Core Viewpoint - Morgan Stanley's report indicates that Bank of China Hong Kong's performance in the first half of the year exceeded the bank's expectations, but was generally in line with market expectations, supported by robust growth in pre-tax operating profit [1] Summary by Category - **Earnings Forecast** - The bank raised its earnings forecast by 20% to reflect more resilient profit margins and trading income [1] - **Rating and Target Price** - The bank maintained a "neutral" rating and adjusted the target price from HKD 37.7 to HKD 38.4 [1]

Group 1 - The core viewpoint of the article highlights that Bank of China Hong Kong (2388.HK) has seen a significant stock price increase, rising over 8% to reach a historical high of 38.2 HKD, with a market capitalization exceeding 400 billion HKD [1] - The bank plans to apply for a stablecoin issuer license, aiming to be among the first approved issuers, following the establishment of a joint venture led by Standard Chartered Hong Kong that has expressed interest in applying for a license [1] - The deadline for the first batch of applications for stablecoin licenses is set for the end of September [1] Group 2 - Although Bank of China is not one of the three sandbox institutions for stablecoin issuance, it has established a dedicated team to advance related developments [1] - There is external optimism regarding the potential development of a stablecoin linked to offshore RMB, which is why the bank places significant importance on the development of stablecoins [1]

Core Viewpoint - Bank of China Hong Kong reported a strong performance for the first half of 2025, with significant increases in net operating income and profit attributable to shareholders, leading to a rise in stock price by over 6% following the earnings announcement [1][2]. Financial Performance - For the first half of 2025, the net operating income before impairment provisions was HKD 40.022 billion, an increase of 13.26% year-on-year [1]. - The profit attributable to shareholders was HKD 22.12 billion, reflecting a year-on-year increase of 10.54% [1]. - Basic earnings per share were HKD 2.0952, with an interim dividend proposed at HKD 0.58 per share [1]. Revenue Breakdown - Net interest income, after accounting for foreign exchange swap contracts, rose to HKD 28.929 billion, a year-on-year increase of 0.4%, driven by growth in average interest-earning assets [2]. - Average interest-earning assets increased by HKD 203.871 billion or 5.7% year-on-year [2]. - The net service fee and commission income increased year-on-year, benefiting from improved market conditions in investment, with notable growth in insurance, securities brokerage, and fund business commissions [1]. Profitability Metrics - The net trading income also saw a year-on-year increase, which helped offset the rise in operating expenses, impairment provisions, and net losses from fair value adjustments of investment properties [1]. - The total profit for the period was HKD 22.796 billion, an increase of HKD 2.333 billion or 11.4% year-on-year [1]. Interest Margin - The net interest margin, after including foreign exchange swap contracts, was 1.54%, a decrease of 7 basis points year-on-year, primarily due to lower market interest rates compared to the same period last year [2]. - The company has strengthened deposit pricing and term management to optimize the deposit structure, which has partially mitigated the impact of declining market interest rates [2].

Core Viewpoint - Bank of China Hong Kong (02388) reported a strong performance for the first half of 2025, with significant increases in net operating income and profit attributable to shareholders, leading to a rise in stock price by over 6% following the earnings announcement [1][2]. Financial Performance - The net operating income before impairment provisions for the first half of 2025 was HKD 40.022 billion, representing a year-on-year increase of 13.26% [1]. - Profit attributable to shareholders reached HKD 22.12 billion, up 10.54% year-on-year, with basic earnings per share at HKD 2.0952 [1]. - The interim dividend proposed is HKD 0.58 per share [1]. Revenue Breakdown - Net interest income, after accounting for foreign exchange swap contracts, increased to HKD 28.929 billion, a year-on-year rise of 0.4%, driven by growth in average interest-earning assets [2]. - Average interest-earning assets grew by HKD 203.871 billion or 5.7% year-on-year [2]. - The net service fee and commission income increased year-on-year, benefiting from improved market conditions in investment, with notable growth in insurance, securities brokerage, and fund business commissions [1]. Profitability Metrics - The net trading income also saw a year-on-year increase, which helped offset the rise in operating expenses, impairment provisions, and net losses from fair value adjustments of investment properties [1]. - The total profit for the period was HKD 22.796 billion, an increase of HKD 2.333 billion or 11.4% year-on-year [1]. Interest Margin - The net interest margin, after including foreign exchange swap contracts, was 1.54%, down 7 basis points year-on-year, primarily due to lower market interest rates compared to the same period last year [2]. - The group has strengthened deposit pricing and term management to optimize the deposit structure, which has partially mitigated the impact of declining market interest rates [2].

