OREANDA-NEWS. August 11, 2011. The Bank of East Asia and its subsidiaries (collectively called the “BEA Group”) have today announced a consolidated profit after tax of HKD 2,757 million for the six months ended 30th June, 2011. This is 28.9 percent higher than the net profit of HKD 2,139 million reported for the same period in 2010. Profit attributable to owners of the parent totalled HKD 2,711 million, or 29.1 percent above the figure reported for the same period last year. Both figures are new records for the Bank, reported the press-centre of BEA.

 Basic earnings per share rose to HKD 1.24, an increase of HKD 0.28 over the HKD 0.96 per share reported for the first six months of 2010. Return on average assets and return on average equity for the first half of 2011 were 0.96 percent and 11.93 percent, respectively.

The Board of Directors has proposed an interim dividend of HKD 0.43 per share, which is an increase of 13.2 percent over the interim dividend of HKD 0.38 per share paid to shareholders a year ago.

During the period under review, the BEA Group focused on enhancing its ability to serve customers throughout Greater China and the region. Operating income rose to HKD 6,638 million, 22.6 percent greater than the HKD 5,412 million recorded for the first half of last year.

Net interest income climbed to HKD 4,400 million, a 19.9 percent increase, year on year. During the first half of 2011, the BEA Group’s net interest margin was 1.73 percent, the same as recorded for the second half of 2010.

Non-interest income increased to HKD 2,238 million, 28.4 percent higher than the HKD 1,743 million recorded for the same period last year.

Operating expenses rose by 4.8 percent to HKD 3,802 million compared to the HKD 3,629 million recorded for the six months ended 31st December 2010. The Group’s cost-to-income ratio was 57.3 percent for the first half of 2011, a significant improvement on the 63.5 percent reported for the second half of 2010 or 62.0 percent for the full year of 2010.

Operating profit before impairment losses for the first six months of 2011 grew by 32.7 percent to HKD 2,836 million, HKD 699 million higher than in the first half of 2010.

During the first six months of 2011, the BEA Group enjoyed a write back of impairment losses on loans and advances of HKD 40 million. In the first half of 2010, the Group had recorded a charge for impairment losses of HKD 150 million. The Group’s overall loan quality continued to improve, with the impaired loan ratio standing at 0.45 percent as of 30th June, 2011.

Operating profit after impairment losses for the first six months of this year rose to HKD 2,855 million, an increase of HKD 886 million, or 45 percent, over the corresponding period in 2010. Profit after taxation grew to HKD 2,757 million for the first six months of 2011, 28.9 percent higher than a year ago.

As of 30th June, 2011, the total consolidated assets of the BEA Group amounted to HKD 598.9 billion, an increase of 12.1 percent over the figure reported at the end of 2010.

Total deposits of BEA Group grew by 10.8 percent from HKD 425.4 billion as of 31st December, 2010 to HKD 471.2 billion as of 30th June, 2011; while total advances to customers increased to HKD 312.5 billion as of the same date, up from HKD 297 billion reported at the end of 2010. Total equity attributable to owners of the parent stood at HKD 46.5 billion at the end of June 2011.

As of 30th June, 2011, the BEA Group’s core capital adequacy ratio stood at 9.4 percent; while its total capital adequacy ratio was 12.6 percent, down from 9.8 percent and 13.2 percent, respectively, at the end of December 2010. The average liquidity ratio was 41.0 percent for the six months ended 30th June, 2011, compared to 43.1 percent for the same period last year. The loan to deposit ratio was 66.3% at the end of June 2011.

Speaking at today’s press conference, Dr. David K.P. Li, Chairman & Chief Executive of the BEA Group announced that the Group had once again registered record profits. “The Group has again set new records, achieving new highs in both operating profit and net profit,” he said. “Performance was strong across our business lines, with increases recorded in both interest and non-interest income. As a result, the Group’s operating profit before impairment losses rose strongly.”

Dr. Li remarked that the Group’s good results, which follow the previous record announced last year, underline the success of BEA’s long-term strategy. “We have been building our franchise on the Mainland for more than two decades. Linking up with our solid foundation in Hong Kong, we offer a proven and highly efficient platform for the two-way flow of business,” he stated. “The strength of our platform is evident from the strong contribution that both the Mainland and Hong Kong now make to our bottom line.”

In recent years, BEA has achieved dramatic growth in referral business from its Mainland outlets to its Hong Kong and overseas units. Changing regulations have also opened up new opportunities in the Renminbi business. “We now offer a wide range of investment and trade products involving the Renminbi. Along with trade finance, retail banking services, and professional services, this capability has been a key driver of the rise in non-interest income for the first half of this year,” Dr. Li said.

BEA’s wholly-owned subsidiary on the Mainland – The Bank of East Asia (China) Limited (“BEA China”) – has met the 75% loan-to-deposit ratio mandated by the China Banking Regulatory Commission well ahead of schedule. As of 30th June, 2011, its loan-to-deposit ratio stood at 72%.

In his concluding remarks, Dr. Li noted that banks must anticipate and deal with a very fluid business and regulatory environment. “That we have announced such strong results against this fluid backdrop is a mark of the exceptional quality and capability of my colleagues and staff at The Bank of East Asia,” he said. “We will continue to exert our best efforts on behalf of our customers, our business partners, and our shareholders,” he said.