恒生银行(00011) - 2022 - 中期财报

Financial Performance - Net operating income before expected credit loss changes and other credit impairment charges decreased to HKD 14,944 million from HKD 17,326 million, a decline of approximately 13.3%[4] - Operating profit fell to HKD 5,533 million, down 45.8% from HKD 10,223 million in the previous year[4] - Profit attributable to shareholders decreased to HKD 4,704 million, a drop of 46.5% compared to HKD 8,767 million in 2021[4] - The average return on ordinary shareholders' equity was 5.2%, down from 9.9% in the previous year[5] - The cost-to-income ratio increased to 48.9%, compared to 39.0% in the previous year[5] - Net profit for the period was HKD 4,696 million, down from HKD 8,761 million, indicating a decline of 46% year-over-year[175] - Basic and diluted earnings per share decreased to HKD 2.31 from HKD 4.44, a decline of 48%[174] - Total operating income reached HKD 27,534 million, compared to HKD 25,633 million in the previous year, reflecting a 7% increase[174] Income and Revenue - The company's net interest income across all businesses recorded growth, despite a challenging environment due to the pandemic and geopolitical tensions[11] - Net interest income increased by HKD 4.73 billion, or 4%, to HKD 123.56 billion, driven by a 3% rise in average interest-earning assets[26] - Net interest income for the first half of 2022 was HKD 12,823 million, an increase from HKD 12,343 million in the same period of 2021, reflecting a growth of 3.9%[27] - Interest income for the six months ended June 30, 2022, was HKD 15,379 million, up 8.5% from HKD 14,174 million for the same period in 2021[192] - The company reported a significant increase in net premium income to HKD 12,008 million, compared to HKD 6,798 million, marking a 77% rise[174] - Total investment service revenue decreased by HKD 8.46 billion, or 36%, to HKD 15.35 billion, particularly in retail investment funds and securities brokerage services[37] Expenses and Losses - Operating expenses rose by 8% year-on-year to HKD 73.13 billion, with a cost-to-income ratio increasing to 48.9% due to reduced operating income and higher expenses[24] - Non-interest income decreased by 52%, leading to a 14% year-on-year decline in net operating income before expected credit loss provisions, amounting to HKD 149.44 billion[25] - The company experienced a net loss from financial instruments measured at fair value through profit or loss of HKD 1,070 million, compared to a gain of HKD 2,685 million in the previous year[174] - The total operating expenses increased to HKD 7,313 million from HKD 6,754 million, reflecting an 8% rise[174] Credit Loss Provisions - The company's expected credit loss provisions increased due to refinancing risks in the mainland commercial real estate sector, leading to a 46% drop in profit attributable to shareholders[13] - Expected credit loss provisions increased by HKD 17.57 billion to HKD 20.96 billion, reflecting heightened risks in the mainland commercial real estate market[20] - Expected credit loss changes and other credit impairment charges amounted to HKD 2,096 million, compared to HKD 339 million in the previous year[174] - The expected credit loss (ECL) coverage ratio for customer loans is 0.69% for Stage 1, 2.45% for Stage 2, and 28.55% for Stage 3, with a total ECL of 1,004,325[88] Customer and Market Trends - The number of target customers increased, particularly among young clients, newly affluent individuals, and corporate clients[11] - The company expanded its market share in new mortgage approvals and maintained a top-three position in Hong Kong[15] - The bank's new customer acquisition rose by 72% year-on-year, expanding the sustainable growth base of deposits[52] - The number of active users for the Hang Seng Olive health management app increased by 127% year-on-year[14] Technology and Innovation - The bank has invested in technology and established a flexible operational infrastructure to support local fintech development[8] - The company launched over 230 digital innovation services and features in the first half of 2022[49] - Digital policy sales grew by 241% compared to the same period last year, leading the market in digital insurance[48] Economic and Market Outlook - The company anticipates continued challenges in the operating environment for the second half of 2022, while rising market interest rates may positively impact net interest income[23] - The company has identified geopolitical and macroeconomic risks as primary emerging risks, particularly related to the COVID-19 pandemic and the instability in the Chinese real estate sector[65] - The consensus central scenario predicts a gradual slowdown in GDP growth for 2022 and 2023, following a strong recovery in 2021, with inflation expected to peak in 2022[92] Regulatory and Compliance - The company continues to monitor and manage risks, including credit risk, market risk, and regulatory compliance risk, amidst ongoing geopolitical tensions and economic uncertainties[61] - The bank is committed to a smooth transition away from LIBOR by 2023, with ongoing collaboration with clients and investors to mitigate associated risks[77] - The company is developing an action plan to enhance organizational structure and data capabilities in line with new climate risk regulations[73]