Shanghai Commercial Bank’s 2018 profit up 17 per cent on higher interest income, forfeited Hong Kong Life deposit

The privately held bank said it received an “extraordinary contribution” from the failed sale of Hong Kong Life Insurance

A consortium forfeited a HK$710 million deposit to the insurer’s owners, including Shanghai Commercial Bank

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Shanghai Commercial Bank had total assets of HK$198 billion at the end of 2018. Photo: Shutterstock

Published: 3:59pm, 16 Apr 2019Updated: 10:35pm, 16 Apr 2019

Shanghai Commercial Bank said on Tuesday that its profit rose 17 per cent in 2018, driven by higher interest income, particularly in the US, and an “extraordinary contribution” resulting from the failed sale of Hong Kong Life Insurance.

The privately held bank, which was established in 1950, reported a profit of HK$2.85 billion (US$363 million) for the year ended December 31, up from HK$2.43 billion a year earlier.

“In the year ahead, the bank will take a more cautious approach to preserve good credit quality and to work closely with smaller enterprises in light of the many more challenges coming from the evolving digital environment and global economies,” the bank said in a statement.

Shanghai Commercial Bank is one of five financial institutions that own Hong Kong Life Insurance.

They agreed to sell the insurer for HK$7.1 billion in 2017, but the mainland China consortium behind the transaction, known as First Origin, missed a deadline to proceed with the deal.

When the deal collapsed, a deposit of HK$710 million paid by the consortium was forfeited to the sellers.