a presentation at jpmorgan china conference...

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PowerPoint Template Guidelines/2007

A presentation at

JPMorgan China Conference 2012

Dicky Yip, EVP

Beijing, 13 June 2012

A presentation at

JPMorgan China Conference 2012

Dicky Yip, EVP

Beijing, 13 June 2012


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1Q2012 performance1Q2012 performanceII


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Net profit (in RMB bn)

20.3

28.5 30.1

39.0

15.9

50.7

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012Q1

CAGR：：：：25.7%

Net operating income(in RMB bn)

62.8

77.3 81.6

104.7

36.6

127.8

0

30

60

90

120

150

2007 2008 2009 2010 2011 2012Q1

CAGR：：：：19.4%

3

1. Further improved profitability

2011 2012Q1 Growth

ROAA 1.19% 1.34% 0.15 pps0.15 pps0.15 pps0.15 pps

ROAE 20.52% 22.69% 2.17 pps2.17 pps2.17 pps2.17 pps

ROAA and ROAE


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PowerPoint Template Guidelines/2007 4

2. Continued Customer-Centric Strategy

� Corporate CustomersBy the end of 2011, effective corporate customers increased by 16.7% yoy

to 0.27 million, in which Win-To Fortune customers increased by 17.3%.

.

� SME CustomersBy 2011, the proportion of SME customers in total corporate customers was

91.9%, increased by 2.9 pps yoy.

� Personal CustomersPersonal customers increased by 5.82% to 49 million from 2010 to 2011,

in which wealth management customers increased by 6.59%.


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5.58%

2, 561.75

2,704.61

2011Q4 2012Q1

3.1 Steady business growth

Deposit from customers(in RMB bn)

Loans to customers(in RMB bn)

Note: Loans before provisioning

Deposit and loan growth

3,414.27 3,283.23

2011Q4 2012Q1

3.99%


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3.2 Steady business growth

21.89%

49.56

60.41

2011Q1 2012Q1

• Fee income from payments & settlement service and bank cards business increased by 74.27% and 46.76%

respectively YoY, which became the major drivers for fee income growth

Net fee & commission income

(in RMB 100 MLN)

Strong growth of fee-based business

(In RMB 100 MLN except for

percentages)2011Q1 2012Q1 Growth

Payments and

settlement service4.47 7.79 74.27%

Bank cards 14.95 21.94 46.76%

Investment banking 17.88 19.00 6.26%

Guarantee and

commitment5.17 5.33 3.09%

Management 7.81 8.57 9.73%

Funds & Insrance Sales

Commissions4.76 3.92 -17.65%

Other fee and

commission income0.8 1.44 80.00%

Fee & commission income breakdown


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Further improvement in net interest margin

3.3. Steady business growth

NIS and NIM stood at 2.47% and 2.60%, up by 4 and 9 bps YoY respectively driven by the following reasons:• Benchmark rate hikes by PBOC since Q4 2010• Further enhanced pricing management

• Continuously improved balance sheet structure

2.47%

2.34%2.39%

2.43%2.45%

2.49% 2.49%

2.36% 2.37%

2.41% 2.43% 2.44% 2.46%2.51%

2.54%2.58% 2.59% 2.60%

Accumulative NIS Accumulative NIM

YTD NIS & NIM

Up by 9 bps YoY

2.47%


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Continued asset quality improvement

4.1 Further enhancement in risk management

0.05 pps

16.06 pps

RMB 95

MLN

219.86 218.91

0.81%

0.86%

2011Q4 2012Q1

256.37%

272.43%

2011Q4 2012Q1

Impaired loan balance and ratio

In RMB 100 MLN except percentages

Provision coverage ratio


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Continuous implementation of Effective Risk Management

All customers involved in Shadow Banking, either as

borrowers or lenders, were monitored and action plans

were designed for high-risk customers

Special and more focused risk management strategies were

given to Government borrowing vehicles, in line with renewed

guidelines from regulatory requirements

A customer specific lending policy was constructed for

property developers, all property security valuations

were updated and after-lending control was stepped

up

Improved procedures and management control over wealth

management products, including the setting up of product

accounting and custodian systems, and the strengthening

of counter parties and post-investment controls

4.2 Further enhancement in risk management


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Development Trend of China’s Banking IndustryDevelopment Trend of China’s Banking IndustryIIII


