BOC Hong Kong Trebles Its Profits

Vanessa Doctor

25 March 2010

BOC Hong Kong registered a 310.6 per cent increase in 2009 profit to HK$13.725 billion (around $1.77 billion), helped mostly by strong shareholder support amid the global financial crisis.

Net operating income before impairment allowances rose 2.1 per cent year-on-year to HK$26.055 billion ($3.36 billion), attributable to higher net fees and commission income, as well as net operating income from the group's insurance segment. Total operating expenses were up 38.4 per cent from 2008, while the return on average total assets and return on average capital and reserves increased 1.19 per cent and 14.79 per cent respectively.

Net interest income was down 11 per cent to HK$17.9 billion ($2.3 billion) due mostly to the narrowing of the group's net interest margin by 31 basis points to 1.69 per cent on low interest rates. However, its average interest-earning assets turned over a 5.4 per cent rise to HK$1.060 trillion ($136.69 billion) by the end of 2009.

"With our solid fundamentals and proactive business strategies, we were able to capture business opportunities and to grow our franchise in a tough market during 2009," said Xiao Gang, the chairman of BOC Hong Kong in a statement.

During the year, the group solidified its leading position in RMB business in Hong Kong and further expanded its scope of service. BOCHK was mandated by the Ministry of Finance of the central government as the joint lead manager, bookrunner and placing bank for the first RMB sovereign bond issued in Hong Kong. The success of the issuance, as shown by the overwhelming response from the market, laid a solid foundation for the group in the development of RMB bond business in Hong Kong.

"While the global financial market is gradually stabilizing, we remain cautious as to the economic outlook for 2010 especially with regard to the possible effects of the 'Exit Policy' to be taken by major economies," commented He Guangbei, the vice chairman and chief executive officer.

"The Hong Kong economy is likely to recover further this year by deepening its economic integration with the Mainland which, given its strong fundamentals and momentum, should remain one of the major growth engines for the Asia-Pacific and global economies," he said.

BOC Hong Kong is a subsidiary of Bank of China Limited.