equity holders of the Bank 39,815 36, Earnings per share for profit attributable to equity holders of the Bank (basic, RMB) Earnings per share for profit attributable to equity holders of the Bank (diluted, RMB) Return on average equity (%) Items As at 2013 As at 31 December 2012 Core capital adequacy ratio (%) * Capital adequacy ratio (%) * Items Net cash (outflow)/inflow from operating activities Net cash (outflow)/inflow from operating activities per share (RMB) Three-month period ended 2013 Three-month period ended 2012 Down by 0.95 percentage point Change Down by 0.21 percentage point Down by 0.40 percentage point Change (%) (76,205) 566,703 N.A. (0.27) 2.03 N.A. * Calculated under the Rules for Regulating the Capital Adequacy Requirement of Commercial Banks. 2

3 1.2.2 Reconciliation of differences between Chinese Accounting Standards ( CAS ) and IFRS financial information There are no differences in the Group s operating results for the three-month period ended 31 March 2013 and 2012 or the total equity as at 2013 and as at 31 December 2012 presented in the Group s consolidated financial statements prepared under IFRS and those prepared under CAS. 1.3 Number of shareholders and top ten shareholders As at 2013, the Bank had a total of 1,032,372 shareholders, comprising 807,356 A-Share Holders and 225,016 H-Share Holders Top ten shareholders as at 2013 Unit: share No. Name of shareholder Number of shares held as at the end of reporting period Percentage of total share capital Type of shareholder 1 Central Huijin Investment Ltd. 189,066,270, % State A 2 HKSCC Nominees Limited 81,670,438, % Foreign legal person H 3 The Bank of Tokyo-Mitsubishi UFJ Ltd. 520,357, % Foreign legal person H 4 China Life Insurance Company Limited dividend personal dividend 005L FH002Shanghai 140,116, % State-owned legal person 5 Dalian Huaxin Trust Co., Ltd. 124,931, % Domestic non state-owned legal person 6 Shenhua Group Corporation Limited 99,999, % State-owned legal person 6 Aluminum Corporation of China 99,999, % State-owned legal person 8 China Southern Power Grid Co., Ltd. 90,909, % State-owned legal person 9 CSOP FTSE China A50 ETF 58,651, % Foreign legal person 10 China Universal CSI Index Securities Investment Fund 52,999, % Domestic non state-owned legal person Type of shares A A A A A A A 3

4 Notes: 1. During the reporting period, Central Huijin Investment Ltd. increased its shareholding of the Bank by 14,077,053 shares. 2. The number of shares held by H-Share Holders was recorded in the register of members as kept by the H-Share Registrar of the Bank. 3. HKSCC Nominees Limited acted as the nominee for all institutional and individual investors that maintain an account with it as at The aggregate number of H Shares held by HKSCC Nominees Limited included the shares held by National Council for Social Security Fund PRC. 4. The Bank is not aware of any connected relations or concerted action among the afore-mentioned shareholders. 5. All the shares held by the aforesaid shareholders are not subject to selling restriction. The shares held by the aforesaid A-Share Holders have not been pledged or frozen. The Bank is not aware of whether the shares held by the aforesaid H-Share Holders have been pledged or frozen. 1.4 Convertible Bonds Convertible bondholders and guarantors Number of convertible bondholders as at ,601 Guarantor of the Bank s Convertible Bonds None Top ten convertible bondholders as at 2013 Amount of Convertible Bonds Percentage of total No. Name of convertible bondholder held as at the end unconverted of the Convertible reporting period Bonds (RMB) 1 An-Bang Insurance Group Co., Ltd. traditional insurance products 2,198,342, % 2 China Credit Trust Co., Ltd. BoComm Fixed Income Stand Alone Trust 1,029,671, % 3 China Life Insurance Company Limited dividend personal dividend 005L FH002Shanghai 1,000,000, % 4 Government of Singapore Investment Corporation Pte Ltd 880,777, % 5 CITIC Securities Co., Ltd. 858,511, % 6 Bosera Convertible Bond Enhanced Debt Securities Investment Fund 839,156, % 7 China Life Insurance Company Limited traditional ordinary insurance products 005L CT001Shanghai 825,169, % 8 Guotai Junan Securities Co., Ltd. 738,688, % 9 Fullgoal Convertible Bond Securities Investment Fund 680,303, % 10 Penghua Value Advantage Securities Investment Fund 677,062, % 4

