2025-09-10 08:31Financial Highlights The Group achieved robust financial growth in the first half of 2025, with profit for the period increasing by 11.4% year-on-year, alongside increases in basic earnings per share and dividends, improved cost-to-income ratio, and enhanced returns on assets and equity, demonstrating strong operational efficiency and capital management Key Financial Indicators for H1 2025 (HKD million) | Indicator | June 30, 2025 | June 30, 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net operating income before impairment allowances | 40,022 | 35,336 | +13.3% | | Operating profit | 28,394 | 25,134 | +13.0% | | Profit for the period | 22,796 | 20,463 | +11.4% | | Profit attributable to equity holders of the Company | 22,152 | 20,040 | +10.5% | | Basic earnings per share (HKD) | 2.0952 | 1.8954 | +10.5% | | Dividend per share (HKD) | 0.580 | 0.570 | +1.8% | | Total assets | 4,399,822 | 4,194,408 (Dec 31, 2024) | +4.9% (compared to end of last year) | | Equity and reserves attributable to equity holders of the Company | 347,059 | 338,716 (Dec 31, 2024) | +2.5% (compared to end of last year) | Key Financial Ratios for H1 2025 (%) | Ratio | June 30, 2025 | June 30, 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Return on average total assets | 1.05 | 1.00 | +0.05 percentage points | | Return on average equity attributable to equity holders | 12.92 | 12.39 | +0.53 percentage points | | Cost-to-income ratio | 20.76 | 22.98 | -2.22 percentage points | | Loan-to-deposit ratio | 59.48 | 61.55 (Dec 31, 2024) | -2.07 percentage points (compared to end of last year) | | Total capital ratio | 25.69 | 22.00 (Dec 31, 2024) | +3.69 percentage points (compared to end of last year) | Management Discussion and Analysis This chapter elaborates on the Group's financial performance, operating conditions, risk management strategies, and a detailed review of each business segment for the first half of 2025, demonstrating robust profit growth, optimized cost management, sound asset quality, and ample liquidity amidst a complex global economic environment Summary of Financial Performance and Condition In the first half of 2025, the Group's profit for the period increased by 11.4% year-on-year to HKD 22.796 billion, with improved returns on average equity and total assets, while net interest margin was affected by lower market interest rates but partially mitigated by optimizing deposit structure, leading to a better cost-to-income ratio of 20.76%, stable asset quality with an impaired loan ratio of 1.02%, significantly enhanced capital ratios due to Basel III implementation, and ample liquidity Key Financial Results Summary for H1 2025 (HKD billion) | Indicator | H1 2025 | H2 2024 | H1 2024 | | :--- | :--- | :--- | :--- | | Profit for the period | 227.96 | 186.55 | 204.63 | | Return on average equity attributable to equity holders (%) | 12.92 | 10.94 | 12.39 | | Return on average total assets (%) | 1.05 | 0.91 | 1.00 | | Basic earnings per share (HKD) | 2.0952 | 1.7208 | 1.8954 | | Dividend per share (HKD) | 0.5800 | 1.4190 | 0.5700 | Key Financial Ratios for H1 2025 (%) | Ratio | H1 2025 | H2 2024 | H1 2024 | | :--- | :--- | :--- | :--- | | Net interest margin | 1.34 | 1.46 | 1.46 | | Adjusted net interest margin | 1.54 | 1.67 | 1.61 | | Cost-to-income ratio | 20.76 | 26.10 | 22.98 | | Impaired loan ratio | 1.02 | 1.05 | 1.06 | | Total capital ratio | 25.69 | 22.00 (Dec 31, 2024) | 22.17 (June 30, 2024) | | Tier 1 capital ratio | 23.69 | 20.02 (Dec 31, 2024) | 20.05 (June 30, 2024) | | Common Equity Tier 1 capital ratio | 23.69 | 20.02 (Dec 31, 2024) | 20.05 (June 30, 2024) | - Net interest margin was 1.34%, and adjusted net interest margin, including funding income or costs from foreign exchange swap contracts, was 1.54%, a year-on-year decrease of 7 basis points, primarily due to lower market interest rates compared to the same period last year, though partially mitigated by optimizing the Group's deposit structure11 - The cost-to-income ratio improved by 2.22 percentage points year-on-year to 20.76%, maintaining a relatively favorable level within the local banking industry12 - The total capital ratio was 25.69%, with both the Tier 1 capital ratio and Common Equity Tier 1 capital ratio at 23.69%, primarily influenced by the decrease in risk-weighted assets following the effective implementation of the Basel III final reform package16 - The average Liquidity Coverage Ratio for the first and second quarters of 2025 and the quarter-end Net Stable Funding Ratio both met regulatory requirements, indicating ample liquidity17 Operating Environment In the first half of 2025, global economic growth faced pressure with a shift towards looser monetary policies, while Mainland China's economy showed strong fundamentals and Hong Kong's economy grew steadily with good performance in merchandise trade and service exports, maintaining a stable financial system, active stock market, buoyant IPO market, and improved property market sentiment - Global trade uncertainty increased, global economic growth faced pressure, and monetary policies in most economies shifted towards easing19 - Mainland China's economy demonstrated strong fundamentals, with stable growth in production and foreign trade, key industries returning to expansion, and steady growth in investment and consumption demand19 - Hong Kong's economy grew steadily, with faster growth in merchandise trade and continued expansion in service exports, leading Moody's to upgrade Hong Kong's credit rating outlook to "stable"19 - Hong Kong's financial system remained stable, the HKD exchange rate was steady, total bank deposits continued to grow, the stock market was active with the Hang Seng Index rising 20.0% from end-2024, and IPO fundraising increased sevenfold year-on-year1920 - Hong Kong's property market sentiment improved, with the private residential property price index rising for three consecutive months, and government stamp duty adjustments positively impacting price stability and transaction volume20 Consolidated Financial Review In the first half of 2025, the Group's net operating income before impairment allowances increased by 13.3% year-on-year to HKD 40.022 billion, driven by growth in net interest income, net fee and commission income, and net trading gain, resulting in a 11.4% year-on-year increase in profit for the period to HKD 22.796 billion and a 10.5% increase in profit attributable to equity holders to HKD 22.152 billion Financial Highlights for H1 2025 (HKD million) | Indicator | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Net operating income before impairment allowances | 40,022 | 35,917 | 35,336 | | Operating expenses | (8,310) | (9