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 31 March 2014 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 No. 1 Fuxingmen Nei Dajie, Beijing, China, Telephone (86) Facsimile (86) ir@bankofchina.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 ) Unit: RMB million (unless otherwise stated) Items As at 31 March 2014 As at 31 December 2013 Change (%) Total assets 15,105,367 13,874, Capital and reserves attributable to equity holders of the Bank 972, , Net assets per share (RMB) Items Three-month period ended 31 March 2014 Three-month period ended 31 March 2013 Change (%) Operating income 119, , Profit for the period 47,199 41, Profit attributable to equity holders of the Bank 45,363 39, Basic earnings per share for profit attributable to equity holders of the Bank (RMB) Diluted earnings per share for profit attributable to equity holders of the Bank (RMB) Return on average equity (%) Net cash inflow/(outflow) from operating activities Net cash inflow/(outflow) from operating activities per share (RMB) Up by 0.27 percentage point 387,052 (76,205) N.A (0.27) N.A 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 2014 and 2013 or the total equity as at 31 March 2014 and as at 31 December 2013 presented in the Group s consolidated financial statements prepared under IFRS and those prepared under CAS. 2

3 1.3 Number of shareholders and top ten shareholders As at 31 March 2014, the Bank had a total of 979,889 shareholders, comprising 759,257 A-Share Holders and 220,632 H-Share Holders Top ten shareholders as at 31 March 2014 No. Name of shareholder Number of shares held Percentage of total share capital Type of shareholder Unit: share 1 Central Huijin Investment Ltd. 189,179,033, % State A 2 HKSCC Nominees Limited 81,632,237, % Foreign legal person H 3 The Bank of Tokyo-Mitsubishi UFJ Ltd. 520,357, % Foreign legal person H 4 Huaxin Trust Co., Ltd. 233,609, % Domestic non state-owned legal person A 5 Shenhua Group Corporation Limited 99,999, % State-owned legal person A 5 Aluminum Corporation of China 99,999, % State-owned legal person A 7 China Southern Power Grid Co., Ltd. 90,909, % State-owned legal person A 8 China Securities Finance Corporation Limited 83,451, % State-owned legal person Foreign legal person 9 CSOP FTSE China A50 ETF 75,793, % 10 Wang Jingfeng 60,588, % Domestic individual Notes: Type of shares 1. During the reporting period, Central Huijin Investment Ltd. s shareholding of the Bank remained the same. 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 31 March 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. A A A 3

4 1.4 Convertible Bonds Convertible bondholders and guarantors Number of convertible bondholders as at 31 March 2014: 15,183 Guarantor of the Bank s Convertible Bonds: None Top ten convertible bondholders as at 31 March 2014 Amount of Convertible Bonds No. Name of convertible bondholder held as at the end of the reporting period (RMB) 1 An-Bang Insurance Group Co., Ltd. traditional insurance products 2 Aegon-Industrial Fund Industrial Bank Industrial Bank Co., Ltd. Shanghai Branch Percentage of total unconverted Convertible Bonds 2,198,342, % 1,475,210, % 3 UBS AG 1,055,340, % 4 China Pacific Life Insurance Co., Ltd. dividend personal dividend 938,110, % 5 Industrial Convertible Bond Hybrid Securities Investment Fund 906,417, % 6 China Pacific Life Insurance Co., Ltd. traditional ordinary insurance products 902,352, % 7 Industrial Trend Investment Hybrid Securities Investment Fund 856,659, % 8 Government of Singapore Investment Corporation Pte Ltd 781,331, % 9 Guotai Junan Securities Co., Ltd. 772,988, % 10 GuoYuan Securities Co., Ltd. 761,873, % Changes in Convertible Bonds during the reporting period Unit: RMB Name of Convertible Bonds Bank of China A-Share Convertible Bonds Before the change Increase/decrease Conversion Redemption Back-sell Others After the change 39,386,767,000 6,000 39,386,761,000 4

5 1.4.3 Accumulated conversion of Convertible Bonds during the reporting period Amount of conversion during the reporting period (RMB) 6,000 Number of converted shares during the reporting period (share) 2,126 Accumulated converted shares (share) 217,391,832 Proportion of accumulated converted shares to total shares before conversion % Amount of unconverted Convertible Bonds (RMB) 39,386,761,000 Proportion of unconverted Convertible Bonds to total issued Convertible Bonds % Previous adjustments of conversion price Effective date of adjusted conversion price Adjusted conversion price Disclosure date Reasons of adjustments Media of disclosure 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 27 March 2013 Downward adjustment approved by the shareholders meeting 18 June 2013 RMB2.82 per share 6 June profit distribution Conversion price at the end of reporting period RMB2.82 per share China Securities Journal, Shanghai Securities News, Security Times, Securities Daily and the websites of SSE, HKEx and the Bank Note: Securities Daily became the Bank s selected newspaper for information disclosure as of 1 January The Bank s outstanding debts, creditworthiness and availability of cash for repayment of debts in future years Dagong Global Credit Rating Co., Ltd. has evaluated the Bank s Convertible Bonds and provided an updated credit rating report (Da Gong Bao SD[2013]No.204) which reaffirmed an AAA credit rating on the Bank s Convertible Bonds. Dagong Global Credit Rating Co., Ltd. believes that the Bank is able to provide significantly strong support to the repayment of its Convertible Bonds issued in The Bank s adequate capital, stable mix of assets and liabilities and healthy profitability provide a solid foundation for the repayment of its various debts. 5

