Bank of China Limited (the "Bank": Hong Kong Stock Exchange stock code: 3988; Shanghai Stock Exchange stock code: 601988; Shanghai Stock Exchange convertible bond code: 113001) announced its 2014first quarter results on 24 April. According to International Financial Reporting Standard ("IFRS"), the Bank recorded a profit after tax of RMB47.199 billion and profit attributable to equity holders of RMB45.363 billion, increased 13.36% and 13.88% year-on-year respectively，maintaining solid development momentum.

Excellent performance in key financial indicators

As at the end of March, the Bank's total assets, liabilities and capital and reserves attributable to equity holders amounted to RMB15.11 trillion，RMB14.09 trillion and RMB972.542 billion, increased 8.87%，9.14% and 5.26% respectively from the prior year-end. Return on average total assets recorded 1.30% andreturn on average equity stood at 19.14%. Net interest margin expanded 7 basis points to 2.29%, the peak level since the financial crisis in 2008. The ratio of non-interest income to total operating incomewas 36.22%, which continued to lead peers. The Bank's asset quality remained stable with sufficient provision. Its non-performing loans ratio and non-performing loans coverage ratio stood at 0.98% and 226.83% respectively.Its capital adequacy ratio, tier 1 capital adequacy ratio and core tier 1 capital adequacy ratio were 12.05%, 9.59% and 9.58% respectively, complying with the regulator's new requirements. The Bank has become one of the pilot banks meeting with Basel III standards since the CBRC's approval in early April.

Optimised business structure and enhanced core profitability

The Bank kept a close eye on economy change domestically and abroad. By taking real economy service as the first priority, the Bank accelerated the transformation of its business structure and enhanced balanced management of its assets and liabilities. As at the end of March, the total customer deposits amounted to RMB11,014.196 billion, grew by RMB916.410 billion or 9.08% compared with the prior year-end. The domestic RMB-denominated customer deposits amounted to RMB8,445.813 billion, grew by RMB735.850 billion or 9.54% from the end of last year. The growth speed and amount led the market with better-than-peers stability.

The amount of loans and advances to customers was RMB8,158.329 billion, grew by RMB550.538 billion or 7.24% compared with the prior year-end. The domesticRMB-denominated loans grew RMB208.878 billion to RMB5,762.508 billion, an increase of 3.76% compared with the prior year-end. The Bank's loan to deposit ratio decreased 1.31 percentage points from the end of last year to 71.21%. The Bank strengthened credit support to the SMEs and wellbeing sectors. Medium sized enterprise loans and small enterprise loans by "BOC Credit Factory" grew by 6.84%and 9.23% respectively with growth rate evidently higher than average growth rate of domestic corporate loans. The proportion of domestic RMB-denominated personal loans to domestic RMB-denominated loans increased 0.11 percentage point to 33.69%.

Due tooptimisation ofthe Bank's asset and liability structure and rise of foreign currency interest rate,the Bank's net interest margin increased by 7 basis points year-on-year to 2.29%. The net interest margin of the domestic foreign exchange and overseas business expanded by 19 and 7 basis points respectively, which offset the 2 basis points decline of domestic RMB net interest margin.

In the first quarter of 2014, the Bank realised non-interest income of RMB43.427 billion, increased by 12.82% year-on-year, representing 36.22% of total operating income, remaining leading position among peers. Net fee and commission income was RMB28.970 billion, increasing 17.15% year-on-year, which was mainly driven by consultancy and advisory fees, credit commitment fees, settlement and clearing fees, bank card fees and other commission fees. The income from aircraft leasing business and insurance business in the diversified platform of the Bank increased 20.12% and 27.26% year-on-year respectively.

Enhanced differentiated competitive edges with strengthened global service capability

The Bank stepped up the market exploration in overseas market with fast asset and liability growth. As at the end of March, the Bank's total overseas assets was USD700.036 billion, an increase of 10.97% compared to the prior year-end, accounted for 26.24% of the Bank's total assets.Overseas profit before tax was USD2.129 billion, an increase of 36.13% year-on-year, accounted for 21.41% of the Bank's total profit before tax.The Bank had a total of 619 overseas institutions, covering Hong Kong, Macau, Taiwan and 37 countries.

