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Finance

The Bank of East Asia Ltd.

Company Background

Bank of East Asia, an independent Hong Kong-based bank, has more than 200 branches around the world, primarily in the Greater China region -- mainland China, Taiwan and Macau.

 

It was established in 1918. In 2007, The Bank of East Asia, the U.K.'s HSBC and Citibank of the U.S. were the first foreign lenders to get permission from the China Banking Regulatory Commission to establish Chinese subsidiaries.

 

The Bank of East Asia maintains a good relationship with the Chinese government as it was quicker than its competitors to offer yuan services.

 

The bank also has a strategic alliance with the online WeBank, which is affiliated with Tencent, one of China's big three Internet players.

 

In 2014, it increased its capital through a third-party allocation of shares to Sumitomo Mitsui Banking, making the Japanese bank its largest shareholder, ahead of Spain's CaixaBank and the Guoco Group of Malaysia.

 

Chairman and CEO David Li Kwok-po is a business tycoon who had served as a member of the Legislative Council of Hong Kong. His first and second sons serve as deputy chief executives at the bank. The Li family has produced political and business leaders.

 

Business Summary

Bank of East Asia Ltd. engages in the provision of banking, financial, business, corporate, and investor services. It operates through the following segments: Personal Banking, Corporate Banking, Treasury Markets, Wealth Management, Financial Institutions, Other Hong Kong Banking Operations, Mainland China Operations, Overseas Operations, Corporate Services, and Others. The Personal Banking segment handles branch operations, personal internet banking, consumer finance, and property loans and credit card business. The Corporate Banking segment includes corporate lending and loan syndication, asset based lending, commercial lending, and securities lending in Hong Kong. The Treasury Markets segment involves in the treasury operations and securities dealing. The Wealth Management segment offers private banking business and related assets. The Financial Institutions segment provides trade financing activities with correspondent banks. The Other Hong Kong Banking Operations segment manages the insurance business, trust business, securities and futures broking, money lender activities, and corporate financial advisory in Hong Kong. The Mainland China Operations segment consists of the back office unit for China operations in Hong Kong, branches and subsidiaries in China, except those subsidiaries carrying out corporate services, data processing, and back office operations and associates operated in China. The Overseas Operations segment includes back office unit for overseas operations in Hong Kong, overseas branches and subsidiaries, except those subsidiaries carrying out corporate services, and associates operated in overseas. The Corporate Services segment covers the company secretarial services, share registration and business services, and offshore corporate and trust services. The Others segment comprises of insurance business, property-related business, supporting units of Hong Kong operations, investment properties, bank premises, and the net results of associates and other subsidiaries. The company was founded in 1918 and is headquartered in Hong Kong.

Financial Highlights

Dec 2019 HKDUSD
Revenue34,413M4,392.10M
Gross Profit----
Operating income2,614M333.62M
Income before tax3,198M408.15M
Net income2,580M329.28M
EBITDA----
Diluted EPS0.890.11
Dividends Per Share0.460.05
Total Assets865,198M111,039.55M
Total liabilities769,523M98,760.62M
Total equity95,307M12,231.70M
Operating cash flow42,050M5,366.80M
Currency in HKDCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 28,737M 25,226M 27,879M 30,838M 34,413M
Gross Profit -- -- -- -- --
Operating income 5,187M 3,163M 7,215M 7,422M 2,614M
Income before tax 5,829M 4,592M 7,565M 8,060M 3,198M
Net income 4,774M 3,010M 5,698M 5,796M 2,580M
EBITDA -- -- -- -- --
Diluted EPS 1.95 1.21 1.70 2.06 0.89
Dividends Per Share 0.88 0.56 1.28 0.83 0.46
Total Assets 781,364M 765,706M 808,942M 839,451M 865,198M
Total liabilities 700,739M 684,086M 716,622M 744,770M 769,523M
Total equity 77,413M 78,431M 89,482M 91,826M 95,307M
Operating cash flow 12,458M 8,909M 2,888M 19,258M 42,050M
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 3,706.76M 3,249.74M 3,577.52M 3,934.65M 4,392.10M
Gross Profit -- -- -- -- --
Operating income 669.06M 407.47M 925.85M 946.98M 333.62M
Income before tax 751.87M 591.56M 970.76M 1,028.38M 408.15M
Net income 615.79M 387.76M 731.18M 739.51M 329.28M
EBITDA -- -- -- -- --
Diluted EPS 0.25 0.15 0.21 0.26 0.11
Dividends Per Share 0.11 0.07 0.16 0.10 0.05
Total Assets 100,819.20M 98,760.63M 103,480.99M 107,218.48M 111,039.55M
Total liabilities 90,416.17M 88,233.29M 91,671.29M 95,125.39M 98,760.62M
Total equity 9,988.58M 10,116.01M 11,446.66M 11,728.43M 12,231.70M
Operating cash flow 1,606.95M 1,147.70M 370.59M 2,457.14M 5,366.80M

Valuation Measures

Dec 2019
PER19.45
ROA0.30%
ROE2.75%
Operating margin7.59%
Profit margin7.49%

Key executives

  • Co-Chief Executive Officer & Executive Director: Man Kiu Li
  • Co-Chief Executive Officer & Executive Director: Man Bun Li
  • Chief Operating Officer & Deputy CEO: Hon-Shing Tong
  • Chief Financial Officer: Dawn Tao
  • Vice President: Hei Lok Shiao

Shareholders

  • Sumitomo Mitsui Financial Group, Inc. (19.5%)
  • Fundacion Bancaria Caixa d'Estalvis i Pensions de Barcelona (15.9%)
  • Guoco Management Co. Ltd. (12.6%)
  • Elliott Investment Management LP (7.4%)
  • LI KWOK PO DAVID (3.4%)
  • The Vanguard Group, Inc. (1.3%)
  • LI KWOK-CHEUNG (1.0%)
  • BlackRock Fund Advisors (0.7%)
  • LI KWOK SING (0.6%)
  • WONG CHI YUN (0.6%)

Contact Details

  • Website:http://www.hkbea.com
  • Address: 10 Des Voeux Road, Central, Hong Kong, Hong Kong
  • Phone: +852.3608.3608

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Competitors

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