BOC Hong Kong (Holdings), the subsidiary of State-owned Bank of China Group, reported steady growth in operating performance and proposed to declare dividends on a quarterly basis starting this year.

The bank said its profit attributable to equity holders reached HK$38.2 billion ($4.91 billion) in 2024, up 16.8 percent from the previous year. The company recommended a final dividend of HK$1.42 per share for 2024. Including the interim dividend, the dividend per share for the full year will be HK$1.99, up 19 percent year-on-year with a dividend payout ratio of 55 percent. 

The bank said its net profit performance was boosted by seizing opportunities from the interest rate cycle by managing assets and liabilities dynamically while controlling deposit costs, resulting in an increase in asset yield.

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After adjusting to the foreign exchange swap-related impact, the bank’s net interest margin widened to 1.64 percent, with net interest income rising 8 percent year-on-year.

“We built on our existing competitive advantages while developing new ones, including the Hong Kong and Macao syndicated loan market, new residential mortgage business, cash pooling business and renminbi business. We also strengthened coordination and collaboration in our regional business,” BOC Hong Kong (Holdings) Vice-Chairman and Chief Executive Sun Yu said in the company annual report.

Looking ahead, BOCHK said it will capitalize on the global resources offered by the Bank of China Group to expand the private banking, asset management and custody businesses, accelerate the growth of Southeast Asian businesses, capturing the mutual market access programs, and enhance regional integrated renminbi business capabilities.

It will also seize opportunities in new frontiers such as technology capabilities.

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S&P Global Ratings said BOCHK’s strong capitalization, and robust funding and liquidity cushion the bank against market weakness.

“BOCHK’s controlled risk appetite, manageable at-risk exposure, and adequate collateral and provision coverage will continue to support its asset quality,” Ming Tan, primary credit analyst at S&P Global Ratings, said.

Tan said BOCHK’s high exposure to Hong Kong’s property sector, which is strained by high commercial real estate vacancies and interest rates, and lingering pressure from the Chinese mainland property downturn and end of loan moratorium policy in Southeast Asia, will pose operational risks to the bank.

The bank’s total assets amounted to HK$4.19 trillion in 2024, up 8.4 percent from a year earlier. In the period, total deposits from customers expanded 8.8 percent year-on-year while total advances to customers decreased 1.5 percent from the previous year.

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Asset quality remained stable, while the impaired loan ratio was 1.05 percent, remaining below the market average. The total capital ratio was 22 percent.