大众金融控股(00626) - 2024 - 中期业绩

Financial Performance Overview Consolidated Statement of Income and Other Comprehensive Income The Group recorded a net loss of HKD 34.493 million for the six months ended June 30, 2024, primarily due to decreased net interest income and a significant increase in credit loss expense Consolidated Statement of Income and Other Comprehensive Income | Metric | Six Months Ended June 30, 2024 (HKD thousands) | Six Months Ended June 30, 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Net Interest Income | 470,710 | 507,088 | -7.2% | | Operating Income | 593,909 | 641,899 | -7.5% | | Credit Loss Expense | (164,303) | (79,851) | +105.8% | | (Loss)/Profit Before Tax | (27,605) | 143,382 | - | | (Loss)/Profit for the Period | (34,493) | 113,753 | - | | Basic (Loss)/Earnings per Share (HKD) | (0.031) | 0.104 | - | - Total comprehensive loss for the period was HKD 61.061 million, compared to a total comprehensive income of HKD 141.9 million in the prior period, primarily impacted by net loss and foreign exchange difference losses[73][52] Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets increased by 5.3% to HKD 43.13 billion, while total liabilities grew and total equity slightly decreased Consolidated Statement of Financial Position | Metric | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 43,132,864 | 40,954,692 | +5.3% | | Customer Loans and Receivables | 24,417,904 | 23,947,182 | +2.0% | | Total Liabilities | 34,515,501 | 32,276,268 | +6.9% | | Customer Deposits | 31,746,368 | 29,536,440 | +7.5% | | Total Equity | 8,617,363 | 8,678,424 | -0.7% | Consolidated Statement of Changes in Equity Total shareholders' equity decreased to HKD 8.617 billion as of June 30, 2024, primarily due to the net loss and other comprehensive loss incurred during the period - Total equity at the beginning of the period was HKD 8.678 billion, decreasing to HKD 8.617 billion at the end of the period due to losses and other comprehensive losses[57] - The Group maintains regulatory reserves to meet the prudential regulatory requirements of the Hong Kong Banking Ordinance, with these reserves appropriated from retained profits[78] Notes to Financial Statements Basis of Preparation and Accounting Policies The interim financial statements are prepared under HKAS 34, consistent with prior annual policies, with no significant impact from newly adopted revised standards - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and should be read in conjunction with the 2023 annual report[79][59] - Revisions to Hong Kong Accounting Standard 1 regarding liability classification were adopted this period, but after assessment, these revisions had no impact on the Group's liability classification[116][69][89] Segment Information The Group's operations are segmented into retail and commercial banking, wealth management, and other businesses, with most revenue and assets concentrated in Hong Kong By Operating Segment Retail and commercial banking generated most operating income but incurred a pre-tax loss, while wealth management services achieved a pre-tax profit - The Group's operating segments include: retail and commercial banking, wealth management services (including stock brokerage and securities management), and other businesses (including taxi trading/leasing and property investment)[15] Operating Segment Performance | Operating Segment | Operating Income (HKD thousands) | (Loss)/Profit Before Tax (HKD thousands) | | :--- | :--- | :--- | | Retail and Commercial Banking | 536,807 | (30,611) | | Wealth Management Services, etc. | 46,643 | 22,326 | | Other Businesses | 10,459 | (19,320) | | Total | 593,909 | (27,605) | Operating Segment Assets and Liabilities | Operating Segment | Segment Assets (June 30, 2024, HKD thousands) | Segment Liabilities (June 30, 2024, HKD thousands) | | :--- | :--- | :--- | | Retail and Commercial Banking | 42,113,392 | 34,208,146 | | Wealth Management Services, etc. | 430,593 | 245,091 | | Other Businesses | 501,035 | 6,906 | By Geographical Area The Group's operations are highly concentrated in Hong Kong, with the majority of external customer revenue and non-current assets derived from this region Segment Revenue by Region | Region | Segment Revenue from External Customers (HKD thousands) | | :--- | :--- | | Hong Kong | 542,586 | | Mainland China | 51,323 | Non-current Assets by Region | Region | Non-current Assets (June 