5 1.4.2 Changes in Convertible Bonds during the reporting period Unit: RMB Name of Convertible Bonds Bank of China A-Share Convertible Bond Before the change Increase/decrease Conversion Redemption Back-sell Others After the change 39,999,328,000 20,000 39,999,308, Accumulated conversion of Convertible Bonds during the reporting period Amount of conversion during the reporting period (RMB) 20,000 Number of converted shares during the reporting period (share) 6,598 Accumulated converted shares (share) 187,132 Proportion of accumulated converted shares to total shares before conversion % Amount of unconverted Convertible Bonds (RMB) 39,999,308,000 Proportion of unconverted Convertible Bonds to total issued Convertible Bonds % Previous adjustments of conversion price Effective date of adjusted conversion price Conversion price after adjustment Disclosure date Reasons of adjustments 4 June 2010 RMB3.88 per share 31 May profit distribution 16 November 2010 RMB3.78 per share 11 November 2010 A Share rights issue 16 December 2010 RMB3.74 per share 13 December 2010 H Share rights issue 10 June 2011 RMB3.59 per share 3 June profit distribution 13 June 2012 RMB3.44 per share 6 June profit distribution 29 March 2013 RMB2.99 per share 26 March 2013 Conversion price at the end of reporting period RMB2.99 per share Downward adjustment to conversion price Media of disclosure China Securities Journal, Shanghai Securities News, Security Times, Securities Daily and the websites of SSE, HKEx and the Bank 5

6 1.4.5 The Bank s outstanding debts, creditworthiness and availability of cash for repayment of debts in future years Dagong International Credit Rating Co., Ltd. (Dagong International) has evaluated the Bank s Convertible Bonds and provided an updated credit rating report (Da Gong Bao SD[2012]No.157) which reaffirmed an AAA credit rating on the Bank s Convertible Bonds. Dagong International believes that the Bank is able to provide significantly strong support to the repayment of its Convertible Bonds issued in The Bank is one of China s large-scale state-owned commercial banks. The Bank s business covers commercial banking, investment banking, insurance, direct investment and investment management, etc., providing comprehensive and quality financial services to personal and corporate customers worldwide. The Bank s risk management capability has continuously improved along with its enhanced capital base and overall operational capability. The Bank s adequate capital, stable structure of assets and liabilities and healthy profitability provide a solid foundation for the repayment of its various debts. Guided by a sound corporate governance mechanism, the Bank is transparent in its financials, efficient in its management and prudent in its operations. The Bank has healthy liquidity and no historical record of default. The Bank will further enhance its management and develop its business in the future and is capable of repaying debts in a timely manner Significant changes to the profitability, asset condition and creditworthiness of the Convertible Bonds guarantor There is no guarantee in relation to the Bank s issuance of the Convertible Bonds. II. SUMMARY OF ANALYSIS ON OVERALL OPERATING ACTIVITIES During the first quarter of 2013, the Group achieved a profit of RMB billion and a profit attributable to equity holders of the Bank of RMB billion, an increase of 8.09% and 8.20% respectively compared with the same period of Return on average total assets ( ROA ) was 1.30%, and return on average equity ( ROE ) was 18.86%, representing increases of 0.11 and 0.76 percentage point compared with the prior year-end. 2.1 The principal components of the Group s consolidated income statement for the three-month period ended 2013 were as follows: 1. The Group earned a net interest income of RMB billion, an increase of RMB6.362 billion or 10.50% compared with the same period of The net interest margin was 2.22%, an increase of 0.07 percentage point compared with the prior year-end. 6

