WHAT IS THE NATURE OF BANK OF CHINA’S GROWTH?
Headquartered in Beijing, China, the Bank of China (BOC) is the oldest bank in the country. As China’s most international and diversified bank, BOC has offices in 37 countries, including Taiwan, Portugal, Canada, Singapore, Hong Kong, and London. During BOC’s first fiscal quarter of 2015, which ended June 30, BOC reported an estimated profit of RMB47.77 billion and a profit attributable to equity holders of RMB45.84 billion, an increase of 1.21 percent and 1.05 percent respectively compared to the prior year period. It is indicated in the investor section of the bank’s website that its financial performance at the end of 2014 was excellent. Due to slowing growth in China, the Shanghai stock market crashed in July–August, 2015, wiping out $5 trillion in value that had been accumulated earlier in the year. However, bank stocks, such as the stock of BOC, led a slight recovery in late August. The central bank of China cut interest rates and reduced the amount of required reserves for banks, aiding a slight recovery. Questions
1. Visit the About Us section of the bank’s website. Go through the information under Organization section and review BOC’s branch offices globally. How has the number of branches changed in the last six months, given that virtually all banks in the United States are closing branches rather than opening them, primarily due to the slow shift of banking to an online business model from a brick-and-mortar one?
2. Visit the investor section on the BOC website and review its financial condition. Compute three key ratios. Rate the bank’s financial condition on an A, B, C, D, or F grading system.
3. Describe BOC’s most recent financial performance?
4. Visit BOC’s investor relations section on its website and check the investor services. Click on 2015 interim results, available under the results presentation, and make a note the top six executives pictured at this website. Determine whether the top twenty executives of Bank of China include any females or minorities. Is this a problem for the company or it is typical of the bank hierarchy among firms in China?