恒生银行(00011) - 2021 - 中期财报

Financial Performance - Net operating income before expected credit losses decreased to HKD 17,326 million, down 9% from HKD 19,187 million in 2020[3] - Profit attributable to shareholders fell by 4% to HKD 8,767 million, compared to HKD 9,143 million in the previous year[5] - Average return on ordinary shareholders' equity was 9.9%, down from 10.7% in 2020[3] - Operating profit decreased by 8% to HKD 10.223 billion, while it increased by 14% compared to the second half of 2020[16] - Total operating income for the first half of 2021 was HKD 25.63 billion, a decrease of 6% from HKD 27.26 billion in the first half of 2020[22] - The group's net profit attributable to shareholders for the first half of 2021 was HKD 8.77 billion, a decrease of 4% compared to the same period in 2020[21] - Total comprehensive income for the period amounted to HKD 8,320 million, compared to HKD 7,211 million in the previous year, reflecting an increase of 15.4%[141] Asset and Liability Management - Total assets increased to HKD 1,800,215 million, up from HKD 1,759,787 million at the end of 2020[4] - Total liabilities amounted to HKD 1,616,448 million, compared to HKD 1,576,592 million, reflecting an increase of 2.5%[142] - Customer loans (net of expected credit loss provisions) amounted to HKD 1,013.463 billion, an increase of HKD 69 billion or 7% compared to the end of 2020[40] - The loan-to-deposit ratio increased to 77.6% as of June 30, 2021, up from 72.4% at the end of 2020[41] - The bank's total assets as of June 30, 2021, were not explicitly stated but can be inferred from the capital and risk-weighted assets data provided[134][135] Income Sources - Non-interest income increased by 24% compared to the same period last year, reflecting the success of the company's measures[9] - The company's net interest income decreased by 4% year-on-year, amounting to HKD 8.767 billion, due to declining interest rates and market challenges[9] - Net service fee income rose by 17% to HKD 3.709 billion, driven by strong growth in retail investment funds and securities services[14] - Wealth management business revenue increased by 44%, primarily driven by higher income from securities brokerage and retail investment fund sales[21] - The net interest income for the first half of 2021 was HKD 11,883 million, a decrease of 19.3% from HKD 14,792 million in the same period of 2020[139] Credit Risk and Provisions - Expected credit loss provisions decreased by HKD 1.421 billion, or 81%, to HKD 339 million, indicating a stable overall expected credit loss balance[16] - The expected credit losses and other credit impairment charges for the first half of 2021 were HKD 339 million, significantly lower than HKD 1,760 million in the same period of 2020, indicating a decrease of 80.7%[139] - The total expected credit loss provision reflects a range of possible economic outcomes based on probability-weighted scenarios, indicating significant judgment and estimation involved in the measurement[69] - The expected credit loss (ECL) coverage ratio for Stage 1 loans is 0.16%, Stage 2 is 1.40%, and Stage 3 is 35.72%[67] Economic Outlook - The outlook for Hong Kong's economy is projected to grow by approximately 7.3% for the full year 2021[6] - The overall economic recovery is observed, but uncertainties remain due to new COVID-19 variants and geopolitical tensions[19] - The consensus central scenario predicts Hong Kong's GDP growth rate to be 5.2% in 2021, with an average growth rate of 2.6% from Q3 2021 to Q2 2026[73] - The average unemployment rate in Hong Kong is expected to be 6.2% in 2021, decreasing to 4.0% over the next five years[75] Dividends and Shareholder Returns - The bank declared an interim dividend of HKD 1.10 per share, totaling HKD 2.20 per share for the first half of 2021, compared to HKD 1.90 in the same period last year[5] - The total dividend declared for the first half of 2021 was HKD 4,206 million, an increase from HKD 3,632 million in the same period of 2020, marking a growth of 15.8%[167] Technology and Digital Services - The bank continues to invest in digital services and technology to enhance customer banking solutions, especially during the pandemic[5] - The number of active mobile banking service users increased to 75%, with login frequency for mobile banking applications rising by 45% compared to the previous year[10] - The company launched over 270 new digital features or service enhancements in the first six months of the year to improve customer experience[10] Risk Management - The company continues to enhance risk management practices, particularly in non-financial risk and financial crime monitoring[44] - The company has established a dedicated climate risk team to support climate change strategies and manage related risks[44] - The company actively supports customers during the ongoing challenges posed by the COVID-19 pandemic, adjusting operational processes as necessary[43] Market Conditions - The transition from LIBOR is ongoing, with the UK Financial Conduct Authority announcing that 24 of the 35 major LIBOR benchmarks will cease publication by the end of 2021[51] - The company is monitoring the market activity of alternative rates such as SOFR and TONA, which are developing slowly in the Asia-Pacific region[52] - The credit spread benchmarks for investment-grade and high-yield bonds approached pre-pandemic levels, supporting major stock markets reaching historical highs in June 2021[119]