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1.41.7

2.12.7

3.34.0

4.6

0

1

2

3

4

5

2005 2006 2007 2008 2009 2010 2011

80 87128 145 164

223272

0

100

200

300

2005 2006 2007 2008 2009 2010 2011

9.412.5

20.3

28.5

39.0

50.7

30.1

0

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011

家数占比

人民币

万亿元

人民币亿元

人民币亿元

占比

Owner’s equity (RMB bn)Total assets (RMB tn)

Net profit (RMB bn)

3.4 times

0.190.24

0.37

0.51

0.66

0.82

0.53

0

0.2

0.4

0.6

0.8

1

2005 2006 2007 2008 2009 2010 2011

3.2 times

1. 2005-2011: a golden era for China’s banking industry

4.38 times4.3 times

Rapid growth of BOCOM

Earning Per Share (RMB））））


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2.1 China’s 12th 5-year Plan

� Targeting the 3rd 10-year high growth period.

� Economic Model switching from investment / export driven to

domestic demand / consumption.

� Continued and accelerated urbanization trend.

� Managing a rapidly aging population.

� “Going Out”, “Market-Driven” & “Go West” strategies.

� Sustainable and efficient development policies.

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4.The growth of small families in large

cities

6. The internationalization of RMB

2.The financial needs from an aging

population

3.The switch from savings to spending

5.The rapid development of new

technology

1.The rapid growth of private wealth

Factors

2.2 China’s 12th 5-year Plan

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• Banks are to benefit from government-supported sectors

including transportation, energy saving and environmental

protection, strategic emerging industries, infrastructure in rural

and western areas, education and healthcare fields

Industry policy

SME Bonds

Asset

• To alleviate the pressure of LTD ratio and provide

opportunities to optimize loan structure

Monetary policy

Credit policy

3. Opportunities still abound for banks

• Policy constraints on business growth are to alleviate due to

fine-tuning of monetary policy, RRR cuts and relaxation of

credit policy

Stable policy environment


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Development Strategies of BOCOMDevelopment Strategies of BOCOMIIIIII


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Aiming to double both net profit and total assets in 2011-1015

1. Bocom’s Five-Year Plan

• To realize the synergy

between domestic and

overseas branches and

between the Bank and its

subsidiaries

• To lay a foundation for

international and universal

banking

• To further improve the key

financial indicators and return

to shareholders

• To take advantage of our

market positioning and

maximize the use of

technology to create

differentiation in the market.

• To grow wealth management

clients and AUM

• To expedite the strategic

transformation and business

re-structuring

• To increase the brand value

and product innovation

capacity

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Wealth management

• Enhance and promote our global

Financial Planning & Asset

Allocation Service to our wealth

management customers

• By the end of March, the customer

number of Private Banking and

OTO Fortune increased by 7.74%

and 8.31% YTD

• Total assets of overseas

institutions reached 388.405 bn

Yuan

• Contributed a net profit of 627

million Yuan, representing a YoY

growth of 33.40%

Overseas Branches

2. Speeding up the BoCom Strategy implementation

• Total assets of subsidiaries

reached 73. 9 bn Yuan, increasing

by 18.50% YTD

• Innovate one-stop financial

services to our customers

Subsidiaries


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3. Optimizing business structure

• SME loan balance grew

by 53.785 bn Yuan YTD,

representing 60% of the

incremental loans

• Share of SME loans rose

to 40.14%

Focus on SMEs

• Loans extended to

resources, life-style,

consumption, service

sectors etc. grew by

24.18 bn Yuan in Q1,

accounting for 27% of

the total newly increment

loan

Adapted to China’s

economy restructuring

• Share of Real Estate

loans declined by 0.11

percentage points YTD

• Share of loans to heavily-

polluting, highly-energy-

consuming and over-

capacity sectors dropped

by 0.12 percentage

points YTD

Reducing exposures to

high-risk sectors

Adapted to China’s

strategic growth sectors

• Overseas loans grew by

21.88%

• Loan balance in Mid and

West China representing

27.87% of total loans


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4. Strategy in fulfilling Bocom’s Five-Year targets

• making the best use of

branch outlets,

electronic delivery and

sales force

• implement the medium-

sized customer

development strategy

• deepen the strategic

cooperation with HSBC

Differentiated

development

• universal banking

operation

• wealth management

Enhance

business focuses

• increase the

proportion of non-fund

income

• optimize the allocation

of credit resources

Accelerate reform

Efficient operation

• Improving

effectiveness of

business operations

• focus on risk

management

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Thank you！！！！

a presentation at jpmorgan china conference...

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