Ladies and gentlemen, good afternoon. Welcome to 2024 Annual Results Briefing of BOC Hong Kong Holdings Ltd.
I'm Xuefei Huang, Board Secretary.
To begin with our results briefing, I would like to introduce the senior management with us today. Mr. Chief Executive, Mr. Liu Chenggang, Deputy.
Chief Executive and Chief Financial Officer, Mr.
Xu Haifeng, Deputy Chief Executive and Chief.
Risk Officer, Mr. Xing Guiwei, Deputy Chief Executive, Mr. Wang Huabin , Deputy Chief Executive, Mr. Chan Man, Deputy Chief Executive, and Madame Li Tong , Deputy Chief Executive.
Today's meeting consists of three parts. First, our CEO Mr. Sun will update the implementation of our strategy in 2024.
Our CFO Mr. Liu will present our financial results. Finally, Mr. Sun will share with us
The outlook and the key priorities for
2025 before our Q& A session.
Now I would like to hand over to CEO Sun . Mr. Sun, please.
Thank you. Ladies and gentlemen, good afternoon. Good to see many old friends. I n 2024, i n the face of a complex and severe operating environment, Bank of China Hong Kong fulfilled its pivotal role in BOC Group's globalization strategy. Enhanced risk control, solidified banking infrastructure and expanded earning sources. Outperforming the market in core businesses and achieving solid operating results of profit attributable to equity holders rose by 16.8% to HKD 38.2 billion. ROE increased to 11.6%. The board has proposed to take the full year DPS to HKD 1.989, up 19% with the payout ratio rising to 55%. We further consolidated our competitive advantages in the local market, maintaining our leadership in Hong Kong and Macau syndicated loan business for 20 consecutive years and new residential mortgage loans for six consecutive years. New-to- bank high- end customers almost doubled while our cross- border personal customer base further expanded.
We saw a 27% increase in cash pool accounts and 30% growth in assets under custody. Our position as a main bank for the Hong Kong SAR Government has been strengthened further. We rapidly grew our treasury business, continued to consolidate our first mover advantage as a market maker and successfully launched central counterparty client clearing business at the LCH - London Clearing House. We achieved double- digit income growth in our integrated businesses with BOC Life ranking second in the market where both BOCI- Prudential and Bank of China (Hong Kong) Asset Management increased their respective AUMs by 16%. We captured collaboration opportunities in the Greater Bay Area and maintained our leadership in mutual market access schemes. We grew Wealth Management Connect customers by 57%.
We led the market in terms of fund remittance, capitalizing on individual visit scheme expansion and Hong Kong SAR Government initiatives. To attract talent and investment, we launched services related to the N ew Capital Investment Entrant Scheme. In addition, the transaction volume for BoC Pay in the Mainland grew by 1.1 x and Mainland card spending increased by 19%. We supported Hong Kong's development as an international hub for innovation and technology as well as construction of the Northern Metropolis. By enriching our cross-border financial service solutions, our tech customer base grew by 8%. We also became the first bank to pilot cross-border corporate credit referencing. We pursued differentiated development through our "One Branch, O ne Policy" strategy for SEA entities while reinforcing and radiating our impact. As a regional headquarter, we focus on Belt and Road cooperation, Chinese enterprises going global, and regional large corporates.
With the corporate customer base of our regional entities increasing by more than 10%, we further extended mutual recognition for wealth management brand and promoted family office services of RMB trading and charity b usiness capabilities were further enhanced, delivering steady growth in RMB- clearing volume. For 2024, SEA entities grew their deposits and loans by 16.5% and 9.9% respectively, while achieving 16.7% growth in net operating income, further increasing their profit contribution. Their NPL ratio was 2.78%, down eight basis points. We fully supported Hong Kong in strengthening its position as a global offshore RMB hub. Our RMB loans and deposits achieved solid growth and maintained market leadership. We also led the market in terms of offshore RMB public bond underwriting. We extended the service hour of the Hong Kong RMB Clearing Bank, which saw 49% growth in clearing volume.
