Docstoc

ppt

Document Sample
ppt Powered By Docstoc
					 China Merchants Bank Co.,
           Ltd.
1H11 Results Announcement




August 31, 2011              0
Forward-Looking Statement Disclaimer
This presentation and subsequent discussions may contain forward-looking statements that

involve risks and uncertainties. These statements are generally indicated by the use of
forward-looking terminology such as believe, expect, anticipate, estimate, plan, project,
target, may, will or may be expressed to be results of actions that may or are expected to
occur in the future. You should not place undue reliance on these forward-looking
statements, which reflect our belief only as of the date of this presentation. These
forward-looking statements are based on our own information and on information from
other sources we believe to be reliable. They relate to future events or our future financial,
business or other performance and are subject to a number of uncertainties that may
cause our actual results to differ materially.




                                                                                                 1
Agenda



 1             Overview


 2       Business development


 3       Financial performance

 4             Outlook




                                 2
Balanced Development of Profitability, Quality and Scale in 1H 2011

             Rapid increase in profit                                                         Continuous increase in ROAA and ROAE

                                                                                                                                                       26.62%
                                                                                                         24.27%
                                                  18,600                                                                                         1.47%
                                                                                                              1.21%
           13,203
(RMB MM)




           1H2010                                 1H2011                                                     1H2010                              1H2011
                                                                                                                         ROAA            ROAE


               Sound asset quality                                                              Steady growth in deposits and loans

                                                    348.41%                                           2,643
           302.41%
                                                                                              2,403
              0.68%                                                                                                                                              2,093
                                              0.61%                                                                                                    1,897
                                                                                                                         1,431 1,555
                                                                                   (RMB bn)




               2010                          1H2011                                           Total assets                 Total loans                Total deposits
                    NPL ratio        Coverage ratio                                                                       2010     1H2011

               Note: in the presentation, unless otherwise indicated, all financials are based on consolidated Group financials; all business data are based on Bank financials
                    (including description on “Second Transformation” achievements)
                                                                                                                                                                                  3
               Unless otherwise indicated, all data shown in the presentation are based on PRC GAAP and denominated in RMB (hereinafter inclusive)
“Second Transformation” Has Received Preliminary Successes




     Capital                   As of June 30, 2011, the Bank has recorded a ROAE of 24.2%, up by 3.82
   utilization                  percentage points YoY
   efficiency
                               Risk-adjusted return on capital (RAROC, after-tax profits) is 22.68%, up by 2.45
  continued to
                                percentage points YoY
    increase




                               As of the end of Jun. 2011, the average floating band of interest rates (weighted at
  Risk pricing                  actual amount) for newly-granted corporate loans has increased by 8.55 percentage
 power of loans                 points YoY; the average floating band of interest rates (weighted at actual amount)
   improved                      for newly-granted retail loans has increased by 14.02 percentage points YoY
    notably                    the Bank’s NIM has reached 3.07%, up by 36 bps YoY primarily due to the
                                enhanced assessment of loan pricing power and interest hike




          Note: Based on Bank financials
                                                                                                                   4
“Second Transformation” Has Received Preliminary Successes (Cont’d)

                                 As of the end of June 2011, the Bank’s cost-to-income ratio is 32.43%, down
   Operating                      by 7.36 percentage points YoY
   efficiency
                                 Per capita pre-tax profits recorded RMB 1.074 million, up by 40.2% comparing
   improved
  consistently                     to full year 2010; pre-tax profits per outlet increased by RMB 14.2 million, up
                                   by 35.0% comparing to full year 2010


                                 As of June 30, 2011, the Bank had 734,700 Sunflower clients and above, each
The proportion                    having an average daily total assets per month of RMB 500,000 or above, up
 of high-net-                     by 9.6% compared with the beginning of the year
worth customer
                                 The number of Diamond Customers and Private Banking Customers has
  increased
                                  increased by 12.4% and 15.3%, respectively, and the profit contribution from
    steadily
                                  those customers has increased by 5.9 percentage points YoY


                                 The Bank’s SME loans have reached RMB 433.8 bn, up by 11.7% compared
 The proportion                   with the beginning of the year, 3.7 percentage points more than the growth
  of SME loans                    rate of total loans of the Bank. The domestic SME loans account for 51.2% of
 went up further                  total domestic corporate loans, up by 1.5 percentage points compared with the
                                  end of the last year




