Dah Sing Financial Holdings (440) H1 2024 earnings summary

Executive summary

• Profit attributable to shareholders rose 21% year-over-year to HK$1.11 billion for the six months ended 30 June 2024, driven by higher asset yields and strong personal banking and insurance performance.

• Net interest income increased 11.2% year-over-year, supported by a higher net interest margin of 2.09% and prudent funding cost management.

• Non-interest income surged 77% year-over-year, mainly from fee and commission income and trading income.

• Operating expenses rose 3% year-over-year, reflecting increased staff costs to support bancassurance sales.

• Interim dividend declared at HK$0.92 per share, payable on 26 September 2024.

Financial highlights

• Net interest income: HK$2,594.6 million, up 11.2% year-over-year.

• Net fee and commission income: HK$594.8 million, up 61.2% year-over-year.

• Net trading income: HK$99.9 million, up from HK$4.8 million year-over-year.

• Operating profit before impairment: HK$1,769.9 million, up 40.8% year-over-year.

• Profit attributable to shareholders: HK$1,112.4 million, up 20.7% year-over-year.

• Basic earnings per share: HK$3.49 (2023: HK$2.92).

• Annualised return on average total assets: 1.1%; annualised return on average shareholders' funds: 8.5%.

• Combined ratio for general insurance improved to 92.4% from 97.8% year-over-year.

Outlook and guidance

• The US Federal Reserve is expected to cut rates in the second half of 2024, potentially supporting external demand and investment.

• Loan demand remains soft, but potential rate cuts and Mainland China’s stabilization measures may gradually improve economic and credit conditions.

• Credit costs are expected to remain high for the rest of 2024; the group will continue to manage business conservatively.