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BOC Hong Kong posts YOY decline in FY'17 net profit

BOC Hong Kong (Holdings) Ltd. posted a year-over-year decline in profit for the 2017 full year as profit from discontinued operations sharply declined.

The company reported full-year consolidated net profit attributable to equity holders of HK$31.07 billion, down from HK$55.88 billion in the prior year.

EPS fell to HK$2.9387 from HK$5.2849.

The S&P Capital IQ consensus mean estimate for full-year 2017 normalized EPS was HK$2.75, while the estimate for GAAP EPS was HK$2.91.

However, profit attributable to equity holders from continuing operations climbed to HK$28.48 billion, or HK$2.6938 per share, from HK$24.57 billion, or HK$2.3243 per share.

Profit attributable to equity holders from discontinued operations, which includes a gain on the disposal of Chiyu Banking Corp. Ltd. of HK$2.50 billion, declined to HK$2.59 billion from HK$31.30 billion. The company noted that the prior-year figure included a gain on the disposal of Nanyang Commercial Bank Ltd. of HK$29.96 billion.

Net interest income climbed to HK$34.71 billion from HK$26.02 billion, while net fee and commission income rose to HK$11.52 billion from HK$10.68 billion. Net insurance premium income rose to HK$14.67 billion from HK$10.63 billion.

Operating profit climbed to HK$33.99 billion from HK$29.48 billion.

The company's net interest margin for the period clocked in at 1.57%, up from 1.33% for the prior-year period. Net charge of impairment allowances for the full year came to HK$1.08 billion, up from HK$601 million in the prior year.

The group's classified or impaired loan ratio came to 0.18% at Dec. 31, 2017, down from 0.23% at Dec. 31, 2016.

As of the end of 2017, the group's capital adequacy ratio clocked in at 20.39%, down from 22.35% at the end of 2016. Its common equity Tier 1 and Tier 1 ratios for the period were both 16.52%, down from 17.64% and 17.69%, respectively, in the prior-year period.

The company's board recommended a final dividend of 75.8 cents per share, up from 62.5 cents per share for 2016. Together with an interim dividend of 54.5 cents and a special dividend of 9.5 cents, the total dividend for 2017 is HK$1.398 per share, down from HK$1.88 in the year prior.

The final dividend, which is subject to shareholder approval, will be paid out on July 16 to shareholders on record as of July 9.

BOC Hong Kong is a unit of Bank of China Ltd.