30, 2024, HKD thousands) | | :--- | :--- | | Hong Kong | 4,246,447 | | Mainland China | 17,023 | Notes on Key Financial Items This section details key financial items, highlighting decreased net interest income, significantly increased credit loss expense, and no interim dividend declaration Interest Income and Expense Net interest income decreased in the first half of 2024 due to interest expense growing faster than interest income Interest Income and Expense Summary | Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Interest Income | 1,013,752 | 950,446 | | Interest Expense | (543,042) | (443,358) | | Net Interest Income | 470,710 | 507,088 | Net Fee and Commission Income Net fee and commission income decreased by 8.6% to HKD 106 million in H1 2024, mainly from wealth management and brokerage services Net Fee and Commission Income Summary | Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Fee and Commission Income | 106,788 | 116,911 | | Fee and Commission Expense | (916) | (1,013) | | Net Fee and Commission Income | 105,872 | 115,898 | Operating Expenses Total operating expenses slightly increased to HKD 433 million in H1 2024, primarily driven by a rise in staff costs Operating Expenses Summary | Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Staff Costs | 276,772 | 266,820 | | Other Operating Expenses | 156,072 | 158,416 | | Operating Expenses Before Fair Value Changes of Investment Properties | 432,844 | 425,236 | Credit Loss Expense Net credit loss expense surged by 105.8% to HKD 164 million in H1 2024, mainly due to increased Stage 3 provisions for customer loans - Net credit loss expense increased from HKD 79.851 million in the prior period to HKD 164.3 million this period[22][34] - Credit loss expense for customer loans was HKD 140 million, a major component of total expense, with Stage 3 (credit-impaired) provisions amounting to HKD 124 million[22] Taxation Despite a pre-tax loss, the Group incurred a tax expense of HKD 6.888 million due to taxable profits from Mainland China operations Taxation Summary | Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | (Loss)/Profit Before Tax | (27,605) | 143,382 | | Tax Expense | (6,888) | (29,629) | - Hong Kong operations recorded a pre-tax loss of HKD 56.84 million, while Mainland China operations recorded a pre-tax profit of HKD 29.24 million, resulting in a tax expense despite an overall loss[37] Dividends The Board resolved not to declare an interim dividend for H1 2024, unlike the prior period's HKD 0.03 per share dividend - The Board resolved not to declare a 2024 interim dividend[101][40] - The interim dividend declared for the same period in 2023 was HKD 0.03 per share, totaling approximately HKD 32.94 million[40] Earnings/(Loss) per Share Basic loss per share was HKD 0.031 for H1 2024, a decline from basic earnings per share of HKD 0.104 in the prior period - Basic loss per share was HKD 0.031, calculated based on a loss of HKD 34.493 million for the period and a weighted average of 1,097,917,618 ordinary shares[18][49] - As of the end of the reporting period, the Group had no ordinary shares outstanding with potential dilutive effects[19] Customer Loans and Receivables Total customer loans and receivables slightly increased to HKD 24.67 billion, but credit quality deteriorated with a rise in overdue loans, while impairment allowances decreased due to write-offs Customer Loans and Receivables Summary | Item | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Total Customer Loans and Receivables | 24,672,034 | 24,287,724 | | Credit-impaired Customer Loans and Receivables | 940,121 | 931,237 | | Total Impairment Allowances | (254,130) | (340,542) | - Total customer loans overdue by over three months amounted to HKD 830 million, representing 3.38% of total loans[154] - The change in total impairment allowances was primarily influenced by write-offs of HKD 294 million in loans during the period[168][96] Debt Securities Investments Total debt securities investments increased to HKD 7.99 billion, with over 90% holding an A3 or higher credit rating, indicating good credit quality Debt Securities Investments Summary | Item | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Total Debt Securities Investments | 7,991,993 | 7,639,528 | - The investment portfolio primarily consists of debt securities issued by banks and other financial institutions (HKD 4.52 billion) and central