New mortgage lending is likely to drop this year as a result of government measures to cool the property market, a senior banker at Hang Seng Bank said.
Nixon Chan Lik-sang, the head of retail banking and wealth management at Hang Seng, expects the bank's mortgage business to be in line with the market's performance, "but it will surely fall short of our target set last year, before the government rolled out the fresh measures in February".
Leading banks in the city increased their mortgage interest rates by 0.25 percentage point each year to offset the higher cost of making such loans.
Chan said the increase was less than he expected and banks would be prudent in increasing their rates in future.
"Hang Seng will not be the market leader in adjusting the prices on mortgages," he said. "We aim to remain one of the top three banks in the market share of new mortgage business."
The bank launched new fixed-rate mortgages last week, and Chan said the response from customers was better than expected.
Lenders including Bank of East Asia and Fubon Bank also plan to launch fixed-rate mortgages. Despite the growing competition, Chan said, Hang Seng would not change the pricing of its fixed-rate mortgages.
To increase income from its retail and wealth management businesses, he said, the bank aimed to boost its frontline sales force to 1,000 from about 800.
Hang Seng has set a target of 50 per cent growth in income from its wealth management business by the end of next year from 2011. Chan said growth in the segment last year was 19 per cent.
The bank said last year that it would spend HK$480 million renovating 60 of its branches. Chan said work at 15 of them had been completed. Including service centres at MTR stations, Hang Seng has 220 outlets in the city.
The number of customers with more than HK$1 million in liquid assets, classified as Prestige clients, jumped 11 per cent last year, Chan said, while those with more than HK$200,000 in liquid assets, classified as Preferred clients, increased 8 per cent.
Daily transactions in gold at the bank had jumped 300 per cent from last week, before the metal's price slumped, he said.