Delivering Growth · 2014. 9. 26. · 2006 by HK$157 million or 23%. Of which, 14% or HK$95 million...

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a FubonFinancialcompany

11-03-2008 2:06:16 PM

Delivering GrowthDelivering Growth

Fubon Bank (Hong Kong) LimitedFubon Bank (Hong Kong) LimitedFY2007 Financial ResultsFY2007 Financial Results

11 March 200811 March 2008

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This meeting may contain forward-looking statements with respect to the financial condition, results of operations and business of the Bank. These forward-looking statements represent the Bank’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed. Certain statements, such as those that include the words “potential”, “estimated”, and similar expressions or variations on such expressions may be considered “forward-looking statements”.

Fubon Bank (HK) Limited – Disclaimer

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FY 2007 : Delivering Growth

Net Interest Income 23%

Non-interest Operating Income 32%

Operating Profit Before Gains and Impairment Losses 43%

Profit Attributable to Shareholders 41%

Proposed Final Dividend of 13 Hong Kong cents per share

Performance Highlights

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a FubonFinancialcompany Key Drivers for 2007 Earnings

Improvement in net interest margin resulted from loan growth, improvement in investment yield and balance sheet mix

Growth in customer franchise

Further enhancement of wealth management and financial markets product platform

Further integration with Fubon Financial

Maintaining sound asset quality

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a FubonFinancialcompany Profit Attributable to Shareholders Grew 41%

-

100

200

300

400

500

600

700

800

900

2006Actual

2007Actual

Favorable

HK$ million

327

Net InterestIncome+157

Net Fees & Commission and Other

Operating Income+227

CDO MTMLoss-90 Operating

Expenses-118

LoanImpairment

+28

SIVImpairment

-162

Gain onDisposal of

AFS Securities

+85Others

+7 461

2006 Actual

2007 Actual

900

800

700

600

500

400

300

200

100

0

Unfavorable

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a FubonFinancialcompany Net Interest Income Rose 23%

Net interest income was higher than

2006 by HK$157 million or 23%.

Of which, 14% or HK$95 million

growth was attributed to loan

growth. Average loan balance

increased HK$5 billion ( 21%).

The remaining 9% growth was from

investment yield (HK$26 million) &

money market performance

improvement (HK$26 million).

650

700

750

800

850

900

2006Actual

2007Actual

697

854

HK$ million

LoanGrowth

+95

InvestmentYield

Improvement+26

Money MarketPerformanceImprovement

+26

Others+10

2006Actual

2007Actual

900

850

800

750

700

650

7

a FubonFinancialcompany Non-Interest Operating Income Up 32%

200

250

300

350

400

450

500

550

600

650

700

2006Actual

2007Actual

2006Actual

2007Actual

Wealth Management ProductsCommission Income( 78% or HK$177 million)

Brokerage-Related Commission Income ( 90%)

Revaluation Loss on CDOs

Non-Interest Operating Income grew by HK$137 million or 32% to HK$568 million from 2006’s HK$431 million.

Unit Trust commission income ( HK$81 million or 197%)Recurring sale of financial markets products ( HK$79 million or 47%)Insurance commission income ( HK$17 million or 101%)

Brokerage-related income ( HK$51 million or 90%)

HK$90 million for 2007

700

650

600

550

500

450

400

350

300

250

200

431

568

WealthManagement

ProductCommission

+177

Brokerage-RelatedIncome

+51

RevaluationLoss on CDOs

-90

HK$ million

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Non-interest Operating Income (Revaluation Losses on CDOs)

At 31 December 2007(In HK$ million)

Nominal Value Market Value%

RevaluationLosses

through P&L

Fortuna Managed CDO III-ATitian CDO PlcAnderson Valley III CDO

78 (US$10 million)78 (US$10 million)78 (US$10 million)

60.00%65.60%58.50%

(31)(27)(32)

(90)

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a FubonFinancialcompany Increase in Operating Expenses by 17%