7 2. The Group reported non-interest income of RMB billion, an increase of RMB4.162 billion or 12.12% compared with the same period of Non-interest income represented 36.50% of the total operating income, an increase of 6.67 percentage points compared with the prior year-end. Of this, net fee and commission income amounted to RMB billion, an increase of RMB3.578 billion or 16.92% compared with the same period of The Group recorded operating expenses of RMB billion, an increase of RMB3.509 billion or 8.89% compared with the same period of The Group s cost to income ratio (calculated under domestic regulations) was 26.61%, a decrease of 5.20 percentage points compared to the prior year-end. 4. The Group s impairment losses on assets amounted to RMB8.261 billion, including: (1) Impairment losses on loans and advances amounted to RMB8.283 billion with a credit cost of 0.47%. As at 2013, the Group reported non-performing loans totalling RMB billion, and the ratio of non-performing loans to total loans was 0.91%, down by 0.04 percentage point from the prior year-end. The ratio of allowance for loan impairment losses to non-performing loans was %, up by 7.94 percentage points from the prior year-end. (2) The net reversal of impairment losses on debt securities amounted to RMB112 million. 2.2 The principal components of the Group s financial position as at 2013 were as follows: The Group s total assets amounted to RMB13, billion, an increase of RMB billion or 4.43% compared with the end of 2012, and total liabilities amounted to RMB12, billion, an increase of RMB billion or 4.41% compared with the prior year-end. The Group s loan to deposit ratio was 71.47%. 1. The Group s due to customers amounted to RMB9, billion, an increase of RMB billion or 7.65% compared with the end of Among these, Domestic RMB-denominated deposits amounted to RMB7, billion, an increase of RMB billion or 9.36% from the prior year-end. 2. The Group s loans and advances to customers amounted to RMB7, billion, an increase of RMB billion or 6.72% compared with the prior year-end. Domestic RMB-denominated loans amounted to RMB5, billion, an increase of RMB billion or 4.02% compared with the prior year-end. 7

8 3. The Group s investment securities 1 amounted to RMB2, billion, a decrease of RMB6.699 billion or 0.30% compared with the prior year-end. The Group s RMBdenominated investment securities amounted to RMB1, billion, an increase of RMB billion or 1.23% from the end of Foreign currency-denominated investment securities amounted to USD billion, a decrease of USD3.911 billion or 3.94% compared with the prior year-end. The carrying value of the debt securities issued by European governments and institutions held by the Group amounted to RMB billion. Of which RMB billion or 96.65% were related to the United Kingdom, Germany, Netherlands, France and Switzerland. The Group did not hold any debt securities issued by governments and institutions in Greece, Portugal, Ireland, Italy and Spain. The carrying value of US subprime mortgage-related debt securities, US Alt-A mortgagebacked and Non-Agency US mortgaged-backed securities held by the Group amounted to USD1.026 billion, and the related impairment allowance was USD564 million. The Group s carrying value of debt securities issued by US agencies Freddie Mac and Fannie Mae together with debt securities guaranteed by these two agencies was USD42 million. 1 Investment securities include available for sale securities, held to maturity securities, loans and receivables and financial assets at fair value through profit or loss. 8

9 III. SIGNIFICANT EVENTS 3.1 Significant changes in major financial statement items and indicators and the reasons thereof Applicable Not Applicable The Group s key financial items and indicators which fluctuated over 30% compared with those as at the end of 2012, or compared with those for the three-month period ended 2012 are as follows: Unit: RMB million, except percentages Items Placements with and loans to banks and other financial institutions Due to customers at fair value As at 2013 As at 31 December 2012 Percentage Change 609, , % 75, ,017 (54.02%) Treasury shares (28) (15) 86.67% Main reasons Due to increase of placements with and loans to domestic banks and other financial institutions. Due to decrease of structured deposits. The subsidiaries increased their holdings of the Bank s stocks. Unit: RMB million, except percentages Items Net gains on investment securities Three-month period ended 2013 Three-month period ended 2012 Percentage Change (73.60%) Impairment losses on assets (8,261) (5,473) 50.94% Shares of results of associates and joint ventures % Main reasons Due to decline in gains from the purchase and sale of debt securities available for sale. Due to increase of domestic impairment losses on loans. Due to increase on shares of results of associates. 9

10 3.2 Development of significant events, related impact and resolution Applicable Not Applicable 3.3 Fulfillment of undertakings by the company and shareholders holding 5% or more shares of the Bank Applicable Not Applicable Based on the best knowledge of the Bank, undertakings by the Bank and its shareholders holding 5% or more shares were fulfilled during the reporting period. 3.4 Warnings and explanations of any forecasted losses or significant changes to accumulated net profit from the beginning of the year to the end of the next reporting period Applicable Not Applicable 3.5 Implementation of cash dividend policy during the reporting period Applicable Not Applicable IV. QUARTERLY REPORT This announcement is simultaneously available on the website of Hong Kong Exchanges and Clearing Limited at and that of the Bank at The first quarter report prepared in accordance with CAS is also available on the website of the Shanghai Stock Exchange at and that of the Bank. Beijing, PRC 25 April 2013 By Order of the Board Bank of China Limited YEUNG Cheung Ying Company Secretary As at the date of this announcement, the directors of the Bank are: Li Lihui, Li Zaohang, Wang Yongli, Sun Zhijun*, Liu Lina*, Jiang Yansong*, Zhang Xiangdong*, Zhang Qi*, Anthony Francis Neoh #, Huang Shizhong #, Huang Danhan #, Chow Man Yiu, Paul #, Jackson Tai # and Nout Wellink #. * Non-executive Directors # Independent Non-executive Directors 10

