Earnings call transcript

Chief Executive Sun Yu

In 2025, faced with a complex and volatile global economic environment, the Chinese Mainland economy continued its stable growth while Hong Kong accelerated its economic recovery.

However, interest rate volatility persisted while credit demand remained weak. Against this backdrop, BOCHK earnestly pursued high-quality development and recorded satisfactory progress, bringing its five-year plan to a successful close, and proactively formulating a future blueprint.

Attributable profit for the year reached HK$40.1 billion, up 4.9% year-on- year. ROE remained largely stable at 11.5%. The Board has proposed a final dividend of HK$1.255 per share. Including the three interim dividends already distributed, DPS for the full year will be HK$2.125, representing an increase of 6.8% year-on-year.

We further consolidated our competitive advantages in the local market, maintaining leadership in new residential mortgage loans for 7 consecutive years, and the largest mandated arranger in the Hong Kong and Macao syndicated loan market for 21 consecutive years. We achieved leading position in IPO receiving bank business, helping Hong Kong to reclaim the top spot in global IPO fundraising. Capitalising on business opportunities in asset and wealth management, we increased assets under custody by

29% and the value of bonds underwritten by 65%, while the personal payroll amounts grew by 17%. For the 4th consecutive year, we gained market share in fund sales, reaching a record high. Our integrated service

1 capabilities were significantly enhanced. BOC Life grew its standard new premiums by 50%, while BOCI-Prudential increased its MPF assets by over 20% and BOCHK Asset Management expanded its AUM by about

40%, maintaining leading position in their respective markets. In addition, we were appointed by the Shanghai Gold Exchange to operate its first

International Board-certified vault in Hong Kong, supporting Hong Kong’s development as an international gold trading centre.

We stepped up efforts to enhance regional operation and management capabilities across the GBA and Southeast Asian cross-border markets. We maintained our leading position in various mutual market access businesses, expanded the service coverage of “GBA Account Opening”, enriched the product solutions of “GBA Loans”, and introduced comprehensive cross-border elderly care solutions. The number of cross- border high-end customers grew by 21%, driving a steady growth in cross- border income. In alignment with HKSAR Government’s “GoGlobal Task

Force”, we launched one-stop cross-border financial service solutions to address the financial needs of Going Global enterprises. We also assisted

HKSAR Government in issuing infrastructure bonds, to support the construction of the Northern Metropolis. Fully leveraging our leading role as a regional headquarters for SEA operations, we refined our capabilities in integrated marketing and expanding product and service offerings. Our

SEA entities delivered steady growth in the number of corporate accounts and personal payroll accounts, while enhancing their treasury business capabilities. During the year, SEA-related deposits and loans grew by

20.2% and 9.6% respectively, both exceeding the corresponding growth rates of the Group, while SEA-related income increased by 6.2%. The NPL ratio of our SEA entities fell to 2.11%.

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We fully supported Hong Kong in playing its role as an offshore RMB business hub, while further consolidating our RMB business capabilities.

We achieved steady growth in RMB assets and RMB public bonds underwritten volume. BOCHK led the industry in RMB clearing, while

BOC Malaysia, the Manila Branch and the Phnom Penh Branch held strong market positions in local RMB clearing services. In addition, the Vientiane

Branch became the acquiring and clearing bank for e-CNY in Laos.

Furthermore, we acted for the first time as a settlement agent for RMB green bonds issued by the Ministry of Finance, and became the first offshore clearing member of the Shanghai Clearing House. We engaged deeply in the HKMA’s RMB Business Facility Arrangements as one of the first commercial bank participants, and assisted Government of Indonesia in issuing Dim Sum bonds and a Malaysian bank in issuing Panda bonds, further encouraging the international use of RMB.

Focusing on digital currency innovation, we participated in the HKMA’s

Project Ensemble and studied the values and risks associated with the trading of digital assets. We also facilitated the innovative development of e-CNY version 2, and optimised mBridge-related business, contributing to the construction of a digital currency ecosystem. Sharpening our efforts to enhance the financial service convenience, we utilised HKMA’s

“Interbank Account Data Sharing” initiative and cross-boundary credit referencing to simplify personal loan approval process. We delivered solid growth across our digital platforms, with active mobile banking personal customers up 19%, iGTB transaction volumes up 66% and BOC Pay+ customers up 12%, while BOC Bill’s settlement volumes rose 13%, reaching almost a 9-year high. To generate greater value from our AI capabilities, we established an AI committee to conduct top-level planning and push forward implementation. We implemented AI in various application scenarios and used AI assistants to boost work efficiency. We

3 also deepened the application of smart technology in anti-fraud management through active participation in the HKMA’s Gen A.I.

