BOC Hong Kong’s Southeast Asia Assets Offer Emerging Market Exposure

With strong fundamentals and a close connection with parent Bank of China, Bank of China Hong Kong is a beneficiary of rising economic integration in the region, in our view. Key advantages for the bank are its cross-border banking services and connections with its parent bank. The bank offers a full range of banking services to retail and high-quality corporate and institutional customers from Hong Kong and mainland China, amassed from its long operating history in Hong Kong. These competitive edges underpin a sticky deposit base, characterized by the second-largest market share in Hong Kong dollar deposits. The bank's funding advantage is complemented by tight cost-control discipline, resulting in an industry-leading cost-to-income ratio of around 30%.