Bank of Communications Co., Ltd Interim Results

Transcription

1 Bank of Communications Co., Ltd Interim Results August 2014

2 Agenda I Financial Highlights II Business Highlights III Risk Management IV Next Step 2

3 Agenda I Financial Highlights 3

4 Performance Highlights (In RMB billions except percentages) 1H2013 Change Attributable profit % NIM 2.39% 2.56% -17bps Net fee & commission income % Share of net fee & commission income 17.28% 16.36% 92bps Cost-to-income ratio 25.71% 25.20% 51bps End- End-2013 Change ROAA 1.21% 1.11% 10bps ROAE 17.10% 15.58% 152bps Impaired loan ratio 1.13% 1.05% 8bps Provision coverage ratio % % -949bps Provision rate 2.30% 2.24% 6bps CAR Note 12.75% 12.08% 67bps Tier 1 CAR Note 10.70% 9.76% 94bps Note: Based on the Provisional Measures on Capital Management of Commercial Banks issued by the CBRC. As approved by the regulators, the Group began to measure the CAR under the Advanced Measurement Approach at the end of June The changes of CAR and Tier1 CAR in the reporting period include the impacts from the alteration of measurement approaches. 4

5 On-balance-sheet and off-balance-sheet business Size of on-balance-sheet assets and off-balance-sheet business Assets under management by domestic branches (In RMB billions) End- End YTD (In RMB billions) End- End YTD On-the-sheet assets Off-the-sheet guarantees and commitments 6, , % 1, , % Include: Loan commitments % L/C % L/G & Guarantees % Acceptance bills % Assets custody Personal AUM 3, , % 2, , % Fund AUM % Trust AUM % Off-thesheet wealth mgmt % 5

6 Balance Sheet Summary (In RMB billions except percentages) End- End-2013 Growth Growth % Loans to customers (less provision) 3, , % Investment securities 1, , % Cash & due from central banks % Due from banks and other financial institutions % Lease financing receivables % Other assets % Total assets 6, , % Due to customers 4, , % Due to banks and other financial institutions 1, , % Other liabilities % Total liabilities 5, , % Share capital % Other equity % Total equity % 6

7 Profit and Loss Summary (In RMB billions except percentages) 1H2013 Growth Growth% Net interest income % Net fee & commission income % Insurance business income % Other income % Net operating income % Impairment losses for loans % Insurance business expenses % Other operating expenses % Include: business cost % Profit before tax % Income tax % Net profit % Include: Attributable profit % 7

8 Continuous increase of brand value Consecutive appearances in Fortune 500 No. 217 in terms of operating revenue, ascending by 26 positions from previous year Ranks No. 19 in terms of Tier-1 Capital among the globe s top 1000 banks, ascending by 4 positions from the previous year with the debut appearance in Top 20 8

9 Loans and Deposits Deposit growth Deposit from customers (in RMB billions) 4, , (In RMB billions except percentages) End- End-2013 YTD 5.25% 2013 Corporate deposits 2, , % Personal deposits 1, , % 9

10 Loans and Deposits Loan growth 5.12% Loans to customers (in RMB billions) 3, , (In RMB billions except percentages) End- End-2013 YTD Corporate loans 2, , % Personal loans % 2013 Include: credit card overdraft % 10

11 NIS & NIM 2.56% NIS & NIM YoY 2.39% 2.33% NIS & NIM QoQ 2.44% Average balance of interest-earning assets (in RMB billions) 10.66% 2.39% 2.20% 2.14% 2.24% 5, , H Q1 2014Q2 NIS NIM 1H

12 Net Fee and Commission Income Net fee & commission income (in RMB billions) 13% 单击此处编辑母版文本样式 1H (In RMB billions except percentages) Payment settlement Breakdown 1H2013 YoY % Bank card % Investment banking Guarantees & commitments Management services Agency services % % % % 12

13 Cost-to-income Ratio (In RMB billions except percentages) 1H2013 Growth Cost-to-income ratio 0.51 pps Net operating income % 25.20% 25.71% Business cost 第二级 % 1H