Sandbox. In addition, we enhanced our smart operations by expanding the capacity of our Regional Operating Centre in Nanning, Guangxi.

We comprehensively implemented the concept of sustainable development, to build new green business models and strive to transition towards net- zero. Over the past five years, our green and sustainability-related loans increased by 7.2 times, ESG bonds underwritten grew by 34%, and greenhouse gases emissions per employee fell by 22%. In 2025, we supported various Mainland local governments in issuing ESG bonds, and once again assisted the HKSAR Government in issuing green bonds in multiple currencies. We strived to create a better and more collaborative society, supporting significant charitable initiatives, through over 50 projects, and more than 170 volunteer events, contributing a total of over

30,000 service hours. During the year, we were again awarded the highest triple A rating by MSCI ESG Research, and named “Hong Kong’s Best

Bank for Corporate Responsibility” by Euromoney.

Deputy Chief Executive Xu Haifeng

In 2025, we further optimised customer base, expanded income sources, improved operating efficiency and strictly adhered to our risk bottom line, to proactively cope with market challenges. This resulted in solid growth in income and earnings, with profit after-tax increasing 5.3% year-on-year to HK$41.2 billion.

We expanded our high-quality deposit base through diversified products and services. We have deepened relationships with large enterprises, financial institutions, government and public organisations, while enhancing the high-end, young and cross-border customer segments, to promote the payroll, cash management and IPO receiving bank services.

All these efforts helped us attract new funds, with customer deposits increasing 7.9% to HK$2.94 trillion. Our deposit mix was further

4 optimised, with CASA deposits increasing by 24.3% and CASA ratio improving by 7 percentage points to 53.4%, outperforming the market average.

Building on our strong positions across local, cross-border, SEA and other key overseas markets, we deepened intra-group collaboration and enriched

RMB usage scenarios, while providing integrated and comprehensive services to local blue-chips, multinationals, leading Going Global enterprises, and major Southeast Asian corporates. We also captured opportunities arising from the recovery of local residential market and maintained our leadership in the new residential mortgage loans, achieving rapid growth in the mortgage loan balances. Our customer loans grew by

2.3% to HK$1.72 trillion, of which loans for use in Hong Kong increased by 3.7%.

We proactively managed our assets and liabilities by enhancing pricing and tenor management for time deposits, while solidifying low-cost funding sources, and optimising the asset deployment across our loans and banking book bond investments. Together with the effective implementation of FX swap strategies, this enabled us to successfully mitigate the impact of lower market interest rates. Adjusted for swap impact, our net interest income increased by 1.4% year-on-year to HK$59.7 billion, while NIM narrowed by 6 basis points to 1.58%. Our fourth quarter NIM was 1.71%, up 17 basis points quarter-on-quarter.

Capitalising on the opportunities arising from strong capital market sentiment and steady recovery in private consumption, we enhanced our product and service capabilities to expand fee businesses, resulting in 13.9% growth in net fee and commission income to HK$11.3 billion. We stepped up wealth management business development, with securities brokerage, funds distribution and insurance business income rising by 45%, 43% and

96%, respectively. We also refined our credit card product portfolios, with

5 credit card income growing by 7.9%, and BOC Bill’s settlement volumes up 13%, reaching almost a 9-year high.

In line with our strategic focus, we prioritised resource allocation for key development areas, while refining our branch network layout and pursuing a low-carbon and smart operations strategy to enhance resource utilisation.

Operating expenses increased by 4%, with cost-to-income ratio improving by 0.93 percentage point to 23.6%, continuously outperforming the market average.

We further strengthened comprehensive risk management, closely monitored market and industry trends, tightened control over high-risk credit portfolios, and conducted timely reviews of customers’ internal credit ratings. Asset quality remained solid.