11 APPENDIX I FINANCIAL STATEMENTS (PREPARED IN ACCORDANCE WITH IFRS) Consolidated Income Statement Unit: RMB million For the three-month period ended (unaudited) (restated) Interest income 122, ,127 Interest expense (56,019) (62,529) Net interest income 66,960 60,598 Fee and commission income 26,172 22,382 Fee and commission expense (1,442) (1,230) Net fee and commission income 24,730 21,152 Net trading gains 2,236 3,039 Net gains on investment securities Other operating income 11,352 9,480 Operating income 105,452 94,928 Operating expenses (42,983) (39,474) Impairment losses on assets (8,261) (5,473) Operating profit 54,208 49,981 Share of results of associates and joint ventures Profit before income tax 54,423 50,076 Income tax expense (12,804) (11,573) Profit for the period 41,619 38,503 Attributable to: Equity holders of the Bank 39,815 36,798 Non-controlling interests 1,804 1,705 41,619 38,503 Earnings per share for profit attributable to equity holders of the Bank during the period (Expressed in RMB per ordinary share) Basic Diluted

12 Consolidated Statement of Comprehensive Income Unit: RMB million For the three-month period ended (unaudited) (restated) Profit for the period 41,619 38,503 Other comprehensive income: Fair value gains on available for sale financial assets: Amount recorded in equity 1,011 2,687 Less: related income tax impact (240) (584) Amount transferred to income statement (111) (544) Less: related income tax impact Subtotal 688 1,732 Share of other comprehensive income of associates and joint ventures accounted for using the equity method (27) (8) Less: related income tax impact 1 2 Subtotal (26) (6) Exchange differences from the translation of foreign operations (1,232) 109 Less: net amount transferred to income statement from other comprehensive income Subtotal Other (1,200) 173 (9) 51 Other comprehensive (loss)/income for the period, net of tax (547) 1,950 Total comprehensive income for the period 41,072 40,453 Total comprehensive income attributable to: Equity holders of the Bank 39,392 38,388 Non-controlling interests 1,680 2,065 41,072 40,453 12

13 Consolidated Statement of Financial Position Unit: RMB million As at 31 March 2013 (unaudited) As at 31 December 2012 (audited) ASSETS Cash and due from banks and other financial institutions 746, ,574 Balances with central banks 1,899,582 1,934,297 Placements with and loans to banks and other financial institutions 609, ,299 Government certificates of indebtedness for bank notes issued 77,097 70,554 Precious metals 152, ,534 Financial assets at fair value through profit or loss 80,834 71,590 Derivative financial assets 38,115 40,188 Loans and advances to customers, net 7,164,086 6,710,040 Investment securities 2,122,991 2,138,934 available for sale 672, ,400 held to maturity 1,173,855 1,183,080 loans and receivables 276, ,454 Investment in associates and joint ventures 12,573 12,382 Property and equipment 151, ,324 Investment properties 17,640 17,142 Deferred income tax assets 18,631 21,292 Other assets 150, ,465 Total assets 13,242,378 12,680,615 13

14 Consolidated Statement of Financial Position (continued) Unit: RMB million As at 31 March 2013 (unaudited) As at 31 December 2012 (audited) LIABILITIES Due to banks and other financial institutions 1,330,564 1,553,192 Due to central banks 141, ,022 Bank notes in circulation 77,007 70,733 Placements from banks and other financial institutions 305, ,004 Derivative financial liabilities 34,785 32,457 Due to customers 9,875,422 9,173,995 at amortised cost 9,800,005 9,009,978 at fair value 75, ,017 Bonds issued 213, ,133 Other borrowings 34,877 34,045 Current tax liabilities 40,959 34,994 Retirement benefit obligations 5,501 5,642 Deferred income tax liabilities 3,852 3,838 Other liabilities 276, ,018 Total liabilities 12,339,908 11,819,073 EQUITY Capital and reserves attributable to equity holders of the Bank Share capital 279, ,147 Capital reserve 115, ,451 Treasury shares (28) (15) Statutory reserves 65,411 65,362 General and regulatory reserves 132, ,909 Undistributed profits 282, ,899 Reserve for fair value changes of available for sale securities 7,909 7,276 Currency translation differences (18,415) (17,352) 864, ,677 Non-controlling interests 38,414 36,865 Total equity 902, ,542 Total equity and liabilities 13,242,378 12,680,615 LI Lihui Director WANG Yongli Director 14

