Hang Seng Bank net profit tumbles 54pc
Accounting gain a year earlier and lower property revaluation cited for drop to HK$8.5b, but chief points to growth across business groups
Hang Seng Bank said net profit dropped 54 per cent to HK$8.47 billion in the first six months of this year mainly because of a one-off accounting gain in the same period last year and lower property revaluation.
The subsidiary of HSBC Holdings said the one-off HK$9.52 billion gain had resulted from a change in accounting procedures for its investment in Industrial Bank, which came after a share placement in 2012 diluted its holdings in the mainland lender.
"Under challenging operating conditions, Hang Seng Bank achieved good growth, with increases in income and profit across all business groups in the first half of 2014," said Rose Lee Wai-mun, the bank's vice-chairman and chief executive. "Overall credit quality was relatively stable. The group remains cautious on the credit outlook."
Excluding the impact of the Industrial Bank gain, net profit fell 5 per cent amid a decrease of HK$769 million in the valuation of net surplus on properties.
Operating profit rose 6 per cent to HK$9.5 billion, thanks to growth in customer lending and fee income in Hong Kong and on the mainland.
Net interest income grew 8 per cent to HK$9.67 billion, boosted by a 4 per cent gain in interest-earning assets including an 8 per cent growth in customer lending.