东亚银行(00023) - 2022 - 中期财报

Profitability and Earnings - Operating profit before impairment losses for the half year ended 30 June 2022 was HK$3,712 million, compared to HK$3,768 million in the same period in 2021[3] - Profit attributable to owners of the parent decreased to HK$1,499 million in H1 2022 from HK$2,671 million in H1 2021[3] - Basic earnings per share dropped to HK$0.39 in H1 2022 from HK$0.78 in H1 2021[3] - Net profit for the 6 months ended 30/6/2022 was HK$1,510 million, a decrease of 44$2,697 million in the same period in 2021[10] - Total comprehensive income for the 6 months ended 30/6/2022 was a loss of HK$1,561 million, compared to a gain of HK$2,446 million in the same period in 2021[10] - Basic earnings per share for H1 2022 was HK$1,090 million, down from HK$2,266 million in H1 2021, reflecting lower profitability[17] - Interim dividend declared for H1 2022 was HK$0.16 per share, totaling HK$430 million, compared to HK$0.35 per share and HK$1,022 million in H1 2021[20] - Net insurance profit decreased significantly to HK$14 million in H1 2022 from HK$352 million in H1 2021[35] - Net insurance premium dropped to HK$500 million in H1 2022 from HK$3,550 million in H1 2021[35] - Profit before taxation for Hong Kong operations was HK$545 million, with Personal Banking contributing HK$966 million and Wholesale Banking contributing HK$379 million[85] Loans and Advances - Total loans and advances to customers and trade bills increased to HK$554,443 million as of 30 June 2022, up from HK$546,577 million at the end of 2021[4] - Loans and advances to customers increased to HK$546,421 million as of 30/6/2022, up from HK$544,437 million as of 31/12/2021[11] - Loans and advances to customers increased to HK$551,372 million as of 30/6/2022 from HK$548,808 million as of 31/12/2021[48] - Gross advances in Hong Kong increased to HK$260,885 million as of 30/6/2022, up from HK$262,209 million at 31/12/2021, with collateral coverage at 77.94$180,622 million as of 30/6/2022, down from HK$183,979 million at 31/12/2021, with collateral coverage at 23.46$4,170 million as of 30/6/2022, up from HK$1,009 million at 31/12/2021[55] - Total advances to customers in Hong Kong increased to HK$265,563 million as of 30/6/2022, up from HK$264,285 million at 31/12/2021[58] - Impaired advances to customers in Mainland China rose to HK$7,440 million as of 30/6/2022, up from HK$4,589 million at 31/12/2021[58] - Specific provisions for impaired loans in Mainland China increased to HK$2,861 million as of 30/6/2022, up from HK$2,822 million at 31/12/2021[58] - Collective provisions for impaired loans in Mainland China increased to HK$1,083 million as of 30/6/2022, up from HK$755 million at 31/12/2021[58] - Total advances overdue for over three months in Mainland China increased to HK$2,005 million as of 30/6/2022, up from HK$2,020 million at 31/12/2021[58] - Loans and advances to customers at amortised cost for Grades 1-15 (Pass) had a principal amount of HK$512,778 million, with 12-month ECL of HK$976 million and accrued interest of HK$1,003 million[130] - Loans and advances to customers at amortised cost for Grades 16-17 (Special Mention) had a principal amount of HK$14,059 million, with lifetime ECL not credit-impaired of HK$58 million[130] - Loans and advances to customers at amortised cost for Grade 18 (Substandard) had a principal amount of HK$6,492 million, with lifetime ECL credit-impaired of HK$30 million[130] - Loans and advances to customers at amortised cost for Grade 19 (Doubtful) had a principal amount of HK$1,409 million, with lifetime ECL credit-impaired of HK$53 million[130] - Loans and advances to customers at amortised cost for Grade 20 (Loss) had a principal amount of HK$802 million, with lifetime ECL credit-impaired of HK$18 million[130] - The total gross carrying amount of loans and advances to customers at amortised cost was HK$551,372 million, with total impairment allowances of HK$4,951 million[130] - The market value of collateral held against impaired loans and advances to customers was HK$3,683 million[130] - Impairment allowances for loans and advances to customers increased to HK$5,020 million as of 30/6/2022, up from HK$4,429 million as of 1st January 2022[169] - Write-offs and net remeasurement of impairment allowances for loans and advances to customers amounted to HK$1,220 million as of 30/6/2022[169] - Loans and advances to customers impairment allowances decreased from HK$4,915 million at the beginning of the year to HK$4,429 million at the end of the year, with write-offs amounting to HK$2,397 million[171] Deposits and Liabilities - Total customers' deposits and