Our impaired loan ratio rose by 9 basis points from the previous year-end to 1.14%, remaining at a solid and manageable level. We conducted more stringent stress-tests on high-risk customers and increased the provisions to ensure sufficient coverage. As a result, our credit cost increased by 19 basis points year-on-year to 0.49%, while the provision coverage ratio edged up by 0.2 percentage point, to 1.09% of total loans, further consolidating our capability to withstand potential risks.

We remained well-capitalised, with total capital ratio and CET1 ratio rising to 25.98% and 24.01%, respectively, driven mainly by earnings growth and a 7.5% reduction in RWA resulting from the implementation of the new

Basel III rules in early 2025. During the year, we endeavoured to enhance shareholder returns by utilising capital more efficiently, increasing the ordinary dividend payout ratio, distributing quarterly dividends, and refining our governance process for share buybacks. In early 2026, we completed the acquisition of BOCI Private Bank. To share in the fruits of our sound business development with shareholders, the Board proposed to

6 launch a three-year shareholder return programme for 2026 to 2028, with details subject to external regulatory review and internal corporate governance procedures.

Chief Executive Officer Sun Yu

Looking ahead, a rapidly changing global geopolitical landscape will add further complexity and uncertainty to the international economic environment, potentially increasing volatility in global trade and financial markets. Banks will face the challenges from shifting of growth dynamics and increasing risk management demands. At the same time, the 15th Five-Year Plan provides clear guidance for the country’s future development, with a focus on advancing high-quality growth and enhancing technological capabilities. The latest HKSAR

Government budget proposes to deepen the development of key industries such as innovation and technology, finance, shipping, and trade. Together with various national strategies supporting Hong Kong’s development, this will help the city consolidate its position as a “super-connector” and

“super-value-adder”. Furthermore, with Going Global Chinese enterprises optimising their industrial chain layouts, alongside the rapid development of AI and digital assets, the Hong Kong banking industry is well-positioned to capture new growth opportunities, providing sustainable momentum for our high-quality development over the next five years.

In the year ahead, BOCHK will remain confident and dedicated to achieving further growth. Strictly adhering to the development strategies of the nation and the Group, we will effectively perform our role as a regional management centre, strengthen our function as a business centre, and drive the development of integrated businesses. We will strive to set new standards for cross-border financial services, enhance our wealth management brand reputation, consolidate our RMB business advantages, and accelerate the development of our custody and asset management

7 businesses, to actively expand our diversified income sources. Furthermore, we will enhance intelligent operations, strengthen our comprehensive risk management capabilities, cultivate a robust corporate culture to maintain high operating efficiency. We will strive to make a strong start to the new five-year plan, delivering greater value for our stakeholders through high- quality development and sound operating performance, while making greater contributions to Hong Kong’s long-term prosperity and stability as well as regional economic development.

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Question and Answer Session

Gary Lam from HSBC

Congratulations on the solid results. BOCHK has been studying on the capital management plan in the past few years and finally got results. I would like to ask what capital ratio levels do the management target in the current stage? When should we expect to implement the 2026-28 shareholder return programme? As credit cost increased notably last year, what is the outlook for 2026?

Deputy Chief Executive and Chief Risk Officer Xu Haifeng: Regarding dividends and capital management, for a long time, BOCHK has been adopting a stable dividend policy, striving to balance between shareholder interest maximisation and long-term growth of the bank, with high regard to realising long-term stable dividend returns. In 2025, we continued to increase shareholder returns by enhancing earning capability, strengthening capital utilisation, raising ordinary dividend payout ratio and distributing quarterly dividends. At the same time, we refined our corporate governance procedure by adding the terms of allowing us to keep treasury shares in the general mandate related to share buyback. In the year, our attributable profit grew 4.9% year-on-year to HK$40.1 billion, with ROE reaching 11.5%. The Board declared a final dividend of HK$1.255 per share. Including the three interim dividends already paid, our total dividend was HK$2.125 per share for the full year, up 6.8% year-on-year. The dividend payout ratio was 56%, up 1 percentage point from 2024. For 2026, we will continue to take into account a number of factors including earnings performance, shareholder return expectations, regulatory requirements, risk changes and various business needs, and determine the full-year dividend payment within the payout range of 40-60%. At the same time, the Board has in-principle approved the framework of the three- year shareholder return programme for 2026-2028, aiming to enhance

9 shareholder returns through flexibly implementing capital management measures including orderly increases in dividend payout ratios within the established range, share buybacks, special dividends, etc. in accordance with market conditions. The details of such programme remain subject to external regulatory review and internal corporate governance procedures, and is expected to be implemented upon the release of interim results announcement for 2026.

