Hang Seng Bank (11) H2 2024 earnings summary

Executive summary

• Operating profit rose 8% year-over-year to HKD 21.6bn, with total operating income up 2% to HKD 41.5bn and profit attributable to shareholders up 3% to HKD 18.4bn; EPS grew 4% to HKD 9.33.

• Non-interest income surged 26% to HKD 10.8bn, offsetting a 5% decline in net interest income to HKD 30.8bn.

• Full-year dividend per share increased 5% to HKD 6.80, with a HKD 3bn share buyback program executed.

• Return on average ordinary shareholders' equity remained stable at 11.3%.

• Strong growth in affluent and mainland China customer segments, with new-to-bank affluent customers up 75% and new account openings for mainland customers up 81%.

Financial highlights

• Net operating income before credit losses grew 2% to HKD 41.5bn.

• Net fee income rose 8% to HKD 5.3bn, driven by a 39% increase in retail investment funds and 19% growth in securities broking income.

• Life insurance-related income increased 17% to HKD 3.1bn.

• Cost efficiency ratio rose to 36.6% from 35.8% last year.

• Gross advances decreased 5% to HKD 832bn, while customer deposits grew 7% to HKD 1,267bn.

Outlook and guidance

• Net interest income is sensitive to interest rate changes, with a 100bp parallel increase expected to boost NII by HKD 1.8bn in 2024.

• Prudent and forward-looking risk management will continue amid ongoing economic uncertainties.

• Continued investment in digital capabilities, community initiatives, and support for SMEs and green finance.

• Focus on sustainable growth and maintaining a healthy dividend policy.

• Management highlights strong capital and liquidity positions to support future growth.