Update | Hang Seng Bank’s first half profit up 23pc on lower bad debt, improved market sentiment
Hang Seng Bank on Monday reported its first half net profit rose 23 per cent to HK$9.84 billion (US$1.26 billion) after lower bad debts and improved market sentiment boosted fee income on stockbroking and fund sales.
The profit is substantially higher than the HK$8 billion recorded in the first half of last year, but still below HK$20 billion in the first half of 2015 when the bank had a one-off gain of HK$10.64 billion from selling most of its stake in China’s Industrial Bank.
Hang Seng, which is a subsidiary of HSBC, reported its net profit for the first half year at HK$9.84 billion, or HK$5.15 per share, up 23 per cent year on year, which was also better than the estimate of a 22 per cent increase to HK$5.12 per share according to the consensus of analysts polled by Bloomberg.
The bank’s first half operating income from mainland China was down 10.5 per cent to HK$921 million but pretax profit was up 47.3 per cent to HK$81 million.
Louisa Cheang Wai Wan, newly appointed chief executive of Hang Seng Bank, said the decline in mainland income was a result of higher renminbi funding costs and government tightening of lending policy to reduce risk.
Looking ahead, Cheang said interest rate movements and stock performance would be key factors affecting Hang Seng’s business performance in the second half.