#12022 Interim Results OXO එ 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED 30 August 2022#2口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED ✓ 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 or will, or may be expressed as being the 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. Our actual results may be materially less favorable than those expressed or implied by these forward-looking statements which could depress the market price of our Level 1 ADSS and local shares. 2#3中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED 1 Strategy Review Agenda 2 Financial & Business Results N Outlook#4中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED 1 Strategy Review#5口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Profit after Taxation Restoring Growth in Earnings and Returns through Solid Operating Results ROE Total Capital Ratio HK$14.4bn 8.84% 21.88% +6.1% +0.42ppt +0.44ppt YOY YoY YTD 5#6口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Committed to Local Market Development through Enhanced Integrated Service Capability 8 Personal Banking Corporate Banking Financial Markets #1 in new residential mortgage loans % of mid to high-end customers: 34% Customer growth in Private Wealth +10% and Wealth Management +7% Introduced "Banking TrendyToo", a new brand targeting the youth segment BOC Life: #1 in standard new premiums in 1Q22 #1 in e-channels market share HK/Macao syndicated loans: #1 for 17 consecutive years Market leader in IPO receiving bank and cash pooling business Six financial support initiatives benefitting about 7,000 corporates Leadership in SME Financing Guarantee Scheme (SFGS) business Corporate and institutional custody customers: +7% BOCI Prudential: top tier player in the MPF market Pre-tax profit of treasury business: +47% Fast growth in trading income, further diversifying income base Assisted BOC Tokyo Branch to launch the world's first TONA-linked floating-rate notes in Japanese Yen Among the first batch of offshore institutional investors to launch the onshore exchange bond market direct access business model BOCHK Asset Management awarded "Best China Fund House" by Asia Asset Management 6#7口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Cemented Cross-border Finance Advantages by Optimising Customer Experience by p A GREATER BAY AREA AWARDS 2022 ASIAMONEY BEST CHINESE BANK Best Chinese Bank for the Greater Bay Area Asiamoney Cross-border Mid to high-end Customers Bucked market trends to achieve growth in cross- border personal customers % of mid to high-end cross-border customers: 25% Financial Intermediation GBA corporate loans: +3.2% Loans to innovative tech companies: +2.8% GBA Account Opening Cumulative number of new accounts: 185k / +10% Launched convenient features such as remote bank account information update and reactivation Cross-boundary Wealth Management Connect Established market-leading position in Southbound and Northbound account openings About 140 wealth and investment products available DO 7#8口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Deepening SEA Business Development by Leveraging Regional Synergies HK$67.3bn +6.8% YTD Customer Deposits HK$54.3bn +3.0% YTD Customer Loans Laos Myanmar HK$1.51bn +22.8% YoY Net Operating Income 2.53 % +0.14ppt YTD Non-performing Loan Ratio Notes: Customer deposits, customer loans and net operating income represent the consolidated data of nine Southeast Asian entities which were prepared in accordance with Hong Kong Financial Reporting Standards. Constant currency terms were used in calculating percentage changes. Non- performing loan ratio was calculated based on their local regulatory requirements. © Thailand Cambodia Vietnam Brunei Malaysia Indonesia Philippines 8#9口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED +42% Cross-border RMB settlement volume Tapping Market Potential to Drive RMB Business Growth +153% RMB transaction volume of treasury business Capturing business opportunities Further widened our market-making business scope by becoming a qualified market maker in the Chinal Foreign Exchange Trade System for currency pairings, and in Shanghai International Gold Exchange Leading position in Southbound Bond Connect trading volume as a participating bank; sustained leadership in Northbound Bond Connect among Chinese banks by custody asset size Solid leadership in RMB standard new premiums in bancassurance sales (0) p RMB 192 tn +7.6% HK's total RMB clearing volume* accounted