Dah Sing Group
2015 Final Results
Dah Sing Group
Performance highlights

Best profits for both DSBG and DSFH since the financial crisis

8% growth in DSBG net profit, and 13% growth for DSFH





10% higher bank core profit driven by steady growth in both net
interest income and fee income
Better bank cost to income ratio (positive “jaws”) with effective
cost management
Slightly higher impairment charges with credit quality under
control
Improved capital adequacy: 12.2% CET1 and 16.7% total CAR
Insurance profit improved as a result of higher margin product
sales and substantially lower transfer to reserves
Dah Sing Group
2
Financial Highlights
Dah Sing Group
Dah Sing Banking Group (2356)
HK$’ million
2015
2014 Change
Net interest income
3,337
2,990
+12%
Net fee and commission income
910
832
+9%
Net trading income and other income
341
343
---
4,587
4,165
+10%
(2,240) (2,127)
+5%
Total operating income
Operating expenses
Operating profit before impairment
2,347
2,038
+15%
Loan impairment losses and other credit provision
(496)
(473)
+5%
618
602
+3%
2,201
2,034
+8%
Basic earnings per share ($)
1.57
1.49
Dividends per share ($)
0.38
0.36
Contribution from BOCQ (after loss on dilution)
Profit attributable to shareholders
Dah Sing Group
4
Dah Sing Financial Holdings (0440)
HK$’ million
2015
2014
Change
Net interest income
3,653
3,293
+11%
Net fee and commission income
803
746
+8%
Net trading income and other income
107
782
-86%
Net insurance premium and change in value of inforce
2,029
2,239
-9%
Total operating income
6,593
7,059
-7%
Net insurance claims and expenses
(1,306)
(2,436)
-46%
Operating expenses
(2,534)
(2,390)
+6%
Operating profit before impairment
2,752
2,233
+23%
Loan impairment losses and other credit provision
(496)
(473)
+5%
618
602
+3%
1,947
1,727
+13%
Basic earnings per share ($)
5.81
5.29
Dividends per share ($)
1.32
1.25
Contribution from BOCQ (after loss on dilution)
Profit attributable to shareholders
Dah Sing Group
5
Dah Sing Banking Group
Dah Sing Group
Key return indicators
14%
12%
11.0%
10.6%
10%
8%
6%
4%
2%
1.2%
1.2%
0%
2014
2015
Return on average total assets
Return on average shareholders' funds
Dah Sing Group
7
Capital adequacy and loan to deposit ratio
Loan to deposit ratio
Capital adequacy ratio
16.3%
16.7%
16.2%
15%
4.9%
(excl. trade bills but incl. CDs)
4.5%
4.5%
70%
10%
11.4%
11.7%
31 Dec 14
30 Jun 15
5%
60%
12.2%
0%
70.8%
72.6%
31 Dec 14
30 Jun 15
69.8%
50%
CET1/Tier 1
31 Dec 15
31 Dec 15
Tier 2
Dah Sing Group
8
Gross advances to customers and trade bills
130,000
120,000
112.6 bn
115.1 bn
116.1 bn
Loans for use outside
HK
110,000
100,000
25%
25%
12%
12%
27%
90,000
HK$ million
80,000
12%
70,000
60,000
50,000
Trade finance and
trade bills
Credit card advances
and other loans to
individuals
11%
11%
12%
16%
17%
16%
Other commercial
lending
34%
34%
35%
Residential and
commercial property
lending
31 Dec 14
30 Jun 15
31 Dec 15
40,000
30,000
20,000
10,000
0
Dah Sing Group
9
Stable net interest margin
2.00%
1.90%
1.90%
1.83%
1.80%
1.76%
1.76%
2014 average
1H15
1.70%
1.60%
1.50%
1.40%
1.30%
2H15
Dah Sing Group
2015 average
10
Income from core businesses
2,600
2,325
2,400
2,200
2,000
2,154
2,011
207
136
7%
404
20%
HK$ million
1,800
1,600
428
2,262
210
9%
522
22%
131
6%
388
17%
10%
20%
Net trading
income and
other operating
income
1,400
Net fee and
commission
income
1,200
1,000
800
1,471
73%
1,519
70%
1,594
69%
1,743
77%
600
400
Net interest
income
200
0
1H14
2H14
1H15
Dah Sing Group
2H15
11
Credit quality
31 Dec 14
30 Jun 15
31 Dec 15
0.0%
Overdue and
rescheduled
assets ratio
0.35%
0.5%
0.47%
0.51%
Impaired loan
ratio
0.64%
0.75%
0.86%
1.0%
Dah Sing Group
12
Commercial banking