           Note: Based on Bank financials
           1. Operating expenses refer to the sum of business and administration expenses and business tax and surcharges   5
Continue to Receive Widespread Recognition from the Business
Community




                                        The Asian Banker
      Financial Times                                                         Private Banker
                                     Best Retail Bank in China
 Top 100 in Global Brand      Best Wealth Management Product in China   Best Private Bank in China
   Value, rank No. 97                Best Credit Card in China




         The Asset                   The Economic Observer                 The Chinese Banker
 Best Professional Custody         Most Respected Enterprise              Best Corporate Image
  Bank in China for 3 times          10-year Achievement                  Best Corporate Social
        consecutively                                                          Responsibility




                                                                             Securities Times
              FCI                         Ad world 2011        Best Investment Banking for Banks in China
                                      Best Innovation Case       Best Bond Underwriting Bank in China
  Champion in Global Export                                       Best Financial Advisor Bank in China
         Factor (2010)            (Iphone mobile-banking case)           Best Bond Deal in China

                                                                                                      6
Agenda



 1             Overview


 2       Business development


 3       Financial performance

 4             Outlook




                                 7
Enhanced Profitability and Competitiveness of Retail Banking with Industry
Leading Wealth Management Franchise
                              Steady Increase of Retail
                                 Loans and Deposits                                                     Balanced Structure of Retail Loans1

                                                                                   7,052                              15.6%                   16.2%
                                                             6,504
                (RMB100 MM)




                                           5,226                                                                       13.0%
                                 4,827                                                                                                        15.7%
                                                                                                                      11.1%                   11.1%


                                                                                                                      60.3%                  57.0%


                                   Retail loans               Retail deposits                                          2010                  1H2011
                                                                                                                          Other personal retail loans
                                              2010         1H2011                                                         Personal operational loans
                                                                                                                          Credit cards receivables
                                                                                                                          Retail housing loans

 Net fee and commission income of                                                     AuM of Sunflower clients or                           Private banking and wealth
 retail banking continues to grow                                                       above grows steadily                                management centers
                                                                                                                           73.47
                                                                                           67.01                      12,983
                                                                                                                                             As of June 30th 2011, the Bank’s
                                                  44.20                                       11,717
                                                                                                                                             private banking customers increased
  (RMB100 MM)




                                                                     (RMB100 MM)




                      29.67                                                                                                                  by 15.3% from beginning of the year,
                                                                                                                                             private banking assets under
                                                                                                                                             management increased by 16.8%;
                                                                                                                                             we have set up 22 private banking
                                                                                                                                             centers in 18 key cities nationwide.
                1H2010                            1H2011                                       2010                   1H2011
                                                                                           AuM of Sunflower clients or above
                                                                                           Number of Sunflower clients or above (10,000)

                                Note: If not otherwise specified, the business data is based on bank financials
                                                                                                                                                                                8
                                Note 1: Based on consolidated Group financials; other retail loans include retail loans collateralized by money assets, auto
                                   loans, housing decoration loans, education loans and consumer lending
Refined Credit Card Business Strategy Has Yielded Results

           Number of credit cards in                                    Percentage of revolving               Cumulative and average
                circulation                                                    balance                       transaction value per card

                                                                                       37.7%
                                             1,797
                                                                          35.4%
               1,754                                                                                         1,713                                   2,170
                                                                                                                                                 2,285
(10,000)




                                                                                                                   1,801




               2010                         1H2011                         2010        1H2011                     1H2010                        1H2011
                                                                                                                 Cumulative transaction value (RMB 100MM)
                                                                                                                 Average transaction value per card per month (Yuan)

                                     NPL Balance of credit cards1                       NPL Ratio of credit cards1


                                                                                                1.89%
                                                                10.81
                                            10.40                                                        1.82%
                       (RMB100 MM)




                                            2010               1H2011                           2010     1H2011


                                      Note: Based on Bank financials
                                      Note 1: Based on consolidated Group financials
                                                                                                                                                             9
Steady Development of Corporate Banking Business with Increasing
Proportion of SME loans

                        Steady growth in corporate                                                Expansion of customer base of
                            deposits and loans                                                     corporate deposits and loans

                                                                    12,967                                                                   2.59
                                                   11,585
                                                                                                   2.21                                  41.47
                8,023           8,707
                                                                                                          39.28
 (RMB100 MM)