6 1.4.6 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 2014, the Group achieved a profit after tax of RMB billion and a profit attributable to equity holders of the Bank of RMB billion, an increase of 13.36% and 13.88% respectively compared with the same period of Return on average total assets (ROA) and return on average equity (ROE) stood at 1.30% and 19.14%, increasing by 0.07 and 1.10 percentage points respectively compared with the prior year-end. 2.1 The principal components of the Group s consolidated income statement for the threemonth period ended 31 March 2014 were as follows: 1. The Group s net interest income amounted to RMB billion, representing an increase of RMB9.507 billion or 14.20% compared with the same period of The net interest margin was 2.29%, an increase of 0.07 percentage point compared with the same period of The Group s non-interest income amounted to RMB billion, representing an increase of RMB4.935 billion or 12.82% compared with the same period of Noninterest income represented 36.22% of operating income, a decrease of 0.28 percentage point compared with the same period of Particularly, net fee and commission income amounted to RMB billion, an increase of RMB4.240 billion or 17.15% compared with the same period of The Group s operating expenses amounted to RMB billion, an increase of RMB1.295 billion or 3.01% compared with the same period of The cost to income ratio (calculated under domestic regulations) was 24.86%, a decrease of 1.73 percentage points compared with the same period of The Group s impairment losses on assets amounted to RMB billion, an increase of RMB6.835 billion or 82.74% compared with the same period of The Group reported non-performing loans totalling RMB billion, and the ratio of non-performing loans to total loans was 0.98%. The ratio of allowance for loan impairment losses to nonperforming loans was %. 6

7 2.2 The principal components of the Group s financial position as at 31 March 2014 were as follows: The Group s total assets amounted to RMB15, billion, an increase of RMB1, billion or 8.87% compared with the end of Total liabilities amounted to RMB14, billion, an increase of RMB1, billion or 9.14% compared with the prior year-end. The Group s loan to deposit ratio was 71.21%. 1. The Group s due to customers amounted to RMB11, billion, an increase of RMB billion or 9.08% compared with the end of Particularly, domestic RMB-denominated deposits amounted to RMB8, billion, an increase of RMB billion or 9.54% from the prior year-end. 2. The Group s loans and advances to customers amounted to RMB8, billion, an increase of RMB billion or 7.24% compared with the prior year-end. Particularly, domestic RMB-denominated loans amounted to RMB5, billion, an increase of RMB billion or 3.76% compared with the prior year-end. 3. The Group s investment securities 1 amounted to RMB2, billion, a decrease of RMB billion or 0.61% compared with the prior year-end. The RMB-denominated investment securities amounted to RMB1, billion, an increase of RMB billion or 1.72% from the end of Foreign currency denominated investment securities amounted to USD billion, a decrease of USD7.784 billion or 8.30% compared with the prior year-end. The total carrying value of debt securities issued by European governments and institutions held by the Group was RMB billion, of which RMB billion or 94.07% was related to the United Kingdom, Germany, Netherlands, France and Switzerland. The Group did not hold any debt securities issued by governments and institutions of Greece, Portugal, Ireland, Italy or Spain. The carrying value of US subprime mortgage-related debt securities, US Alt-A mortgagebacked securities and US Non-Agency mortgage-backed securities held by the Group amounted to USD737 million, and the related impairment allowance was USD366 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 amounted to USD32 million. 1 Investment securities include securities available for sale, securities held to maturity, loans and receivables, and financial assets at fair value through profit or loss. 7