The Cambodian RMB Clearing Bank successfully commenced operations. Well, all SEA entities realized steady growth in RMB clearing volumes. We enriched RMB products and services through innovation. We successfully issued RMB 5 billion of Panda bonds and completed the first RMB repo deal using bonds under the northbound Bond Connect. We advanced our digital transformation and contributed to the construction of Hong Kong as an international hub for innovation and technology. We supported the government's initiatives including severe weather market trading arrangements and the Interbank Account Data Sharing Program. We also participated in Hong Kong MA's project , the m Bridge Project, and the e-Hong Kong Dollar pilot program to develop application scenarios for digital currencies. We empowered business development with technology. We added a special room for talent schemes in our Home Expert app while growing active mobile banking customers by 18%.
We launched a brand new version of iGTB corporate mobile banking and doubled the number of registered BOC Connect users in payment- related businesses. We grew BoC Pay customers by 18% and BoC Bill settlement volume by 10%. We further promoted intelligent operations and smart risk control and fostered an innovation culture by sponsoring various technology innovation contests. We continue to enrich green and low carbon products and service offerings. For the year, green and sustainability related loans increased by 29% while the number of ESG funds available for sale rose by 38% and our ESG bond investments grew by 25%. We also assisted Mainland local governments in issuing ESG themed bonds and supported SMEs financing needs and corporate transformation. Following Hong Kong MA 's guidance, we became the first Chinese bank to establish its own taxonomy for green and sustainable finance standard.
We stepped up staff development, expanding our talent pool by 20% while achieving a steady rise in staff satisfaction. We also supported distinctive large scale charity projects and carried out 160 volunteer events totaling 29,000 service hours in the year. Our ESG efforts were widely recognized. We have been named Asia- Pacific Climate Leaders by Financial Times and received multiple volunteer awards from the Hong Kong SAR Government for consecutive years. This concludes the strategy review for 2024. Next, our CFO, Mr. Liu will walk you through our financial performance. Ms. Liu, please.
Thank you. Good afternoon everybody. In 2024, taking advantage of the market interest rate movement, we actively managed assets and liabilities and delivered stable NIM performance. We captured opportunities from the recovery in capital markets and the tourism industry and expanded our fee income. Meanwhile, we prudently controlled operating expenses while strengthening risk management. All of these efforts help us to grow the profit after tax by 12.2% to HKD 39.1 billion. Amid a high interest rate environment, we balanced between deposit growth and funding cost by strengthening internal collaboration and cross border businesses. We further extended our high quality customer base while tapping demand in payroll, settlement, custody and treasury businesses. As a result, our customer deposits grew by 8.8% to HKD 2.72 trillion, increasing our local market share to 15.56%.
Capitalizing on the opportunities from new quality productive forces and economic and trade connections with Southeast Asia, we effectively serve the needs of large multinationals, Chinese enterprises, going global and large Southeast Asia corporates. While enriching RMB application scenarios, we also provided comprehensive planning and online services to satisfy customers' home purchasing demands. As at the end of 2024, our customer loan balances stood at HKD 1.7 trillion, increasing our market share to 16.35%. Residential mortgages increased by 3.5% from last year end, capturing opportunities arising from higher market interest rates. We proactively managed our assets and liabilities, expanded AIEA, and dynamically managed bond investments to achieve higher returns. We enhanced our payroll services and cash management business to explore low cost funding. Adjusted for swap impact, our NIM expanded by 1 basis point to 1.64% with net interest income rising 8% to HKD 58.9 billion.
In the second half, our NIM was 1.67%, up 6 basis points half- on- half. Benefiting from the recovery of economic activity and tourism industry as well as rising demand for wealth management, our net fee income for the full year increased by 7.9%, driven by 15% year- on- year growth on the second half. Specifically, fee income from security brokerage and insurance business rose by 24% and 56% respectively. A strong increase in our fund sales market share got the 55% growth in fund distribution commission. At the same time, income from currency exchange and trust and custody services rose by 36% and 15% respectively. Credit card fee income increased by 5.3% supported by the 7.9% growth in card spending volume and 9.8% growth in merchant acquiring volume in Hong Kong retail market.
