Wing Hang Bank

Record gain for Wing Hang Bank

PUBLISHED : Friday, 18 August, 2006, 12:00am
UPDATED : Friday, 18 August, 2006, 12:00am

Wing Hang Bank, a family-owned mid-tier lender, reported a 16.7 per cent net profit growth in the first half, as its loan growth more than offset a decline in interest margin to give it higher interest income.

Half-year profit jumped to record HK$817.4 million from HK$700.6 million a year ago as its loan book grew 3.1 per cent, thanks to the expansion on the mainland and Macau.

Without accounting for bad loan provisions, its operating profit rose 14.3 per cent to HK$955.9 million. Net interest income jumped 16.3 per cent, but the margin fell three basis points to 1.83 per cent mainly because of a flatter yield curve at its treasury operation and pressure in mortgage repricing.

Chairman Patrick Fung Yuk-bun said the strong increase in interest income was a result of a 24 per cent loan growth on the mainland and Macau, the two markets accounting for 20 per cent of the bank's pretax profit. 'We hope the profit contribution from mainland and Macau will be up to 40 per cent in five years,' he said.

Banco Weng Hang, its Macau subsidiary, recorded after-tax profit of 115.5 million patacas in the first half, up 14.6 per cent from a year earlier. It did not disclose earnings from its mainland operation.

Mr Fung said Wing Hang would continue to seek expansion on the mainland, where it has already invested more than HK$900 million. He said the bank would not rule out further expansion through acquisitions in Hong Kong, the mainland and Macau.

Meanwhile, Mr Fung said the net interest margin should rise in the second half as he expected loans to keep growing and the bank's bond investment to improve.

The bank will pay an interim dividend of 82 HK cents per share. Its shares fell 2.26 per cent yesterday, closing at HK$77.70.