OREANDA-NEWS. February 21, 2011. The Bank of East Asia and its subsidiaries (collectively, the “BEA Group”) have announced that consolidated profit after taxation reached HKD 4,303 million for the year ended 31st December, 2010. This represents a new record high for the BEA Group, and is 60.8 percent higher than the net profit of HKD 2,677 million recorded for 2009, reported the press-centre of Bank of East Asia.

Basic earnings per share rose to HKD 1.92, an increase of HKD 0.53 over the HKD 1.39 per share reported for 2009. Return on average assets and return on average equity were 0.9 percent and 10.1 percent, respectively.

The Board of Directors has proposed a final dividend of HKD 0.56 per share, bringing the total dividend for the year to HKD 0.94 per share. The full-year dividend for 2009 was HKD 0.76 per share.

While overseas economies continued to face challenges in 2010, Hong Kong enjoyed an economic rebound due in large part to continued robust growth on the Mainland. The BEA Group is well placed to capitalise on the favorable economic conditions in Greater China, and generated a total operating income of HKD 11,126 million for 2010, a rise of 9.2 percent compared to the HKD 10,188 million recorded for 2009.

Net interest income climbed to HKD 7,543 million, a rise of 11.8 percent compared to the previous year. The BEA Group’s net interest margin narrowed slightly to 1.78 percent in 2010, down 2 basis points from the previous year.

Total non-interest income increased to HKD 3,583 million, 4.1 percent above the HKD 3,441 million recorded for the previous year. Net fee and commission income surged by 30.1 percent, to HKD 2,942 million.

Total operating expenses rose by 12.6 percent to HKD 6,904 million, as the Group continued to invest in support of future growth. For 2010, the cost-to-income ratio stood at 62.0 percent.

Operating profit before impairment losses increased to HKD 4,222 million, a rise of HKD 163 million compared to the figure reported for 2009.

Prudent credit risk management helped BEA register a sharp drop in impairment losses on loans and advances, to HKD 285 million, a decrease of 74.2 percent over the previous year. The overall impaired loan ratio stood at 0.54 percent at the end of 2010. Operating profit after impairment losses grew to HKD3,916 million, an increase of 34.2 percent over the position one year ago.

Total profit after taxation rose to HKD 4,303 million, 60.8 percent higher than a year ago. Profit attributable to owners of the parent totalled HKD 4,224 million, a rise of 62.2 percent compared to 2009.

As of 31st December, 2010, the total consolidated assets of the BEA Group amounted to HK\\$534.2 billion, an increase of 23.1 percent over the figure reported as of the same date in 2009.

Total advances to customers amounted to HKD 297.0 billion, representing a rise of 19.9 percent from HKD 247.7 billion at the end of 2009, while total customer deposits grew by 22.6 percent from HKD 342.5 billion at year-end 2009 to HKD 419.8 billion as of the end of 2010. Total equity attributable to owners of the parent stood at HKD44.2 billion at the end of 2010.

As of 31st December, 2010, the BEA Group’s capital adequacy ratio stood at 13.2 percent, lower than the 13.3 per cent reported as of the same date in 2009. The average liquidity ratio was 44.9 percent for the year ended 31st December, 2010, compared to 43.3 percent recorded in the previous year.

Speaking at press conference, Dr. David K.P. Li, Chairman & Chief Executive of the BEA Group, said: “Our business performance was strong across the board. Not only is our profit at a new record high, we set new records in total assets, total loans outstanding and total deposits.”

The Group’s record-setting performance has been built on its success in leveraging the dual strengths of its established Hong Kong base and growing Mainland franchise. In Hong Kong, BEA’s corporate and commercial loan balance finished the year up 36 percent compared to the end of 2009.

The Bank’s loan and trade finance businesses greatly benefited from the strong demand of Mainland enterprises for offshore financing. Business channelled via The Bank of East Asia (China) Limited (“BEA China”) – the Group’s wholly-owned subsidiary bank on the Mainland – accounted for 24 percent of the corporate and commercial loan and trade finance portfolio of the Bank’s Hong Kong business as at the end of 2010.

Retail banking was also strong, with double-digit growth in both total deposits and the number of new integrated accounts opened in 2010. BEA took advantage of stable economic conditions and improved consumer confidence to make strong gains in consumer lending, up 40 percent compared to the previous year. Effective marketing helped credit card receivables post a double-digit rise.

BEA’s structured products recorded growth of over 30 percent in terms of fee income year on year. Mutual funds sales nearly doubled in 2010, and fund assets under custody rose by 40 percent.

Dr. Li said: “We have taken advantage of further relaxation of Renminbi business in Hong Kong to develop a wide range of new investment products and business services denominated in Renminbi.” During 2010, BEA launched its first offshore structured RMB investment product – the RMB Capital-Guaranteed Currency Linked Deposit Series, followed by the RMB Non-Capital Guaranteed Interest Rate and Currency Linked Deposit to meet the diverse needs of its customers.

BEA China recorded increases in total advances to customers and deposits of 10.9 percent and 40.4 percent, respectively, year on year. In 2010, BEA China opened two full branches, in Suzhou and Zhengzhou, and 16 sub-branches, including four “cross-location” sub-branches in Foshan, Zhongshan, Huizhou and Zhaoqing in Guangdong Province. At the end of 2010, the BEA Group operated a total of 94 outlets in 28 cities on the Mainland, one of the largest Mainland franchises held by any foreign bank.

In addition to the extensive branch network now operated by BEA China, in December 2010 BEA established the Group’s first rural bank on the Mainland, Shaanxi Fuping BEA Rural Bank Corporation, in Shaanxi Province.

In 2010, BEA’s international operations returned to profit due to the strong performance in Southeast Asia and the United Kingdom. Operations in Singapore, Malaysia, and the UK all reported record after-tax profits for the year. BEA also achieved satisfactory results for its US operations.

While noting that economic conditions may be more fragile in 2011, Dr. Li expressed confidence in the outlook for the BEA Group. “Our strong credit quality, excellent customer relationships, and well-integrated business platform give us confidence to continue to pursue and develop new business opportunities,” Dr. Li concluded.