2019年香港银行业报告（英文版）.pdf

The future of banking kpmg/cn Hong Kong Banking Report 2019Contents Introduction Overview Future business modelsWhat will it take to win in the age of digital banking?Customer experience at the core of banks winning strategyWealth management partnerships take centre stage in ChinaMoving towards a connected enterprise A digital futureHarnessing the full power of AI also requires smart governance and controlsOpen APIs offer new opportunities for banks, but first they must focus on working effectively with third parties Blockchain: no longer a buzzword in Hong KongThe age of the data culture is here 4 6 13 14 17 20 24 28 29 32 34 36 2 | Hong Kong Banking Report 2019 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Smart risk managementRegtech is fast becoming an indispensable part of the banking industryInformation sharing the key to enhancing financial crime complianceConsumer trust is at the core of managing cyber and emerging technology risk Viewing conduct risk through a forward-looking lens is the way of the future The future marketA shifting regulatory focus towards conduct and dataTax developments will drive banking opportunities in Hong Kong, but potential challenges lie ahead The future of banking in ChinaCreating a seamless banking experience in the Greater Bay Area Financial highlights About KPMG Contact us 38 39 42 44 46 48 49 52 54 56 59 90 91 Hong Kong Banking Report 2019 | 3 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. In this years annual Banking Report we take our traditional look back at the results of banks in 2018, but also take some time to look forward and set out our thinking on the Future of Banking. We believe the focus for banks in Hong Kong now should firmly be on what the Future of Banking looks like and how they can position themselves to be successful in a rapidly changing environment. The speed of change in the sector is being shaped by four key factors. Firstly, the underlying performance of banks margins are being squeezed and costs continue to be a focus means that banks need to think about different business and operating models if they want to be successful in the future. In addition to this, changing customer expectations, the increasing volume and importance of data and the rise of technology as an enabler to transform business models are also changing the sector. In 2018, banks in the city generally benefited from increasing margins which drove profitability. After several years of reducing or stagnant margins, in 2018 we saw an increase as banks benefited from interest rate rises in the US. However, global uncertainty has changed market sentiment and further rate hikes are unlikely. In fact, we may even see rate cutes before the end of 2019, which could cause margins to shrink again. We have also seen costs slightly increase across the sector with increasing investment in technology. This was offset by the credit quality of banks remaining stable, indicating that banks could perhaps take more sensible risks. We believe that banks need to look more closely at how they operate and interact with their customers to achieve more profitable growth. With consumer expectations continuing to rapidly evolve, customer experience remains absolutely critical for the long-term success of banks. Service providers in other sectors continue to raise the bar for customer experience, leading consumers to increasingly demand a similar user experience when it comes to banking. If banks do not provide this experience then customers may be more open to using new entrants to the sector, such as the new virtual banks. Many banks have traditionally designed processes and procedures around meeting regulatory obligations and/or risk management outcomes, rather than around how to best serve the customer. We believe that the banks that can redesign their existing processes and operating model with the desired customer interaction and experience at the heart of it all will be successful. Part of this improved customer experience will be how banks use data. The volume and velocity of data continues to increase exponentially. Data is a crucial asset for banks and a key driver of the future of banking. Financial institutions therefore need to seek to improve how they use and monetise their data to better serve their customers, as well as how to utilise data to better manage risk. We believe that it is now more important than ever for banks to embed a data culture throughout their organisation in order to unlock the true value of their technologies and meet customer expectations. Introduction Paul McSheaffrey Partner, Head of Banking & Capital Markets, Hong Kong KPMG China 4 | Hong Kong Banking Report 2019 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. However, in order to fully harness their data and improve the effectiveness of their digital strategy, banks need to first ensure that they implement robust and appropriate governance and infrastructure. This is an area where we continue to see banks struggle due to legacy systems. Importantly, it is not just about getting it right once. Banks need to have a sustainable platform, governance and associated processes to ensure that their data is maintained at a high level to enable them to better serve their customers. The last force shaping the Future of Banking is the enabling use of technology. Technologies such as artificial intelligence (AI) and automation are becoming increasingly available to help enable some of the customer-driven changes to banks business and operating models and to improve profitability. While many institutions view technology and automation as a way to reduce costs and improve quality, we believe the real value is in helping to deliver services faster and better, a key demand from consumers. Looking forward to 2019, we expect to see greater pressure on margins, and uncertainty and geopolitical tensions contributing to more muted growth of balance sheets as corporates become more cautious in their outlook. Coupled with increasing costs, 2019 could be a challenging year for banks in Hong Kong. Nonetheless, there continues to be a number of opportunities for growth. The ongoing development of the Greater Bay Area for example provides an avenue of growth for Hong Kong banks in the coming years. Clearly the industry is going through significant change, and we expect to see the factors discussed above shape the Future of Banking in Hong Kong. It is no coincidence that at the same time we have seen virtual bank licences recently being issued in Hong Kong, with these new players preparing to launch later this year. Time will tell as to how successful the new virtual banks will be in Hong Kong. However, what is clear is that they will be a major driver of change and improve competition in the sector, forcing traditional banks to innovate and improve their service offering. This will all be for the benefit of the customer, who stand to be the real winners. I hope you enjoy our perspective on the sector in 2019, and would welcome the opportunity to discuss the banking results and the current industry landscape. Hong Kong Banking Report 2019 | 5 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 1 The analysis is based on financial institutions registered with the Hong Kong Monetary Authority. 