Core Viewpoint - Bank of China (Hong Kong) Limited reported a net profit attributable to shareholders of HKD 22.152 billion for the first half of 2025, representing a year-on-year increase of 10.5% [1][3] Financial Performance - The operating environment in Hong Kong improved, and the capital market rebounded, leading to an increase in intermediary business income for Bank of China (Hong Kong) [3] - Commission income from insurance, securities brokerage, and fund businesses grew year-on-year [3] - The impaired loan ratio was 1.02%, which is better than the market average, indicating robust asset quality [3] Business Development - Bank of China (Hong Kong) enhanced the application of Renminbi in trade and capital markets to meet the offshore financing needs of corporate clients, with Renminbi customer loans increasing by 16% compared to the end of last year [3] - The Renminbi clearing volume at the Manila and Phnom Penh branches recorded stable growth [3] Future Outlook - The company plans to continue promoting global development, focusing on expanding its business in Southeast Asia, as well as enhancing connectivity and Renminbi business [3]

Financial Data and Key Metrics Changes - Profit attributable to equity holders increased by 10.5% to HKD 22.2 billion, with ROE rising by 0.53 percentage points to 12.92% [3][4][76] - After-tax profit grew by 11.4% year on year to HKD 22.8 billion [15] - Customer deposits increased by 5.6% to HKD 2,880 billion, with CASA deposits surging by 31.7% [17][18] - NPL ratio decreased by three basis points to 1.02%, outperforming the market average [20] Business Line Data and Key Metrics Changes - BOC Life's standard new premiums grew by 30%, ranking second in the market for the first quarter [5][79] - Assets under custody increased by 19% [4][79] - Fee income from investment and insurance business grew significantly by 95%, resulting in a 25.8% growth in net fee income [19][50] - The number of cross-border high-end customers grew by 44%, and new high-end personal banking customers increased by 35% [4][78] Market Data and Key Metrics Changes - In Southeast Asia, deposits and loans increased by 10.5% and 8.4% respectively, with income rising by 9.3% year on year [9][82] - RMB loans grew by 16%, with a 90% increase in the underwriting volume of offshore RMB public bonds [10][82] - The average LCR and NSFR stood at 208% and 140% respectively, indicating solid liquidity [20] Company Strategy and Development Direction - The company aims to deepen the development of private banking, asset management, and custodian business while enhancing its role as a regional headquarters for Southeast Asian operations [22][23] - The focus will be on balancing quality, profitability, and scale, diversifying income sources, and maintaining consistent risk management [23] - The company is committed to digital transformation and enhancing its capabilities in AI applications [12][70] Management's Comments on Operating Environment and Future Outlook - The banking sector faces a challenging operating environment due to uncertain global economic conditions and local market interest rates [3][22] - The company expects continued pressure on banking operations but sees opportunities arising from industrial chain optimization and the robust development of AI and digital assets [22][23] - Management anticipates that interest rates will remain uncertain, impacting NIM and net interest income [32] Other Important Information - The Board declared a second interim dividend of HKD 0.29 per share, with total DPS for the first half amounting to HKD 0.58 [4][76] - The company has been recognized for its ESG and CSR efforts, receiving various accolades from renowned institutions [13][14] Q&A Session All Questions and Answers Question: Outlook for NIM and dividend policy - Management noted that HIBOR has fluctuated, impacting NIM, which was 1.54%, down seven basis points year on year, and expects pressure on NIM going forward [29][30][32] - Regarding dividends, the company aims to balance long-term shareholder returns with operational results, maintaining a dividend payout ratio within a specified range [33][34][35] Question: Loan growth expectations and Southeast Asia strategy - Loan demand has increased by a single digit, with expectations for steady growth in the second half, supported by policy and market conditions [38][39][40] - The Southeast Asian market is a key focus, with strategies to enhance contributions to overall revenue and strengthen regional risk management capabilities [41][42][43] Question: Fee income sustainability and asset quality - Non-interest income increased significantly, with expectations for continued growth driven by strong market conditions and customer needs [49][50] - Asset quality remains stable, with a focus on managing risks associated with the property market and maintaining healthy coverage ratios [53][54][56]

