OREANDA-NEWS. May 06, 2011. Bank of China Limited (“BOC”: Hong Kong Stock Exchange stock code: 3988; Shanghai Stock Exchange stock code: 601988) announced its 2011 first quarter results. According to International Financial Reporting Standards (“IFRS”), BOC has achieved profit after tax of RMB35.01 billion,an increase of 28.03% compared with the same period of the previous year, reported the press-centre of Bank of China.

Since 2011, the Bank continued to adopt the scientific outlook on development, earnestly implemented the State’s macro-economic policies and its strategic development plan with the principles of streamlining structure, scaling up, managing risks and sharpening competitiveness. The Bank has made significant progress in the transformation of its business, and worked to optimise management processes and accelerated infrastructure construction. In the first quarter of 2011, the Bank achieved robust improvement in profitability and efficiency.

Key financial indicators continued to improve
In the first quarter of 2011, BOC’s earnings per share reached RMB0.12, up by RMB0.02 compared with the same period of 2010. Return on average total assets (ROA) and return on average equity (ROE) were 1.29% and 20.23% respectively, an increase of 0.11 percentage point and 0.42 percentage point respectively compared with the same period of 2010. The non-performing loan ratio dropped by 0.06 percentage point to 1.04% as compared with the prior year-end, while NPL coverage ratio increased by 9.32 percentage points from the prior year-end to 205.99%. The cost to income ratio decreased by 0.47 percentage point compared with the same period of 2010 to 27.72%.

Stable growth in deposits and loans with continuously improvement in market position
In the first quarter of 2011, taking advantage of the seasonal increase in deposit business, BOC strengthened its marketing activities, expanded customer base, enhanced the efficiency of outlets and achieved stable growth in customer deposits. As at 31 March 2011, total deposits from customers amounted to RMB7,951.845 billion, an increase of RMB468.591 billion or 6.26% from the prior year-end. Domestic RMB-denominated deposits from customer amounted to RMB6,396.519 billion, an increase of RMB419.440 billion or 7.02% from the prior year-end. The market share of corporate deposits and personal deposits reached 9.71% and 9.34%, an increase of 0.36 percentage point and 0.18 percentage point respectively. The improvement of market share for loans and deposits both ranked the first among the four large banks.

In 2011, the Bank continued to implement the prudent monetary policy and the requirement of macro-economic adjustment, and supported a reasonable credit supply, promoting the steady and balanced development of its loan business. As at 31 March 2011, the Bank’s total customer loans rose by RMB296.075 billion or 5.23% to RMB5,956.696 billion compared with the prior year-end. Domestic RMB-denominated loans amounted to RMB4,189.001 billion, an increase of RMB167.285 billion or 4.16% compared with the prior year-end.

Net interest income maintained stable growth while non-interest income recorded rapid increase
In the first quarter of 2011, BOC recorded net interest income of RMB53.536 billion, an increase of RMB9.03 billion or 20.29% compared with the same period of 2010. The Bank’s net interest margin (NIM) reached 2.11%, an increase of 0.07 percentage point compared with the same period of 2010, which was mainly attributable to the further structure optimization of assets and liabilities, improvement in loan pricing and effect of macro-economic adjustment measures such as the raise of benchmark interest rates by People’s Bank of China (PBOC).

In the first quarter of 2011, non-interest income of BOC reported an increase of RMB6.981 billion or 30.30% to RMB30.024 billion, in which, net fee and commission income amounted to RMB18.582 billion, an increase of RMB2.926 billion or 18.69% compared with the same period of 2010. Other non-interest income amounted to RMB11.442 billion, an increase of RMB4.055 billion or 54.89% compared with the same period of 2010. Significant increase was reported in net trading gains, insurance premium income and revenue on precious metals business. Non-interest income represented 35.93% among the total operating income, up by 1.82 percentage points compared with the same period of 2010, maintaining the leading position among peers.

Asset quality maintained stable and operating efficiency steadily improved
Since 2011, BOC continued to enhance proactive risk management and strengthen liquidation and resolution on non-performing assets, and achieved continuous improvement in asset quality. As at 31 March 2011, the Bank reported indentified impaired loans totalling RMB62.752 billion, representing a decrease of RMB1.124 billion from the prior year-end. The ratio of identified impaired loans to total loans was 1.05%, down by 0.08 percentage point compared with the end of 2010. The ratio of non-performing loans to total loans was 1.04%, a decrease of 0.06 percentage point from the prior year-end. The ratio of allowance for loan impairment losses to non-performing loans was 205.99%, up by 9.32 percentage points from the prior year-end. Due to market recovery, the reversal of impairment losses on debt securities amounted to RMB486 million.

In 2011, BOC further increased human resources input in its outlets, key regions, and business lines across its domestic, overseas and subsidiary institutions. It also devoted significant resources to the rapid development of key regions, business, products and projects, and continued to increase investment in infrastructure construction, including outlets, channels and IT Blueprint. During the first quarter, the Bank recorded operating expenses of RMB33.142 billion, an increase of 25.80% compared with the same period of 2010. The Bank’s cost to income ratio (calculated under domestic regulations) was 27.72%, a decrease of 0.47 percentage point compared with the first quarter of 2010, showing steady improvement in operating efficiency.

BOC has achieved strong performance in all business lines in the first quarter, providing a solid base for the healthy business development for the full year. In the beginning year of the 12th Five-Year Plan, the Bank will accelerate innovation, greatly expand its customer base, rapidly sharpen outlet competitiveness, strengthen unified planning so as to push forward the integrated development of its domestic and overseas operations, and promote business management transformation in an effort to achieve innovative, transformative and cross-border development, with the aim of becoming a leading international bank to continuously create value for shareholders.