Skip to Content

Hang Seng Bank Ltd 00011

Rating as of

Morningstar’s Analysis

Currency in HKD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


Hang Seng Bank’s Second Half 2020 Result Below Expectation

Michael Wu, CAIA Senior Equity Analyst

Analyst Note

| Michael Wu, CAIA |

Hang Seng Bank’s second half and full year 2020 result was below our expectation. Profit before tax for the full year came in at HKD 19.4 billion, compared to our forecast of HKD 22.4 billion. While we expected net interest margin to compress in the second half, the decline was worse than expected. Net interest margin for the full year was 1.73%, implying a second half net interest margin of 1.5%. The decrease was in line with the decline in half-yearly average 1-month HIBOR, which declined to 0.30% in the second half from 1.42% in the first half. Positively, net fee income was steady against the first half with lower fees for insurance products offset by higher brokerage, given the strong trading turnover in the capital markets. Credit card fees also increased 9% half on half as economic activities picked up in the second half of 2020, prior to the fourth coronavirus wave in December. Full year expected credit loss was HKD 700 million lower than our forecast of HKD 2.7 billion, and also declined against the first half. The bank maintains a strong position with common equity Tier 1 at 16.8%. With the economic backdrop improving, second half dividend was higher at HKD 3.60 per share, taking full year dividend to HKD 5.50 per share, and ahead of our HKD 5.12 per share forecast.

Read Full Analysis

Company Profile

Business Description

Hang Seng Bank is a Hong Kong-based financial institution. Founded in 1933, the bank has a long history in Hong Kong and operates three main segments consisting retail banking and wealth management, commercial banking, and global banking and markets. The majority of the group's profit is generated in Hong Kong and mainland China. HSBC is a majority shareholder with a 65% stake in Hang Seng Bank. The former acquired a 50% stake in 1965, subsequently increasing its shareholding.

83 Des Voeux Road Central
Hong kong, Hong Kong
T +852 21981111
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 9,628

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.