(Stock Code 股份代號：23) Annual Report 2019 年報 Welcome to The Bank of East Asia, Limited's website 歡迎瀏覽東亞銀行有限公司網站 CONTENTS 目 錄 | --- | --- | --- | |-------|--------------------------------------------------------------------------------------|-------| | | Corporate Profile 本行簡介 | 02 | | | Financial Highlights 財務摘要 | 03 | | | Five-Year Financial Summary 5 年財務概要 | 04 | | | Executive Chairman's Statement 執行主席報告書 | 06 | | | Report of the Senior Management 高層管理人員報告書 | 12 | | | Biographical Details of Directors and S ...

Financial Performance - Operating profit before impairment losses for the half year ended 30 June 2019 was HK$ 5,184 million, an increase of 19.4% from HK$ 4,340 million in the same period of 2018[4] - Profit attributable to owners of the parent decreased to HK$ 1,000 million for the half year ended 30 June 2019, down 74.9% from HK$ 3,992 million in the same period of 2018[4] - Basic earnings per share for the period was HK$ 0.22, a decrease of 83.1% compared to HK$ 1.30 for the same period last year[9] - Total comprehensive income for the period was HK$ 2,443 million, a decrease of 24.3% compared to HK$ 3,227 million in the same period last year[10] - The operating profit after impairment losses was HK$ 121 million, a decrease from HK$ 4,057 million in the previous year, indicating a decline of 97%[97] - The profit before taxation for the six months ended June 30, 2019, was HK$ 636 million, down from HK$ 4,781 million in 2018, representing a decrease of 86.7%[99] Assets and Liabilities - Total assets reached HK$ 876,778 million, representing a growth of 6.0% from HK$ 826,834 million in the previous year[5] - Total liabilities increased to HK$ 771,790 million, up from HK$ 735,876 million, reflecting a growth of 4.9%[11] - Total customer deposits and certificates of deposit issued rose to HK$ 646,008 million, an increase of 4.3% from HK$ 619,497 million in the same period of 2018[5] - Total assets increased to HK$ 876,778 million as of June 30, 2019, up from HK$ 839,451 million at December 31, 2018, representing a growth of 4.4%[11] - Total liabilities were HK$ 771,790 million, up from HK$ 735,876 million in 2018, which is an increase of 4.9%[99] Loans and Advances - Total loans and advances to customers and trade bills increased to HK$ 524,107 million, up 3.1% from HK$ 507,531 million as of 30 June 2018[5] - Loans and advances to customers rose to HK$ 506,099 million, an increase of 1.6% from HK$ 498,284 million[11] - The total gross carrying amount of loans and advances to customers at amortised cost is HK$ 511,281 million, with a principal amount of HK$ 473,718 million classified as "Pass" loans[147] - The total gross carrying amount of loans and advances to customers at amortised cost increased from HK$ 500,631 million as of 31 December 2018 to HK$ 511,281 million as of 30 June 2019[147] - The total advances to customers reached HK$ 511,281 million, with impaired advances accounting for 1.63% of the total[72] Impairment and Credit Risk - The impaired loan ratio increased to 1.6% from 0.9% in the previous year, indicating a rise in credit risk[5] - Impairment losses on financial instruments totaled HK$ 5,063 million, significantly higher than HK$ 282 million in the previous year, indicating a substantial increase in credit risk[54] - The total impairment allowances for credit-impaired loans increased to HK$ 3,946 million as of June 30, 2019[147] - The balance of lifetime ECL credit-impaired for loans and advances to customers was HK$ 4,154 million as of June 30, 2019, significantly higher than HK$ 1,252 million at December 31, 2018[185] Income and Expenses - Net interest income for the half year was HK$ 7,406 million, up 18.4% from HK$ 6,250 million in the same period of 2018[8] - Total operating expenses increased to HK$ 4,918 million for the six months ended June 30, 2019, compared to HK$ 4,186 million for the same period in 2018, representing a 17.5% increase[52] - Total fee and commission income decreased slightly to HK$ 1,895 million for the six months ended June 30, 2019, compared to HK$ 1,935 million in 2018[48] - The Group's interest expense rose to HK$ 7,150 million for the six months ended June 30, 2019, from HK$ 5,933 million in 2018[45] Cash Flow and Dividends - Net cash generated from operating activities for the six months ended June 30, 2019, was HK$7,308 million, a significant recovery from a net cash outflow of HK$11,466 million in the same period of 2018[14] - The interim dividend declared was HK$0.11 per share on 2,897 million shares, totaling HK$319 million, a decrease from HK$0.51 per share on 2,808 million shares, totaling HK$1,432 million in 2018[19] - The proposed dividends not provided for decreased significantly from HK$1,906 million as of December 31, 2018, to HK$319 million as of June 30, 2019[107] Financial Instruments and Fair Value - The total fair value of financial instruments measured at fair value was HK$ 160,190 million, compared to HK$ 151,166 million as of December 31, 2018, representing an increase of approximately 6.73%[127] - The Group's Level 1 financial assets amounted to HK$ 32,124 million as of June 30, 2019, up from HK$ 25,967 million at the end of 2018, indicating a growth of about 23.5%[127] - The fair value of derivatives decreased to HK$ 6.141 billion as of June 30, 2019, down from HK$ 10.211 billion at the end of 2018[199] Other Key Metrics - The bank's cash and balances with banks and other financial institutions rose to HK$ 52,823 million, an increase of 5.6% from HK$ 48,106 million[11] - The total customer liabilities under acceptances increased to HK$ 25,257 million as of June 30, 2019, from HK$ 21,747 million at the end of 2018[83] - The total gross carrying amount of debt investment securities at amortized cost was HK$ 19,165 million, with HK$ 19,089 million as the carrying amount after impairment allowances[171]

