Bank of China : Announced 2015 First Quarter Results

Bank of China Limited ("the Bank": Hong Kong Stock Exchange stock code: 3988, 4601(Offshore Preference Share); Shanghai Stock Exchange stock code: 601988, 360002 (the First Tranche Domestic Preference Share), 360010 (the Second Tranche Domestic Preference Share)) announced its 2015 first quarter results on 29 April. According to International Financial Reporting Standard ("IFRS"), the Bank recorded a profit after tax of RMB47.769 billion and profit attributable to equity holders of RMB45.838 billion, increasing 1.21% and 1.05% year-on-year respectively.

Stable performance in key financial indicators with further enhanced capital base

As at the end of March 2015, the Bank's total assets, liabilities and equity amounted to RMB16.02 trillion, RMB14.75 trillion and RMB1.27 trillion, increased 5.03%, 4.83% and 7.49% respectively from the prior year-end. The ROA and ROE recorded 1.22% and 16.93% respectively. The Bank successfully issued the Second Tranche Domestic Preference Shares of RMB28 billion and completed the conversion of A-share convertible bonds with accumulated conversion ratio of 99.94%. Its capital adequacy ratio and tier 1 capital adequacy ratio increased to 14.13% and 11.85% respectively.

Support real economy with optimised business structure

The Bank continuously supported the real economy with optimised credit structure, and realised modest growth of its loan book. As at the end of March 2015, the Bank's loans and advances to customers amounted to RMB8.80 trillion, increasing RMB319.119 billion or 3.76% compared with the prior year-end. The domestic RMB-denominated loans amounted to RMB6.38 trillion, growing by RMB280.147 billion or 4.59% from the prior year-end. New loans were primarily granted to the key national strategic opportunities, key areas related to livelihood initiatives and key projects under "Going Global" efforts.

Facing challenging market environment, the Bank strived to enhance service innovation to expand deposit base. As at the end of March 2015, the Bank's customer deposits totalled RMB11.56 trillion, an increase of RMB670.755 billion or 6.16% compared with the prior year-end. The domestic RMB-denominated deposits increased RMB513.707 billion or 6.31% to RMB8.66 trillion from the prior year-end. The Bank's annualised net interest margin was 2.22%, and declined by 3 basis points compared with the whole year of 2014.

The Bank continued to regulate its fee charge policy and practice, pushed forward its integrated operations and enhanced competitive edges. In the first quarter of 2015, the Bank's non-interest income amounted to RMB40.329 billion, representing 33.24% of total operating income, maintaining a leading position. The number of effective credit card issuance and the volume of credit card consumption maintained the fast growth momentum and drive the bank card fees to increase by 21.64% year-on-year. The Bank grasped the opportunity from rebounding domestic capital market to distribute fund and bonds, with relevant commission income increasing by 62.95% and 36.50% year-on-year, respectively. Diversified business platform continued to contribute profit with insurance premium and aircraft leasing income increasing by 30.14% and 9.48% year-on-year, respectively.

Enhance internationalised operations with ascending in international status

Firmly following the nation's new pattern of all-round opening up，the Bank vigorously strengthened its globally integrated financial services and improved international operation. As at the end of March 2015, the Bank's total overseas assets and profit before tax was USD781.354 billion and USD2.147 billion, and accounted for 27.58% of the Bank's total assets and 21.12% of the Bank's total profit before tax, respectively, which continued to lead major peers.

The Bank's cross-border RMB businesses maintained the leading market position. Its cross-border RMB settlement volume ranked 1st in market share, and its cross-border RMB clearing transactions volume continued to lead global peers. The Bank officially launched the RMB clearing businesses in Sydney and Malaysia, and introduced cash exchange services of RMB against the Nepalese Rupee (NRS). The Bank further released "Credits Investing & Financing Environment Difference Index" (CIFED) and completed the first offshore RMB financing for aircraft business in the world. Its outlets in Guangdong, Tianjin and Fujian Free Trade Zone were officially opened and successfully conducted the first batch of transactions.

The Bank actively provides financial supports to the nation's "Belt and Road" strategy. It continuously improved global network distribution to increase the coverage along the "Belt and Road" regions. As at end of March 2015, the Bank owned 630 overseas institutions in 42 countries and regions. The Bank continued to strengthen financial support to serve domestic and overseas corporations. As at end of March 2015, the Bank cumulatively extended loan commitment of USD125.8 billion to 1,763 "Going Global" projects. As the sole lead Chinese bank among the syndication, the Bank supported Bright Food (Group) Co., Ltd.'s acquisition of a majority of shares in Israel's dairy company, Tnuva. As the lead arranger, the Bank's Poland Branch participated the Polenergia Group's wind power syndicate project invested by China-CEE fund. The Bank also signed "General Agreement on 'Belt and Road' Strategic Cooperation" with Anhui Conch Cement Company Limited. In 2015, the Bank will provide financial support to "Belt and Road" construction with USD20 billion and the fund will amount to around USD100 billion in the coming three years.

Strengthen risk control with stable asset quality

Due to slowing down of macro economy and its structure adjustment，the domestic banks are facing with incremental pressure on asset quality. The Bank took multiple measures to control risk and resolve stressed assets, to ensure the asset quality stable and credit risk under control. As at the end of March 2015, the non-performing loans amounted to RMB116.777 billion, accounting for 1.33% of total loans. Total RMB16.5 billion of non-performing loans were resolved by its domestic branches in the first quarter of 2015. The ratio of allowance for loan impairment losses to non-performing loans was 167.05% and the ratio of provision to total loans of domestic institutions was 2.67%, both complying with regulatory requirements. It also strictly controlled the overall credit exposure to local government financing vehicles, reclassified the credit obligations following the government guidelines, and continuously strengthened the risk management of heavy overcapacity industries, real estate, etc.

In the future, the Bank will adhere to the development trend of internationalisation, more deliberately build its own forward path within the national framework of opening up and deepening reforms. It will take proactive steps to embrace the "new normal" of economic growth, seize the opportunities from the national development strategy of "Belt and Road", and unremittingly march towards its strategic goal of "Serving Society, Delivering Excellence".

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