Hang Seng Bank’s 1st-half profit tumbles 60pc
Bank expects operating conditions to remain ‘challenging’
Hang Seng Bank reported a 60 per cent slump in first-half net profit, as rising bad loans and lower fee income weighed on a balance sheet that was helped in the previous year by a one-time gain.
The lender, a unit of HSBC, said net income was HK$8 billion for the first six months, or HK$4.19 per share, down from last year’s HK$20 billion profit, according to a stock exchange statement.
The Hong Kong lender had reported a one-time gain of HK$10.64 billion, from disposing of most of its stake in China’s Industrial Bank. Excluding the one-time gain, Hang Seng’s first-half profit fell 15 per cent from last year.
“Profitability and income were down against the high baseline created by the buoyant investment sector and exceptional market conditions in the first half of 2015,” Hang Seng’s vice-chairman and chief executive Rose Lee Wai-mun said in a statement.
Hang Seng’s first-half operating profit dropped 12 per cent to HK$9.52 billion compared with last year, as a slump in the equity markets hurt its wealth management business, causing fee income to decline 27 per cent per cent to HK$2.85 billion.
Income from interests rose 5 per cent to HK$11 billion, driven by growth of consumer loans and financial investments. Net interest margin fell 1 basis point to 1.85 per cent in the first half.
