Dah Sing Financial reports annual profit rose 12.8 per cent, marking its best year since the global crisis

Hong Kong bank reduced credit exposure to small and medium-sized lenders in China two years ago

PUBLISHED : Wednesday, 23 March, 2016, 8:04pm
UPDATED : Wednesday, 23 March, 2016, 8:06pm

Hong Kong-based Dah Sing Financial Holdings reported its 2015 profit rose 12.8 per cent to HK$1.9 billion from a year earlier, reflecting its best annual profit result since the 2008 financial crisis.

The bank, majority controlled by the local Wong family, said the profit result was buoyed by growth in both its banking and insurance business. The board declared a final dividend of 27 Hong Kong cents per share.

The core banking unit, Dah Sing Bank reported net profit rose 8.2 per cent to HK$2.2 billion.

Management said the result came from having reined in its China credit exposures two years ago, when it shifted its lending approach away from small to medium-sized businesses towards more secure state-owned enterprises who were able to meet collateral stringent collateral requirements in property and cash.

Meanwhile, it was able to compress funding costs from market and client deposits in the second half of last year. The result has been an industry low level of non-performing loans of 0.75 per cent, even as that signalled an uptick from from 0.35 per cent in 2014. Net interest margins rose to 1.83 per cent from 1.76 per cent in the prior year.

“Performances in both Dah Sing Financial Holdings and Dah Sing Bank have been excellent. This is our best year since the global financial crisis,” said Harold Wong, managing director and chief executive of Dah Sing Banking Group.

Dah Sing announced in January it is conducting a strategic review on its profitable life insurance business. Wong said the move had stemmed from an internal business review, which takes place every few years. He said it had been not been prompted by shareholder pressure.

“We want to produce better return to our shareholders,” Wong said. “This is still an early stage project. We are reviewing how we want to move forward with our insurance and sales strategy. We will make disclosures to the market when the time comes.”

In Wednesday’s trade, Dah Sing Banking Group’s shares closed 1.56 per cent higher to HK$14.32 per share. Dah Sing Financial’s shares rose 2.13 per cent to HK$47.95