Operating Expenses increased HK$118 million or 17% to HK$835 million

Major increase was in compensation & staff-related expenses of HK$96 million

Headcount growth (Dec-06: 911; Dec-07: 1,101)Full year salary effect on headcount growth in 2006

Premises expenses rose HK$22 millionNew office space to cope with business expansion and headcount growth

Lower depreciation charges due to some fixed assets fully depreciated in 2006

Other Expenses increased HK$13 million

Higher systems-related expenses to support business growth

650

700

750

800

850

900

2006Actual

2007Actual

900

850

800

750

700

6502006Actual

2007Actual

HK$ million

717

835StaffExpenses

+96

PremisesExpenses

+22

Depreciation-13

OtherExpenses

+13

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a FubonFinancialcompany Impairment Losses on Investments (SIV)

*Cullinan Finance Ltd.

In February 2008, Cullinan’s income notes for US$15 million was switched into income notes newly issued by Mazarin Funding Limited (US$10.7 million) and Barion Funding Limited (US$4.3 million) at 19.9% NAV.

FIVE Finance Corporation (Nominal Value equivalent of US$25 million)

In November 2007, FIVE’s income note was switched to a portfolio of high grade assets of which the tenor and credit quality are in line with its investment strategy at 62.162% NAV.

At 31 December 2007At 31 December 2007(In HK$ million)

Nominal Value Market Value%

ImpairmentLosses

through P&L

Centauri CorpCullinan Finance Ltd.*

156 (US$20 million)117 (US$15 million)

51.60%25.70%

(76)(86)

(162)

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(HK$ million)

Credit Card AdvancesPersonal LoansHire PurchaseShort Term AdvancesOverdrafts & Commercial LoansSyndicated & Term LoansInstalment Housing LoansProperty Mortgage LoansNon-performing Loans

Advances to Customers

2007

520279

5,1175,2122,4445,0609,4743,352

176

31,633

2006

493235

4,4504,1401,3353,2898,6293,100

243

25,914

5.418.715.025.983.153.99.88.1

(27.6)

22.1

Variance(%)

Advances to Customers Rose 22%

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a FubonFinancialcompany Customer Deposits Increased by 23%

(HK$ million)

Demand DepositsSavings DepositsCall DepositsFixed Deposits

Deposits from Customers

2007

6,439957

2,88231,196

41,474

2006

5,410833

2,24725,320

33,811

19.014.928.223.2

22.7

Variance(%)

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a FubonFinancialcompany Sound Asset Quality

Net charge of individual impairment losses for 2007 was HK$37 million, decreased by HK$23 million when compared to 2006’s HK$60 million.

The decrease was mainly due to write-backs of provisions for corporate loans in 2H 2007.

Impaired loans ratio consecutively reduced to 0.55% at 31 Dec 2007, much lower than industry’s 0.89% at 30 Sep 2007.

* Source from the HKMA

0.5

1.0

1.5

2.0

2.5

Dec 2004 Jun 2005 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Dec 2007

Industry * Fubon (HK)

Impaired Loan Ratio

Sep 07: 0.89%

Dec 07: 0.55%

(%)

Tot al

ConsumerLoans

38

Charge for Individual Impairment Losses (2007)In HK$ Million

11

37

-12

SME

ConsumerLoans

CorporateLoans

Total

Dec 2004 Jun 2005 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Dec 2007

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a FubonFinancialcompany Improvements of Key Financial Ratios

39.35 38.19 39.94

0

10

20

30

40

2005 2006 2007

Non-interest Income to Income Ratio (%)

1.15 1.44 1.65

0

1

2

2005 2006 2007

Net Interest Margin (%) Cost to Income Ratio (%)

72.57 63.62 58.76

0

20

40

60

80

2005 2006 2007

Cost to Income Ratio (%)

14.4216.6014.94

0

10

20

2005 2006 2007

Capital Adequacy Ratio (%)

15


0.51 0.63 0.81

0

1

2005 2006 2007

Return on Assets (%)

6.48 8.4711.43

0

1 0

2005 2006 2007

Return on Equity (%)

58.81 66.46 69.60

0

5 0

2005 2006 2007

Loan to Deposit Ratio (%)

0.99 0.930.55

0

1

2005 2006 2007

Impaired Loan Ratio (%)

Improvements of Key Financial Ratios (Cont.)

