Hang Seng Bank beats expectations to report 29 per cent increase in interim profit

Hang Seng Bank, a subsidiary of HSBC, Hong Kong’s largest bank, on Monday reported a better than expected increase in net profit for the first half of 2018, which rose by 29 per cent thanks to higher interest and fee income.

Its profit rose to HK$12.65 billion (US$1.61 billion) in the first half, or HK$6.62 per share, up from HK$9.84 billion a year earlier. This is higher than the average forecast of a 10 per cent increase – a net profit of HK$10.899 billion or HK$5.65 per share – made by analysts polled by Bloomberg.

“We grew profit before tax by 28 per cent, with solid increases in net interest income and non-interest income. All business lines recorded growth in revenue and profitability,” Louisa Cheang Wai-wan, the chief executive of Hang Seng Bank, said in a result announcement statement.

“With increasingly mobile lifestyles shaping service expectations, particularly among the younger segment, we added value with investments in technology and operational infrastructure that give customers greater flexibility over when and where they manage their finances,” she said.

“Our strong cross-border and cross business connectivity continued to play a key role in capturing new business in Hong Kong and mainland China. Hang Seng China recorded satisfactory growth in profitability despite the high cost of renminbi funding in the first half of the year.”

The profit for the first half is higher than the last two years, but is below the HK$20 billion reported in the first half of 2015, when the bank made a one-off gain of HK$10.64 billion from selling most of its stake in China's Industrial Bank.