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Hang Seng Bank Ltd 00011

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Hang Seng Bank’s First-Half 2021 Results In Line on Lower Credit Costs

Michael Wu, CAIA Senior Equity Analyst

Analyst Note

| Michael Wu, CAIA |

Hang Seng Bank’s first-half results were within our expectations. Profit before tax of HKD 10.3 billion was down 3% year on year, but represented a 17% increase on a half-on-half basis. The bank’s profit benefited from lower expected credit loss charge of HKD 339 million, down from HKD 1.76 billion and HKD 978 million in the first and second half of fiscal 2020, respectively. Net interest income was down 19.7% year on year, due to an expected decline in net interest margin on a year-on-year basis. The decline was offset by a 16.8% year-on-year increase in net fee income, ahead of our previous estimates. As expected, net fee income growth was led by investment and credit card related fee income, which collectively increased 22.1% year on year. The bank declared a second-quarter dividend of HKD 1.10 per share, in line with the first-quarter dividend and our revised forecast in late July.

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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, and has subsequently increased its shareholding.

Contact
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 9,704