Core Viewpoint - UBS forecasts that Bank of China Hong Kong (02388) will maintain high levels of impairment provisions, with credit costs at 36 basis points for the first half of the year, consistent with the second half of last year, despite strong performance expectations for the first half [1] Group 1: Financial Performance - UBS maintains a forecast of a 1% year-on-year decline in net profit for the full year, despite an expected 3.4% year-on-year increase in net profit for the first half, driven by a strong growth of 55.8% in non-interest income [1] - The decline in net interest income is projected at 9.1% due to falling HIBOR rates, which will be offset by the growth in non-interest income [1] Group 2: Revenue Drivers - Key drivers of non-interest income include significant increases in capital market-related fees, such as securities brokerage, fund distribution, and insurance agency fees, which are expected to rise significantly with the rebound of Hong Kong stocks and declining market interest rates [1] - Trading-related investment income is also anticipated to perform well, with expected revenue growth of 8.1% in this segment [1] Group 3: Earnings Forecast - UBS has raised its earnings per share forecasts for 2025 to 2027 by 3% to 9%, reflecting strong growth in non-interest income [1] - The target price for Bank of China Hong Kong has been increased from HKD 34.5 to HKD 36.5, while maintaining a "Neutral" rating [1]

Core Viewpoint - UBS forecasts that Bank of China Hong Kong's net profit for the first half of the year will increase by 3.4% year-on-year, primarily driven by a strong growth in non-interest income of 55.8%, which offsets a 9.1% decline in net interest income due to falling HIBOR [1] Group 1: Non-Interest Income - The strong growth in non-interest income is attributed to capital market-related fees, including securities brokerage, fund distribution, and insurance agency fees, which are expected to significantly increase with the rebound of Hong Kong stocks and declining market interest rates [1] - Trading-related investment income is also anticipated to perform well, with business revenue growth projected at 8.1% [1] Group 2: Profit Forecasts - Despite the strong performance in the first half, UBS maintains a forecast for a 1% year-on-year decline in net profit for the entire year [1] - Earnings per share forecasts for 2025 to 2027 have been raised by 3% to 9%, reflecting the robust growth in non-interest income [1] - The target price has been adjusted from HKD 34.5 to HKD 36.5, while maintaining a "Neutral" rating [1]

Core Viewpoint - Bank of China (Hong Kong) aims to enhance its investment in the ASEAN market, focusing on resource allocation, infrastructure development, and regional collaboration to strengthen its competitive advantage in the area [1] Group 1: Market Expansion - Bank of China (Hong Kong) has successfully expanded in the ASEAN market by acquiring and integrating 7 Southeast Asian institutions and establishing 3 new branches [1] - The bank has transitioned from a city bank to a regional bank, forming an initial regional management system that promotes integrated and centralized operations [1] Group 2: Financial Performance - As of the end of 2024, the customer deposit balance for Bank of China (Hong Kong) in Southeast Asia reached HKD 86.18 billion, reflecting a growth of 16.5% compared to 2023 [1] - The loan balance in the same region amounted to HKD 58.744 billion, showing an increase of 9.9% from the previous year [1]

Core Viewpoint - The Hong Kong 300 Local Stock Index has shown significant growth, with a 5.26% increase over the past month, 8.42% over the past three months, and a year-to-date increase of 19.72% [1] Group 1: Index Performance - The Hong Kong 300 Local Stock Index is currently at 1476.85 points [1] - The index is designed to reflect the performance of both mainland and local Hong Kong companies, with a base date of December 31, 2004, set at 1000.0 points [1] Group 2: Index Holdings - The top ten weighted companies in the Hong Kong 300 Local Stock Index are: AIA Group (28.18%), Hong Kong Exchanges and Clearing (19.7%), Bank of China (Hong Kong) (5.53%), CLP Holdings (5.05%), CK Hutchison Holdings (4.76%), Sun Hung Kai Properties (4.69%), Link REIT (4.08%), Hang Seng Bank (3.25%), Power Assets Holdings (2.88%), and Hong Kong and China Gas (2.85%) [1] - The index is fully composed of companies listed on the Hong Kong Stock Exchange [1] Group 3: Industry Composition - The industry composition of the index shows that finance accounts for 56.65%, real estate 17.34%, utilities 12.25%, communication services 6.31%, consumer staples 3.11%, industrials 1.57%, consumer discretionary 1.51%, healthcare 0.65%, and information technology 0.62% [2] - The index samples are adjusted biannually, with changes implemented on the next trading day following the second Friday of June and December [2]

