Hang Seng Bank (11) H1 2024 earnings summary

Executive summary

• Profit before tax rose 3% year-over-year to HK$11,307m, with attributable profit up 1% to HK$9,893m and return on equity at 12.4%.

• Net interest income increased 2% to HK$15,483m, and non-interest income grew 4% year-over-year, driven by strong retail investment fund sales and insurance service results.

• Total capital returns to shareholders, including a HK$3bn share buy-back, reached HK$7.6bn, up 80% year-over-year.

• Second interim dividend of HK$1.20 per share declared, bringing total 1H 2024 dividends to HK$2.40 per share, up 9% year-over-year.

• Launched new ETFs, expanded cross-boundary wealth management, and introduced major SME and sustainability funds.

Financial highlights

• Net operating income before credit losses rose 2% year-over-year to HK$20,431m.

• Operating profit increased 5% to HK$11,396m year-over-year.

• Net interest margin widened to 2.29% in 1H24 from 2.09% in 1H23.

• Cost efficiency ratio increased to 36.8% from 35.9% year-over-year.

• Customer deposits rose 2% to HK$1,205bn; gross loan balances decreased 1% to HK$850bn.

Outlook and guidance

• Management remains optimistic about Hong Kong’s economic outlook and property market, expecting cash flow pressures in CRE to recede as interest rates fall.

• Growth momentum anticipated to continue in non-interest income.

• Forecast FY2024 ECL charges to be lower than FY23.

• Ongoing investment in digital innovation, green finance, and cross-boundary financial services.

• Focus remains on supporting customers and delivering long-term shareholder value.