                                                                                       (10,000)
               Total corporate loans             Total corporate deposits
                                                                                                          2010                          1H2011
                                                                                                                 Number of corporate depositors
                                        2010   1H2011
                                                                                                                 Number of corporate borrowers


               Rapid growth of SME loan business1                                     Increased % of SME loans in total loans

                                                            4,338                                                                       51.2%
                                                                                                      49.7%


                        3,884
 (RMB100 MM)




                        2010                             1H2011                                           2010                         1H2011



                         Note: Based on Bank financials
                                                                                                                                                    10
                         Note 1: SME is defined in accordance with PRC national standards
Other Corporate Banking Business Maintained Steady Development


                  Financial leasing                                        Offshore financial business                                     International business
                                                                                                                                                                           550

                                                                                                                                                                        755




                                                         (USD 100 MM)
                                                                                                  28.1
  (RMB100 MM)




                                                                                                                                               668
                                      305.0                                   24.3




                                                                                                                  (100 MM)
                227.9




                                                                                                                                               26


                 2010                1H2011                                   2010              1H2011                                        1H2010                  1H2011
                               Total assets                                             Credit assets                                          International settlement (USD)
                                                                                                                                               Cross boarder RMB settlement

                   Business with                                                 Asset custody                                                Bond underwriting
                financial institutions
                                                                                                                                                                       3.29
                1,985                            2,042
                                              398                                                        4,547                                 2.36
  (RMB100 MM)




                                                             (RMB100 MM)




                                                                                                                             (RMB100 MM)
                    268                                                         3,209




                    2010                 1H2011
                   Over-the-counter interbank assets
                                                                                 2010                    1H2011                              1H2010                   1H2011
                   Placements from other banks and
                                                                                        Assets custody                                                 Bond underwriting
                   financial institutions
                                                                                        balance

                          Note: Based on Bank financials                                                                                                                         11
Progressive Development of Financial Market Business


              Proprietary investment                                 Entrusted wealth management




                                               3,900
              3,738
                                                                                               2,571




                                                                          1,798
(RMB100 MM)




                                                       (RMB100 MM)


              2010                            1H2011                      2010                1H2011




                      Note: Based on Bank financials                                                   12
     Optimized Network and Enhanced Comprehensive Service Capacity

                                                                 Private banking and wealth
                    Branch network                               management centers                              Online banking transactions

                                              1,917              As of June 30th 2011, we have set                                                 1,666
            1,913                                                                                                                              22,724
                                                                 up 22 private banking centers in                   1,272
                                          854
                830                                                                                                   16,823
                                                                 18 key cities nationwide. Built




                                                                                                      (10,000)
                                                                 upon the existing Sunflower
                                                                 wealth management centers and
                                                                 VIP offices, we have set up 54
                                                                 wealth management centers                           1H2010                   1H2011
                                                                                                                     Total number of online retail banking
                2010                     1H2011                                                                      transactions
            Number of outlets          Self-service banks                                                            Total number of online corporate banking
                                                                                                                     transactions


                      Direct banking                             Mobile banking                            Replacement rate of over-the-
                                                                                                         counter transactions by e-banking
                                       416.47                                                                                                      47.9%
                                                                 As of June 30th 2011, our                          45.1%
                                                                 contracted clients for mobile
(10,000)




                                                                                                                                              85.4%
             190.33                                                                                                   82.4%
                                                                 banking have reached 2.111
                                                                 million, with 709,400 accumulative
                                                                 transactions (excluding mobile
             1H2010                    1H2011                    payment), an increase of 237.8%,
                                                                 and accumulative transaction                         2010                   1H2011
           Transaction volume of "Easy Banking"
                                                                 value of RMB 44.947 bn, an                        Replacement of retail OTC transaction
                                                                 increase of 574.2%                                Replacement of corporate OTC transaction


                                Note: Based on Bank financials                                                                                               13
               Steady Improvement of Wing Lung Bank’s Business Performance


               Expansion of loan and deposit business                                                               Significant increase of
                                                                                                                      earnings after tax
                                                                        1,096
                                                         1,043
                                                                                                                                                   9.73
                                           816
                                705
                                                                                                                         6.37
                (HKD 100 MM)