Financial Data and Key Metrics Changes - Profit attributable to equity holders increased by 10.5% to HKD 22.2 billion, with ROE rising by 0.53 percentage points to 12.92% [4][81] - Total customer deposits grew by 5.6% to HKD 2,880 billion, with CASA deposits surging by 31.7% [16] - After-tax profit grew by 11.4% year on year to HKD 22.8 billion [15] - Operating expenses increased by 2.3% to HKD 8.3 billion, while cash to income ratio improved by 2.2 percentage points to 20.8% [19] Business Line Data and Key Metrics Changes - BOC Life's standard new premiums grew by 30%, ranking second in the market for the first quarter [6][83] - Assets under custody increased by 19% [5][82] - Fee income from investment and insurance business grew significantly by 95%, resulting in a 25.8% growth in net fee income [19][52] - The number of cross-border high-end customers grew by 44%, and new high-end personal banking customers increased by 35% [5][82] Market Data and Key Metrics Changes - The NPL ratio of Southeast Asian entities was 2.7%, down eight basis points from the end of last year [9][86] - RMB loans grew by 16%, with a 90% increase in the underwriting volume of offshore RMB public bonds [10][86] - The average LCR and NSFR stood at 208% and 140% respectively, indicating solid liquidity [20] Company Strategy and Development Direction - The company aims to deepen the development of private banking, asset management, and custodian business while enhancing its role as a regional headquarters for Southeast Asian operations [22] - The strategic focus includes leveraging innovative technologies and strengthening talent development to support the next five-year plan [22] - The company is committed to balancing quality, profitability, and scale while diversifying income sources and maintaining consistent risk management [22] Management's Comments on Operating Environment and Future Outlook - The management noted that the banking sector faces a challenging operating environment due to uncertain global economic conditions and local market interest rates [4] - The outlook for the second half anticipates continued pressure on banking operations due to cyclical and structural adjustments in Hong Kong's economy [22] - New opportunities are expected from industrial chain optimization and the robust development of AI and digital assets [22] Other Important Information - The company launched the dual currency BOC GoCard and grew BOC Pay plus mainland transaction volumes by 40% year on year [7][84] - The company actively participated in offshore RMB market development and supported the issuance of green bonds and infrastructure bonds [10][88] - The company established an AI committee to coordinate AI-related applications and risk management [12][76] Q&A Session Summary Question: Outlook on NIM and HIBOR's impact - Management indicated that HIBOR has fluctuated, and while the NIM was 1.54%, it is expected to face pressure due to lower interest rates [29][32] Question: Dividend policy and share repurchases - Management confirmed a second interim dividend of HKD 0.29 per share, with a focus on long-term shareholder returns and potential share repurchases [33][34] Question: Loan growth expectations for the second half - Management noted steady loan demand growth, with expectations for recovery in loan demand despite global economic challenges [39][41] Question: Fee income sustainability - Management expects continued strong momentum in fee income driven by investment insurance and cross-border consumption [52][55] Question: Asset quality and property market outlook - Management reported stable asset quality with a focus on risk management, particularly in the property sector, which remains under pressure [56][59]