certificates of deposit issued grew to HK$691,221 million as of 30 June 2022, compared to HK$661,656 million at the end of 2021[4] - Deposits from customers grew to HK$644,564 million as of 30/6/2022, compared to HK$633,505 million as of 31/12/2021[11] - Deposits from customers amounted to HK$644,564 million, including HK$69,500 million in demand deposits and current accounts[89] - Deposits from customers reached HK$633.505 billion, with demand deposits and current accounts accounting for HK$79.657 billion[91] - Total liabilities for the company were HK$801,886 million, including HK$258,970 million repayable on demand[89] - Total liabilities were HK$791.42 billion, with deposits from customers making up HK$633.505 billion of this amount[91] - Total liabilities for Hong Kong operations were HK$503,485 million, with Personal Banking accounting for HK$338,097 million[85] - Financial liabilities designated at fair value through profit or loss decreased to HK$30,171 million at 30th June 2022 from HK$36,877 million at 31st December 2021[68] - The carrying amount of financial liabilities designated at FVTPL was HK$460 million lower than the contractual amount due at maturity[71] - Trading liabilities increased to HK$55,641 million at 30th June 2022 from HK$42,915 million at 31st December 2021[72] - Loan capital increased to HK$12,258 million at 30th June 2022 from HK$6,488 million at 31st December 2021[73] - Loan capital with face value of HK$3,923 million (US$500 million) and carrying amount of HK$3,847 million, issued on 22nd April, 2022, carries a coupon rate of 4.875$1,961 million (US$250 million) and carrying amount of HK$1,967 million, issued on 7th July, 2022, carries a coupon rate of 5.125% p.a. and matures on 7th July, 2028[75] - Loan capital with face value of HK$1,758 million (RMB1,500 million) and carrying amount of HK$1,757 million, issued on 25th April, 2019, carries a coupon rate of 4.94% p.a. and matures on 25th April, 2029[75] - Loan capital with face value of HK$4,707 million (US$600 million) and carrying amount of HK$4,687 million, issued on 29th May, 2020, carries a coupon rate of 4$10.09 billion, with face values of US$650 million each[97][98][99] - Contractual amounts of contingent liabilities increased to HK$14,546 million as of 30/6/2022, up from HK$14,005 million as of 31/12/2021[182] - Total commitments rose to HK$293,048 million as of 30/6/2022, compared to HK$264,205 million as of 31/12/2021[182] - Capital commitments outstanding as of 30/6/2022 totaled HK$469 million, up from HK$456 million as of 31/12/2021[185] Impairment Losses and Provisions - The impaired loan ratio increased to 1.58$2,136 million in H1 2022 from HK$581 million in H1 2021[7] - Impairment losses on financial instruments surged to HK$2,136 million in H1 2022 from HK$581 million in H1 2021[41] - Impairment allowances for loans and advances to customers increased to HK$5,020 million as of 30/6/2022, up from HK$4,429 million as of 1st January 2022[169] - Write-offs and net remeasurement of impairment allowances for loans and advances to customers amounted to HK$1,220 million as of 30/6/2022[169] - Loans and advances to customers impairment allowances decreased from HK$4,915 million at the beginning of the year to HK$4,429 million at the end of the year, with write-offs amounting to HK$2,397 million[171] - Debt investment securities impairment allowances increased from HK$331 million at the beginning of the year to HK$484 million by mid-year, with net remeasurement adjustments contributing HK$115 million[173] - Other financial assets impairment allowances rose from HK$252 million at the beginning of the year to HK$398 million by mid-year, driven by a net remeasurement adjustment of HK$142 million[177] - Loan commitments and financial guarantee contracts accounted for HK$315 million of the total impairment allowances for other financial assets by mid-year[177] - The company's impairment allowances for trade bills measured at FVOCI are not recognized in the financial position statement as their carrying amount reflects fair value[179] Capital and Equity - Common Equity Tier 1 capital ratio decreased to 15.7% as of 30 June 2022 from 16.9% at the end of 2021[4] - Total equity attributable to owners of the parent decreased to HK$95,968 million as of 30/6/2022, down from HK$101,778 million as of 31/12/2021[11] - Retained profits decreased to HK$32,530 million as of 30/6/2022, compared to HK$35,385 million as of 1/1/2022[13] - Non-controlling interests decreased to HK$267 million as of 30/6/2022, down from HK$304 million as of 31/12/2021[11] - The company repurchased 247 million shares in April 