恒生银行(00011) - 2021 - 中期财报

Financial Performance - Net operating income before expected credit losses decreased from HKD 19,187 million in 2020 to HKD 17,326 million in 2021, a decline of 9.7%[5] - Profit attributable to shareholders decreased by 4% to HKD 8,767 million, with earnings per share at HKD 4.44[7] - The average return on ordinary shareholders' equity was 9.9%, down from 10.7% in the previous year[5] - Operating profit declined by 8% to HKD 10.223 billion, while it increased by 14% compared to the second half of 2020[13] - Pre-tax profit decreased by 3% to HKD 10.298 billion, with net profit attributable to shareholders down by 4% to HKD 8.767 billion[19] - The net profit for the six months ending June 30, 2021, was HKD 8,761 million, a decrease of 4.1% from HKD 9,135 million in the same period of 2020[150] - Total comprehensive income for the period was HKD 8,314 million, compared to HKD 7,203 million in the previous year, reflecting an increase of 15.4%[150] Asset and Liability Management - Total assets increased to HKD 1,800,215 million from HKD 1,759,787 million, reflecting a growth of 2.3%[6] - Total liabilities amounted to HKD 1,616,448 million, compared to HKD 1,576,592 million, reflecting an increase of 2.5%[151] - Customer loans (net of expected credit loss provisions) rose by HKD 69 billion, or 7%, to HKD 1,013.46 billion[44] - Financial investments decreased by HKD 55 billion, or 10%, to HKD 499 billion, reflecting a reallocation of surplus funds to support loan growth[42] - The total maximum credit risk exposure was 2,274,019 million as of June 30, 2021, compared to 2,222,648 million at the end of 2020, showing an increase of 2.3%[61] Income Sources - Non-interest income increased by 24% year-on-year, reflecting successful measures taken by the company[10] - Net service fee income rose by 17% to HKD 3.709 billion, driven by strong growth in retail investment funds and securities brokerage services[12] - Wealth management income increased by 44%, driven by higher revenues from securities brokerage and retail investment fund sales[20] - The company reported a net service fee income of HKD 3,175 million, with securities brokerage and related services contributing HKD 978 million[185] - Total operating income for the first half of 2021 was HKD 25.63 billion, with net interest income of HKD 11.88 billion and net service fee income of HKD 3.71 billion[181] Credit Risk and Provisions - Expected credit loss provisions decreased by HKD 1.421 billion, or 81%, to HKD 339 million, reflecting a stable overall expected credit loss balance[13] - Total impaired loans increased by HKD 12.87 billion, or 22%, to HKD 70.11 billion, with the impaired loan ratio rising to 0.69% from 0.32% a year earlier[29] - The expected credit loss provision for customer loans was 5,132 million as of June 30, 2021, slightly down from 5,180 million at the end of 2020[63] - The expected credit loss (ECL) estimation reflects a range of possible economic outcomes based on probability-weighted scenarios[71] - Significant uncertainty remains in estimating expected credit losses due to the economic impact of the COVID-19 pandemic[83] Dividends and Shareholder Returns - The company announced 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 of 2020[7] - The board declared a second interim dividend of HKD 1.10 per share, totaling HKD 21.03 billion, to be paid on September 2, 2021[177] - The company declared dividends totaling HKD 7,456 million, which includes HKD 5,353 million from the fourth interim dividend and HKD 2,103 million from the first interim dividend[153] Market and Economic Outlook - The economic outlook for Hong Kong anticipates a growth of approximately 7.3% for the full year 2021[8] - The central scenario predicts Hong Kong's GDP growth of 5.2% in 2021, with an average growth rate of 2.6% from Q3 2021 to Q2 2026[74] - The unemployment rate in Hong Kong is projected to average 6.2% in 2021, decreasing to 4.6% in 2022[75] - The company is closely monitoring geopolitical developments and managing credit portfolios through thematic reviews and internal stress tests[50] Digital Transformation and Innovation - The company continues to invest in digital services and technology to enhance customer banking solutions, particularly during the pandemic[7] - The company launched over 270 new digital features or services in the first half of the year to enhance customer experience[10] - The company introduced the "SimplyFund" investment service, which has received recognition for its user-friendly interface and low investment threshold[11] - The bank's digital cash management solutions, including QR code payment services, led to a 68% increase in average current and savings deposits, resulting in robust growth in interest income[40] Risk Management - The bank's risk management policies remain consistent, focusing on credit risk, liquidity risk, and market risk among others[45] - The company is focused on minimizing operational risks to ensure continuous service delivery to clients and stakeholders[140] - The bank established a dedicated climate risk team to support climate change strategies and manage related risks[46] Regulatory and Compliance - The company is preparing to implement the new Hong Kong Financial Reporting Standard No. 17 for insurance contracts, effective January 1, 2023, which may impact future profit recognition[161] - The company has adopted a business continuity plan to ensure critical client services remain unaffected during the pandemic[52]