DAH SING(HK:00440)2021-04-22 09:05Financial Performance - Shareholders' funds increased to HK$28,386 million in 2020, up from HK$26,805 million in 2019, representing a growth of approximately 5.4%[21] - Total deposits reached HK$198,027 million in 2020, an increase from HK$188,866 million in 2019, reflecting a growth of about 4.1%[21] - Profit attributable to shareholders decreased to HK$1,158 million in 2020, down from HK$1,708 million in 2019, indicating a decline of approximately 32.2%[21] - Basic earnings per share fell to HK$3.62 in 2020, compared to HK$5.28 in 2019, representing a decrease of around 31.4%[21] - Total dividend distribution for 2020 was HK$300 million, a significant drop from HK$470 million in 2019, reflecting a reduction of approximately 36.2%[21] - Operating income for the banking business declined by 3% compared to 2019, with net interest income down 9% due to a lower net interest margin[54] - Non-interest income increased by 18%, driven by strong trading income, despite net fee and commission income growing only 3%[56] - Overall loan growth was less than 1%, with modest growth in commercial and retail banking, while trade finance was negatively impacted by a slowdown in international trade[55] - Operating profit before credit impairment losses was HK$2,551.4 million, down 2.6% from HK$2,620.5 million[1] - Operating income fell by 2.6% to HK$5,248.8 million, mainly due to lower net interest income[86] - The cost to income ratio increased to 54.0% from 52.9% in 2019[85] - Credit impairment charges rose by 82% year-on-year, reflecting a more difficult market environment amid the COVID-19 pandemic[88] - The total impairment charge for the year was HK$531 million, an increase of HK$244 million compared to 2019[89] Asset and Capital Management - Total assets grew to HK$254,961 million in 2020, up from HK$250,312 million in 2019, indicating an increase of approximately 1.5%[21] - Common Equity Tier 1 capital increased to HK$22,799 million in 2020 from HK$21,292 million in 2019, representing a growth of 7.1%[137] - The Tier 1 capital rose to HK$23,697 million in 2020, up from HK$22,191 million in 2019, reflecting an increase of 6.8%[137] - The total capital base after deductions reached HK$29,118 million in 2020, compared to HK$28,454 million in 2019, marking a growth of 2.3%[137] - The consolidated capital adequacy level at year-end was 17.6%, down from 17.9% the previous year[64] - As of December 31, 2020, Dah Sing Bank's consolidated Common Equity Tier 1 ratio was 13.8%, slightly up from 13.4% at the end of 2019[64] - The liquidity maintenance ratio increased to 47.8% in 2020, up from 46.4% in 2019, indicating enhanced liquidity management[137] Governance and Leadership - Mr. David Shou-Yeh Wong has been the Chairman since 1987 and has over 55 years of experience in banking and finance[31] - The company has a diverse board with members holding significant positions in various financial institutions and organizations[31][32][34][35] - The board includes members with extensive backgrounds in auditing, risk management, and regulatory compliance[35] - The company emphasizes strong governance through its Audit and Nomination and Remuneration Committees led by experienced directors[32][35] - The board's composition reflects a commitment to industry expertise and regulatory knowledge, enhancing the company's strategic direction[34][35] - The company has maintained a stable leadership structure with long-serving members contributing to its strategic vision[31][32] - The Board of Directors consists of 10 Directors and 1 Alternate Director as of December 31, 2020, ensuring a strong independent element for objective decision-making[150] - The Company has complied with all code provisions of the Corporate Governance Code, with exceptions noted in provisions A.4.1 and E.1.2[147] - The roles of Chairman and Chief Executive Officer are held by different individuals to ensure a balance of power and authority within the Company[152] - The Company emphasizes sound corporate governance practices to enhance investor confidence and safeguard stakeholder interests[148] Risk Management - The Group's banking business risk profile moderately deteriorated in 2020, with key asset quality metrics worsening compared to 2019, although overall credit quality remained manageable[131] - The Group implemented a set of Expected Credit Loss (ECL) models to assess impairment provisions, considering macroeconomic factors and portfolio characteristics[132] - The Group took measures to strengthen risk management and control processes in preparation for the revised Supervisory Policy Manual on liquidity risk that took effect in 2020[133] - Cybersecurity remains a continuous focus for the Group, with ongoing monitoring and enhancements to safeguard against system attacks and data breaches[134] - The Group engaged an external consultant to review and enhance its anti-money laundering (AML) system and controls, applying technology solutions to sustain effectiveness[135] Digital Transformation and Customer Engagement - Over 50% of retail banking customers in Hong Kong are using digital channels, indicating a shift towards online and mobile interactions[68] - The number of digital banking users increased by 12% compared to 2019, with total digital payment transactions rising by 62%[98] - The eCorp mobile banking app was introduced in August 2020 to enhance digital banking capabilities for corporate customers[114] - The bank continued to invest in digital solutions and upgraded its digital banking channels to enhance customer experience[106] - The launch of various credit card programs and an integrated collection service for merchants aimed to promote online spending and customer acquisition[94] Insurance Operations - Net premium income for the insurance business grew by 6%, resulting in a profit increase of HK$26 million or 35%[61] - The Group's insurance business reported significantly higher profit than in 2019, with strong performance from investments[53] - The net insurance premium and other income for the Group's insurance business increased to HK$526 million in 2020 from HK$496 million in 2019[122] - Operating expenses for the insurance business rose to HK$139 million in 2020, compared to HK$129 million in 2019, impacting overall profitability[122] - The overall investment returns of the general insurance business were bolstered by fair value gains and increased trading income[123] Employee and Corporate Culture - The total number of employees decreased slightly from 3,097 at the end of 2019 to 3,079 at the end of 2020, a reduction of 0.6%[143] - The Group implemented various training programs in 2020 to support staff development and adapt to the COVID-19 pandemic, including virtual training courses[143] - The Group expanded its medical insurance benefits in 2020 to include all employees and their dependents, promoting employee wellness initiatives[143] Strategic Initiatives - The relocation to the new Dah Sing Financial Centre is set to be completed by the end of March 2021, marking a key milestone for the Group[72] - The Group anticipates that market conditions will recover in the long term, allowing for a return to a growth-focused strategy[70] - The financial markets in Hong Kong have remained buoyant so far in 2021, with the economy in Mainland China starting to rebound[67]