OREANDA-NEWS. May 06, 2013. Bank of China Limited ("Bank": Hong Kong Stock Exchange stock code: 3988; Shanghai Stock Exchange stock code: 601988) announced its 2013 first quarter results.

According to International Financial Reporting Standards ("IFRS"), during the period, the Bank recorded a profit after tax of RMB41.619 billion, a year-on-year growth of 8.09%. The profit attributable to equity holders of the Bank increased 8.20% to RMB39.815 billion.

Return on average equity ("ROE") and return on average total assets ("ROA") stood at 18.86% and 1.30% respectively, 0.76 and 0.11 percentage point higher compared with the prior year. Capital adequacy ratio and core capital adequacy ratio was 13.23% and 10.33% respectively.

Steady growth in deposits and loans, and continuous improvement in net interest margin
As at the end of March, the Bank's total assets and liabilities amounted to RMB13.24 trillion and RMB12.34 trillion, growing by 4.43% and 4.41% respectively from the prior year-end. The Bank vigorously expanded core deposits with higher stability and achieved rapid growth in customer deposits. As at 31 March, total customer deposits amounted to RMB9,875.422 billion, an increase of 7.65% from the prior year-end. Domestic RMB-denominated deposits amounted to RMB7,662.290 billion, an increase of 9.36% from the prior year-end. Liability structure continued to improve, the proportion of structured deposits to total deposits decreased by 1.03 percentage points, and the proportion of demand deposits rose by 0.37 percentage point. The proportion of customer deposits to total liabilities increased 2.41 percentage points.

Firmly seizing the opportunities arising from the domestic demand expansion, industrial transformation and upgrading, urbanization construction and pension security improvement, the Bank strengthened the support on real economy and achieved steady growth in customer loans. As at 31 March, the Bank's total customer loans grew by 6.72% to RMB7,326.252 billion compared with the prior year-end. Domestic RMB-denominated loans amounted to RMB5,272.980 billion, an increase of 4.02% from the prior year-end. Loan to deposit ratio decreased 0.52 percentage point from the end of last year to 71.47%. Domestic RMB personal loans and small-sized enterprises loans achieved fast growth. The proportion of high-yield assets continued to increase, with the proportion of net loans and advances to total assets increasing 1.18 percentage points compared with the prior year-end.

In the first quarter of 2013, the Bank realized net interest income of RMB66.960 billion, an increase of 10.50% compared with the same period of last year. Net interest margin expanded 7 basis points from last year to 2.22%.

Resilient growth in non-interest income, and sustainable improvement in operating efficiency
In the first quarter, the Bank's non-interest income reached RMB38.492 billion, representing a year-of-year increase of 12.12%. The proportion of non-interest income to the operating income was 36.50%, remaining the market leader. Net fee and commission income was RMB24.730 billion, an increase of 16.92% year-on-year. The structure of fee-based businesses was further improved with agency commission fees, bank card fees and custodian fees growing rapidly. Capital-lite fee-based business income accounted for 70.98% of the net fee and commission income, an increase of 1.34 percentage point year-on-year.

Insisting on thrifty operation, the Bank strictly controlled operating expenditures and optimized its expense structure to improve cost efficiency. In the first quarter, the Bank's operating expenses increased 8.89% to RMB42.983 billion, and business and management expenses was RMB28.062 billion, up 8.01% compared to the same period of last year, lower than the growth rates of operating income and net profit after tax. The operating efficiency was further improved with the cost to income ratio at 26.61%, down by 5.20 percentage points compared to last year.

Rapid overseas business development with further strengthened competitive advantages
Seizing tightly the opportunities arising from China enterprises' "Going Global" strategy and recovery of international market, the Bank accelerated the construction of its integrated global service system and actively expanded overseas business. In the first quarter, total overseas assets and profit before tax recorded steady growth, accounting for 24.31% of the Bank's total assets and 18.03% of total profit before tax. The Bank maintained its leading position in cross-border RMB business, and achieved cross-border RMB settlement transaction volume of RMB872.4 billion, up 78.08% year-on-year. The overseas network was further expanded in the first quarter with 7 new overseas institutions opened, and the Bank had a total of 620 overseas institutions, covering Hong Kong, Macau, Taiwan and 36 countries.

Stable asset quality, and risk from key industries under control
The Bank closely monitored macroeconomic environment and earnestly conducted regular risk investigation, risk classification re-inspection, risk early warning and post-lending management as well as intensified risk recognition and prevention, thus maintained a stable quality of credit assets. The Bank strictly controlled the loan balance to local government financing vehicles and strengthened risk control for real estate sector, sector with overcapacity and others. As at the end of March, the Bank's non-performing loans were RMB66.397 billion, a slightly increase of RMB0.949 billion compared with that of the end of 2012. The ratio of non-performing loans to total loans was 0.91%, 0.04 percentage point lower than the prior year-end. The allowance for loan impairment losses to non-performing loans was 244.24%, up 7.94 percentage points from the prior year-end. Domestic institutions' ratio of allowance for loan impairment losses to total loans remained stable at 2.62%. In consistent with loan growth, the annualized credit cost was 0.47%, maintaining at reasonable level.

The Bank has achieved strong performance in all business lines in the first quarter, building up a solid foundation for future development. The Bank will firmly seize this important strategic development opportunity and fully leverage the competitive advantages of its international, diversified and intellectual operation to accelerate the building of a premier multinational bank and deliver excellence across new frontiers.