Group 1 - As of June 3, Bank of China Hong Kong (02388.HK) closed at HKD 33.600, up 1.82% from the previous trading day, with an intraday high of HKD 34.000, marking a nearly one-year high [1] - On that day, the main capital inflow was HKD 2,056.7885 million, while outflow was HKD 1,847.2540 million, resulting in a net inflow of HKD 209.534 million [1] Group 2 - Bank of China Hong Kong is a licensed bank registered in Hong Kong, formed in 2001 through the restructuring of the Bank of China Group's institutions in Hong Kong, merging ten of the twelve banks [2] - The company has divested its stakes in Nanyang Commercial Bank and Chiyu Banking Corporation in 2016 and 2017, respectively, and has expanded its regional presence in Southeast Asia, with branches in several countries [2] - Bank of China Hong Kong is one of the three note-issuing banks in Hong Kong and the only RMB clearing bank, holding a leading position in major business markets [2] - The company provides comprehensive financial and investment services to individuals, various enterprises, and institutions through a vast branch network and efficient electronic channels [2] - The holding company, Bank of China Hong Kong (Holdings) Limited, was registered in Hong Kong in September 2001 and listed on the Hong Kong Stock Exchange in July 2002, making it one of the largest listed companies and banking groups in Hong Kong [2]

Group 1 - The seminar titled "Tide Rising in Hong Kong, Synergy for Win-Win" focused on the integration of Shenzhen and Hong Kong capital markets and the process of listing in Hong Kong, highlighting the role of intermediaries in providing comprehensive services throughout the listing cycle [1] - Bank of China Hong Kong (BOCHK) is one of the largest commercial banks in Hong Kong, with a significant presence in Southeast Asia, and plays a crucial role in supporting Chinese enterprises in their overseas expansion [2] - BOCHK has collaborated with BOCI, its international investment banking arm, to provide a full range of investment banking services, including IPOs, mergers and acquisitions, and bond issuance, assisting around 200 companies in listing in Hong Kong over the past 40 years [2] Group 2 - Experts at the seminar emphasized the importance of timing for IPOs, suggesting that companies should not wait for the best market conditions to initiate the listing process, as market conditions can change rapidly [3] - BOCHK has successfully supported hundreds of companies in their Hong Kong listings by offering comprehensive financial services, including public offerings and fund management [3] - The selection of an investment bank is critical for companies, as it represents a choice of a "survival plan" in the Hong Kong capital market, especially in a volatile market environment [3] Group 3 - Shenzhen has many high-potential companies, and Hong Kong is positioned to play a vital role as a "super connector" and "super value creator" in helping mainland enterprises expand into overseas markets [4] - BOCHK aims to support the development of the Guangdong-Hong Kong-Macao Greater Bay Area and facilitate high-level opening-up through financial assistance [4] - The integration of policy interpretation, financial services, and resource connection is shaping a new standard for the collaboration between mainland and Hong Kong capital markets, providing strong momentum for the internationalization of enterprises [4]