14 Deposit Per Outlet and Profit Per Capita Deposit per outlet (in RMB billions) Profit per capita (annualized, in RMB thousands) 4.36% 8.60% H

15 Agenda II Business Highlights 15

16 Corporate Financial Service Profit before tax (in RMB billions) Highlights Net fee & commission income (in RMB billions) % % H2013 No. of Win-to Fortune customers 1H % 1H

17 Corporate Financial Service Corporate & Institutional Service MSME Service Increased the brand influence of Win-to Fortune through Win-to Fortune by Your Side" Roadshows Strengthened the support to major clients by signing strategic cooperation agreements with leading players in telecom, agriculture and transportation sectors Ranked top in insurance debt guarantee market share on the strength of the innovative pilot NCD business Took the lead in direct investment in domestic automobile industry to effectively extend profit margin 第二级 Completed the first commercial factoring business in the FTZ as one of the first banks qualified for centralised foreign currency management for MNCs in the FTZ Balance and share of domestic MSME loans 42.85% 1, % 1, In RMB billions, % Down 1.58 pps 0.55% "POS Loan": fully "on-line" business process achieved under an integrated risk management system Financial services for business circles: advancing with a marketing focus on the package of "personal revolving loans + personal short-term business loans + Jia Yi Tong" Hi-tech financial services: a pilot program for the dedicated service model established to tap on the linkage between investment and loans 17

18 Corporate Financial Service Investment Banking Assets Custody Qualified by NDRC as lead underwriter for bonds, with the approval and completion of the first batch of corporate bonds Pioneered in debt financing instruments to fund renovation of shanty areas Secured a number of local government bond issuance in the capacity of lead underwriter by closely observing government policies Revenue from investment banking: RMB3.146 billion, representing 18.17% of the Group's net fee & commission income Acted as domestic lead underwriter for 126 debt financing instruments with a total underwriting amount of RMB billion, up 45.35% YoY Expedited innovative custody service for insurance debt investment plans, leasing funds, asset securitisation, special-purpose medicare funds, salary and welfare plans Secured the leadership in pension service sector based upon a diversity of unique services Successfully provided custody service for RQFII products, and became the custodian for Shanghai's first QDLP product via the active participation in Shanghai's QDLP pilot program Assets under custody reached RMB3.74 trillion, up 32.76% YTD 18

19 Corporate Financial Service Supply Chain Finance Proactively promoted Kuai Yi Shou and Kuai Yi Tie for further development of the industryleading receivables service platform Reinforced the application of "Smart Vehicle Financial System" to provide convenient and efficient financial services to automobile manufacturers and dealers Covering 1,200+ industry chain networks for 10,000+ enterprises Cash Management Vigorously promoted the interbank cash management platform integrating budgeting, bills and credit features, to provide one-stop integrated solutions for medium and large corporate and institutional customers Enhanced user experience of Corporate Online Banking, Corporate Banking Link and SWIFT Net Bank-corporate Express Offering cash management service for 16,000 corporate groups through 80,000 cash management accounts International Settlement & Trade Finance International settlement volume by domestic branches reached USD billion, up 12.48% YoY International trade finance volume reached USD billion. International factoring volume reached USD 882 million, up 31.84% YoY, among which the FCI international dual factoring volume amounted to USD 694 million, ranking the 8 th among its 269 global members 19

20 Personal Financial Service & Wealth Management Highlights No. of personal customers 4.92% Personal AUM by domestic branches (in RMB billions) 7.32% 1, , H2013 Net fee & commission income (in RMB billions) 2013 Profit before tax (in RMB billions) 18.41% % H2013 1H

21 Personal Financial Service & Wealth Management Personal wealth management No. of BOCOM fortune standard customers 5.88% No. of OTO fortune standard 11.16% customers No. of private banking customers 12.42% Further improved customer-oriented wealth management service featuring cross-border finance and private trust Held nearly 100 roadshows for customers and set up 70+ cross-border financial service centres Established a new media marketing architecture of "Micro-banking + OTO brand + account manager" to innovatively uplift brand value and brand influence in key areas through promotional events such as "OTO Carnival" 21

