Zhi Tong Cai Jing·2025-09-01 01:45Core 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].