History and Community Commitment - The Bank of East Asia, Limited was incorporated in Hong Kong in 1918 and formally opened for business in 1919[16] - In 1949, the Bank donated HK$100,000 to local charities on its 30th Anniversary, reaffirming its commitment to the community[16] - The Bank established a HK$500,000 Educational Foundation Fund in 1969 to benefit higher education in Hong Kong[16] - The Bank contributed to the war effort during World War II by promoting Chinese National Salvation bonds, raising millions of dollars[16] - BEA expanded its support for Hong Kong students by establishing a HK$2 million scholarship fund for local universities[22] - BEA established The Bank of East Asia Charitable Foundation to support education and poverty relief initiatives[26] - BEA donated HK$5 million to support the Hong Kong Red Cross in establishing the largest blood collection center in Hong Kong[32] Expansion and International Presence - BEA opened its Singapore Branch in 1952, expanding its regional presence[16] - In 1984, the Bank opened its first US branch in New York and sold 80% of its US retail operation to ICBC in 2011, maintaining a fully-owned wholesale operation[18] - The Bank opened its London Branch, expanding its international presence[20] - The Bank of East Asia (Canada) was incorporated in Toronto, with an 80% interest sold to ICBC in 2009[22] - The Shanghai Branch was relocated to the Lujiazui Finance and Trade Zone of Pudong, enhancing its operational capacity[22] - The Bank established Shanghai International Finance Company Limited, the first merchant bank formed in Shanghai outside the Special Economic Zones[20] - The Bank formed a joint-venture leasing company, Siam Sanwa Trilease Company Limited, with The Siam Commercial Bank Limited and The Sanwa Bank Limited in Thailand[20] Financial Performance and Growth - Total operating income from continuing operations increased by 7.0% to HK$17,072 million in 2018, compared to HK$15,953 million in 2017[45] - Profit attributable to owners of the parent from continuing operations rose by 3.4% to HK$6,509 million, up from HK$6,298 million in the previous year[45] - Total loans and advances to customers increased by 5.7% to HK$515,281 million, compared to HK$487,686 million in 2017[45] - Total assets grew by 3.8% to HK$839,451 million, up from HK$808,942 million in 2017[45] - Total deposits rose by 4.0% to HK$632,604 million, compared to HK$608,150 million in 2017[45] - The Group recorded a profit attributable to shareholders of HK$6,509 million in 2018, a decrease of 30.4% from HK$9,347 million in 2017[67] Digital Transformation and Innovation - BEA became the first foreign bank to offer online banking services in China, receiving official approval from the People's Bank of China[26] - BEA launched SupremeGold, a wealth management service targeting affluent customers[26] - BEA launched iPayment Hub, the first consolidated payment platform in Hong Kong[37] - The Bank launched a digital trade finance platform, eTradeConnect, in October 2018, utilizing blockchain technology to streamline processes and enhance operational efficiency[102] - The Bank's mobile application was revamped in early 2018, introducing features such as facial recognition for instant credit card and consumer loan applications[102] - The bank plans to deploy a new IT infrastructure in 2019 to support the Hong Kong Monetary Authority's Open API Framework, enhancing service offerings to customers[103] Risk Management and Compliance - The Group has established a comprehensive risk management framework in line with HKMA requirements, incorporating a "Three Lines of Defence" model[125] - The Group faces various principal risks, including credit risk, market risk, operational risk, and compliance risk, which are managed through an Enterprise Risk Management framework[125] - The compliance division is responsible for overseeing regulatory compliance and managing compliance risks, particularly in relation to anti-money laundering and counter-financing of terrorism regulations[157] - The Group conducts independent regulatory compliance reviews using a risk-based approach to manage compliance risk effectively[133] - The Group has developed technology risk policies and cyber security strategies to strengthen protection against unauthorized access and disruptions[131] Leadership and Governance - The Bank of East Asia has multiple directors serving on various committees, enhancing governance and strategic oversight[186] - The company emphasizes its commitment to corporate governance through the appointment of independent non-executive directors[184] - The directors have extensive educational backgrounds, including degrees from Cambridge University and Stanford University, contributing to their expertise in financial management[186] - The leadership team is actively involved in community and public service roles, reflecting the company's engagement with societal issues[186] Future Outlook and Strategic Initiatives - The bank plans to enhance its digital banking services, aiming for a 20% increase in online transactions by the end of 2019[167] - Future expansion plans include entering new markets in Southeast Asia, with a focus on retail banking services[171] - The bank is exploring potential acquisitions in the fintech sector to bolster its technological capabilities and market reach[171] - The management has set a target of achieving a return on equity of 10% for the upcoming fiscal year[167] - The bank anticipates a 5% growth in total assets for the upcoming fiscal year, projecting to reach HKD 800 billion[190]