OREANDA-NEWS. August 10, 2012. The Bank of East Asia and its subsidiaries (collectively, the “BEA Group”) have announced consolidated profit after taxation of HKD 3,037 million for the six months ended 30th June, 2012, reported the press-centre of BEA. 

This is 10.1 percent higher than the net profit of HKD 2,757 million reported for the first half of 2011. Profit attributable to owners of the parent totalled HKD 2,988 million, or 10.2 percent above the figure reported for the same period last year. Both profit figures are new records for the Group.

Basic earnings per share increased to HKD 1.35 compared with HKD 1.24 per share reported a year ago. Return on average assets and return on average equity for the first half of 2012 were 0.95 percent and 12.20 percent, respectively.

The Board of Directors has declared an interim dividend of HKD 0.43 per share, which is the same as the interim dividend paid to shareholders one year ago. During the period under review, BEA Group’s total operating income grew to HKD 7,449 million, 12.2 percent above the HKD 6,638 million recorded for the first half of 2011.

By focussing on its core businesses, BEA expanded net interest income to HKD 4,621 million, a 5.0 percent increase year on year. During the first six months of 2012, the BEA Group’s net interest margin narrowed to 1.63 percent, down 10 basis points from the 1.73 percent recorded for the same period in 2011.

Net fee and commission income increased by 9.6 percent, to HKD 1,664 million.

Total non-interest income jumped to HKD 2,828 million, 26.4 percent higher than the HKD 2,238 million recorded for the same period last year. Operating expenses increased by 9.7 percent to HKD 4,172 million, compared to HKD 3,802 million in the first half in 2011.

Anticipating further weakness in the global economy, BEA implemented a strict costcontrol regime at the beginning of 2012. The cost-control measures have had the desired impact. The Group’s cost-to-income ratio was 56.0 percent for the first half of 2012, down from 69.0 percent in the second half of 2011, or 62.9 percent for the whole of 2011.

Operating profit before impairment losses for the first six months of 2012 grew by 15.6 percent to HKD 3,277 million, or HKD 441 million higher than in the first half of 2011.

The Group’s overall loan quality continued to improve, with the impaired loan ratio standing at a low level of 0.37 percent as of 30th June, 2012.

Operating profit after impairment losses for the first six months of this year rose to HKD 3,134 million, an increase of HKD 279 million, or 9.8 percent, over the corresponding period in 2011.

Total profit after taxation grew to HKD 3,037 million for the first six months of 2012.

Profit attributable to owners of the parent reached HKD 2,988 million, representing a rise of 10.2 percent over the first half of 2011, and 81.5 percent over the second half of last year.

As of 30th June, 2012, the total consolidated assets of the BEA Group stood at HKD 641.5 billion, an increase of 4.9 percent over the figure reported at the end of 2011.

Total loans to customers increased to HKD 330.7 billion as of 30th June, 2012, up from HKD 321.9 billion at the end of 2011. Total deposits of the BEA Group grew by 2.7 percent from HKD 478.8 billion as of 31st December, 2011 to HKD 491.9 billion as of 30th June, 2012. Total equity attributable to owners of the parent amounted to HKD 50.4 billion at the end of June 2012.

As of 30th June, 2012, the BEA Group’s core capital adequacy ratio stood at 9.7 percent, while its total capital adequacy ratio was 13.2 percent. The average liquidity ratio was 45.5 percent for the six months ended 30th June, 2012, while the loan-to-deposit ratio was 67.2 percent at the end of June 2012.

Speaking at today’s press conference, Dr. David K.P. Li, Chairman & Chief Executive of the BEA Group, announced that the Group’s consistent business strategies had once again proven their worth, as the Hong Kong, China and overseas operations combined to deliver solid results.

“Our Corporate and Commercial Banking continues to be favourably impacted by the ongoing policy efforts to internationalise the Renminbi”, said Dr. Li. “Demand for offshore Renminbi loans in Hong Kong from both Mainland-based and local corporations has grown as a result.”

BEA’s Retail Banking business continued to use the Bank’s strong branch network to enhance services and expand its customer base. In particular, BEA saw good growth in the number of payroll and Small and Medium Enterprise accounts during the first half of the year.

During the period under review, the Bank’s mutual fund distribution business enjoyed a hefty 70 percent increase in revenue and a 40 percent increase in assets under custody, as compared with the same period last year. “This was largely due to having the right products available at the right time, and executing an effective promotional campaign to secure new business,” Dr. Li mentioned.

BEA’s wholly-owned Mainland-incorporated subsidiary, The Bank of East Asia (China) Limited (“BEA China”), expanded its business at a moderate pace during the first six months of 2012. Total loans outstanding and deposits increased by 5.2 percent and 2.9 percent, respectively, compared to the end of 2011.

“We are particularly encouraged by the steady increase in personal banking deposits, as we attract new customers to the Bank,” Dr. Li said. “Personal deposits now make up 22 percent of the total at BEA China, up from 15.7 percent one year ago.”

The Bank’s overseas operations delivered gains during the period under review. BEA’s Singapore Branch, which celebrated its 60th Anniversary in May this year, has enjoyed particular success in providing cross-border Renminbi services. Dr. Li concluded: “Despite the challenges presented by the slowing global economy, we have a unique franchise, loyal clients, and a highly motivated workforce. I have great faith in our ability to overcome the challenges ahead, and be prepared for any new opportunities that arise once the global economy revives.”