We strategically allocated resources to support the group's development priorities such as digitalization, regional development, integrated service and talent team building. Meanwhile, we pursue low carbon operations, improved the cost and income alignment and enhanced resource utilization efficiency. Our operating expenses increased by 5.3% in the year. Cost-to-income ratio improved by 0.8 percentage point to 24.6%, continuously outperforming the market average. We closely track market developments and industry dynamics while strengthening the monitoring and control of high-risk credit portfolios. At the end of 2024, our NPL ratio remained flat at 1.05%, outperforming the market average. Credit cost was 0.3%, down 8 basis points. ECL coverage of total loans rose by 2 basis points to 0.89%, further consolidating our capability to withstand the potential risks. Our total capital ratio increased to 22% while our CET1 capital ratio stood at 20%, mainly due to earning growth.
At the same time, a lower risk rate of mortgage loan also helped to slow RWA growth. We actively responded to investor demand for enhancing shareholder returns and optimized our capital allocation. We further increased the full year dividend payout ratio to 55% for 2024 and plan to pay quarterly dividends starting from 2025. We announced the acquisition of BOCI Private Bank and will strive to build the group's private banking and asset management platform in Hong Kong. At the same time, we actively started the corporate governance procedure for share buybacks following the revision of Hong Kong company audits, and we renew the general mandate for share issuance and buyback. While committing to hold treasury shares, we maintained a robust equity position with the NSFR and average LCR for the fourth quarter of 2024 standing at 142% and 201% respectively. This concludes our 2024 annual results review.
Yu will now share the Group's outlook and priorities for 2025.
Thank you. Looking ahead to 2025, the global political and economic landscape will undergo significant transformation. Considerable uncertainties remain regarding the interest rate cut path and magnitude in major economies. Banking industry will still face challenges in both transforming growth momentum and risk management. Since last September, the country has launched a series of incremental economic stimulus policies which have effectively boosted social confidence and supported solid economic recovery. Meanwhile, the Hong Kong SAR government focused on reforms and the transformation in its latest policy address and accelerated the implementation by aligning with the national development strategies and the measures benefiting Hong Kong. In addition, positive factors such as industrial chain optimization, Belt and Road cooperation and RCEP will continue to create new growth opportunities for Hong Kong's banking sector in 2024.
Hong Kong Bank of China (Hong Kong) will continue to strengthen risk management, consolidate banking infrastructure, and diversify income sources. We are dedicated to successfully concluding the current five-year plan and effectively developing a new five-year strategy leveraging the global advantages of BOC Group. We will proactively expand our private banking, asset management, custody, and global markets business to boost our competitiveness in the Hong Kong local market. We will implement a differentiated One Branch, One Policy development strategy in Southeast Asia to accelerate growth and enhance the contribution to the Group. We will capture opportunities presented by the Mutual Market Access Scheme and strengthen RMB business coordination.
In bracing advances in technology, we will establish an AI governance framework and improve technology capabilities. Additionally, we will continue to prioritize talent development and closely monitor critical risk areas such as CIE sector to firmly guard against systematic risks while solidly pushing forward all key business tasks. With robust support from all sectors of society and the unwavering dedication of our colleagues, Bank of China (Hong Kong )will seize opportunities to forge new frontiers and strive to achieve high quality development while promoting Hong Kong's long term prosperity and stability as well as regional economic development to ultimately create greater value for all shareholders. This marks the end of my presentation. Thank you. You are very welcome to ask any questions. Thank you.
Thanks for the presentation by CEO Sun and CFO Liu . It is the time to answer questions from our analysts. The Q & A session will be conducted in Mandarin. English speaking f riends, please feel free to ask the handsets from our colleagues for the simultaneous interpretation service.
Analysts friends, if you have any questions, please raise your hands. Our colleagues will pass you the microphone. Please be reminded to ask no more than two questions each time and state your name and your organization. Second row on the right please.