8 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 2013, or compared with those for the three-month period ended 31 March 2013 are as follows: Unit: RMB million, except percentages Items As at 31 March 2014 As at 31 December 2013 Change Treasury shares (42) (28) 50.00% Reserve for fair value changes of available for sale securities 3,564 1, % Main reasons Due to increase in holdings by the Bank s subsidiary of the Bank s stocks. Due to increase of fair value of available for sale debt securities caused by volatility in domestic debt securities market. Unit: RMB million, except percentages Items Three-month period ended 31 March 2014 Three-month period ended 31 March 2013 Change Net trading gains 3,798 2, % Net gains on investment securities Impairment losses on assets Share of results of associates and joint ventures % (15,096) (8,261) 82.74% % Main reasons Due to increase of net gains from foreign exchange and foreign exchange products. Due to increase of gains from the purchase and sale of available for sale debt securities. Due to increase of allowance for impairment losses on domestic loans. Due to increase on share of results of associates. 8

9 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 2014 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 24 April 2014 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: Tian Guoli, Chen Siqing, Li Zaohang, Sun Zhijun*, Liu Lina*, Zhang Xiangdong*, Zhang Qi*, Wang Yong*, Chow Man Yiu, Paul #, Jackson Tai #, Nout Wellink #, Lu Zhengfei # and Leung Cheuk Yan #. * Non-executive Directors # Independent Non-executive Directors 9

10 APPENDIX I FINANCIAL STATEMENTS (PREPARED IN ACCORDANCE WITH IFRS) Consolidated Income Statement Unit: RMB million For the three-month period ended 31 March (unaudited) (restated) Interest income 142, ,979 Interest expense (65,990) (56,019) Net interest income 76,467 66,960 Fee and commission income 30,719 26,172 Fee and commission expense (1,749) (1,442) Net fee and commission income 28,970 24,730 Net trading gains 3,798 2,236 Net gains on investment securities Other operating income 10,396 11,352 Operating income 119, ,452 Operating expenses (44,262) (42,967) Impairment losses on assets (15,096) (8,261) Operating profit 60,536 54,224 Share of results of associates and joint ventures Profit before income tax 60,928 54,439 Income tax expense (13,729) (12,801) Profit for the period 47,199 41,638 Attributable to: Equity holders of the Bank 45,363 39,834 Non-controlling interests 1,836 1,804 47,199 41,638 Earnings per share for profit attributable to equity holders of the Bank during the period (Expressed in RMB per ordinary share) Basic Diluted

11 Consolidated Statement of Comprehensive Income Unit: RMB million For the three-month period ended 31 March (unaudited) (restated) Profit for the period 47,199 41,638 Other comprehensive income: Items that may be reclassified subsequently to profit or loss Fair value gains on available for sale financial assets: Amount recorded in equity 3,178 1,011 Less: related income tax impact (998) (240) Amount transferred to income statement (125) (111) Less: related income tax impact , Share of other comprehensive income of associates and joint ventures accounted for using the equity method 1 (27) Less: related income tax impact 1 1 (26) Exchange differences from the translation of foreign operations 1,578 (1,232) Less: net amount transferred to income statement from other comprehensive income (60) 32 1,518 (1,200) Other 249 (9) Subtotal 3,848 (547) Items that will not be reclassified to profit or loss Actuarial losses on defined benefit plans (36) (16) Less: related income tax impact 5 (3) Subtotal (31) (19) Other comprehensive income for the period, net of tax 3,817 (566) Total comprehensive income for the period 51,016 41,072 Total comprehensive income attributable to: Equity holders of the Bank 48,640 39,392 Non-controlling interests 2,376 1,680 51,016 41,072 11

12 Consolidated Statement of Financial Position Unit: RMB million As at 31 March 2014 (unaudited) As at 31 December 2013 (audited) ASSETS Cash and due from banks and other financial institutions 761, ,584 Balances with central banks 2,593,376 2,132,001 Placements with and loans to banks and other financial institutions 808, ,049 Government certificates of indebtedness for bank notes issued 80,280 82,069 Precious metals 216, ,208 Financial assets at fair value through profit or loss 87,691 75,200 Derivative financial assets 41,907 40,823 Loans and advances to customers, net 7,976,137 7,439,742 Investment securities 2,155,094 2,181,270 available for sale 646, ,196 held to maturity 1,244,576 1,210,531 loans and receivables 264, ,543 Investment in associates and joint ventures 13,747 13,368 Property and equipment 160, ,968 Investment properties 20,591 20,271 Deferred income tax assets 22,847 22,928 Other assets 166, ,818 Total assets 15,105,367 13,874,299 12

