Hang Seng Bank’s High Profitability Is Supported by Its Low-Cost Operation

Prudent management, conservative lending policy, and a strong record in risk management saw Hang Seng Bank emerge from previous financial crises unscathed. Unlike its global peers in the 2008 global financial crisis, the bank did not have to raise equity at steep discounts to repair its balance sheet. The bank's efficient, low cost operation is supported by a large deposit base, mainly derived from low-cost and sticky current and savings accounts. This has resulted in high profitability relative to peers, with return on common equity consistently above the bank's cost of equity.