Thank you, m anagement. Congratulations management on the excellent results. I noticed two new shareholders return arrangement. My question is also about that. That is when you decided on cash dividend and quarterly dividend payments, how do you see the allocation in Q1, Q2, Q3, Q4. Behind that
Is it because of the past guidance of 40%-60% cash dividend in the past and also share buyback considerations about the treasury shares? I understand that this process will not be achieved at one goal, but in the medium to long term. I understand that parent bank's shareholding is 66%. Assuming at the peak profit, then you can buy back 9% in order to maintain 25% public float. Do we have this kind of restriction? Thank you.
Yes. I will ask DCE Liu to answer the question on share buyback and dividend.
Thank you for the questions. I believe this is a question of interest to investors management. First of all, we have to work hard to increase shareholders' return. This is our priority. Just now as our CEO presented our results, BOC Hong Kong seized the high interest opportunity to enhance our profitability.
You can see our core businesses achieving continuous growth. For ROE, it is up 1% at 11.6% ROE.
There is increase and instability.
We are increasing return to shareholders. This lays a strong foundation for that. Secondly, concerning dividend payments, actually we live up to shareholders' concern and aspiration. Final dividend.
The whole year dividend.
HKD 1.898 up 19% year- on- year. Dividend payout was up 1 percentage point at 55%. In other words, the dividend payout is rising amid stability. Now, because of the above undertaking, you can see that BOC Hong Kong adheres to a sound dividend policy. We want to maximize shareholders' return. At the same time, we have to balance that with the long term development of the bank. In this way we can enhance shareholders' return in the long run in 2025. In terms of capital management, we will continue to strengthen it. As you said just now, for example, we have got some promises in four areas. Basically, first of all, we have to enhance the operating capability of capital. That is most fundamental. As you can see, we have regionalization integration advantages. In terms of business, we have to outperform the market.
In 2024 we achieved very good results and this is because of our core business winning over or outperforming in the market. In this way our profitability can be enhanced in terms of capital operation. Basically we have promised to make one move. As said in our presentation in January 2025, basically we've acquired the BOCI Private Bank business so as to expand our business with the ultra high net worth customers. And for our asset management and capital management business, there is strong room for development as well. The second move is that in terms of risk appetite range, we will steadily increase our dividend payout but it will be between 40%-60%. As you can see that in the past years we are steadily increasing that for four years, four consecutive years already.
On the third point, we want to optimize shareholders way of getting dividends. We will increase dividend frequency from 2x every year to 4x . By doing that, our shareholders can enjoy dividend return earlier and their yield can also be more stable and this can enhance investment flexibility of our shareholders. Because of amendments to Hong Kong Company Ordinance, we have also made amendments to our mandate. In this way, this kind of work will be submitted to the AGM for approval and at the same time we will proactively enhance communication with the regulator to do relevant work. Thank you.
We welcome the next question. Winning in the second row please.
Thank you, m anagement team. C ongratulations on the excellent results. I have a question here. With respect to your development in the emerging market such as the Southeast Asia, recently we have seen that with respect to some U.S. new policies and foreign trade wars, etc. We have seen some volatility in the Southeast Asian market such as Indonesia, et cetera. I do not know whether this has affected your going global and Belt and Road business in terms of the percentages thereof and as well as your asset qualities as well as the outlook for your further expansion.
I have Mr. Li Tong for DCE to answer this question.
There is no sound coming from the speaker. The speaker's microphone is off.
You can hear me now. Yes. Thank you for your question.
Last year we can see that thanks to the very good performance of consumption in Southeast Asia, we have seen very good recovery. We predict that for the ASEAN countries and for the same year and the whole year's growth would be quite high in single- digits. For our bank we are focusing on a multi diversified development with interconnected in the region and continue to improve our performance. If you can look at our for specific data for our ASEAN countries Southeast Asia and the loan business has grown by 9.9% and thanks to the improvement in the NIM which is 3.6% in terms of the net operation income is about HKD 4.32 billion and has grown by 7% which has continued to contributed to the group's business.