17% higher net interest income and improved NIM
Robust commercial loan growth offset by softer cross-border
trade bills business

Increasing focus on provision of fee based services

Higher operating profit backed by better cost to income ratio

Segmental profit after tax affected by higher credit cost
Segment profit after tax (HK$’m)
Segment assets (HK$’m)
Dec 15
Dec 14
55,906
54,596
2015
2014
Dah Sing Group
623
648
13
Personal banking

Segmental profit grew by 16%

Growth driven by residential mortgages and personal loans



Strong fee and commission income growth in 1H15 due to
wealth management fees and stock brokerage commission
Overall credit cost under control but somewhat higher credit
cost from unsecured lending
Continued focus on improving our deposit franchise
Segment profit after tax (HK$’mn)
Segment assets (HK$’m)
Dec 15
Dec 14
44,239
41,989
424
2015
2014
Dah Sing Group
367
14
Treasury

Moderate segmental profit growth of 4%

Net interest income growth by 36%


Conservative liquidity management; Liquidity Maintenance
Ratio of around 40% well above statutory requirement
Prudent treasury portfolio with high average credit rating
and relatively short duration to manage interest rate risk
Segment profit after tax (HK$’mn)
Segment assets (HK$’m)
Dec 15
Dec 14
63,141
55,551
2015
2014
Dah Sing Group
383
369
15
Overseas banking
Macau:



Improving NIM and higher profit contribution
5% loan growth due to softening domestic loan demand,
especially housing loans
Consistently benign credit quality
PRC:


Tighter credit risk control leading to a better credit performance
in our Mainland business given uncertain market conditions
BOCQ: Slight increase in profit contribution; HK$48m deemed
disposal loss relating to dilution from share placement
Dah Sing Group
16
Dah Sing Financial Holdings
Dah Sing Group
Insurance Group – financial highlights
HK$’ million
2015
2014
Change
1,892
1,943
-3%
23
819
-97%
149
312
-52%
Other income
36
22
+64%
Total income
2,100
3,096
-32%
Claims
(892)
(1,106)
-19%
Commission and other expenses
(476)
(473)
+1%
Transfer to reserves
(371)
(1,244)
-70%
Tax and others
(36)
(21)
+71%
Net profit
325
252
+29%
342%
320%
+22%
Net premium income
Investment income
Increase in value of in-force
Solvency margin cover - DSLA
Dah Sing Group
18
Investment portfolio and net worth of insurance group
16
14
13.83
13.41
12.92
12
Size of
investment
portfolio
HK$ billion
10
8
6
4.08
4.23
4.41
4
Net worth
(including VoIF)
2
0
31 Dec 14
30 Jun 15
Dah Sing Group
31 Dec 15
19
Key return indicators
12%
9.9%
9.7%
10%
8%
6%
4%
2%
0.9%
0.9%
0%
2014
2015
Return on average total assets
Return on average shareholders' funds
Dah Sing Group
20
Conclusions
Dah Sing Group
Conclusions

Steady core banking profit growth driving higher profit
attributable to shareholders

Faster growth in 1H15; market more difficult in 2H15

Credit exposure under control resulting in stable credit cost

Good ROE maintained for both DSBG and DSFH

Strengthened capital base due to internal capital generation

Continue to focus on efficient deployment of capital and risk
management, particularly in our Mainland and Mainland
related business
Dah Sing Group
22