2022 Performance and Sustainability Focus
Well-managed B/S composition in preparation of interest rate trend
Cost of deposit (Included DPA)
1.27%
Funding Strategy
Earning asset
Deposit mix
-50 bps
Pre-funded
strategy
0.80%
0.77%
CASA 30%
35%
41%
40%
Utb
Reprice >1Y,
30%
Flexible Asset-Liability Portfolio
Reprice <1Y,
70%
Hybrid
43%
CASA
40%
TD
17%
The Bank will benefit from interest rate hike
due to well-positioned asset-liability portfolio
Assets
Majority of assets can be repriced quickly
.
•
70% of earning assets could reprice within
1 year.
Shortening investment duration.
Liabilities
•
100% of deposit is linked with Admin Rate,
allowing the Bank to manage on rate
adjustment.
•TD has been accelerated on acquisition in
preparation for the rate rising trend, with
47% growth YTD.
38%
Deposit
Hybrid
51%
47%
43%
TD
32%
14%
12%
17%
2019
2020
2021
2022
Well deposit mix reflected the Bank's funding strategy at each stage
With post-merger optimization balance sheet direction, we have optimized
deposit structure by reducing high-cost TD from 32% to 12% in 2021,
achieving lower funding cost (-50 bps).
Since 4Q21, the Bank has pre-funded long term deposit TD to prepare B/S
ahead of the interest rate hike. There would be pressure on NIM in short term
but would help sustain margin once loan growth picks up.
Borrowing
Match with FCY
ST lending
Float
26%
Fix
74%
•
74% of total borrowings is fixed rate,
no impact from market rate increase.
•
70% of floating rate borrowings is used
for FCY short-term lending. Therefore,
the interest rate impact is offset.
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