Hang Seng to continue cross-border expansion | South China Morning Post
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  • Mar 3, 2015
  • Updated: 1:57am

Hang Seng Bank

Established in 1933 as a money-changing shop in Hong Kong, Hang Seng Bank is the second largest bank in Hong Kong. The bank is majority owned by the HSBC Group through The Hongkong and Shanghai Banking Corporation and is a Hang Seng Index constituent stock.

BusinessBanking & Finance

Hang Seng to continue cross-border expansion

Lender expects strong economic growth to bolster widening of services to customers

PUBLISHED : Wednesday, 06 March, 2013, 12:00am
UPDATED : Wednesday, 06 March, 2013, 5:33am

Expectations of strong economic growth on the mainland have prompted Hang Seng Bank to continue to expand its outlets there this year, according to vice-chairman and chief executive Rose Lee Wai-mun.

This was despite its mainland business' operating profit falling 28.8 per cent last year, as a result of a 15.3 per cent rise in operating expenses and bad debt charges.

Lee said in a post-results media briefing yesterday that the lender will continue to open more outlets on the mainland but did not give details. It added seven outlets on the mainland last year, bringing the total to 46.

"The mainland outlets are important to serve customers who have business in both Hong Kong and [mainland] China. They are also important to expand our yuan business," she said.

The lender expects China's gross domestic product to grow 8 per cent this year, higher than the 7.5 per cent predicted by Premier Wen Jiabao yesterday.

"The predicted economic growth is reasonable as Chinese exports to the US have bounced back while domestic consumption also has had stable growth. Both the central and the provincial governments have invested a lot in infrastructure projects and this would encourage economic growth," Lee said.

The lender, a subsidiary of HSBC, on Monday reported a 15 per cent rise in net profit for last year to HK$19.43 billion, thanks to an increase in fee income, lower bad-debt provision in Hong Kong and contributions from associates such as Industrial Bank on the mainland.

A Barclays report said Hang Seng's profit last year was better than expected, but the outlook would be affected by the change of accounting method for Industrial Bank. Hang Seng this year will no longer account for Industrial Bank as an associate in sharing profit following the mainland bank's completion of a private placement. Hang Seng would report its stake in the bank as a financial investment which means only taking its dividend payment.

Lee said excluding the profit contribution from Industrial Bank, Hang Seng's return on equity would fall from 22.9 per cent to 18 per cent, which she said is still a high level among its peers.

Barclays said Hang Seng profit should be about 21 per cent lower if Industrial Bank's dividend income rather than shared profit was taken into account.


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