We continue to solidify our business and we can also see that our NPL is decreasing by 0.08% for the coverage ratio is 191.2%. It is plenty and in 2024 we have focused on the government's new development landscape as well as looking at the further connections among the groups and focusing on the going global larger clients. We focus on green and sustainability business to continue to push forward for the healthy growth of SEA and we can see that we continue to assist with the Chinese companies going global for instance taking on their payroll business and services. We continue to further deepen the mutual recognition of our wealth management products and focusing on family business growth.
In addition, we continue to focus on the QR code as well as cross-border business with the union business, and for the RMB business we focus on the regional clearing house business. For Cambodia, clearing house has officially been launched, and for the Malaysian local market, our business in there has increased by 12%. We have seen 78% of cross-border RMB business growth and very strong. You have asked about 2025. We will continue to focus on integrated business for Southeast Asia. We continue to have differentiated development measures with the same policy. Number one, to focus on the development of Southeast Asia to ensure the healthy development. Number one is to grasp the market opportunities and to focus on the importance of business, and we focus on the Chinese companies going global as well as SEA's business.
These are the three topics, three parts of the clients we focus on for our business. We try to become the leaders for the Chinese companies going global as well as for the local customers to become the leaders that they would select us. We would try our best to become the number one choice for the various options and to benchmark ourselves with the leaders in the local market to continue to improve our core competitiveness and to continue to play our role as the main driver and main leader in those business.
Second, we have talked about further expanding the use of RMB and to continue to expand our clearing house network for Chinese companies going global and national strategic business. With all these scenarios, we continue to launch the exchange between RMB as well as the local currency, improving our abilities to market make as well as to meet the demand of the local currency customers. Number three is to push forward for digital services. We focus on using our mobile banking apps as well as the iGP platform building to help us with the cross-border QR code and we look at the digital currencies usage and to help us to acquire further customers and to provide smart businesses to the region. Number four is to continue to focus on our risk control. You can see that 2024 we have seen some very good results.
In the next year we'll continue to focus on regional development, focusing on the external changes, focus on the RMB and help us to forecast the risks that may occur and to ensure the stable growth of Southeast Asian business.
Thank you. Next question please. On the second row. The one on the second row please.
Thank you management for your sharing. I have two questions related to net interest income, so I want to have better understanding of your business. First, on a half- on- half basis, NIM has improved quite well. Given the interest rate cut background, I'm very curious to know more. During the initial stage of rate cut, your deposit pass through rate, what l evel is it on?
In the future with rate cut, how much more room can the deposit live up to the challenge? That's my first question. Second question is about deposit growth. Actually I'm happy to see that right now you are actually making an adjustment from asset based business driver to liabilities based and your deposit grew fast. Based on my observation, your deposit pricing among your peers is not very aggressive. With rather stable price, you got a lot of deposit customers. I'm very curious, in the past one to two years, in which areas of business, among which customer groups have you improved your business so that you can get fast growth in deposits?
Thank you very much for your two questions which you are curious about. I will ask DCE Liu to take the question.
Yes, your questions are indeed challenging.
We face the rate cut environment, and to banks, much challenge and pressure is being caused right now when we face up to rate cut environment.
The core is that we have
To dynamically manage our assets and liabilities as presented in 2024, our net interest income, our NIM achieves quite good results. As you can see on a half- on- half basis we have a rise in Q4 NIM after adjustment 1.7 up 7 basis points, half- on- half. The core issue here is that on the liability side, we have to control our deposit cost. As you know, in the U.S. the rate cut started in September. However, concerning our cost control, we started in the first quarter. That is our foremost responsibility, to control deposit cost. When our quotation is not that aggressive. Actually we did a lot on for example cash management and also cross border customers and personal wealth management, business expansion or development. You can see from our deposit balance, it's up 6.4%. The growth is better than the market.
Another thing is that we compressed deposit cost. That includes two points. First, we shorten the deposit pass through. In other words, it is actually significantly narrowed. If we lock in the fixed rate deposit term, then the pressure will be bigger. Looking at now, three months and below deposits account for 60%-70% of the total. This rhythm, this repress rhythm can support us in phasing up to the rate cut cycle. Besides, our deposit cost has come down significantly. On the margin in 2024, deposit costs gradually came down. That is a process. Of course, in 2025, I believe in Q1 2025, this is our core work as well. We still have to control deposit costs because the rate cut cycle has not ended yet. Besides, on the asset side, we have to enhance our asset yield.