Regarding our asset quality and credit cost, Hong Kong economic growth accelerated in 2025, with continued improvement in external trade, retail sales and residential property market. However, office and retail commercial properties still faced pressure from high vacancy. We continued to closely monitor market information and customer dynamics, strengthened credit risk control mechanisms and measures, and maintained strict monitoring of high-risk credit portfolios. Benefiting from our prudent risk management and strong customer base, our overall asset quality remained solid with adequate provisions. As of the end of 2025, our impaired loan ratio was 1.14%, up 9 basis points from the end of last year, continuing to outperform the Hong Kong market average of 2.01%. We made adequate provisions with full-year loan impairments of HK$8.25 billion, up HK$3.30 billion year-on-year. Credit costs were 49 basis points, up 19 basis points year-on-year, primarily driven by the impairment increases resulted from internal credit rating downgrades of certain property customers, implementation of stricter stress test assumptions for specific portfolios, and the weakened cash-flow projection for certain existing non-performing customers, given the ongoing pressure on the property market in the year. For 2026, we expect a certain degree of upward pressure on the non-performing loan ratio, which should remain better than the market average. We will adhere to our prudent strategy and maintain

10 adequate provisions. If there is no big swing in the global economies, we expect the full-year credit costs to improve compared with 2025.

Winnie Wu from BOA

Based on the current macroeconomic situation, how does BOCHK’s ECL model factor in the risk in such macro environment? For example, regarding risk exposure to the Middle East and private credit areas, and the high oil price impact on trade and Southeast

Asian economies, how are these factors being considered?

Deputy Chief Executive and Chief Risk Officer Xu Haifeng: Regarding the Middle East risk exposure, currently it accounted for a very small percentage of our total exposure with manageable risk. As to how the high oil price evolves and how it affects inflation, it will take some time to observe. As regards the impact on our Southeast Asian business, we are currently conducting relevant study and examination. We see that the current situation is still solid and risk remains controllable. Regarding private credit exposure, thus far we do not have any direct exposure. Our exposures to private equity customers are not directly deployed in private credit business, while the relevant exposure is small compared with our total credit risk exposure. We will closely follow the latest changes in the customer conditions. Overall risk remains manageable.

Michael Zhang from Citi

As 1-month HIBOR dropped recently, what is the outlook for the net interest margin (NIM) in the first quarter? With volatile market expectations on U.S interest rate cuts at the moment, what do you see for the full-year NIM trend? Regarding fee income, what is the outlook for loan commissions and wealth management incomes?

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Deputy Chief Executive and Chief Risk Officer Xu Haifeng: Since the beginning of this year, the U.S. fed funds rate has remained between 3.5% and 3.75%. Due to geopolitical tensions, energy prices fluctuated and market attention on inflation trends increased significantly. However, fed funds rate futures indicated that the rate would stay unchanged for the remainder of the year, reflecting a substantial decrease in rate cut expectations compared with before. Meanwhile, U.S. Treasury yields rose recently with the yield curve trending flat, which showed that the market already priced in certain expectations. Looking ahead, the impact of oil prices on inflation and the global economic outlook will continue to influence the repricing of the U.S. Treasury curve. Interest rate volatility is expected to persist. Based on our balance sheet conditions, the U.S. dollar position has a small negative gap, so the impact of rising U.S. dollar interest rates is relatively manageable. The HK dollar position has a positive gap, meaning rising interest rates will benefit us. Since the beginning of this year, HK dollar liquidity has been relatively abundant, and the 1-month HIBOR has fallen from 3% to around 2% levels, before recently rising to about 2.4% due to quarter-end factors. Going forward, the changes in HK dollar interest rates will primarily depend on factors such as HK dollar demand, capital market activities, and quarter-end effects, among others. Overall speaking, the decline in HK dollar interest rates, coupled with HKD-USD interest rate gap maintained between 120-

130 basis points, will weigh on NIM of banks. As always, we will continue to closely monitor market changes and dynamically adjust asset-liability mix with a forward-looking approach. Through various measures, we will strive to mitigate the impact of low market interest rates on NIM and net interest income.