for over 70% of global offshore total Nurturing the SEA market RMB product and service capabilities further enhanced with RMB transaction volume of Southeast Asian entities' treasury business up 77% □ Rapid growth in RMB clearing volumes handled by BOC Malaysia and Manila Branch Jakarta Branch achieved a market share of ~80% in local currency settlement (LCS) business, and was #1 by both customer number and transaction volume *Through RMB RTGS in Hong Kong 9#10口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Reinforcing Technological Foundations to Advance Digitalisation 사 Enhancing online service capabilities Number of transactions via e-channels as % of total: 88% Number of mobile banking active customers: +6% Livi Bank: obtained insurance agency license; launched personal loan product “livi Flexi Loan" Promoting open bank and e-payment businesses Daily usage of open API: +291% BoC Pay: customers +9%; joined new round of Consumption Voucher Scheme BOC Bill: settlement volume +6%; launched BOCHK Bill Merchant Loan Programme HKATI 香港科技創新聯盟成立 暨 中銀香港科技創新獎啟動儀式 of Technology and Innovation and Innovation Hong Kong Alliance technology In HK Science a BOCHK Establishment & Launch Ceremony Strengthening smart operations ST 25 of business operations and risk management Operation Centre Implemented remote operating system to support WFH Consistently enhanced the effectiveness of Nanning Regional Expanded application of smart technologies to increase efficiency *** INNO WEEK ARE YOU READY? INO WHEN BOCHK Challenge 2021-22 Take the Lead Drive the Future 中間香港創新先壓大賽 BOCHK Challenge 2021-22 Dhe tan 中国银行(香港) BANK OF CHINA 10#11口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Driving Product and Service Innovation to Lead Green Transformation Best Bank for CSR in Hong Kong Asiamoney A BEST BANK AWARDS 2022 ASIAMONEY BANK FOR CSR HONG KONG SAR 사 • . • • Became a cornerstone member of the Alliance for Green Commercial Banks initiated by International Finance Corporation (IFC) and the HKMA Signed strategic partnership agreement with Guangzhou Emissions Exchange to explore carbon finance opportunities in the GBA Completed first green repo transaction to support sustainable building projects Jointly launched S&P BOCHK GBA Climate Transition Index, the first climate transition index covering listed companies in GBA Finished the green upgrading of Bank of China Tower, earning a "Platinum” rating from "BEAM Plus" 53% Green and Sustainable Loans +101% New Green Deposits + 24x ESG Total Relationship Balance بھی +71% ESG Bond Underwriting Amount 11#12中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED 21 Financial & Business Results#13口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED HK$m Profit after Taxation up 6.1% Year-on-Year p 13,591 1,409 (1,513) 2,286 (244) 14,417 (532) (120) (460) (+8.7%) (-22.7%) (+106.9%) (+3.2%) (+45.0%) (+545.5%) (+17.2%) 1H2021 Profit after Net Interest Net Fee Income Taxation Income* Other Non- Interest Income* Operating Impairment Expenses Allowances Revaluation Loss of Investment Properties * Adjusted for the funding income or cost of FX swap contracts Taxation & Others 1H2022 Profit after Taxation 13#14口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED HK$m Steady Expansion in Customer Deposits Customer Deposits up 3.0% 2,400,609 2,331,155 65.3% 61.7% CASA Balance: -2.6% 2021.12 2022.06 Time and Other Deposits Current and Saving Deposits (CASA) CASA Ratio Continual Increase in Market Share Market Share 15.68% up 0.43 ppt Deposits Market Share 14 14#15口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Balanced Growth in Customer Loans p Customer Loans up 5.1% to HK$1.68tn HK$m Loans for Use in HK - 622,924 Corporate +7.1% Loans for Use in HK - 513,155 Individuals +2.3% Loans for Use Outside HK 463,911 +4.9% Trade Financing 81,060 +10.1% 2021.12 2022.06 Continuous Gains in Market Share Market Share 14.80% up 0.62 ppt Loans Market Share 15#16口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Net Interest Margin Bottoming Out NIM* Improves on Rising Market Interest Rates 1H21:1.10% 2.0% 2H21: 1.08% 1H22: 1.13% HK$m 1.5% 1.19% 1.11% 1.09% 1.11% 1.06% 1.08% 1.0% 0.5% Steady AIEA Growth 2,977,664 16,254 +8.7% 3,139,822 +5.4% 17,663 செ. 