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Bank of China Announced 2015 Annual Results


Profit After Tax Reached RMB179.417 billion, up by 1.25%

2016-03-30

Bank of China Limited (“the Bank”: Hong Kong Stock Exchange ordinary share code: 3988,4601(Offshore Preference Share); Shanghai Stock Exchange ordinary share code: 601988,Domestic Preference Share code: 360002, 360010) announced its 2015 annual results on 30 March. According to International Financial Reporting Standard (“IFRS”), the Bank recorded a profit after tax of RMB179.417 billion and profit attributable to equity holders of RMB170.845 billion in 2015, up by 1.25% and 0.74% year-on-year respectively.

As Mr. Tian Guoli, Chairman of the Bank, said, the Bank intertwined its own development with the nation’s strategy, and adhered to the strategic goal of “Serving Society, Delivering Excellence”. By fully exerting its advantages in internationalised operations, the Bank captured business opportunities in RMB internationlisation, interest rate liberalisation and internet finance. In recent years, the Bank recorded stable growth in both total assets and after-tax profit. The Bank ranked 4th in Top 1,000 World Banks with three positions higher from previous year. It also designated as one of the Global Systemically Important Banks for five consecutive years with continuously elevated market position.  

Mr. Tian Guoli also said that standing on the tide of RMB internationalisation development, the Bank will continue to devote its efforts to lead the market. The Bank will accelerate the construction of the financial artery of the “Belt and Road”, and place equal emphasis on cross-border collaborative business and overseas local business, to enhance overseas development foundation. It will also grasp opportunities from internet finance, and boost innovation in technology and business modes, to shape new competitive and growth advantages. 

Specifically, the Bank’s 2015 operational features embody in the following aspects:

Good performance in key financial indicators with steady after-tax profit

As at the end of 2015, the Bank’s total assets, liabilities and capital and reserves attributable to equity holders amounted to RMB16.82 trillion,RMB15.46 trillion and RMB1.30 trillion, increasing 10.26%,9.88% and 14.38% respectively from the prior year-end. The ROA and ROE recorded 1.12% and 14.53% respectively. Net interest margin was 2.12%. Non-interest income ratio stood at 30.65%, up 1.02 percentage points, maintaining leading position among peers. The Bank’s cost to income ratio (calculated under domestic regulations) decreased 27 basis points year-on-year to 28.30%, further improving its operating efficiency. Asset quality remained relatively stable with non-performing loans ratio standing at 1.43%. The ratio of allowance for loan impairment losses to non-performing loans and the allowance for loan impairment losses to total loans of domestic institutions recorded 153.30% and 2.62% respectively, meeting regulatory requirement. The Bank’s total capital enhanced steadily, and its capital adequacy ratio and tier 1 capital adequacy ratio recorded 14.06% and 12.07% respectively, increasing 19 and 72 basis points from the end of 2014.  

Support real economy with optimised asset and liability mix

In 2015, the Bank enhanced its credit support to real economy to fulfil its social responsibility. As at the end of 2015, the Bank’s loans and advances to customers amounted to RMB9.14 trillion, increasing RMB652.585 billion or 7.69% compared with the prior year-end. The Bank’s loan extension structure was further improved, and its personal loans increased 13.47% with the proportion to total loans increasing 1.54 percentage points from the last year-end to 30.28%. The Bank’s micro and small-sized enterprises business satisfied the regulatory requirement of the “Three No-Less-Thans”.

Besides adjusting asset mix, the Bank also consolidated liability management and vigorously developed stable fund sources. As at the end of 2015, the total customers deposits amounted to RMB11.73 trillion, increasing 7.75% from the prior year-end. In addition, the Bank made breakthrough achievement in building up overseas fund pool, which fully exhibited its globally advantage in funds allocation.

Comprehensively enhanced risk management with stable asset quality

Facing new economic and financial challenges from domestic and overseas markets, the Bank uphold the principle of “substance over form”, comprehensively enhanced its risk management and defended the risk bottom line. As at the end of 2015, its non-performing loans was RMB130.897 billion and non-performing loans ratio recorded 1.43%. The increase of both figures were lower than the average level of Chinese commercial banks.

The Bank intensified project access, credit approval and post-lending management, enhanced risk monitoring and early warning,and proactively retreated credit to industries and customers that did not comply with macroeconomic policies. It established window guidance mechanism over key areas and innovated non-performing assets collection mode with combined measures such as cash recovery, reorganisation, batch disposal and write-off. In 2015, the Bank’s domestic institutions resolved RMB104.4 billion of non-performing assets and successfully reorganised and revitalised several key projects.