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Deputy Chief Executive Chan Man

In 2025, Hong Kong’s economic growth accelerated, with continued improvements in retail and tourism sectors and robust trading activities in stock and property markets. We seized business opportunities, and focused on customer demand for wealth management and cross-border consumption, to strengthen products and services and expand sources of fee income. Full-year net fee and commission income reached HK$11.27 billion, up 13.9% year-on-year.

Among this, income from investment and insurance businesses grew by about 60%, mainly driven by securities brokerage, insurance and funds distribution. We capitalised on the positive sentiment in the Hong Kong stock market, and achieved 45% and 43% year-on-year growth in securities brokerage and funds distribution incomes respectively, while our insurance commission income grew by nearly 100%. In traditional businesses, we actively leveraged the government’s “Mega Events Economy” and grew our credit card fee income by 7.9% year-on-year. The growth in the aforementioned fee incomes offset the decrease in loan commissions income as a result of low market demand. For 2026, Chinese Mainland’s macro policies are expected to further strengthen and become more effective, boosting employment and consumption. On the other hand, Hong

Kong will see continuous improvement in consumption and business confidence and moderate credit growth. Focusing on the needs of high-end, cross-border and young customer segments, we will continue to strategically position our wealth management business, and strengthen business-line collaboration. We will also promote our comprehensive service capabilities for corporate and institutional customers to drive the growth of corporate related fee income such as custody. With all these efforts, we aim to further optimise our fee income structure.

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Helen Li from UBS

In the last two years, we saw rapid expansion in banks’ balance sheets, what are the growth targets for loans and deposits for 2026? BOCHK’s cost-to-income ratio remained low in 2025, what is the outlook for operating expense growth in the future? Recently, your banking peers have increased AI deployments, what plans does BOCHK have in this regard?

Deputy Chief Executive Wang Huabin

In 2025, Mainland and Hong

Kong economic recovery remained on solid trend, with full-year GDP growth of 5.0% and 3.5% respectively. Total loan demand in the local banking sector bottomed out. BOCHK seized business opportunities and grew its customer loans by 2.3% to HK$1.72 trillion, with a local market share of 16.27%. Specifically, corporate loans for use in Hong Kong grew relatively fast, primarily driven by SOEs under the central and local governments, and leading local corporates. Hong Kong mortgage loans,

Southeast Asian business related loans and RMB loans also became growth engine. For 2026, affected by factors such as uncertain U.S tariff policies and elevated geopolitical risks, global economy may continue a low- growth trend, presenting challenges to asset growth in banking industry.

On the positive side, Chinese Mainland’s macroeconomic policies are expected to produce impact in the early stage, driving increases in investment, steady growth in exports and consumption. and rapid development in new quality productive forces. While the local mortgage loan demand will remain steady, Hong Kong will accelerate the cultivation and application of innovative technologies, and further consolidate its advantageous position as a transit for Going Global Chinese enterprises, helping it to better integrate into the nation's overall development agenda and further stimulating loan demand. Meanwhile, the signing of China-

ASEAN FTA 3.0 Upgrade Protocol will further enhance trade facilitation.

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In addition to that, financing costs of customers might be able to improve as a result of lower HK dollar interest rates supported by ample liquidity, relatively wide USD-HKD interest rate gap, and low RMB interest rate levels. These positive factors will support the steady loan growth of the local market. Facing both challenges and opportunities, we will hold a firm position in the Hong Kong, cross-border, SEA and other overseas markets, and remain fully committed to serving the real economy. We will actively leverage our advantages in RMB business, residential mortgages, green loans and tech financing. We will proactively capture business opportunities, adhere to our risk bottom-line, and balance between return and scale, striving to steadily grow the customer loans and outperform the market this year.