0.0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1H2021 1H2022 NIM* 1M LIBOR 1M HIBOR Net Interest Income* Average Interest-Earning Assets (AIEA) Adjusted for the funding income or cost of FX swap contracts Market data source: Bloomberg 16#17口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Continuous Headwind on Net Fee Income Net Fee Income down 22.7% YoY Traditional Business Fees Broadly Recovered in 2Q HK$m 6,657 5,215 5,144 8,116 6,687 6,823 Insurance 1,793 953 1,769 Currency Exchange 3,441 2,716 2,265 Bills Commissions 2,882 3,018 2,789 1H2021 2H2021 1H2022 Credit-Related Business: Loan Commissions Net Fee and Commission Income Investment and Insurance-Related Businesses Non-Credit Related Business: Traditional Fee Services Growth rate QoQ 19.8% 9.6% Credit Card Business 6.2% Trust and Custody Services 5.4% 17.5% 17#18口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Notable Improvement in Cost Efficiency HK$m Stable Operating Expenses Market-beating Cost-to-Income Ratio 54.7% 51.9% 10 11 216 7 7,826 7,582 1H2021 Staff Premises & Depre- Others 1H2022 Costs Equipment ciation & Amorti- sation * 30.3% 28.7% 1H2021 1H2022 Market Average BOCHK Market data source: HKMA *1Q2022 18#19口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Consistently Solid Asset Quality NPL Ratio below Market Average * 0.98% 0.88% 2021.12 0.27% 0.46% 2022.06 Market Average BOCHK Provision Remains Sufficient HK$m 0.21% 0.15% 1,726 1,197 1,051 733 316 504 359 (40) 1H2021 1H2022 Credit Cost Market data source: HKMA *As at end of March 2022 Net Charge of Impairment Allowances - Advances and Other Accounts Stage 1 Stage 2 Stage 3 19#20口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Enhanced Capital and Liquidity Position 사 Stable Capital Ratios Total Capital Ratio Tier 1 Capital Ratio 21.88% +0.44ppt 19.55% +0.44ppt CET 1 17.73% Capital Ratio +0.43ppt 2021.12 2022.06 Enhanced Liquidity Ratios 159.34% 140.72% 134.15% 126.44% 126.88% 121.70% 1H21 2H21 1H22 Average NSFR Average LCR 20 20#21中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED 3 Outlook#22口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Second Half Outlook Challenges Opportunities Rapidly evolving international political and economic landscape Increasing financial market volatility High-quality development momentum maintained in mainland economy Stabilising economic growth in Hong Kong Global supply chain pressures Rising stagnation risk Tightening monetary policies of major central banks Divergent global economic outlook Bright business prospects from deeper GBA construction and RCEP Rate hike benefits banks' earnings outlook New opportunities from green finance 22#23BOC 1912-2022 口 中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Bridge China and the World for the Common Good 사 Building a First-Class Regional Banking Group • 88 Key Tasks • • • • • Maintain stability while seeking progress Stick to strict risk management Facilitate infrastructure construction Enhance quality of development • Harness BOC's strengths to fulfill our social responsibilities • Promote ESG concepts to nurture green development Deepen personal banking reform to upgrade service experience Tap RMB business opportunities to cement leading advantages Improve integrated services to build core competence Grasp regional opportunities to drive high-quality growth Consolidate tech foundations to advance digitalisation strategy Uphold stringent risk management principles and strengthen comprehensive risk management 23#24中銀香港(控股)有限公司 BOC HONG KONG (HOLDINGS) LIMITED Appendices 24 24#25Income Statement and Balance Sheet Summary Income statement summary (HK$m) 1H2022 1H2021 Change Net interest income* 17,663 16,254 8.7% Net fee and commission income 5,144 6,657 -22.7% Other non-interest income* 4,425 2,139 106.9% Net operating income before impairment allowances 27,232 25,050 8.7% Operating expenses (7,826) (7,582) 3.2% Pre-provision Operating Profit (PPOP) 19,406 17,468 11.1% Net charge of impairment allowances (1,714) (1,182) 45.0% Operating profit 17,692 16,286 8.6% Profit for the period 14,417 13,591 6.1% Profit attributable to equity holders of the Company 13,472 12,576 7.1% Per share (HK$) 1H2022 1H2021 Change Basic earnings per share 1.2742 1.1895 7.1% Dividend per share 0.447 0.447 Balance sheet summary (HK$m) 2022.06 2021.12 Change Total assets 3,621,134 3,639,430 -0.5% Advances to customers 1,681,050 1,599,084 5.1% Total liabilities 3,296,619 3,311,969 -0.5% Deposits from customers 2,400,609 2,331,155 3.0% Capital and reserves attributable to equity holders 324,515 327,461 -0.9% *Adjusted for the funding income or cost of FX swap contracts 25#26Average Balances and Average Interest Rates (HK$m) / % Assets Balances and