恒生银行(00011) - 2021 - 年度财报

Financial Performance - Net operating income for 2021 was HKD 33,182 million, a decrease of 8% from HKD 36,068 million in 2020[5]. - Operating profit fell by 19% to HKD 16,231 million in 2021 from HKD 20,125 million in 2020[5]. - Profit attributable to shareholders decreased by 16% to HKD 13,960 million in 2021 compared to HKD 16,687 million in 2020[5]. - The average return on ordinary shareholders' equity was 7.7% in 2021, down from 9.6% in 2020[5]. - The cost-to-income ratio increased to 42.6% in 2021 from 36.6% in 2020[5]. - Earnings per share for 2021 were HKD 6.93, a decline of 17% from HKD 8.36 in 2020[5]. - The pre-tax profit decreased by 16% to HKD 16.385 billion, down from HKD 19.414 billion in 2020[60]. - Non-interest income grew by 2% year-on-year, amounting to HKD 9.36 billion, while net interest income decreased by 11% to HKD 23.82 billion due to adverse interest rate environment[33]. Asset and Equity Management - Total assets as of December 31, 2021, were HKD 1,820,185 million, a 3% increase from HKD 1,759,787 million in 2020[5]. - Shareholders' equity at year-end was HKD 184,332 million, slightly up from HKD 183,100 million in 2020[5]. - The common equity tier 1 capital ratio decreased to 15.9% in 2021 from 16.8% in 2020[5]. - The liquidity coverage ratio was 192.7% in 2021, down from 230.4% in 2020[5]. - Total customer deposits increased by HKD 35 billion, or 3%, totaling HKD 1,339 billion[39]. Strategic Initiatives and Market Focus - The bank aims to become the preferred banking and financial services partner in the Greater Bay Area, which has a population of over 72 million[18][19]. - The Greater Bay Area's GDP is projected to exceed USD 4.6 trillion by 2030, more than doubling from 2020[19]. - The bank is committed to becoming a leader in ESG initiatives and aims to achieve carbon neutrality by 2030[20]. - The bank is focusing on expanding sustainable financing and ESG investments to drive "new economy" development[19]. - The company plans to launch the first ESG exchange-traded fund based on the Hang Seng Index, responding to the growing demand for ESG investment products[27]. Digital Transformation and Innovation - The company continues to invest in digital technology, launching 415 digital innovation services and features for personal banking last year[28]. - The number of users for the award-winning mobile wealth management app increased by 12%, with login frequency growing by 26% and online transaction volume surging by 44%[28]. - The bank launched a remote account opening service with electronic signature functionality, allowing customers to open a "Virtual+" business account in as little as 3 working days[48]. - The bank successfully launched over 415 digital innovation services and features, enhancing customer-centric banking solutions[84]. Risk Management and Compliance - The company actively manages both financial and non-financial risks to maximize shareholder value and profitability[105]. - The risk management framework includes a three-line defense model to support effective risk management across the organization[108]. - The company conducts regular risk assessments to ensure the retention of key personnel and maintain operational safety[108]. - The group conducts extensive stress testing as part of its risk management and capital planning, assessing the impact of adverse events on financial stability[117]. - The company faces geopolitical and macroeconomic risks related to US-China tensions and the COVID-19 pandemic, which may disrupt operations and threaten employee safety[122]. Credit Risk and Expected Credit Losses - The expected credit loss provisions increased by HKD 690 million, or 3%, to HKD 2.807 billion[65]. - The ratio of expected credit losses to total customer loans was 0.69% as of December 31, 2021, up from 0.55% in 2020[69]. - The expected credit loss estimation remains highly uncertain despite the economic recovery in 2021, with management exercising caution in selecting economic scenarios and their weights[173]. - The management has identified significant uncertainty in estimating expected credit losses due to the ongoing economic impact of the COVID-19 pandemic[185]. Economic Outlook and Projections - The central scenario predicts a GDP growth rate of 3.1% for Hong Kong and 5.3% for mainland China in 2022, with a five-year average growth rate of 2.7% and 5.1% respectively from 2022 to 2026[178]. - The unemployment rate is expected to average 4.1% in Hong Kong and 3.8% in mainland China for 2022, with a five-year average of 3.6% and 3.8% respectively[178]. - The economic outlook is influenced by risks related to the pandemic's progression, vaccine rollout, and geopolitical tensions, particularly between the US and China[175]. - The management considers the probability of the central scenario for mainland China to be 80%, with a combined probability of 15% for the two downside scenarios[184].