Wing Hang Bank, which yesterday posted a 45.36 per cent plunge in net profit for the first six months, said it did not expect to make substantial provisions in the second half. Net profit at the family-owned bank fell to HK$512.58 million from HK$938.12 million a year ago because of lower core income and loan impairment charges surging 85.9 per cent to HK$84 million. The bank also had an unrealised net loss of about HK$64.8 million mainly from a rise in the fair value of its perpetual subordinated debt. Chairman and chief executive Patrick Fung Yuk-bun said loan impairment charges had improved half on half. 'There was no new bad debt in the second quarter,' he said. He said the bank had made less than HK$200 million in provisions for potential settlements relating to the Lehman Brothers minibonds. This and the provisions made last year should cover most of the potential costs of the minibond repurchase. Sixteen banks sealed a deal with regulators last month to settle claims with investors over the Lehman minibond fiasco. Wing Hang estimated the cost of its buy-back at HK$356.9 million. Mr Fung attributed the earnings drop to loans falling 1.9 per cent and net interest and fee income shrinking amid the weak economic climate. In Hong Kong, demand for mortgage loans and initial public offering financing is increasing. The bank also saw its brokerage business volume in the second quarter almost match the peak before the financial crisis. Mainland loans also began to pick up. The bank declared an interim dividend of 20 HK cents. Mr Fung said the dividend payout ratio in the first half was lower because the economy was just recovering and the bank wanted to retain earnings to strengthen its core capital. He said it was too early to say whether the bank would continue its low dividend payment. Warren Blight, an analyst at Fox-Pitt Kelton, said Wing Hang's results were below his expectations, because of a number of one-off items and the minibond provisioning, but that recurrent income did relatively well. 'I expect a better second half as the one-offs are reduced and a healthier economy would kick into their numbers,' Mr Blight said. Meanwhile, Chong Hing Bank, a small family-owned lender, said first-half net profit rose 53.25 per cent. Write-downs on securities available for sale, including exposure to structured investment vehicles, plunged to HK$44.29 million from HK$153.18 million a year ago. Profit growth was also helped by unrealised gains on securities as market prices rose after the turmoil.