13 Consolidated Statement of Financial Position (continued) Unit: RMB million As at 31 March 2014 (unaudited) As at 31 December 2013 (audited) LIABILITIES Due to banks and other financial institutions 1,736,038 1,551,624 Due to central banks 213, ,939 Bank notes in circulation 79,985 82,212 Placements from banks and other financial institutions 388, ,265 Derivative financial liabilities 30,866 36,212 Due to customers 11,014,196 10,097,786 at amortised cost 10,823,593 9,941,288 at fair value 190, ,498 Bonds issued 236, ,704 Other borrowings 30,433 29,570 Current tax liabilities 49,702 40,031 Retirement benefit obligations 4,715 4,815 Deferred income tax liabilities 3,814 3,385 Other liabilities 304, ,279 Total liabilities 14,092,998 12,912,822 EQUITY Capital and reserves attributable to equity holders of the Bank Share capital 279, ,365 Capital reserve 116, ,121 Treasury shares (42) (28) Statutory reserves 80,271 80,225 General and regulatory reserves 144, ,450 Undistributed profits 368, ,673 Reserve for fair value changes of available for sale securities 3,564 1,652 Currency translation differences (20,314) (21,542) 972, ,916 Non-controlling interests 39,827 37,561 Total equity 1,012, ,477 Total equity and liabilities 15,105,367 13,874,299 TIAN Guoli Director CHEN Siqing Director 13

14 Consolidated Statement of Cash Flows Unit: RMB million For the three-month period ended 31 March (unaudited) (restated) Cash flows from operating activities Profit before income tax 60,928 54,439 Adjustments: Impairment losses on assets 15,096 8,261 Depreciation of property and equipment 3,144 3,197 Amortisation of intangible assets and other assets Net gains on disposal of property and equipment, intangible assets and other long-term assets (157) (45) Net gains on disposal of investment in subsidiaries, associates and joint ventures (16) Share of results of associates and joint ventures (392) (215) Interest income arising from investment securities (17,631) (15,657) Dividends arising from investment securities (52) (48) Net gains on de-recognition of investment securities (263) (174) Interest expense arising from bonds issued 2,244 2,082 Accreted interest on impaired loans (125) (93) Net changes in operating assets and liabilities: Net increase in balances with central banks (94,071) (76,026) Net increase in due from and placements with and loans to banks and other financial institutions (135,034) (88,271) Net increase in precious metals (23,415) (1,911) Net increase in financial assets at fair value through profit or loss (8,584) (9,764) Net increase in loans and advances to customers (551,367) (462,174) Net (increase)/decrease in other assets (16,723) 2,915 Net increase/(decrease) in due to banks and other financial institutions 184,414 (222,628) Net increase in due to central banks 12,344 11,892 Net increase/(decrease) in placements from banks and other financial institutions 49,286 (7,943) Net increase in due to customers 916, ,681 Net increase in other borrowings Net (decrease)/increase in other liabilities (5,769) 15,296 Cash inflow/(outflow) from operating activities 391,828 (71,732) Income tax paid (4,776) (4,473) Net cash inflow/(outflow) from operating activities 387,052 (76,205) 14

15 Consolidated Statement of Cash Flows (continued) Unit: RMB million For the three-month period ended 31 March (unaudited) (restated) Cash flows from investing activities Proceeds from disposal of property and equipment, intangible assets and other long-term assets 1,583 1,000 Proceeds from disposal of investment in subsidiaries, associates and joint ventures Dividends received Interest income received from investment securities 15,287 12,865 Proceeds from disposal/maturity of investment securities 187, ,160 Increase in investment in subsidiaries, associates and joint ventures (6) (182) Purchase of property and equipment, intangible assets and other long-term assets (5,123) (6,372) Purchase of investment securities (160,190) (231,055) Net cash inflow from investing activities 39,639 21,488 Cash flows from financing activities Proceeds from issuance of bonds 30,639 12,819 Repayments of debts issued (19,261) (10,990) Cash payments for interest on bonds issued (2,163) (2,172) Dividend payments to non-controlling interests (126) (152) Other net cash flows from financing activities (14) 7 Net cash inflow/(outflow) from financing activities 9,075 (488) Effect of exchange rate changes on cash and cash equivalents 3,748 (10,326) Net increase/(decrease) in cash and cash equivalents 439,514 (65,531) Cash and cash equivalents at beginning of the period 1,150,566 1,072,283 Cash and cash equivalents at end of the period 1,590,080 1,006,752 15

16 APPENDIX II CAPITAL ADEQUACY RATIO (CAR) Unit: RMB million, except percentages Group As at 31 March 2014 (unaudited) I. CAR calculated in accordance with the Capital Rules for Commercial Banks (Provisional) 1. Net common equity tier 1 capital 960, Net tier 1 capital 961, Net capital 1,208, Common equity tier 1 capital adequacy ratio 9.58% 5. Tier 1 capital adequacy ratio 9.59% 6. Capital adequacy ratio 12.05% II. CAR calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks 1. Core capital adequacy ratio 10.32% 2. Capital adequacy ratio 12.95% Note: CARs have been prepared in accordance with the Capital Rules for Commercial Banks (Provisional) (Y.J.H.L [2012] No. 1) issued by the China Banking Regulatory Commission. 16