placements with banks Average balance 1H2022 1H2021 Average yield Average balance Average yield 412,493 0.72% 385,213 0.80% and other financial institutions Debt securities investments and other debt instruments 1,082,644 1.30% 970,458 1.27% Debt securities investments and other debt instruments 1.72% 1.34% (adjusted)* Advances to customers and other accounts 1,638,263 1.66% 1,604,278 1.52% Other interest-earning assets 6,422 2.53% 17,715 0.70% Total interest-earning assets (HK$m)/% Liabilities Deposits and balances from banks and other financial institutions Current, savings and time deposits Other interest-bearing liabilities 3,139,822 1.41% 2,977,664 1.34% 1H2022 1H2021 Average balance Average rate Average balance Average rate 323,117 0.81% 203,553 0.44% 2,254,428 0.46% 2,263,622 0.30% 22,756 1.10% 18,178 1.09% Total interest-bearing liabilities Net interest margin Net interest margin 2,600,301 0.51% 2,485,353 0.32% 1H2022 1H2021 0.99% Net interest margin (adjusted)* Adjusted for the funding income or cost of FX swap contracts 1.13% 1.08% 1.10% 26#27Fee and Commission Income HK$m Loan commissions 1H2022 1H2021 Change 1,769 1,793 -1.3% Securities brokerage 1,388 2,189 -36.6% Credit card business 903 996 -9.3% Insurance 556 734 -24.3% Payment services 360 374 -3.7% Trust and custody services 341 374 -8.8% Funds distribution 295 417 -29.3% Bills commissions 262 321 -18.4% Safe deposit box Currency exchange Funds management Others 149 151 -1.3% 87 58 50.0% 26 101 -74.3% 687 608 13.0% Fees and commission income 6,823 8,116 -15.9% Fees and commission expense (1,679) (1,459) 15.1% Net fee and commission income 5,144 6,657 -22.7% 27#28Operating Expenses HK$m 1H2022 1H2021 Change Staff costs 4,605 4,389 4.9% Premises & equipment expenses 589 579 1.7% Depreciation and amortisation 1,526 1,515 0.7% Others 1,106 1,099 0.6% Total operating expenses 7,826 7,582 3.2% 2022.06 2021.06 Change Full-time staff headcount 14,220 14,462 -1.7% 28#29HK$m 2022.06 2021.12 Change Total deposits from customers 2,400,609 2,331,155 3.0% CASA 1,481,441 1,521,328 -2.6% Demand deposits and current accounts 296,744 327,234 -9.3% Savings deposits Time, call and notice deposits 1,184,697 919,168 1,194,094 -0.8% 809,827 13.5% Customer Deposits 29 29#30Advances to Customers HK$m 2022.06 2021.12 Change Loans for use in Hong Kong - industrial, commercial and financial 622,924 581,799 7.1% Property development 184,971 166,208 11.3% Property investment 85,751 78,125 9.8% Financial concerns 23,824 23,392 1.8% Stockbrokers Wholesale and retail trade Manufacturing 1,919 3,070 -37.5% 31,055 27,281 13.8% 46,713 44,492 5.0% Transport and transport equipment Recreational activities Information technology Others Loans for use in Hong Kong - individuals 62,610 62,000 1.0% 169 176 -4.0% 33,944 31,753 6.9% 151,968 145,302 4.6% 513,155 501,406 2.3% Loans for the purchase of flats in Home Ownership Scheme, Private Sector Participation Scheme and Tenants Purchase Scheme Loans for purchase of other residential properties 35,325 34,776 1.6% 357,494 349,645 2.2% Credit card advances Others Trade financing Loans for use outside Hong Kong Gross advances to customers 10,439 12,079 -13.6% 109,897 104,906 4.8% 81,060 73,611 10.1% 463,911 442,268 4.9% 1,681,050 1,599,084 5.1% 30 30#31Gross Advances and Other Accounts by Internal Credit Grade and Stage Classification 2022.06 2021.12 HK$m Stage 1 Stage 2 Stage 3 Total Advances to customers 1,647,766 24,655 7,810 1,680,231 Pass 1,643,813 18,520 Stage 1 1,561,306 1,662,333 1,558,267 Stage 2 Stage 3 33,457 4,321 Total 1,599,084 25,138 1,583,405 Special mention 3,953 6,135 10,088 3,039 8,319 11,358 Substandard or below 7,810 7,810 4,321 4,321 Trade bills Pass 8,142 8,142 8,142 7,264 8,142 7,264 7,264 7,264 Special mention Substandard or below Advances to banks and 550 other financial institutions 550 727 727 Pass 550 550 727 727 Special mention Substandard or below Gross advances and other accounts 1,656,458 Impairment allowances Advances and other accounts (5,298) 1,651,160 22,728 24,655 (1,927) 7,810 (3,857) 3,953 1,688,923 1,569,297 (11,082) (4,843) 1,677,841 1,564,454 33,457 4,321 1,607,075 (2,406) 31,051 (2,632) 1,689 (9,881) 1,597,194 31#32Non-bank Mainland Exposures HK$m On-balance sheet exposure Off-balance Total loans and O/W: for use in Debt securities advances Mainland Subtotal sheet exposure Total exposure and others 296,461 78,931 76,259 372,720 35,856 408,576 Central government, central government-owned entities and their