A woman walks past a branch of the Hang Seng Bank in the financial district of Hong Kong on July 27, 2015. (PHILIPPE LOPEZ / AFP)
HONG KONG – Hang Seng Bank reported on Monday a 46 percent drop in first-half profit, booking HK$4.7 billion compared with HK$8.7 billion a year ago.
The bank declared a second interim dividend of 70 HK cents per share. The total dividend for the first half adds up to HK$1.40 per share.
Earnings per share fell by 48 percent to HK$2.31 per share for the six months ending June 30.
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Global economic headwinds and international geopolitical tensions have created complications and challenges for all businesses
Diana Cesar, CEO, Hang Seng Bank
Executive Director and Chief Executive Officer, Diana Cesar, described the first half as “particularly difficult’’ in that the fifth wave of coronavirus infections in Hong Kong, “continued to disrupt trade and business activities”.
Global economic headwinds and international geopolitical tensions have created complications and challenges for all businesses, she said. “These have inevitably impacted financial performances.’’
At its subsidiary, Hang Seng China, operating profit fell.
But trade lending recorded robust growth. Revenue was up by 32 percent, and the portfolio balance grew by 5 percent when compared with end-2021. Net interest income and non-interest income rose.
At Hang Seng Bank, the first-half net interest income grew by HK$473 million, or 4 percent, year-on-year to HK$12.35 billion as a result of rising interest rates, and the net interest margin improved by one basis point to 1.52 percent. Net fee income fell by HK$1.08 billion, or 29 percent, to HK$2.62 billion.
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Operating profit dropped by 46 percent to HK$5.53 billion, while pre-tax profit fell by 47 percent to HK$5.43 billion.
Return on average ordinary shareholders’ equity was 5.2 percent, compared with 9.9 percent a year ago.
Change in expected credit losses and other credit impairment charges increased by HK$1.75 billion to HK$2.09 billion from the first half of 2021.