2022, reducing the total number of ordinary shares to 2,689 million[24] - The company repurchased 247 million shares at a total cost of HK$2.916 billion, deducted from retained profits[95] - Regulatory reserve restricted the distribution of reserves to shareholders by HK$2.327 billion as of 30th June 2022[96] - Total equity of The Bank of East Asia (China) Limited was HK$25,837 million as of the reporting date[198] - Blue Cross (Asia-Pacific) Insurance Limited reported total assets of HK$2,301 million and total equity of HK$651 million as of the reporting date[194] Interest and Fee Income - Net interest income increased to HK$5,830 million in H1 2022 from HK$5,523 million in H1 2021[7] - Net fee and commission income decreased to HK$1,440 million in H1 2022 from HK$1,540 million in H1 2021[7] - Interest income rose to HK$9,658 million in H1 2022, up from HK$8,887 million in H1 2021, driven by higher income from loans, deposits, and investment securities[26] - Fee and commission income decreased to HK$1,751 million in H1 2022 from HK$1,969 million in H1 2021, with notable declines in credit cards and securities brokerage[31] - Interest expense increased to HK$3,828 million in H1 2022 from HK$3,364 million in H1 2021, driven by higher costs on customer deposits and debt securities[28] - Net gain from financial instruments designated at FVTPL increased to HK$289 million in H1 2022 from HK$16 million in H1 2021[34] - Non-interest income for Hong Kong operations totaled HK$1,393 million, with Personal Banking contributing HK$584 million and Wealth Management contributing HK$331 million[85] - Hong Kong operations reported a net interest income of HK$1,130 million and non-interest income of HK$565 million for the 6 months ended 30th June 2021[87] - Mainland China operations recorded a net interest income of HK$1,962 million and non-interest income of HK$450 million for the same period[87] - Overseas operations generated a net interest income of HK$828 million and non-interest income of HK$117 million[87] - Total operating income for Hong Kong operations was HK$4,358 million, while Mainland China operations contributed HK$2,412 million[87] Assets and Investments - Total assets as of 30/6/2022 were HK$908,211 million, a slight increase from HK$907,470 million as of 31/12/2021[11] - Total assets increased to HK$907.47 billion, with significant contributions from loans and advances to customers at HK$544.37 billion[91] - Total assets for Hong Kong operations stood at HK$562,973 million, with Treasury Markets accounting for HK$238,600 million[85] - Total assets for Hong Kong operations stood at HK$556,806 million, with Mainland China operations at HK$262,575 million and overseas operations at HK$118,789 million[87] - Total assets of The Bank of East Asia (China) Limited stood at HK$253,384 million as of the reporting date[198] - Blue Cross (Asia-Pacific) Insurance Limited reported total assets of HK$2,301 million as of the reporting date[194] - Total investment securities increased to HK$150,471 million as of 30/6/2022, up from HK$147,507 million at 31/12/2021[61] - Debt securities measured at FVOCI increased to HK$107,303 million as of 30/6/2022, up from HK$101,968 million at 31/12/2021[61] - The fair value of the Group's investment in AFFIN Bank Berhad was HK$3,891 million, higher than the carrying value of HK$3,375 million, resulting in no impairment charge[63] - The VIU calculation for AFFIN Bank Berhad used a discount rate of 12.08$217 million, while a 50 basis points increase would decrease the VIU by HK$194 million[65] - A 10$389 million, while a 10% decrease would reduce the VIU by HK$389 million[65] - The net book value of fixed assets at 30th June 2022 was HK$13,543 million, compared to HK$13,844 million at 31st December 2021[66] - Other assets increased to HK$50,989 million at 30th June 2022 from HK$42,523 million at 31st December 2021[67] - Level 1 financial assets measured at fair value totaled HK$25,031 million as of 30/6/2022, compared to HK$26,082 million at 31/12/2021, with a significant portion in investment securities[111] - Level 3 financial assets, which involve significant unobservable inputs, increased to HK$1,643 million as of 30/6/2022, up from HK$1,520 million at 31/12/2021, primarily due to changes in fair value of investment securities[111] - The fair value of investment securities measured at FVOCI increased to HK$129,843 million as of 30/6/2022, up from HK$125,524 million at 31/12/2021, reflecting gains in fair value[111] - The discount rate used in Level 3 valuations decreased to 12.4% as of 30/6/2022, down from 15.3% at 31/12/2021, impacting the fair value of