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2007 Full Year Actual – Per Share Calculations

39.33

27.91

20.60

0

10

20

30

40

2005 2006 2007

19.0018.00

17.00

0

10

20

2005 2006 2007

3 . 5 13 . 3 93 . 2 0

0 . 0 0

2 . 0 0

4 . 0 0

2 0 0 5 2 0 0 6 2 0 0 7

Book Value Per Share(HK$)

Earnings Per Share(HK Cents)

Dividend Per Share(HK Cents)

3.203.39 3.51

2005 2006 2007 2005 2006 2007 2005 2006 2007

20.60

27.91

39.33

17.0018.00

19.00

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Taiwan-Related Business – Operating Profits before Gains & Impairment Losses

Taiwan-Related Business 12%

Non Taiwan-Related Business 88%



Taiwan-related: Wealth ManagementTaiwan-related: Corporate BankingTaiwan-related: Hire PurchaseNon-Taiwan related business

Year 2006 Year 2007

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Taiwan-Related Business – Loans and Deposits






As at 31/12/2006 As at 30/6/2007Loans

Deposits

Taiwan-related: Wealth ManagementTaiwan-related: Corporate BankingTaiwan-related: Hire PurchaseNon-Taiwan related business

As at 31/12/2007





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a FubonFinancialcompany Sustainable Growth

Sustain broad-based growth to enhance ROEContinue to build customer franchiseInvestment in infrastructures and product platform• CRM/ e-banking systems enhancement• Establish high net worth platform• Wealth management/ financial markets product platform

enhancementLaunch asset management business, targeting to launch the first public fund in 1H2008Prepare for China expansion

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a FubonFinancialcompany 2007 Full Year – Income Statement

(HK$ million)

Net interest incomeOther operating incomeMark-to-market loss for CDOsOperating incomeOperating expenseOperating profit before gains & impairment lossesImpairment losses on advances to customersImpairment losses on available-for-sale securities (SIVs)Other impairment lossesOperating profit after impairment lossNet gain on disposal of available-for-sale securitiesNet gain on disposal of fixed assetsProfit before taxationTaxation

Profit for the year

2007 Actual

2006 Actual

Variance (%) vs 2006

854658(90)

1,421(835)

587(38)

(162)(5)

382132

3517(56)

461

697431

01,127(717)

411(66)

0(1)

345470

392(64)

327

22.552.8NA

26.116.542.8

(42.6)NA

>10010.7

>100NA

32.0(13.6)

41.0

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a FubonFinancialcompany 2007 Full Year – Balance Sheet

(HK$ million)

Cash, short term funds & placementsTrade bills less reserves and CDAdvances to customers less reservesAccrued interest and other accountsInvestmentsFixed Assets

Deposits and balances of banks & FIsDeposits from customersCD and FRN issuedShort Position and Exchange Fund PapersOther accounts and liabilitiesSubordinated debtsShareholders’ funds

2007 Actual

2006 Actual

Variance (%) vs 2006

12,486347

31,4792,130

13,0391,142

60,623

1,45841,4743,9756,0921,8801,6224,122

60,623

14,786158

25,7511,6889,8451,119

53,347

96233,8114,9386,6401,4471,5703,979

53,347

(15.6)>10022.226.232.42.0

13.6

51.622.7

(19.5)(8.3)29.93.33.6

13.6

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Thank youThank you

Delivering Growth · 2014. 9. 26. · 2006 by HK$157 million or 23%. Of which, 14% or HK$95 million...

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Transcript of Delivering Growth · 2014. 9. 26. · 2006 by HK$157 million or 23%. Of which, 14% or HK$95 million...