OREANDA-NEWS. November 11, 2013. Bank of China Limited (the “Bank”, Hong Kong Stock Exchange stock code: 3988; Shanghai Stock Exchange stock code: 601988) announced its 2013first three quarters results on October, 30th. During the period, the Bank achieved sustainable and steady growth with solid development foundation.

Continuous improvement on key financial indicators

According to International Financial Reporting Standards (“IFRS”), during the period, the Bankrecordeda profit after tax of RMB125.32 billion, a year-on-year growth of 12.68%. The profit attributable to equity holders of the Bank increased 13.24% to RMB120.21 billion. Return on average total assets (“ROA”) and return on average equity (“ROE”) reached 1.27% and 18.66% respectively, representing increases of 0.08 and 0.53 percentage point compared with the prior year-end.Net interest margin expanded 7 basis points since prior year-end to 2.22%. Domestic RMB and overseas net interest margin expanded by 10 and 13 basis points respectively.

The non-interest income increased 21.72% year-on-year to RMB97.25 billion. This represented 31.84% of total operating income, an increase of 2.18 percentage points compared with the same period of last year, maintaining its leading position among the peers. The cost to income ratio decreased 0.97 percentage point year-on-year to 29.14%, with operating efficiency further improved. Capital remains adequate with capital adequacy ratio and core capital adequacy ratio standing at 13.29% and 10.44% respectively.

Assets and liabilities recorded stable growth. As at the end of September, the Bank’s total assets and liabilities amounted to RMB13.62 trillion and RMB12.70 trillion, an increase of 7.45% respectively from the prior year-end. The Bank’s customer deposits totalled RMB10.05 trillion, up by 9.50% compared with the prior year-end. Loans and advances to customers grew by 9.77% to RMB7.54 trillion.

Strengthened business structure optimisation to support the development of the real economy

From the beginning of this year, the Bank strengthened the business structure optimisation and supported the key industries and projects that closely concern national economy and the people’s livelihood to facilitate the development of real economy. The Bank reinforced the supports to the strategic emerging industries, cultural industry and agriculture, and strengthened the financial services for industrial transformation and upgrading and technical reform projects, as well as the small to micro enterprises and personal consumption.

Domestic RMB-denominated customer loans reached RMB5.49 trillion, which grew by RMB421.94 billion or 8.32% from the prior year-end. Loans for strategic emerging industries and agriculture increased 22.33% and 13.84% respectively. Medium-sized enterprises loans grew by 15.29% and the proportion to domestic corporate loans increased by 1.83 percentage points. RMB-denominated small enterprises loans by "BOC Credit Factory" grew by 27.98%, about 22 percentage points higher than the growth rate of domestic RMB-denominated corporate loans. Domestic RMB-denominated personal loans grew rapidly and the proportion to domestic RMB loans reached 33.53%.

Fully leveraged the opportunities from mobile internet development, the Bank accelerated the construction of internet bank. Driving by the "two engines" of internet banking and traditional banking services, the Bank pushed forward business transformation and financial service innovation to improve service capability and meet the customer demand.

Accelerated the development of cross-border business to support enterprises “going global”

The Bank further leveraged its advantages of internationalisation, diversification and specialisation to strengthen its overseas markets exploration. In the first three quarters, total overseas assets and profit before tax reached USD584.6 billion and USD4.83 billion, accounting for 24.72% and 18.50% of the Bank’s total assets and profit before tax. During the period, the Bank had established 12 overseas institutions, and currently owns 625 overseas institutions in Hong Kong, Macau, Taiwan and 37 countries, and 10 China desks within its correspondent banks, further expanding its overseas service network.

The Bank has maintained the leading market position in cross-border RMB businesses. In the first three quarters, the Bank has conducted RMB2.67 trillion cross-border RMB settlement businesses, up by 56% compared to the same period of last year. In late September, the Bank released BOC Cross-border RMB Index globally, being the first bank in China who independently compiled and released an index relating to RMB internationalisation. Fully leveraging on  advantages of its global service network and diversified platforms, the Bank continued to improve its global service capability and supported the Chinese enterprises “going global”. The Bank provided quality and efficient financial solutions in the deals of Shuanghui International acquiring Smithfield and CNOOC acquiring Nexen, playing important roles in the proceeding of these projects.

Strengthened the proactive risk management to stabilise asset quality

Since the beginning of this year, the Bank has taken active measures to address the challenges and pressures arising from a changing economic situation. It further specialised its risk management measures, adhered to prudent credit policies, strictly controlled the exposure to local government financing vehicles and strengthened risk control for real estate sector, sectors with overcapacity and others. The asset quality remained stable with sufficient risk mitigation capability. As at the end of September, the Bank’s non-performing loans totalled RMB72.06 billion. NPL ratio stood at 0.96%, slightly up 0.01 percentage point from the prior year-end. Special-mention loan ratio was 2.47%, down 0.55 percentage point. The non-performing loans coverage ratio was 232.90% and the provision to total loans ratio for domestic institutions was 2.62%.

In the future, the Bank will firmly seize the important opportunities from RMB internationalisation, interest rate liberalisation and mobile internet development. Focusing on providing a superior customer experience, enhancing its market competitiveness and improving operating profitability, the Bank will continue to adjust business structure, improve management mechanism, explore global markets, enhance risk management, push forward infrastructure development. Undertaking the social responsibilities, the Bank is aiming to become a good bank and bring long-term sustainable value to shareholders.