The Bank maintained the leading position in cross-border RMB business. In the first quarter of 2014, the Bank's cross-border RMB settlement volume reached RMB1.49 trillion, representing an year-on-year growth rate of 70.80%. During the reporting period, the Bank publishedBOC Off-shore RMB Index, the first RMB internationalisation related index released worldwide. The Bank successfully issued RMB3.00 billion "Lion City" bonds in Singapore，signed strategic cooperation agreements with Australian Securities Exchange and Deutsche Boerse Group to actively explore off-shore RMB market, and was deeply involved in the construction of Shanghai Free Trade Zone.

The Bank continued to improve global customer service capability. In the first quarter, the Bank signed a series of cooperative agreements with Airbus Group, BPIFrance, Redes Energeticas Nacionais and Royal Dutch Airlines, which expandedits global service territory to push forward the development of international investment and trade.

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 March, the Bank's non-performing loans totalled RMB80.320 billion. NPL ratio stood at 0.98%, slightly up 0.02 percentage point from the prior year-end. Special-mention loan ratio was 2.48%, down 0.01 percentage point. The non-performing loans coverage ratio was 226.83% and the provision to total loans ratio for domestic institutions was 2.71%.

The Bank will firmly seize the sound momentum in the first quarter and integrate its own development more consciously into the overall trend of economic transformation and social progress, and will exert itself to make progress and strive to shoulder social responsibilities in a bid to be an excellent bank and reward the trust and support of shareholders and public with more outstanding performance.

Financial Highlights

(IFRS)

Key Performance Figures

Unit: RMB million Change Three-month period ended 31 Mar 2014 Three-month period ended 31 Mar 2013
Net interest income 14.20% 76,467 66,960
Non-interest income 12.82% 43,427 38,492
Including: Net fee & commission income 17.15% 28,970 24,730
Operating expenses 3.01% (44,262) (42,967)
Impairment losses on assets 82.74% (15,096) (8,261)
Profit after income tax 13.36% 47,199 41,638
Profit attributable to the equity holders of the Bank 13.88% 45,363 39,834

Key Assets and Liabilities Figures

Unit: RMB million Change As at 31 Mar 2014 As at 31 Dec 2013
Total assets 8.87% 15,105,367 13,874,299
Loans and advances to customers 7.24% 8,158,329 7,607,791
Total liabilities 9.14% 14,092,998 12,912,822
Due to customers 9.08% 11,014,196 10,097,786
Capital and reserves attributable to equity holders of the Bank 5.26% 972,542 923,916

Key Ratios

Change (PPT) Three-month period ended 31 Mar 2014 Three-month period ended 31 Mar 2013
Return on average total assets (annualised) (annualized) 0.00 1.30% 1.30%
Return on average equity (annualised) 0.27 19.14% 18.87%
Net interest margin 0.07 2.29% 2.22%
Cost to income ratio （calculated under domestic regulations） -1.73 24.86% 26.59%
Change (PPT) As at 31 Mar 2014 As at 31 Dec 2013
Non-performing loan ratio 0.02 0.98% 0.96%
Non-performing loan coverage ratio -2.52 226.83% 229.35%
Capital adequacy ratio -0.41 12.05% 12.46%
Tier 1 capital adequacy ratio -0.11 9.59% 9.70%
Common equity tier 1 capital adequacy ratio -0.11 9.58% 9.69%

Per Share Information

Unit: RMB  Change Three-month period ended 31 Mar 2014 Three-month period ended 31 Mar 2013
Earnings per share (basic) 0.02 0.16 0.14
 Change As at 31 Mar 2014 As at 31 Dec 2013
Net assets per share 0.17 3.48 3.31

Notes: Capital ratios are calculated according to the Capital Rules for Commercial Banks (Provisional)



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