Deputy Chief Executive Chan Man

regarding mortgage loan business, benefiting from positive factors such as sustained local economic improvement, a prosperous stock market, falling HKD interest rates, and increasing rental yields, Hong Kong's residential property market achieved a steady recovery in 2025. While average prices rose by over 3%, and transaction volume exceeded 62,800 cases, up 18.3% year-on-year, the rental index increased by 4.3%. Our cumulative number of new mortgage loans for the year reached 21,989, up 38.7% year-on-year, with a market share of 32.1%, ranking first in the market for 7 consecutive years. We also maintained market leadership in mortgages for uncompleted properties, completed properties, reverse mortgages, and government-subsidised housing. As of end of December 2025, our mortgage loan balance stood at

HK$471.8 billion, an increase of 5.2% compared to the end of 2024, outperforming the market growth rate of 3.4%. Overall asset quality remained good, with an NPL ratio of 0.131% and a delinquency and rescheduled loan ratio of 0.08%, better than the market average. Since early

15 this year, the residential market has remained active. With the Mainland and Hong Kong economies continuing to develop steadily, HKD interest rates remaining in moderate downward trend, and the “cheaper in renting than buying” situation persisting, residential property demand is expected to further recover. Residential mortgages are a core business for BOCHK.

We remain committed to serving the community by providing comprehensive and professional mortgage services for different property types. We will continue to leverage our advantage of having the largest branch network in Hong Kong, strengthen integrated online and offline services, and strive to meet the homeownership needs of both local residents and new arrivals. While adhering to the principle of prudent risk management, we will actively maintain the high-quality development of our mortgage business.

Deputy Chief Executive and Chief Risk Officer Xu Haifeng: As at the end of 2025, our customer deposits reached HK$2.9 trillion, up HK$216.2 billion or 7.9% compared to the end of 2024, representing a local market share of 15.0%. CASA deposits grew by 24.3%, outperforming the market’s growth rate of 17.0%, and our CASA ratio recovered by 7 percentage points to 53.4%. We leveraged diversified products and services to drive deposit growth, while further consolidating and expanding the high-quality customer base by deepening relationships with large corporations, financial institutions, government and public entities. For

2026, under the premise of maintaining ample liquidity and balancing between volume and pricing, we will manage the time deposit prices and growth pace, and sustain steady deposit growth for this year, while maintaining a market-leading CASA ratio.

On the cost side, our operating expenses were HK$18.19 billion in 2025, up 4.0% year-on-year. Benefiting from relatively fast income growth, our

16 cost-to-income ratio decreased by 0.9 percentage point to 23.6%, remaining at a competitive level among local peers. Specifically, staff costs increased by 5.2%, driven by salary increases. An increase in information technology spending offset the reduction in rental expenses, leading to a

6.2% rise in premises and equipment expenses. Increases in advertising, promotional, and information services expenses drove other operating expenses up by 5.4%. For 2026, we will pursue effective cost integration and resource allocation through refined management, to provide assurance for long-term sustainable development. Specifically, we will accelerate branch network transformation and innovation of new business model, through simplified branch network model and intelligent channel evolution.

We will develop online and offline integrated marketing service system, and gradually replace the traditional telemarketing model. We will deepen the integration of regional operation and platforms, and realise economies of scale through intensive operation. We will also continue to perform low- carbon operation, and enhance the management of both existing and new resources to optimise the cost structure. Operating expenses for 2026 are expected to increase steadily, with the cost-to-income ratio staying at a better level compared with peers, and its long-term target within 35% remaining unchanged,

Deputy Chief Executive Xing Guiwei

Artificial intelligence (AI), especially generative AI (GenAI), brought great opportunities for financial technology innovation. Each year, we continuously invested in digitalisation and information technology, especially for AI, and actively explored and implemented practical applications under risk-based governance and control. Currently, we have already established an AI committee, and constructed AI governance mechanism, which aim to organise and promote AI scenario applications and risk management. In the

17 year, we implemented AI in dozens of application scenarios, which cover various areas such as precise marketing, intelligent customer service, smart risk management and intelligent operations. We fully promoted company- wide usage of AI office assistant to improve efficiency. We also offered AI knowledge Q&A assistant to frontline colleagues to consolidate multi- source product and business information, helping to enhance work efficiency. We broadly applied AI sales compliance service prompts in front offices, and integrated market news and critical customer observant and analysis, to build a new marketing mode by taking advantage of

“human-computer collaboration”. We used market-leading AI digital human technology to improve customer experience across service channels.

We actively used GenAI in precise marketing, deeply integrating AI technology into business workflow, and realising auto-formation of marketing copywriting and hyper-personalised recommendations. We promoted AI applications in AML and negative news monitoring for global markets, to enhance intelligent risk management abilities. We participated in the Gen AI sandbox programme jointly promoted by the HKMA and

Cyberport, completed “AI avatars” and anti-fraud solution pilot validation.