                                                                                                 (HKD 100 MM)
                                  Total loans                 Total deposits                                             1H2010                   1H2011
                                                                                                                                Comprehensive Earnings
                                            2010      1H2011
               Increase in non-interest income                                  Stable capital adequacy ratios                           Sound asset quality

                                                      5,391
                                                                                   14.87%                                                 0.60%
                                4,381
                                                     23,000
                               18,100                                               9.65%                                                                        0.46%
(HKD 10,000)




                                                                                                                14.10%


                                                                                                                 9.41%

                               1H2010                1H2011                         2010                        1H2011                     2010                  1H2011
                                Net fee and commission income                                                                                        NPL Ratio
                                                                                           CAR        Core CAR
                                Net income from assurance
Agenda



 1             Overview


 2       Business development


 3       Financial performance

 4             Outlook




                                 15
           Steady and Rapid Growth of Interest Income


                    Interest income                                     Average interest-earning assets                      Average interest-bearing liabilities



                                              55,082
                                                                                                          2,409,676                                        2,265,366
                                                                                                                                                              1.6%
                                                                            2,150,615                     10.0%
                                                                                                                                        2,008,402
                                                                                                                                                              13.7%
                                                                              10.0%                       13.6%
           39,226                                                                                                                         2.0%
                                              35,716                          11.4%                                                       14.7%
                                                                                                          14.4%
(RMB MM)




                                                             (RMB MM)




                                                                                                                             (RMB MM)
           26,343                                                             14.8%


                                              19,366                                                                                                          84.8%
                                                                                                                                          83.3%
           12,883                                                                                         62.0%
                                                                              63.8%




               1H2010                     1H2011                              2010                        1H2011                          2010               1H2011
              Interest income          Interest expense             Placements with banks and other financial institutions              Issued debts
              Net interest income                                   Balances with central bank
                                                                                                                                        Placements from banks and other
                                                                    Bond investments                                                    financial institutions
                                                                    Loans and advances                                                  Deposits from customer


                                Note: Based on consolidated Group financials
                                                                                                                                                                          16
NIM Increased Rapidly


   Average yield of interest-                                Average cost of interest-                                              NIM
         earning assets                                          bearing liabilities

                                                                                                                                                  2.99%
                                      5.73%
                                                                                                   5.11%
                                                                                                                                          2.65%
                                                                                                                        2.56%
                                                            4.67%
 4.87%
                                      4.61%

 3.93%
                                      3.77%
                                                                                                   2.87%
                                      3.30%
  2.88%
                                                            1.64%                                  1.72%

  2.31%                                                     1.37%                                  1.48%
                                                            1.24%
  1.44%                               1.51%



     2010                       1H2011                            2010                         1H2011                   1H2010            2010    1H2011

Loans and advances                                        Customer deposits

Total interest-earning assets                             Placements from banks and other financial institutions
                                                          Issued debts 1
Placements with banks and other financial institutions
                                                          Total interest-bearing liabilities
Bond investments
Balances with central bank



                        Note: Based on consolidated Group financials
                                                                                                                                                           17
                        Note 1: Issued debts include certificates of deposit, convertible bonds, financial debts and subordinated notes
           Continuous growth of non-interest income


                      Non-interest income                                               Net fee & commission income by segment




                         10,340


                                                                                                4,420
                                                      8,163


              6,591                                                                                                3,341
                                                                                       2,967
                                           5,346
                                                                                                          2,338
(RMB MM)




                                                                            (RMB MM)
                                                                                                                                            402
                                                                                                                                    41

            Net non-interest income     Net fee & commission                            Retail banking   Corporate banking      Treasury and others
                                               income
                                                                                                         1H2010            1H2011
                          1H2010       1H2011




                             Note: Based on consolidated Group financials
                                                                                                                                                      18
Continuous Growth of Wealth Management Income


        Income from wealth management                           Income from agency funds and
                                                                     agency trust plans
                                                                                     1,137

                                            2,522
  (RMB MM)




                                                     (RMB MM)
                                                                    598
                  1,534




                  1H2010                  1H2011                   1H2010          1H2011



             Income from entrusted wealth                   Income from agency sale of insurance
                     management
                                                                                    606

                                             559                    449
  (RMB MM)




                                                     (RMB MM)
                    339




                   1H2010                  1H2011                  1H2010         1H2011



                    Note: Based on Bank financials
                                                                                                   19
Stable Growth of Other Non-interest Income