22 Personal Financial Service & Wealth Management Credit Card Cards in force in mainland China (in millions) million pieces Total spending volume in mainland China (in RMB billions) +47.5% Note: including quasi-credit cards 1H2013 The new brand proposition of "Easy for More" launched on 16 January 2014 Focused on customer experience to improve services and processes. Both customer size and quality were improved on the back of the transformation and innovation on traditional card application channels as well as the rapidly growing emerging channels 22

23 Personal Financial Service & Wealth Management Debit Card Cards in force in mainland China (in millions) million pieces Total spending volume in mainland China (in RMB billions) +20% H2013 Continued to enhance marketing and innovation in Pacific Bank Card business, including new offerings of Go-abroad Financial Card, Children's Card and Visual Card Stepped up new product R&D to launch Pacific Gold Fortune Card and independent IC cards suitable for mobile payment Promoted development of new products and features such as multi-currency debit cards and nonmedium debit card 23

24 Treasury and Institutional Business Highlights Profit before tax 15.53% In RMB billions, % Interest income of investment securities 36.63% H2013 1H2013 Interest income due from banks and other financial institutions 38.72% H

25 Treasury and Institutional Business Treasury Business Money market business Accumulative trading volume in RMB money market by domestic branches amounted to RMB6.93 trillion Accumulative trading volume in foreign currency money market amounted to USD92.1 billion Trading book business Banking book business Precious metals business Trading volume of RMB-denominated bonds by domestic branches reached RMB0.68 trillion Accumulative foreign currency trading volume in interbank market amounted to USD330.3 billion One of the first RMB/GBP direct market makers in the inter-bank foreign currency market The Group's balance of investment securities hit RMB1, billion, up 3.58% YTD, with a yield rate of 4.28%, up 58 bps YoY The trading volume of Gold T+D accounts amounted to RMB50.34 billion, up 25.11% YoY Accumulative proprietary gold trading volume totaled tons, maintaining the active presence in market 25

26 Treasury and Institutional Business Institutional business Endeavoring to explore financial factor markets: launched the main board fund transfer system for Shanghai Gold Exchange; entered into custody service agreement with Shanghai Clearing House; and executed strategic cooperation agreements with Shanghai Gold Exchange, Dalian Commodity Exchange and Bohai Commodity Exchange Working closely with policy banks in liability business, agency business, etc. Connecting 18,691 outlets of 105 member banks through the Inter-bank Cooperation Platform Cooperating with 73 brokerage companies in margin business with a market coverage of 83% Number of margin clients under custody increased by 20.42% YTD Margin deposits in the futures accounts amounted to RMB80.6 billion, defending the market-leading position 26

27 Service Network Physical channel 2,713 outlets in total with a net increase of 23 YTD Presence covers 224 cities at or above prefecture level. Coverage ratio at prefecture and municipal-level cities reached 67.07%, up 2.7 pps YTD, with the coverage ratio in West China rising by 3.05 pps YTD to 40.45% Developed differentiated standards for outlets to facilitate business resource integration of underperforming outlets Encouraged more specialised and innovative small outlets to upgrade the inclusive financial service capability Reforms on business model and marketing system of provincial branches to empower their operations Coverage ratio at prefecture and municipal-level cities 2.7 pps 64.37% 67.07%

28 Service Network E-channels Diversion rate of e-banking No. of self-service outlets 3.38 pps 78.33% 81.71% ,655 12, Launched the 2 nd -Generation Digital Certificate on personal on-line banking and remuneration analysis on corporate on-line banking. Number of personal and corporate on-line banking transactions increased by 53.20% and 52.41% respectively YoY Launched public portals on Easy Trust Bank and Alipay Wallet on Mobile Banking platform. Transaction number of Mobile Banking increased by % YoY Number of registered e-payment customers increased by 47.16% YTD. Transaction amount of e-payment increased by % YoY 183 "itm" machines installed in 37 branches "Remote Wealth Management" service provided to clients via service hotline 95559, with AUM increasing by % YoY 28