Facing profound influence of AI in the banking industry, we will systemically realise the dual value of AI in enhancing internal capabilities and driving future strategic transformation, while expanding technological achievements into new domains, to create higher business values.

(Online Question) Lv Songtao from CICC: Wealth management business has experienced rapid growth in a number of quarters, how do the management expect its growth sustainability? As CASA deposits grew strongly in 2025, what were the sources of growth in terms of customer types and service scenarios, and what is the relevant growth strategy and

18 outlook for 2026?

Deputy Chief Executive Chan Man

From the macro level, China supports Hong Kong to leverage its advantages as an international financial centre, while the HKSAR Government has focused on strengthening Hong

Kong’s competitiveness as a leading asset and wealth management centre in the region. In 2025, we proactively captured the opportunities of economic recovery to pursue business growth. Specifically, our fund sales transaction volume increased by over 80%. Personal wealth management income grew by 40% year-on-year, and private banking fee income grew by 29%. We fully supported the HKSAR Government’s family office policy, strengthened intra-group collaboration, and enhanced our influence in the family office sector. During the year, our private banking AUM grew by 10%, and the acquisition of BOCI Private Bank was completed in

January 2026. We comprehensively met the needs of wealth succession and value growth of high-end customers, and increased the number of “Private

Wealth” centres to 9, achieving the coverage of one centre per district for high-end wealth management centres. We recorded double-digit growths in the number of private wealth customers and total relationship balance

(TRB), and drove further increase of the high-end customer income contribution to 63%, of which high-end customer TRB rose by 13%. We achieved notable results in integrated business development. We further expanded our global custody network coverage, successfully secured the transfer of asset portfolios from key clients including sovereign funds, and were appointed as a common depository by Euroclear and Clearstream.

Total custody assets under custody grew by 29%. Full-year standard new premiums for BOC Life increased by 49.5% year-on-year, ranking second in the market in the first three quarters. BOCHK Asset Management continued to promote product innovation, launching the first tokenised

19 share class of the “BOCHK All-Weather HKD Money Market Fund” while its AUM and AUA grew by 37%. For 2026, the 15th Five-Year Plan continues to support Hong Kong in consolidating and enhancing its competitive advantages. The HKSAR Government’s Budget launched policy measures, such as further optimising connectivity arrangements, promoting securities market reforms, and optimising the scope of tax concessions for family offices and funds. BOCHK will strengthen intra- group collaboration and synergy, continue to focus on the wealth management needs of key customer segments such as high-end, cross- border, and family segments, enrich our diversified product solutions, refine touchpoints across all network channels, enhance empowerment through digitalisation and intelligent development, and expand the construction of the “Wealth+” ecosystem platform. We will also fully unleash the potential for insurance business and push forward private banking business integration, to enhance our wealth management capability.

Deputy Chief Executive and Chief Risk Officer Xu Haifeng: Regarding the development of our deposit business in 2025, this has just been elaborated on. For 2026, we will effectively manage fixed deposit pricing and the pace of deposit growth, to maintain steady and sustainable deposit growth for the year, while keeping the CASA ratio at a leading position in the market. Specifically, in terms of business development, we will seize incremental opportunities such as the international use of RMB, Going

Global initiatives of enterprises, cross‑border activities, new quality productive forces, IPOs, and regionalisation. Leveraging our comprehensive business capabilities in corporate banking, we will deepen the engagement with local large blue chips, SOEs under the central and local governments, and industry leaders, while also tapping the potential of

20 mid‑tier and long‑tail customers. At the same time, we will expand our reach to customers in Southeast Asia, the Middle East, Europe, and other regions to attract fund inflows. In personal banking, we will flexibly roll out promotional initiatives and target large local employers for bulk customer acquisition. We will continuously strengthen collaboration across customer segments and product lines, and strive to increase the number of payroll customers through acquisition, retention and activation. We will fully leverage the fundamental functions of customer bases and products such as payroll services, cross‑border services, cash pooling, and custody in promoting low‑cost deposit growth. Through on‑balance‑sheet and off‑balance‑sheet coordination, we will enhance the retention and stickiness of low‑cost deposits, and continue to drive the growth of CASA deposits.

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