In high interest environment, demand for loan is not as robust. We seized the high interest rate opportunity to dynamically manage our investment. On deposits we suppress the term and on the asset side, we extend our duration of bond investment. Of course this is within our risk appetite. Bond yield is up 37 basis points. Finally, as DCE Li said, we will expand our Southeast Asian business. The NIM is a lot higher than that in Hong Kong. For our group's NIM, there will be a very positive contribution. As a result, in 2025 this year, you can see that in terms of dividend expectation, there is funds flowing into Hong Kong from overseas. Liquidity of Hong Kong dollar is very adequate. Hong Kong interest rates will continue to come down.
The Fed's rate cut policy is still not certain. Overall speaking, given this rate cut background, NIM will still see some pressure. In 2025, concerning our work, I think we need to continue our successful approach. In 2024, on the liability side, we have to control our deposit costs. Secondly, on the market side, we have to seize our good businesses. For example, RMB cross- border business and Southeast Asian business. In our banking book, we have to lock in. Right now the market interest rate is still high, so we will still lock in some high yield investments. Finally, in terms of business development, there are many areas apart from NIM. This year the market recovers in relation to our insurance stocks and funds. That will be a big push. In 2024 we achieved double- digit growth.
For these income, they will alleviate our pressure in terms of NIM. Overall speaking, when rates will come down, we will try our best to control the impact on NIM so as to maintain stable net interest income. Thank you.
Thank you, Mr. Liu. N ext question please stand in the second row please.
Thank you. Management team, this is a Sam Wong from Jefferies. I'd like to ask about asset quality at the moment for the management team, what is your view on the Hong Kong mortgage market? In addition for this year and next year's credit. My next question is about Basel 3.1 and in terms of the specifics of this and how is this going to affect your capital structure in terms of your repo, would this have any impact on your repo?
Haifeng , we have Haifeng DCE to answer this question.
Thank you for your question. Especially you mentioned about Hong Kong real estate and the relevant mortgage inequalities thereof.
Overall, speaking for our bank, by end of 2024 in Hong Kong for the mortgage and we have HKD 270 billion versus last year, it is down by 8.8% for the group level and it accounts for 15%. In terms of the structure, 85% of those are used in Hong Kong and 60% for properties, 5.7% for Mainland China. In terms of a customer structure, majority of our customers are still the local blue chip companies. Over 60% are listed companies. Generally speaking, they are very healthy. Generally speaking we keep it at a healthy level. For this group of target, the risks are well controlled in terms of the qualities of the asset. Again, it is being affected by individual clients or customers. NPL is 1.73% by end of last year and it is slightly up versus last year.
For the coverage ratio, it is 17% and the total is 0.65%. The reason for this is because some of the individual real estate companies in Hong Kong, because they are under a lot of pressure for cash flow, there are uncertainties of their payment repayment abilities. Generally speaking, these customers, they have Hong Kong real estate properties as their collaterals and that would account for about 60%-70%. Looking into 2025, we think that the market is likely to see stabilize. You asked about commercial properties that is waiting to come back. Overall speaking for our bank, we will continue to pay attention to the market and especially will remain prudent, as we always have been, to make sure that we are on top of the risks and especially in terms of ensuring the development of our business.
We will take certain credit control method to help our customers to receive their payment accordingly. Overall speaking, we can see that for commercial properties, even if we face some pressure, overall risks are under control. In addition, in terms of our overall loan quality, we are confident that we can outperform the market in terms of provisions. We will continue to be prudent, as we always have been, to have
Plenty.