subsidiaries and joint ventures Local governments, local government-owned entities and their subsidiaries and joint ventures PRC nationals residing in Mainland or other entities incorporated in Mainland and their subsidiaries and joint ventures Others Total With reference to the completion instructions for the HKMA'S return of Mainland activities (Note 44 of the Notes to the Interim Financial Information of 2022 Interim Report), as of 30 June 2022, the total on-balance sheet non-bank Mainland exposure was HK$691.4bn, down 2.0% from the end of last year, accounting for 20.6% of total assets Of this, total loans and advances was HK$599.7bn, up HK$17.8bn or 3.1% YTD. Asset quality was solid with an NPL ratio of 0.67%. Loans for use in the Mainland stood at HK$229.6bn, accounting for 13.7% of total loans of the Group. 76,082 45,441 7,733 83,815 5,768 89,583 122,477 32,067 6,951 129,428 21,461 150,889 104,699 73,117 705 105,404 8,574 113,978 599,719 229,556 91,648 691,367 71,659 763,026 20% 34% Customer 14% Structure 32% Analysis of loans and advances for use in Mainland Central government, central government-owned entities and their subsidiaries and joint ventures Local governments, local government-owned entities and their subsidiaries and joint ventures PRC nationals residing in Mainland or other entities incorporated in Mainland and their subsidiaries and joint ventures Others 18% 39% Sector Structure 15% 10% 14% 4% Property development & investment Electricity and gas Manufacturing Transport and transport equipment ■Hotel, Inn and food & beverage Others 32#33Loan Exposure to Mainland Property Companies HK$bn (-2.7%) 105.8 102.9 2021.12 2022.06 % to total loans 6.6% 6.1% As at the end of June 2022, loans to Chinese real-estate (CRE) developers amounted to HK$102.9bn, down 2.7% from the end of 2021; accounting for 6.1% of Group's total loans, down 0.5ppt. CRE impairment allowances/total CRE loans was 2.3% ■The property corporate customers in Mainland mainly operate in the GBA and tier 1 & 2 coastal cities, and are market leaders with national business presence and relatively stable financial condition ■SOE loans: 78%; private enterprise loans: 22% Loans for use in Mainland: 56%; loans for use in Hong Kong: 42% Based on "three red lines" definition, green line loans: 81%; yellow line loans: 19%. Investment-graded customer loans: 71% 33#34Loan Exposure to Vulnerable Sectors As of end of June 2022, customer loan exposure to industries severely affected by COVID-19 (including trading, retail, aviation, tourism (incl. hospitality), F&B, entertainment) amounted to HK$144.4bn, an increase of HK$3.54bn from the end of 2021; accounting for 8.59% of total loans, a decrease of 0.22ppt from the end of 2021 Exposure by customer type: 84.5% to large corporates; 15.5% to SMEs Asset quality: Special mention loans totaled HK$2.95bn, accounting for 2.04% of the relevant loan balances; non-performing loans were HK$1.189bn, accounting for 0.82% of the relevant loan balances. Overall asset quality remained stable Exposure by customer type 15.5% O 84.5% Asset quality Non- Special mention performing 0.82% 2.04% Pass 97.14% Large corporates SMES Pass Special mention ■Non-performing 34#35BOC Life Business Development MOODY'S A1 HK$m 1H2022 1H2021 Change Standard new premiums Value of new business 6,604 6,286 5.1% STANDARD 964 524 Total assets 201,741 (2022.06) 197,906 (2021.12) 84.0% 1.9% A & POOR'S #1 in life insurance and RMB insurance Overall market 21.3% Leading position maintained in e-channel and QDAP sales In 1Q22, BOC Life's standard new premium market share was 21.3%, becoming #1 in the market E-channel 32.7% Remained #1 in RMB insurance business with a 77.2% market share in 1Q22 RMB business Qualifying Deferred Annuities* 77.2% Further diversified distribution channels, maintained market leadership in bancassurance sales, and proactively expanded tied agency and broker channels. In 1H22, standard new premiums via tied agency and broker were up 102% and around 12x YoY respectively BOC Life Other Insurance Companies 19.2% BOC Life Other Insurance Companies ■In 1Q22, E-channel* market share reached 32.7%, maintaining market leadership *Statistics from Insurance Authority: Direct Distribution Channel including online channel sales, direct mail and telesales with the majority coming from online channel sales ** ■Maintained leading position in the Qualifying Deferred Annuity Policy (QDAP) market since its launch in 2019 ** April 2019 to March 2022 35