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Stock Code: 2388 Driving Excellence on New Grounds Summary Financial Report 2014 This Summary Financial Report only gives a summary of the information and particulars contained in the “2014 Annual Report” (the “Annual Report”) of the Company from which this Summary Financial Report is derived. Both the Annual Report and this Summary Financial Report are available (in English and Chinese) on the Company’s website at www.bochk.com and the Stock Exchange’s website at www.hkexnews.hk. You may obtain, free of charge, a copy of the Annual Report (English or Chinese or both) from the Company’s Share Registrar, Computershare Hong Kong Investor Services Limited, details of which are set out in the letters sent by the Company to its shareholders in mid April 2015. Our Vision is to be YOUR PREMIER BANK Our Mission is to customer satisfaction and provide quality Build and professional service rewarding career opportunities and cultivate Offer staff commitment values and deliver superior returns to Create shareholders Our Core Values are Social We care for and contribute to our Responsibility communities We measure results and reward Performance achievement We uphold trustworthiness and Integrity business ethics Respect We cherish every individual Innovation We encourage creativity Teamwork We work together to succeed Combining the initials of mission and core values, we have BOC SPIRIT BOC Hong Kong (Holdings) Limited (“the Company”) was incorporated in Hong Kong on 12 September 2001 to hold the entire equity interest in Bank of China (Hong Kong) Limited (“BOCHK”), its principal operating subsidiary. Bank of China Limited holds a substantial part of its interests in the shares of the Company through BOC Hong Kong (BVI) Limited, an indirect wholly-owned subsidiary of Bank of China Limited. BOCHK is a leading commercial banking group in Hong Kong. With over 260 branches, more than 600 ATMs and other delivery channels in Hong Kong, BOCHK and its subsidiaries offer a comprehensive range of financial products and services to personal and corporate customers. BOCHK is one of the three note issuing banks in Hong Kong and also the Clearing Bank for Renminbi business in Hong Kong. In addition, the BOCHK Group (comprising BOCHK, Nanyang Commercial Bank and Chiyu Banking Corporation) and its subsidiaries have 42 branches and sub-branches in the Mainland of China to provide cross-border banking services to customers in Hong Kong and the Mainland. The Company began trading on the main board of the Stock Exchange of Hong Kong on 25 July 2002, with stock code “2388”, ADR OTC Symbol: “BHKLY”. Theme Contents 2014 marked another year of success for the Group Financial Highlights 2 with record high results. The cover of the annual report Five-Year Financial Summary 3 features an illuminated Bank of China Tower to represent Chairman’s Statement 6 our ongoing pursuit of excellence and commitment to Chief Executive’s Report 8 sustainable growth. This is reflected in our theme for this year’s annual report, Driving Excellence on New Grounds. Management’s Discussion and Analysis 16 Corporate Information 48 We are also committed to further enhancing the customer Board of Directors and Senior Management 50 experience by offering the diverse range of services and Report of the Directors 55 products via different platforms for our personal and Corporate Governance 59 corporate clients. Corporate Social Responsibility 82 Awards and Recognition 92 Looking ahead, by capitalising on our solid foundation Financial Section 96 and strong franchise, the Group will be proactive in taking advantage of new opportunities to create greater value Shareholder Information 131 for our customers, shareholders, employees and the Definitions 134 community. We will remain focused on Serving Society, Branch Network & Corporate Banking Centres 137 Delivering Excellence and contributing to the enhancement of Hong Kong as an international financial hub and its long-term economic development. This Summary Financial Report is available in both English and Chinese. Printed copy prepared in the language different from that in which you have received is available by writing to the Company’s Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong or email to [email protected]. This Summary Financial Report is also available (in both English and Chinese) on the Company’s website at www.bochk.com and the Stock Exchange’s website at www.hkexnews.hk. If you have any