Of provisions set aside. This is my response. Thank you. Thank you. With respect to Basel III, we know that this has already been implemented on the 1st of January this year. In our Q1 report, we will have a very detailed response. Very quickly to respond to your question for Basel III, this is about various risks such as credit risk and operation risk, market risk, leverage ratio excess. Looking at it now in terms of our RWA as well as market risk RWA and all of these, we have seen some savings and especially on our credit risk RWA. This is mainly because there have been a lot of adjustments, including the LGB figure, it has reduced from 45% to 40%. In addition, the removal of the 1.06 x multiplier in the RWA calculation formula.
For the Basel III reforms will occur in phases and therefore our capital ratios will benefit from PIT and which will then reduce over time. Specific numbers that we will be disclosing in Q1.
Thank you. Next question please. Jamie in the middle.
Greetings. I'm Jamie from JPMorgan. Two questions from me. First, for loans we can see that last year that was a contraction. For the whole industry it's the same. This year in terms of your loan business, what is your strategy? How do you make your plan? Is there an opportunity to go back to a positive growth or a re you
Going to strive for outperforming the market? My second question is about fees. Some time ago the management said that last year the momentum was very good. For this year, based on our observation, of course, recently there was some volatility in the market for new customers. Can you share with us this year up till now, how was your customer acquisition this year in terms of related fees? In the market there is fund distribution and insurance. Do you think you can still maintain the double -digit growth? Thank you.
Yes. In terms of loan growth, I would defer to DCE Wang and for fee income, another DCE?
Yes, thank you for your question. In 2024, global economy growth was at a low level. Market rate is high, market interest rate is high. Right now, credit demand is weak.
In Hong Kong, loans came down by 2.8% for Hong Kong banks. Given this complex environment, BOCHK continued to capitalize on our professional service and our brand equity for the whole year. Given the high base in the previous year, it came down 1.5%. We outperformed the market with local market share increasing to 16.4%. Overall speaking, our total loans came down. However, in Hong Kong, when it comes to corporate loans in industries such as transportation, wholesale, retail, information technology and stock brokerage, in these segments, there is quite good growth for personal loans, including mortgages. For public housing, it grew by 3.5%. Given the weak environment, there are some positive factors. Looking into 2025, both challenges and opportunities coexist. Risks of global economic downturn are increasing as the external environment becomes more complex, putting more pressure on the banking industry.
At the same time, we see that the mainland economy remains resilient with solid foundations. With the government implementing a series of policies to expand domestic demand and promote sustained economic recovery. Hong Kong is actively aligning with national strategies and policies that benefit the city. Bringing new development opportunities to Southeast Asia has become an important destination for overseas direct investment by Chinese enterprises which will drive strong economic growth in the region. We will adhere to work principle of seeking progress while maintaining stability on the basis of adhering to the risk. Bottom line, we will seize market opportunities fully committed to supporting real economy and promote high quality development of the loan business. Specifically, there are a few main points. First, we'll serve the demand of Chinese enterprises going global. We'll strengthen business collaboration with key branches onshore and our Southeast Asian entities, focusing.
On corporate needs of new EV, new
Energy and biomedicine in their globalization efforts. We'll focus on cross-border RMB and trade finance products and enrich various financial service and support offerings, striving to expand customer base and loan base with the customers going global. Second, we will seize business opportunities brought by development of new productive forces. On one hand, we will continue to optimize our tech finance service model, actively develop customer relationship with leading players in AI and Internet markets. Meanwhile, we will strengthen cooperation with industry organization and innovative startups and companies characterized by refined, specialized, distinctive and innovative and business unicorns with comprehensive financing support. On the other hand, we'll expand green finance business and proactively align with market signature projects to support customers in the low carbon transition and increase our green finance proportion in our business. Third, we leverage our leading position in the RMB business.
Taking advantage of cheaper RMB financing costs against Hong Kong dollar and US dollar will enrich application scenarios of RMB and meet offshore RMB financing needs of enterprises. At the same time, we will capture policy opportunities and expand relevant business. In line with the liquidity arrangement for RMB trade financing launched by Hong Kong MA earlier this year, we'll continue to set our base in Hong Kong. The cross-border GBA Southeast Asian and overseas markets will strive to balance loan scale and earnings of our loan business so as to achieve solid loan growth and continue to outperform the market in the year. Thank you.