Financial Performance - In Q1 2025, the group's net operating income before impairment provisions increased by 12.9% year-on-year to HKD 20.087 billion[5]. - Net interest income, after accounting for foreign exchange swap contracts, rose by 3.4% year-on-year to HKD 14.778 billion, driven by an 8.3% increase in average interest-earning assets[5]. - Net service fees and commission income surged by 34.7% year-on-year to HKD 3.424 billion, primarily due to a recovery in the stock market and increased client demand for investment and wealth management services[5]. - Operating expenses increased by 3.4% year-on-year, with a cost-to-income ratio of 20.51%, maintaining a strong position within the local banking sector[6]. - The group's total assets as of March 31, 2025, amounted to HKD 4216.228 billion, reflecting a 0.5% increase from the end of 2024[9]. Customer Deposits and Loan Quality - Customer deposits grew by 3.6% compared to the end of 2024, reaching HKD 2822.55 billion, with savings deposits increasing and time, short-term, and notice deposits declining[9]. - The loan quality remained stable with a non-performing loan ratio of 1.01%, consistently outperforming the market average[9]. Digital Transformation and Innovation - The group is focusing on digital transformation and enhancing data governance, while also promoting sustainable high-quality development in line with ESG principles[10]. - The group launched a simplified corporate loan application process on the iGTB platform, accelerating the credit approval process for corporate clients[12]. - The group enhanced its digital banking services in Southeast Asia, launching new features such as local large cross-bank transfer functions[14]. - The group is focused on risk management and digital transformation to enhance online services and trading capabilities[13]. Business Expansion and Market Position - The group is actively pursuing business opportunities in the Greater Bay Area and Southeast Asia, strengthening its competitive position in cross-border and RMB business[10]. - The group maintained its leading position in the syndicated loan market in Hong Kong and Macau, supporting the construction of overseas treasury for enterprises[12]. - The trust and custody asset scale continued to grow, with successful acquisition of multiple new custody asset portfolios[12]. - The group optimized its product matrix in personal banking, leading to a significant increase in stock trading volume and monthly active customer numbers during the quarter[11]. - Insurance commission income grew well in the first quarter, supported by the introduction of various insurance promotion offers and services for high-net-worth clients[11]. - The group actively expanded green finance business, signing multiple loan agreements related to green and sustainable development[12]. Financial Returns - The board announced an interim dividend of HKD 0.29 per share, with the ex-dividend date set for May 14, 2025[15].