queries about how to obtain copies of the Company’s Annual Report or Summary Financial Report or how to access those documents on the Company’s website, please call the Company’s hotline at (852) 2846 2700. Financial Highlights 2014 2013 Change For the year HK$’m HK$’m +/(-)% Net operating income before impairment allowances 44,282 40,313 9.8 Operating profit 30,260 27,493 10.1 Profit before taxation 30,663 27,793 10.3 Profit for the year 25,105 23,075 8.8 Profit attributable to the equity holders of the Company 24,577 22,252 10.4 Per share HK$ HK$ +/(-)% Basic earnings per share 2.3246 2.1046 10.4 Dividend per share 1.1200 1.0100 10.9 At year-end HK$’m HK$’m +/(-)% Capital and reserves attributable to the equity holders of the Company 176,714 158,813 11.3 Issued and fully paid share capital 52,864 52,864 – Total assets 2,189,367 2,046,936 7.0 Financial ratios % % Return on average total assets1 1.19 1.22 Return on average shareholders’ equity2 14.65 14.37 Cost to income ratio 29.29 29.97 Loan to deposit ratio3 64.79 64.63 Average liquidity ratio4 42.17 37.93 Total capital ratio5 17.51 15.80 Profit for the year 1. Return on average total assets = Daily average balance of total assets 2. Return on average shareholders’ equity Profit attributable to the equity holders of the Company = Average of the beginning and ending balance of capital and reserves attributable to the equity holders of the Company 3. Loan to deposit ratio is calculated as at year end. Loan represents gross advances to customers. Deposit represents deposits from customers including structured deposits reported as “Financial liabilities at fair value through profit or loss”. 4. Average liquidity ratio is calculated as the simple average of each calendar month’s average liquidity ratio of BOCHK for the year. 5. Total capital ratio is computed on the consolidated basis for regulatory purposes that comprises the positions of BOCHK and certain subsidiaries specified by the HKMA in accordance with the Banking (Capital) Rules. Profit attributable to the equity Total assets Capital and reserves attributable to holders of the Company the equity holders of the Company HK$’m HK$’m HK$’m 24,577 2,500,000 200,000 25,000 2,189,367 176,714 20,000 2,000,000 160,000 15,000 1,500,000 120,000 10,000 1,000,000 80,000 5,000 500,000 40,000 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2 BOC Hong Kong (Holdings) Limited Summary Financial Report 2014 Five-Year Financial Summary The financial information of the Group for the last five years commencing from 1 January 2010 is summarised below: 2014 2013 2012 2011 2010 For the year HK$’m HK$’m HK$’m HK$’m HK$’m Net operating income before impairment allowances 44,282 40,313 35,617 30,846 27,508 Operating profit 30,260 27,493 23,499 22,478 18,239 Profit before taxation 30,663 27,793 25,521 24,680 19,742 Profit for the year 25,105 23,075 21,547 20,813 16,690 Profit attributable to the equity holders of the Company 24,577 22,252 20,930 20,430 16,196 Per share HK$ HK$ HK$ HK$ HK$ Basic earnings per share 2.3246 2.1046 1.9796 1.9323 1.5319 At year-end HK$’m HK$’m HK$’m HK$’m HK$’m Advances and other accounts 1,014,129 924,943 819,739 755,229 645,424 Total assets 2,189,367 2,046,936 1,830,763 1,738,510 1,661,040 Daily average balance of total assets 2,112,622 1,890,403 1,734,388 1,823,989 1,382,121 Deposits from customers1 1,483,224 1,327,980 1,229,131 1,146,590 1,027,267 Total liabilities 2,007,895 1,883,928 1,675,689 1,605,327 1,542,751 Issued and fully paid share capital 52,864 52,864 52,864 52,864 52,864 Capital and reserves attributable to the equity holders of the Company 176,714 158,813 150,969 129,765 115,181 Financial ratios % % % % % Return on average total assets 1.19 1.22 1.24 1.14 1.21 Cost to income ratio 29.29 29.97 31.61 25.49 34.84 Loan to deposit ratio 64.79 64.63 63.32 61.00 59.69 1. Deposits from customers include structured deposits reported as “Financial liabilities at fair value through profit or loss”. Advances and Deposits from other accounts customers HK$’m HK$’m 1,483,224 1,200,000 1,500,000 1,014,129 1,000,000 1,200,000 800,000 900,000 600,000 600,000 400,000 200,000 300,000 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 BOC Hong Kong (Holdings) Limited Summary Financial Report 2014 3 Efficient e-Banking Service Chairman’s Statement TIAN Guoli Chairman In 2014 we saw continued volatility in global financial markets, and record of achieving long-term profitability from our core particularly in the last quarter of the year.