Fully exert advantages in internationalised operations with rapid growth of overseas business

Consistent with China’s high-level reform and opening up,the Bank  vigorously developed overseas business, enhanced globally integrated  financial service capabilities and accelerated internationalised operation. In the past three years, the Bank’s overseas assets grew 54.06% with the proportion to total assets reaching 27.01%, and its overseas pre-tax profit contribution increased 5.05 percentage points to 23.64%, while non-performing loans ratio of its overseas institutions remained as low as 0.17%.
In 2015, the Bank continued to enhance its global network. Its overseas institutions cover 46 countries and regions,leading Chinese peers. The Bank also accelerated the building of the financial artery of the “Belt and Road” initiative. Its overseas institutions cover 18 countries along the “Belt and Road”. The Bank granted a total of USD28.6 billion in credits to customers along the “Belt and Road”, followed up approximately 330 material projects and expressed the intent to lend totalled approximately USD87.0 billion. It also successfully issued the first “Belt and Road” bond in the overseas market. The Bank actively supported Chinese enterprises’ “Going Global”, initiated the “cross-border SME matchmaking service” platform and successfully held 11 face-to-face cross-border matchmaking fairs as an invention of SME service mode.

The Bank continued to maintain its competitive edges in RMB internationalisation business. Its cross-border RMB settlement volume reached RMB5.39 trillion, while cross-border RMB clearing volume reached RMB330.96 trillion, maintaining the first place in global market. In 2015, the Bank was designated as the local RMB clearing bank in Kuala Lumpur, Hungary, South Africa and Zambia, thus accounting for half of the world’s 20 authorised RMB clearing banks. The Bank actively promoted the use of RMB in emerging business, completed the first RMB-CHF direct transaction in the interbank market, and launched the pioneering forward foreign currencies exchange along the “Belt and Road” countries against the RMB and trading products on behalf of customers. It closely cooperated with a number of overseas exchanges in launching RMB-denominated products and launched the pioneering RMB Bond Trading Index and the BOC OBOR RMB Index globally.

Improve diversified platform business with significant year-on-year growth in before tax profit

In 2015, the Bank pushed forward the strategy of integrated operations and its market position was consolidated. The profit before tax of its diversified business platforms grew 42% year-on-year with its proportion to pre-tax profit increasing 1.36 percentage points, becoming one of the vital propeller for the Bank’s profit growth.

BOCI strengthened collaboration with the group’s commercial banking platform. Its equity financing and trading businesses, bond issuance and underwriting business maintained leading position in the Hong Kong market. BOCI China achieved significant progress in operational performance. BOCIM’s AUM topped the ranking list in the market. The Bank’s insurance business was further improved. BOC Samsung Life was officially opened for business, which enables the Bank to become the only state-owned commercial bank holding both domestic and overseas property and life insurance licenses. BOCG Investment strongly supported the group’s businesses in the “Belt and Road” initiatives and achieved prominent after-tax profit growth. BOC Aviation maintained first market ranking in Asia market.

Build up “E-BOC” brand with comprehensive upgrade in internet finance business

The Bank firmly seized the nature of the financial service, and adhered to the thinking of integrated development of “finance internet-enabled” and “internet finance”. It further accelerated the transition to online service from traditional financial service and improved the efficiency and coverage of financial service. By implementing scenario fusion and data insight, as well as exploring new commercial mode, the Bank built “E-BOC” brands with its distinguished features and advantages.

The Bank further sharpened its edges in cross-border services, and initiated a cross-border e-commerce financial services solution named “BOC Global E-commerce”. The “BOC Easy-trade Cyber-tariff” service held the largest market share for the 9 consecutive year, thus its competitive edges was further enhanced. The Bank also established an online financial supermarket designed to meet customers' diverse demands, and pushed forward online asset management services. The Bank comprehensively reinforced internet finance and improved functionality and customer experience of its e-banking channels. A total of 2,598 outlets completed their upgrade towards smarter functionality and its mobile banking transaction amount increased 152% compared with the prior year, while the substitution ratio of e-banking channels for outlet-based business transactions reached 88%.

As Mr. Chen Siqing, President of the Bank, said, the year 2016 marks the opening year of building well-of society in an all-around way, and also the crucial year to push forward the structural reform. Bank of China will conscientiously implement the development concepts of innovation, coordination, green development, opening up and sharing. Adhering to the nation’s key strategies, the Bank will drive innovation, deepen business transition, improve risk control system, rigorously resolve NPLs and enhance the group’s integrated governance to reshape the developing momentum and rebuild the new advantages, in an aim to deliver more contribution to building well-of society in all aspects while achieving operational targets.

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