governments (HKD 2.78 billion)[171] - Over 90% of debt securities investments are rated A3 or higher by Moody's, with no impaired or overdue debt securities investments at period-end[200][148] Contingent Liabilities, Commitments and Derivatives Off-balance sheet risk exposure totaled HKD 2.45 billion, mainly from cancellable commitments and foreign exchange contracts, with HKD 20,000 in related expected credit loss provisions Off-Balance Sheet Risk Exposure | Item | Contract Amount (HKD thousands) | | :--- | :--- | | Direct Credit Substitutes | 27,805 | | Transaction-related Contingent Items | 18,590 | | Other Unconditionally Cancellable Commitments | 1,749,820 | | Foreign Exchange Contracts | 467,485 | - The corresponding expected credit loss for unaccepted off-balance sheet risk exposures was HKD 20,000[178] Management Discussion and Analysis Financial Review The Group reported a post-tax loss of HKD 34.5 million in H1 2024, a significant decline attributed to decreased net interest income and a surge in credit loss expense - The Group recorded a post-tax loss of HKD 34.5 million, a significant decrease of HKD 148.3 million compared to the profit in the prior period[128] - Net interest income decreased by 7.2% to HKD 470.7 million, primarily due to increased interest costs on time deposits[184] - Credit loss expense increased by 105.8% to HKD 164.3 million, primarily impacted by increased credit costs for hire purchase loans and unsecured personal loans[216] Business Review Retail and commercial banking, despite high revenue contribution, incurred a pre-tax loss due to increased credit losses, while wealth management saw profit growth despite revenue decline - Retail and commercial banking business operating income accounted for 90.4%, but recorded a pre-tax loss of HKD 30.6 million, primarily due to increased credit loss expense[191][221] - Operating income from wealth management services, stock brokerage, and securities management businesses decreased by 15% to HKD 46.6 million, but pre-tax profit increased by 47.7% to HKD 22.3 million due to reduced operating costs[192] - The main subsidiary, Public Bank (Hong Kong), recorded a loss of HKD 4.1 million (compared to a profit of HKD 65.3 million in the prior period), primarily due to increased credit loss expense for hire purchase loans caused by falling license values in the taxi and public light bus industries[188] Funding, Capital and Risk Management The Group maintains strong capital ratios well above regulatory requirements, though asset quality faces challenges with a slight increase in impaired customer loans - Public Bank (Hong Kong) Group's consolidated Common Equity Tier 1 capital ratio is 23.9%, and its total capital ratio is 24.7%, indicating a robust capital position[196] - The ratio of impaired customer loans to total customer loans slightly increased from 3.7% at the end of 2023 to 3.8% as of June 30, 2024, reflecting a challenging operating environment[240] - The Group's primary funding sources are internal capital growth, customer deposits, and financial institution deposits, with the bank loan-to-equity ratio maintained at a healthy 0.18 times[225][238] Outlook The Group anticipates an uncertain economic outlook for H2 2024, focusing on prudent risk management, customer base expansion, income diversification, and digital transformation - A slow economic recovery is expected in the second half of 2024, with a highly uncertain outlook and limited growth momentum for corporate loans[230] - The Group will continue to adopt prudent capital and liquidity risk management and seek loan growth with reasonable returns[244] - More resources will be allocated in the future to promote the digitalization of financial services and develop business through electronic channels to enhance efficiency and cost-effectiveness[244][231] Corporate Governance and Other Information Corporate Governance and Compliance The Board confirmed compliance with the Corporate Governance Code, the Audit Committee reviewed interim results, and no listed shares were purchased, sold, or redeemed - The Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2024[248] - The Board was not aware of any information indicating non-compliance with the code provisions of the Corporate Governance Code during the reporting period[247] - For the six months ended June 30, 2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed shares[246]