格隆汇8月29日丨中银香港(02388.HK)公布中期业绩，2025年上半年，期内溢利为227.96亿港元，同比 增长11.4%；公司股东应占溢利为221.52亿港元，同比增长10.54%；每股基本盈利为2.0952港元。第一 次及第二次中期股息均为每股0.29港元，合计为每股0.58港元。 2025年上半年，集团期内提取减值准备前之净经营收入为400.22亿港元，按年上升13.3%。计入外汇掉 期合约的资金收入或成本后的净利息收入按年上升，由平均生息资产增长带动。净服务费及佣金收入按 年上升，主要是把握了投资市场气氛回暖的机遇，保险、证券经纪和基金业务佣金收入按年增长。净交 易性收益亦按年上升，抵销了经营支出、减值准备净拨备及投资物业公平值调整之净亏损增加的影响。 与2024年下半年相比，集团提取减值准备前之净经营收入上升港币41.05亿元或11.4%，主要由于净服务 费及佣金收入和净交易性收益上升，抵销了净利息收入下降的影响。经营支出及投资物业公平值调整之 净亏损回落，减值准备净拨备则增加，期内溢利较去年下半年上升港币41.41亿元或22.2%。 相关事件 中银香港(02388.HK)上半年纯利增长10. ...

Financial Performance - Profit attributable to equity holders increased by 10.5% year-over-year to HK$22,152 million[9] - Basic earnings per share increased by 10.5% to HK$2.0952[63] - Customer deposits increased by 5.6% to HK$2,875,521 million[39] - Customer loans increased by 2.0% to HK$1,710,380 million[41] - Net fee and commission income increased significantly by 25.8% to HK$6,292 million[38, 63] Business Highlights - The company remained 1 in cumulative number of new residential mortgage loans for 6 consecutive years[11] - Cross-border high-end customer increased 44% year-over-year[11] - Value of bonds underwritten increased significantly by 105%[11] - Assets under custody increased by 19%[11] - BoC Pay+ transaction volumes in the Mainland surged by 38.8%[14] SEA Business - Customer deposits in SEA increased by 10.5% year-to-date[17] - Customer loans in SEA increased by 8.4% year-to-date[17] - Operating income in SEA increased by 9.3% year-over-year[17] BOC Life Business Development - Standard new premiums increased by 33.6% to HK$14,831 million[84] - Value of new business (VNB) increased by 36.1% to HK$2,178 million[84]

Core Insights - Bank of China Hong Kong (02388) reported a net operating income of HKD 40.022 billion for the first half of 2025, an increase of 13.26% year-on-year [1] - The profit attributable to shareholders was HKD 22.12 billion, up 10.54% year-on-year, with basic earnings per share at HKD 2.0952 and an interim dividend of HKD 0.58 per share proposed [1] - The net interest income, after accounting for foreign exchange swap contracts, rose to HKD 28.929 billion, a 0.4% increase year-on-year, driven by the growth in average interest-earning assets [2] Financial Performance - The net interest income before impairment provisions was HKD 25.063 billion for the first half of 2025, supported by a 5.7% year-on-year increase in average interest-earning assets, amounting to HKD 2,038.71 billion [2] - The net interest margin, after including foreign exchange swap contracts, was 1.54%, a decrease of 7 basis points year-on-year due to lower market interest rates compared to the previous year [2] - Total assets reached HKD 439.982 billion as of June 30, 2025, reflecting a growth of HKD 20.5414 billion or 4.9% from the end of the previous year [2] Revenue Sources - Net service fee and commission income increased year-on-year, benefiting from improved market conditions, particularly in insurance, securities brokerage, and fund business commissions [1] - Net trading income also rose year-on-year, offsetting the increase in operating expenses, impairment provisions, and net losses from fair value adjustments of investment properties [1] - Cash and balances with banks and other financial institutions decreased by HKD 12.7679 billion or 20.9%, primarily due to a reduction in deposits with the central bank [2]