Loan growth boosts Hang Seng Bank's earnings
Gains in home and commercial lending, along with rising fee income, help the bank deliver 38 per cent increase in net profit
Hang Seng Bank yesterday reported its net profit last year rose 38 per cent to HK$26.68 billion, thanks to strong growth in lending and fee income as well as one-off accounting gains related to its mainland investment.
The bank reported HK$9.52 billion gains due to a change in accounting procedures for its investment in Industrial Bank, which came after a share placement by Industrial Bank in 2012 diluted its holdings in the mainland lender.
This aside, Hang Seng's net profit rose 19 per cent to HK$17.16 billion, spurred by growing residential mortgage and commercial lending, widening interest margin, and higher fee income from selling stocks and insurance products.
A fourth interim dividend of HK$2.20 per share will be paid, bringing the full-year dividend to HK$5.50 a share.
The bank, however, saw a 38.1 per cent drop in operating profit at its mainland operation. This resulted from a 5.7 per cent decline in interest income as it paid a high cost to compete for deposits last year.
We believe our investment on the mainland will bring in more cross-border business
The lender, a subsidiary of HSBC, continued to expand on the mainland by adding 2 billion yuan (HK$2.54 billion) in capital in October to its operations on the mainland, where it now has 50 outlets after expanding its network and headcount.