              Banking card fee income              Income from investment banking business


                                          2,260
                                                                              1,119
   (RMB MM)




                   1,701




                                                      (RMB MM)
                                                                 563




                   1H2010                1H2011                  1H2010      1H2011



     Income from assets under custody              International business non-interest income
                                          228
                                                                               862


                 147
   (RMB MM)




                                                      (RMB MM)
                                                                  820




                 1H2010                1H2011                    1H2010       1H2011



                  Note: Based on Bank financials
                                                                                                20
Significant Achievements in Cost Control


               Operating income and expense                                                               Cost-to-income ratio1



                        46,056                                                                      35.05%


                                                                                                                            32.63%

             32,934
  (RMB MM)




                                                                15,026
                                                  11,544




             Operating income                     Operating expense                                 1H2010                  1H2011

                               1H2010      1H2011




                 Note: Based on consolidated Group financials
                                                                                                                                     21
                 Note 1: cost-to-income ratio = business and administration expenses / operating income
Stable Asset Quality


                Impairment loss on assets                                       Credit cost (annualized)
                                                4,064
                                                                                                           0.53%

                                                                                0.43%
   (RMB MM)




                   2,394




                   1H2010                       1H2011                          2010                       1H2011



              Asset quality of corporate loans                                  Asset quality of retail loans
               0.92%                                                         0.34%                             0.32%
                  8,016
                                                                                                           1,740
                                                0.81%                            1,670
   (RMB MM)




                                                                  (RMB MM)
                                            7,766




                   2010                   1H2011                                 2010                      1H2011
                       NPL balance      NPL ratio                                        NPL balance   NPL ratio

                   Note: Based on consolidated Group financials
                                                                                                                       22
Stable Capital Adequacy Ratio in Line with Regulatory Requirements


        Core capital adequacy ratio                       Capital adequacy ratio



                                                        11.47%

         8.04%                                                             11.05%

                                     7.81%




          2010                      1H2011              2010               1H2011




         Note: Based on consolidated Group financials
                                                                                    23
Agenda



 1             Overview


 2       Business development


 3       Financial performance

 4             Outlook




                                 24
Outlook
2H 2011

                 Challenges                                    Mitigants

 Tightening macro control policies
 More stringent regulatory restrictions and    Strengthen capital management
  higher regulation standard
 Tightening liquidity and intensified          Enhance risk-pricing capability
  competition for deposits among peers
                                                Accelerate SME business

                                                Promote sound development of wealth
                                                 management business
                Opportunities
 Rebound of NIM due to interest hike           Enhance origination and coverage for
  expectation                                    medium to high-end retail clients
 Higher household income and enhanced
  awareness of wealth management                Expedite the integration of Wing Lung

 Great potential for specialized SME            Bank to push forward international
  financial services                             business operation
 New opportunities for expanding the
  market of non-interest income business


                                                                                         25
A+H Rights Issue

         More stringent capital            Asset quality risk due to          Capital adequacy of CMB is
            requirements by                  uncertainties of macro                lower than industry
          regulatory authorities                   economy                               average




                                    Proposal for A+H Rights Issue

 The Rights Issue will be conducted on the basis of up to 2.2 Rights Shares for every ten (10) existing Shares; the
  Subscription Price shall be the same after exchange rate adjustment for A+H shareholders
 Subscription Price: to be determined based on a discount to market price having regard to the trading prices of the
  A Shares and the H Shares on the secondary markets before the publication of the Rights Issue announcement,
  provided that the Subscription Price will not be lower than the most recent audited net asset value per Share of the
  Company before the Rights Issue as determined by a domestic auditor in accordance with the PRC GAAP. The
  final Subscription Price shall be determined by the Board (or its authorized delegates) pursuant to the authorization
  of the shareholders’ meeting in consultation with the sponsor(s)/lead underwriter(s) on the Price Determination Date
 It is expected that the gross proceeds of the Rights Issue will be not more than RMB 35 bn
 Use of proceeds: all proceeds will be used to strengthen the capital base of the Bank and improve capital adequacy
  ratio
 Mid-term capital management plan: as of the end of 2015, it is expected that Tier 1 CAR will reach 9.5% and CAR
  will reach at least 11.5%



                                                                                                                       26
Q&A




      27

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:54
posted:10/6/2011
language:English
pages:28