Financial Performance - Net operating income before impairment provisions for 2024 was HKD 71,253 million, an increase of 8.5% from HKD 65,498 million in 2023[6] - Operating profit for 2024 reached HKD 48,677 million, up 14.5% compared to HKD 42,558 million in 2023[6] - Annual profit for 2024 was HKD 39,118 million, representing a 12.9% increase from HKD 34,857 million in 2023[6] - Basic earnings per share for 2024 were HKD 3.6162, a rise of 16.9% from HKD 3.0950 in 2023[6] - Net operating income before impairment provisions was HKD 71.25 billion, up 8.8% year-on-year, and annual profit was HKD 39.12 billion, an increase of 12.2%[24] - Annual profit for the company reached HKD 39.118 billion, representing a year-on-year increase of 12.2%[42] Asset and Deposit Growth - Total assets as of year-end 2024 amounted to HKD 4,194,408 million, up from HKD 3,868,783 million in 2023, reflecting a growth of 8.4%[6] - Customer deposits for 2024 increased to HKD 2,724,221 million, a growth of 8.8% from HKD 2,503,841 million in 2023[8] - Total assets reached HKD 4,194.41 billion, an increase of 8.4% year-on-year[24] - Total customer deposits reached HKD 2,724.22 billion, an increase of HKD 220.38 billion or 8.8% year-on-year[84] Capital and Efficiency Ratios - The cost-to-income ratio improved to 24.55% in 2024 from 25.35% in 2023, indicating enhanced operational efficiency[6] - The total capital ratio improved to 22.00% in 2024 from 21.18% in 2023, indicating a stronger capital position[6] - The bank's capital adequacy ratio is robust, with a Common Equity Tier 1 capital ratio of 20.02% and a non-performing loan ratio of 1.05%, outperforming industry averages[14] - The average return on total assets for 2024 was 0.95%, up from 0.90% in 2023[8] - The average return on equity and average return on total assets were 11.61% and 0.95%, respectively, with increases of 1.01 percentage points and 0.05 percentage points year-on-year[42] Loan and Deposit Management - The loan-to-deposit ratio decreased to 61.55% in 2024 from 67.99% in 2023, suggesting a more conservative lending approach[6] - Customer loans totaled HKD 1,676.89 billion, a decrease of HKD 254.16 billion or 1.5% compared to the previous year[78] - Personal loans increased by HKD 144.08 billion or 2.5%, driven by government-subsidized housing plans[81] - Trade finance loans decreased by HKD 28.41 billion or 6.0%[80] Digital Transformation and Innovation - The company plans to focus resources on digitalization, regionalization, and integration to drive future growth[54] - The mobile banking app introduced new features, including the ability to buy and sell certificates of deposit and deposit physical checks, enhancing customer convenience[93] - The "Property Expert" mobile app has achieved approximately 192,000 downloads, with online mortgage applications accounting for over 80% of total mortgage applications, an increase of over 20 percentage points year-on-year[93] - The group is focusing on digital transformation, aiming for seamless service across regions and channels, with enhancements in online and mobile banking services[120] Sustainable Development and ESG Initiatives - Green and sustainable development-related loan balances and ESG fund sales increased by 28.8% and 37.7%, respectively[16] - Green private loan applications increased by 48% year-on-year, indicating a growing focus on sustainable finance[92] - The bank launched Hong Kong's first carbon footprint tracking feature in its mobile banking app, promoting green financial practices among customers[92] - The company has been recognized for its sustainable development efforts, receiving the "Most Influential ESG Bank in Hong Kong" award[103] Risk Management - The group emphasizes the importance of effective risk management, balancing risk control with business development to ensure shareholder value while maintaining acceptable risk levels[127] - Credit risk primarily arises from lending, trade financing, and funding operations, with detailed management strategies outlined in the financial statements[128] - The group maintains a prudent liquidity risk preference, ensuring stable and sufficient cash sources to meet liquidity demands under normal and stressed conditions[134] - The group has established a "three lines of defense" system for operational risk management, with all departments as the first line of defense responsible for self-assessment and self-correction[136] Awards and Recognition - The bank was recognized as "Hong Kong's Most Stable Bank" for five consecutive years by The Asian Banker[19] - The company has been awarded "Best Cash Management Bank in Hong Kong" for the 10th time by The Asian Banker[100] - The company received multiple awards for its asset management capabilities, including the "Best RMB Fund Manager in Hong Kong" for 2024[109] Leadership and Governance - The board includes members with diverse expertise in risk management, corporate governance, and sustainable development[176] - The company emphasizes sustainable development and corporate governance as key strategic areas[175] - The board's composition reflects a strong commitment to diversity and extensive industry experience[181] - The independent directors collectively bring a wealth of knowledge from various industries, including finance, technology, and public service[191][199]

中银香港(02388.HK)：2025年4月29日（星期二）召开董事委员会会议，藉以（其中包括）审议及通过 本公司2025年第一季度财务及业务回顾，以及考虑宣派2025年度第一次中期股息。 ...

Financial Data and Key Metrics Changes - Profit attributable to equity holders increased by 16.8% to HK$38.2 billion, with ROE rising to 11.6% [2] Business Line Data and Key Metrics Changes - The company actively managed assets and liabilities, achieving stable NIM performance while expanding fee income due to recovery in capital markets and the tourism industry [3] Market Data and Key Metrics Changes - The company noted that the global political and economic landscape is undergoing significant transformation, with uncertainties regarding interest rate cuts in major economies [4] Company Strategy and Development Direction - The company is focused on enhancing risk control, solidifying banking infrastructure, and expanding earning sources as part of its globalization strategy within the BOC Group [2] - The management emphasized the importance of transforming growth momentum and risk management in the banking industry moving forward [4] Management Comments on Operating Environment and Future Outlook - Management acknowledged the complex and severe operating environment but highlighted the effectiveness of recent economic stimulus policies in boosting social confidence and supporting economic recovery [4] Other Important Information - The company is currently controlling operating expenses while strengthening risk management [3] Q&A Session Summary Question: Inquiry about new shareholders return arrangement - Management received congratulations on excellent results, and the question pertained to the new shareholders return arrangement [6]