Bank of China ((BACHY)) has held its Q4 earnings call. Read on for the main highlights of the call.
The Bank of China recently held its earnings call, revealing a strong financial performance for 2024. The bank reported significant growth in assets and liabilities, alongside notable contributions from its global business operations. Despite challenges in the real estate sector and personal loans, the overall sentiment was positive, reflecting the bank’s strategic innovations in technology and green finance.
Growth in Total Assets and Liabilities
The Bank of China reported a substantial increase in its total assets and liabilities, with assets surpassing RMB35 trillion and liabilities reaching RMB32 trillion. This represents growth rates of 8.11% and 8.20% respectively from the previous year, highlighting the bank’s robust financial foundation.
Increase in Operating Income and Profit
Operating income for the bank rose to RMB632.8 billion, marking a year-on-year growth of 1.38%. Additionally, the after-tax profit saw an increase of 2.58%, reaching RMB252.7 billion, underscoring the bank’s profitable operations.
Strong Performance in Technology and Green Finance
The bank has made significant strides in technology and green finance, providing RMB1.91 trillion in credit to technology-based enterprises. The domestic green credit balance also grew by an impressive 31.03%, reflecting the bank’s commitment to sustainable finance.
Significant Increase in Global Business Contribution
The bank’s global business operations contributed significantly to its overall performance, with the pre-tax profit of foreign commercial banks increasing by 40.75% year-on-year. This segment now contributes 26.78% to the group, up by 4.08% from the previous year.
Dividend Implementation and Share Price Increase
For the first time, the Bank of China implemented an interim dividend, which was well-received by the market. Share prices of A and H shares rose significantly by 55.24% and 42.97%, respectively, reflecting investor confidence.
Challenges in the Real Estate Market
The real estate sector continues to be a challenge for the bank, being the largest source of new non-performing loans (NPLs). This ongoing pressure affects the bank’s asset quality, requiring careful management.
Pressure on Personal Loan Quality
Personal loans, particularly operation and mortgage loans, have seen an increase in new NPLs year-on-year. This trend adds significant pressure on the bank’s asset quality, necessitating strategic interventions.
Impact of Global Economic Challenges
Global political and economic uncertainties, particularly in North America and Europe, pose challenges to the bank’s overseas asset quality control. These factors require the bank to enhance its risk management strategies.
Forward-Looking Guidance
Looking ahead to 2025, the Bank of China aims to continue its support for the real economy and enhance its global presence. The bank plans to focus on key areas such as AI, green finance, and digital transformation, while improving risk management. The management also highlighted key performance metrics, including a net interest margin of 1.4%, a return on assets of 0.75%, and a return on equity of 9.5%.
In summary, the Bank of China’s earnings call painted a positive picture of its financial health and strategic direction. Despite challenges in certain sectors, the bank’s focus on innovation and growth in global operations suggests a promising outlook for the future.