15 Consolidated Statement of Cash Flows Unit: RMB million For the three-month period ended (unaudited) (unaudited) Cash flows from operating activities Profit before income tax 54,423 50,076 Adjustments: Impairment losses on assets 8,261 5,473 Depreciation of property and equipment 3,197 2,858 Amortisation of intangible assets and other assets Net gains on disposal of property and equipment, intangible assets and other long-term assets (45) (14) Share of results of associates and joint ventures (215) (95) Interest income arising from investment securities (15,657) (14,828) Dividends arising from investment securities (48) (43) Net gains on de-recognition of investment securities (174) (659) Interest expense arising from bonds issued 2,082 1,796 Net changes in operating assets and liabilities: Net increase in balances with central banks (76,026) (215,067) Net increase in due from and placements with and loans to banks and other financial institutions (88,271) (9,488) Net increase in precious metals (1,911) (6,271) Net increase in financial assets at fair value through profit or loss (9,764) (5,779) Net increase in loans and advances to customers (462,174) (247,374) Net decrease/(increase) in other assets 2,822 (5,920) Net (decrease)/increase in due to banks and other financial institutions (222,628) 282,007 Net increase in due to central banks 11,892 13,799 Net (decrease)/increase in placements from banks and other financial institutions (7,943) 5,571 Net increase in due to customers 713, ,137 Net increase in other borrowings 832 5,149 Net increase in other liabilities 15,312 10,568 Cash (outflow)/inflow from operating activities (71,732) 571,444 Income tax paid (4,473) (4,741) Net cash (outflow)/inflow from operating activities (76,205) 566,703 15

16 Consolidated Statement of Cash Flows (continued) Unit: RMB million For the three-month period ended (unaudited) (unaudited) Cash flows from investing activities Proceeds from disposal of property and equipment, intangible assets and other long-term assets 1, Proceeds from disposal of investment in subsidiaries, associates and joint ventures 2 Dividends received Interest income received from investment securities 12,865 11,745 Proceeds from disposal/maturity of investment securities 245, ,155 Increase in investment in subsidiaries, associates and joint ventures (182) (505) Purchase of property and equipment, intangible assets and other long-term assets (6,372) (4,870) Purchase of investment securities (231,055) (290,498) Net cash inflow/(outflow) from investing activities 21,488 (42,872) Cash flows from financing activities Proceeds from issuance of bonds 12, Repayments of debts issued (10,990) (156) Cash payments for interest on bonds issued (2,172) (1,914) Dividend payments to non-controlling interests (152) (153) Other net cash flows from financing activities 7 (38) Net cash outflow from financing activities (488) (2,115) Effect of exchange rate changes on cash and cash equivalents (10,326) 1,067 Net (decrease)/increase in cash and cash equivalents (65,531) 522,783 Cash and cash equivalents at beginning of the period 1,072,283 1,017,368 Cash and cash equivalents at end of the period 1,006,752 1,540,151 16

17 APPENDIX II CAPITAL ADEQUACY RATIO (CAR) Unit: RMB million, except percentages Group As at 2013 (unaudited) I. CAR calculated under the Administrative Measures for the Capital of Commercial Banks (Trial) 1. Net core tier-1 capital 871, Net tier-1 capital 872, Net capital 1,125, Core tier-1 CAR 9.52% 5. Tier-1 CAR 9.53% 6. CAR 12.30% II. CAR calculated under the Rules for Regulating the Capital Adequacy Requirement of Commercial Banks 1. Core CAR 10.33% 2. CAR 13.23% Note: CARs have been prepared in according to the Administrative Measures for the Capital of Commercial Banks (Trial) (CBRC Decree [2012] No.1) issued by the China Banking Regulatory Commission. 17