2 The top 10 locally incorporated licensed banks mentioned in this article are the 10 banks with the highest total assets among all locally incorporated banks as at 31 December 2018. Overview Hong Kongs banking sector showed resilience in 2018, with stable capital and liquidity performance and strengthening profitability. Subsequent to the strong global economic environment which brought growth to Hong Kongs banking sector in 2017, the pace of global economic growth in 2018 moderated as challenges arising from international trade tensions created uncertainty. In 2018 the Hong Kong economy grew by 3 percent, compared to 3.8 percent growth in 2017. Despite the slight deceleration in macro-economic indicators, Hong Kongs banking sector managed to maintain its strength which is reflected in the overall performance by licensed banks. The total assets of all licensed banks grew by 3.6 percent compared to growth of 8.1 percent in 2017. The operating profit before impairment charges of all licensed banks increased by 15 percent to HK$268 billion from HK$234 billion in 2017. After many years of reducing or stagnant interest margins, 2018 was the year when US interest rates started to rise which flowed through to stronger income for Hong Kong banks. However, global uncertainty has changed sentiment and further rises are unlikely, and we may see some of the improved net interest margin (NIM) reverse in 2019. In Hong Kong, digital innovation has become a new focus for the sector. Following the virtual bank licenses granted by the Hong Kong Monetary Authority (HKMA) in the first half of 2019, it is expected that a new banking experience will be brought to customers in Hong Kong. This will initially focus on retail customers and small and medium enterprises, offering basic banking services. However, we expect that the services provided will quickly become more sophisticated and that traditional banks will respond. This will increase the quality of services in Hong Kong and foster a much more competitive and innovative environment. In this report we present an analysis 1of some key metrics for the top 10 locally incorporated licensed banks 2in Hong Kong. Please note we have conducted this analysis on a legal entity basis and where banks have a dual entity structure in Hong Kong (e.g. a branch and an incorporated authorised institution), we have not combined the results. Paul McSheaffrey Partner, Head of Banking & Capital Markets, Hong Kong KPMG China T erence Fong Partner, Financial Services KPMG China 6 | Hong Kong Banking Report 2019 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3 NIM is either quoted from public announcements of financial statements, or calculated based on annualised net interest income and interest-bearing assets or total assets, depending on the availability of information. 4 HSBC consolidated results include Hang Seng and its other Asia operations. 5 HSBC 2018 Annual Report and Accounts - p.10hsbc.hk/content/dam/hsbc/hk/docs/legal/ regulatory-disclosures/annual-report-and-accounts-2018.pdf 0% 1% 2% 3% 2.18% 2.06% 1.88% 1.86% 1.73% 1.66% 1.56% 1.40% 1.23% 1.32% Hang Seng HSBC CITIC DBS Nanyang BEA BOC (HK) SCB ICBC (Asia) CCB (Asia) 2018 2017 Source: Extracted from individual banks financial and public statements Net interest margin Net interest margin With four interest rate hikes by the US Federal Reserve in March, June, September and December 2018 increasing the US benchmark interest rate by 1 percent in 2018, the HKMA Base Rate was also adjusted upward from 1.75 percent in 2017 to 2.75 percent. However, retail deposit rates in Hong Kong remained relatively low and adjusted upward during the second half of 2018 resulting in a slower pace in the upward trend of the funding costs. This contributed to the improved NIM 3and profitability of the surveyed banks. The average NIM across the surveyed licensed banks increased by 11 basis points compared to 2017. The average NIM for the top 10 licensed banks for 2018 increased to 1.69 percent compared to 1.54 percent for 2017. Nine out of the top 10 banks posted an increase in NIM. Hang Seng Bank Limited (Hang Seng) and The Hongkong and Shanghai Banking Corporation Limited (HSBC) 4continued to post the highest NIM among the top 10 locally licensed banks as at 31 December 2018. Hang Sengs NIM improved to 2.18 percent (increase of 24 basis points compared with 2017) which was largely due to the improvement in deposit spreads as a result of rises in Hong Kong dollar and US dollar interest rates. HSBCs NIM increased to 2.06 percent (an increase of 18 basis points compared with 2017), mainly due to higher margins from Hong Kong and mainland China activities. For HSBC, an improvement was noted in Hong Kong activities with an increase of 0.25 percent in the related NIM mainly driven by the widened customer deposit spreads, the change in asset portfolio composite due to customer lending growth, and higher re-investment yields brought by higher interest rates. The NIM in HSBCs mainland China activities also increased, contributed by higher yields from portfolio mix changes and improved lending spreads and customer deposit spreads. 5 Hong Kong Banking Report 2019 | 7 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2019 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Cost-to-income ratios 0% 10% 20% 30% 40% 50% 60% 70% 22.93% 27.81% 29.52% 35.92% 38.99% 40.25% 41.54% 44.57% 58.91% 50.16% ICBC (Asia) BOC (HK) Hang Seng Nanyang CITIC CCB (Asia) HSBC BEA DBS SCB 2018 2017 Source: Extracted from individual banks financial and public statements Among the top 10 locally incorporated banks, DBS Bank (Hong Kong) Limited (DBS) recorded the largest increase in NIM (27 basis points) due to higher interest yields as they booked financial assets with longer tenor. The NIM of Bank of China (Hong Kong) Limited (BOC (HK) remained flat in 2018 compared to 2017. We noted a slight increase in the proportion of short-t