29 Service Network Account manager team Client service No. of corporate account managers Up 7.6% 8,838 1H2013 9,507 No. of personal account managers Up 10.1% 10,773 1H2013 No. of certificate-holding account managers 7,193 1, ,859 Rolled out the servicing skills contest "My Sincere Smile" Enhanced the protection of consumers interest through public education campaigns such as "Financial Knowledge at Your Side" and "A Journey for Financial Literacy", together with inspections on bank card related consumer interest protection practices Complaints handled decreased by 52.6% YoY Ranked the 1 st in the China Retail Banking Customer Satisfaction Survey

30 Overseas Operation and Non-banking Services Internationalisation Strategy: highlights Amount and share of total assets of overseas offices (in RMB billions) 1.61 pps 8.72% % 24.88% 4.43% Impaired loans of overseas offices (in RMB millions, %) 0.06 % 0.05% pps 2013 Amount and share of net profit of overseas offices (in RMB billions) pps 5.62% % % 12 overseas offices with a total of 54 outlets 1,643 correspondent banks in total, covering 140 countries and regions 1H

31 Overseas Operation and Non-banking Services Internationalisation Strategy: other business Synergy between domestic and overseas branches Offering integrated and high-quality financial services to both domestic and overseas corporate customers, including cross-border trade settlement and financing, global capital deployment and assets/liabilities portfolio, overseas investment and M&A support, and overseas and cross-border business consultation, with priority given to cross-border operation services for customers in automobile, aviation and heavy industry sectors The synergy business volume amounted to USD billion, up 9.21% YoY; and the total revenue reached RMB3.312 billion, up 21.85% YoY Cross-border RMB business Entered into agreement for the first overseas RMB-denominated loan to non-financial institution, completed the first overseas loan to Chinese funded corporation and the first commercial factoring RMB external debt business in Shanghai FTZ Granted the first China-Singapore cross-border RMB loan to Suzhou Industrial Park Cross-border RMB settlement volume by domestic branches amounted to RMB billion, up 30.09% YoY. Cross-border RMB settlement volume by overseas institutions amounted to RMB billion, up 36.10% YoY Offshore business The number of active offshore customers increased by 21% YTD Offshore international settlement volume reached USD billion, up 39.78% YoY 31

32 Designated as RMB clearing bank in Seoul, as announced by Chinese President Xi Jinping on the China-ROK Economic and Trade Cooperation Forum on 4 July 2014 Marked an important milestone under the internationalisation strategy of the Bank A move to fuel our cross-border RMB business and enhance overseas integrated strength Designated as RMB clearing bank in Seoul to push forward RMB internationalisation 32

33 Overseas Operation and Non-banking Services Non-banking services Highlights of subsidiaries BOCOM Financial Leasing: aggressively promoted aviation leasing through innovative RMB/FX financing channels, leading to a breakthrough in self-purchased aircraft leasing. Leasing assets balance reached RMB billion, up 19.54% YTD BOCOM International Trust: the first bank-backed trust company qualified for overseas asset mandate; rolled out the first investment trust product for innovative SMEs. AUM amounted to RMB billion, up 23.8% YTD, defending the award of "Outstanding Trust Company" granted by Shanghai Securities News BOCOM Schroder: introduced innovative business models covering bills, trusts and funds. The HK subsidiary was qualified as a RQFII. AUM amounted to RMB billion, up 76.65% YTD Total assets of subsidiaries and share in the Group (in RMB billions) 0.30 pps 2.36% 2.06% % Net profit of subsidiaries and share in the Group (in RMB billions) 0.43 pps 2.91% H % % 33

34 Agenda III Risk Management 34

35 Risk Management Risk preferences Perfecting the risk management system "Prudence, balance, compliance and innovation" as the overall risk preferences Established a four-dimensional risk tolerance system covering revenue, capital, quality and rating, and set 23 detailed risk limit indicators for credit, market, operation, liquidity, interest rate and sovereign risks Included overdue asset ratio, non-standard asset ratio and highly liquid asset ratio of quasi-credit and wealth management businesses into the risk limit system, to strengthen the overall risk control in line with business transformation Risk management framework Further improved the operation mechanism and process of risk management committees by supplementing their decision-making and supervising role to strengthen the risk control over major businesses, areas and regulations Focused on the build-up of small-scale compliance middle offices in various business areas, and defined their structure, functional positioning and management system under basic construction principles and requirements, enabling the Risk Management Department to work more closely with such middle offices 第五级 in conducting retail loan, asset management, marketing, custody and personal finance businesses 35