Concerning fee income and the outlook in 2025, we believe that the mainland continues to nurture new quality productive forces and they are deepening the external opening up. There will be stronger economic momentum and recovery.
Then based on that, there are a number of favorable policies for Hong Kong and the macro environment will be stable and will become more positive. This is beneficial to our investment insurance funds and consumption tourism as well. For fund sales, insurance, custodian, business credit cards, fee income, that would be some good support. With that, we will dig deeper into customer needs and enrich customer service and enhance our distribution marketing capability so that we will retain and acquire customers and then we will expand and expand growth for our fee income. Now you are interested in our customer acquisition capability. In the first part, you have already seen the 2024 results presentation for medium to high end customer growth and cross border customer growth. You have seen it already. In Q1 2025, we realized that this trend continues.
What we are concerned about is that we have to continue to be customer centric. We have to understand customer needs. For customer acquisition, especially for local customers and cross border customers, the needs are different. The point is how to make sure that given the market volatility that the assets can be arranged with global allocation. We will do some work in terms of product. For example, investment insurance and funds will make necessary arrangements in terms of currency choice, it will become richer. Right now, given the investment demands, we will enhance online service capability so as to meet the needs of cross border customers.
For customer acquisition then by means of our product channels and also customer relationship, we will do a good job of customer acquisition so that our customers can have deeper relationship with us and we can enhance our relationship. In that way, we can drive stable development of our fee income. Thank you.
Thank you both. In the interest of time, we have last two question asking opportunities. We have next one, Helen please, in the second row.
Thank you. Management team, this is Helen from UBS. I have a few questions with respect to Hong Kong property commercial properties. We can see that in 2024 for Hong Kong's commercial properties there is a very obvious decline. For some individual developers there are some issuance of loans to these places. What are your considerations at the moment? Do you think this is the opportunity for banks? For instance, right now, do you have more bargaining power and you can have a better pricing or is it that you'd like to continue to reduce your exposure to commercial properties?
Recently we can also see that some developers, they have used some of the loans from the banks to swap for their non-collateral loans. Versus the collateral loans versus the non-collateral loans, are they going to be higher or cheaper? Thirdly, how do you look at the tail end of the risks of the companies? Overall, we can see that all the banks are reducing their exposure to commercial properties. Is this going to worsen the situation of cash flow of developers? Are you seeing some peers who are actually very aggressive in Hong Kong's commercial properties? What's your view on the tail end of the risk?
You have asked three questions and we have taken note of all of these. We have Mr. Xu to take this question and all these are very sharp questions.
First of all, in terms of the commercial properties and overall, speaking for commercial properties, we can see that there are a few areas. Number one, the inventory has increased and it is still in a very high interest environment. Some of those may have suffered from very tight cash flow. With this, for us on our side, we are on one hand working with them and we hope that we can reach a consensus and reach some solutions to help us to alleviate the risks. In addition, we also hope to have various methods to help the customers to reduce their risks and to go through the difficult times with them together. For this market, we do hope that we can be with them to go through this high interest tough time.
We believe that in the second half of this year and next year with the interest cut, the pressure will be alleviated. We hope that we can go through tough times with them and we do think that in a year's time the market will get better. Your other question, which is about loans with collaterals versus loans without collaterals in terms of the pricing overall speaking, this would still depend on the specific situation of the customers and as well as the conditions of these customers and in terms of the pricing. Again, it is about the specific customers and their specific situation. I think it's quite hard to really answer this in a one off situation. In addition, your first question. Sorry, I forgot your first question. Can you repeat it?
My first question is all the banks are reducing their exposures to commercial properties and in this situation for BOCHK , do you think that this is an opportunity because you would be in a better position to demand a higher interest rate or are you going to continue to reduce the exposure for commercial properties?
It is not only about the pricing. We also need to consider risks. We need to look at it comprehensively. Let me look at this from a risk perspective. From the field perspective, we of course would need to ensure all the risks and factors are well considered.
Thank you very much, m anagement. Because of time, we have to end the session here. If you still have further questions, please feel free to contact the IR team. Thank you very much.