恒生银行(00011) - 2020 - 中期财报

Financial Performance - Net profit attributable to shareholders decreased by 33% to HKD 9.143 billion, with earnings per share down 34% to HKD 4.64[7]. - Operating income before expected credit loss changes decreased to HKD 19.187 billion from HKD 22.409 billion, a decline of approximately 14%[4]. - The average return on ordinary shareholders' equity was 10.7%, down from 17.0% in the previous year[7]. - Operating income decreased by 20% to HKD 17.427 billion[20]. - Operating profit fell by 28% to HKD 11.134 billion, with a 20% decline before expected credit loss adjustments[20]. - Total operating income decreased to HKD 27,259 million for the half-year ended June 30, 2020, down 19% from HKD 33,800 million in the same period of 2019[31]. - Profit attributable to shareholders decreased by 33% to HKD 9,143 million, down from HKD 13,656 million year-on-year[31]. - Non-interest income dropped by 33% to HKD 4.395 billion, with net service fee income down by 9%[22]. - Wealth management income dropped by 38%, primarily due to weak customer trading activity[32]. - The company’s pre-tax profit from wealth management and personal banking decreased by 33% to HKD 55.57 billion[57]. Asset and Capital Management - Total assets increased to HKD 1,732.021 billion from HKD 1,676.991 billion, reflecting a growth of approximately 3.3%[4]. - The common equity tier 1 capital ratio was 16.3%, down from 16.9% at the end of 2019[26]. - Shareholders' equity decreased by HKD 3 billion, or 2%, to HKD 176 billion compared to the end of 2019[71]. - The liquidity coverage ratio was 193.8%, down from 205.9%[4]. - The average liquidity coverage ratio as of June 30, 2020, was 198.0%, compared to 181.6% as of March 31, 2020[166]. - The average stable funding ratio as of June 30, 2020, was 151.0%, up from 146.0% as of March 31, 2020[168]. Credit Risk and Provisions - Expected credit loss provisions increased to HKD 1.76 billion from HKD 0.51 billion year-on-year, reflecting the impact of the pandemic[22]. - The expected credit loss provision for customer loans at amortized cost was $4,551 million as of June 30, 2020, up from $3,513 million at the end of 2019, indicating a rise of about 29.5%[100]. - The total expected credit loss across all financial instruments was $5,044 million as of June 30, 2020, compared to $3,754 million at the end of 2019, indicating an increase of approximately 34.2%[100]. - The expected credit loss for corporate and commercial loans was $2,036 million, with a coverage ratio of 0.35%[108]. - The expected credit loss for personal loans was $1,391 million, with a coverage ratio of 0.41%[108]. Economic Outlook and Market Conditions - Economic outlook predicts a contraction of 4% to 7% for Hong Kong's economy in 2020 due to the impact of the COVID-19 pandemic[8]. - The global GDP is expected to contract by -3.9% in 2020, followed by a recovery to 4.8% in 2021, indicating a V-shaped recovery[115]. - Unemployment rates in major markets are projected to rise significantly in 2020, with an average rate of 4.6% in Hong Kong and 4.5% in mainland China[118]. - The average growth rate of local GDP in Hong Kong is projected to be -4.8% in 2020 and 4.2% in 2021, while mainland China is expected to grow by 1.4% in 2020 and 8.1% in 2021[118]. Operational Resilience and Technology Investment - The company continues to invest in technology and employee development to enhance customer service and operational resilience[6]. - Approximately 210 new digital innovation services and features were launched in the first half of the year, significantly exceeding the 150 launched in the entire year of 2019[16]. - The company plans to continue investing in technology, new markets, and new customer segments to support long-term growth[31]. - The bank has implemented a business continuity plan, maintaining service levels despite increased remote work arrangements, with no significant impact on third-party service providers[84]. Customer Support and Relief Measures - The company provided temporary relief measures for customers affected by the COVID-19 pandemic, assisting clients in Hong Kong, China, and Macau[156]. - The group implemented various relief measures for personal customers affected by the COVID-19 pandemic, including a six-month principal repayment deferral for mortgage loans[161]. - The customer relief program for wholesale loans included 1.6 thousand customers, with a total loan withdrawal amount of HKD 78,777 million, accounting for 12.9% of total wholesale loans of HKD 611,456 million[157]. Risk Management and Compliance - The bank is actively managing risks related to the COVID-19 pandemic and its impact on customers and operations[74]. - The bank continues to closely monitor the evolving situation, particularly in light of geopolitical tensions and their effects on the business environment in Hong Kong[86]. - The company has developed a global method to incorporate forward economic guidance into expected credit loss calculations, affecting both probability of default (PD) and loss given default (LGD) estimates[128]. - The company’s credit risk management includes a breakdown of loans into three stages, with 755,265 million in Stage 1, 199,706 million in Stage 2, and 3,029 million in Stage 3[151].