36 Risk Management Risk management tools Optimisation of risk management system Carried out comprehensive risk identification and operational checks under the refined risk monitoring requirements; strengthened real-time risk control backed by information system to boost management effectiveness Implementation of advanced capital measurement approach was approved by the regulator, making us one of the first commercial banks to adopt such approach both at the parent company and group 单击此处编辑母版文本样式 levels. Given our internationally advanced risk measurement, risk management and capital management standards, the Bank ranks ahead domestically The comprehensive system for implementing the advanced capital measurement approach secured our first-mover advantages in policy process, model development and management, data accumulation and standardisation, system design and implementation, business management and assessment, independent verification and auditing, professional training, etc. Improved the coverage of measurement model and management system over credit, market and operation risks 36

37 Risk Management Credit risk Market & liquidity risk Operation risk Strengthened supervision on key areas. Carried out thorough risk review on real estate, LGFV, webs of credit guarantee, bills, coal trading and commodity financing Took initiative to address unexpected risk events and potential risks Optimised the centralised credit management system to standardise and strengthen management and risk assessment/monitoring on quasicredit businesses Strengthened the market risk management system in line with changing regulatory requirements and market conditions Improved forward-looking liquidity management based on global economic analysis and with reference to PBOC open market operation and market conditions Improved risk analysis and monitoring for bond investment to prevent and defuse risks timely Refined operation risk management through casespecific data mining, research and follow-up Improved initial, self- and reevaluation of business process, targeting weak links to develop and implement action plans Carried out special review on operation risks in additional overdue loans as well as advances under bank acceptances and L/C 37

38 Risk Management Loan structure optimisation Credit policy Achievements in loan structure optimisation Optimised credit policies under the Outlines of Credit and Risk Policies 2014 and the Credit Extension Guidelines on Sectors and Regions for a better asset mix Loans for livelihood protection and consumption upgrade (in agriculture and fishery, gas/water, technology, culture, education, healthcare and social work) grew faster than the average Expanded and deepened limit and quota management on excessive overcapacity and real estate development, to exercise strict control over total credit disbursements and press ahead structural optimisation Loan balance in Central and West China represented 29.43%, up 0.61 pps YTD Personal loans represented 23.91%, up 0.91 pps YTD Developer loans represented 5.75%, down 0.41 pps YTD LGFV loans represented 6.38%, down 0.42 pps YTD Loan balance in heavily-polluting, highly energy-consuming and over-capacity sectors represented 2.25%, down 0.27 pps YTD 38

39 Risk Management Asset quality (in RMB billions, %) Impaired loan balance Impaired loan balance and ratio End- End Change % Impaired loan ratio 1.13% 1.05% 0.08 pps Corporate impaired loan balance Corporate impaired loan ratio Personal impaired loan balance Personal impaired loan ratio % 1.09% 1.00% 0.09 pps % 1.26% 1.21% 0.05 pps 9.49 pps 0.06 pps Provision coverage % % 2013 Provision rate 2.30% 2.24% 2013 Ruling out the steel trading loans, the overall asset quality maintained stable. In particular, asset quality of LGFV loans and developer loans kept favorable 39

40 Agenda IV 4 Next Step 40

41 Next Step The Group is committed to "reform, innovation and transformation" with a focus on the following aspects: Adhere to the "3-increas-3-decrease" goal to carry forward transformation towards a profit growth model based on low capital consumption and low cost expansion Further deepen the Second Round of Reforms to boost efficiency and profitability at H.O. and branches, and innovatively profit from the rapidly growing asset management sector Press ahead with risk management technological innovations and implement more prudent credit and risk management policies to maintain overall stability of asset quality Refine customer orientation for precision marketing, cross-selling and higher customers' comprehensive value, aiming to be the best service bank in China Capitalise on the geographical advantage and first-mover advantage brought by major reform initiatives, such as Shanghai FTZ, to sharpen our edge in cross-border, trans-industry and trans-market services 41

42 Q & A