DAH SING(00440)2023-09-18 08:40Financial Performance - For the six months ended June 30, 2023, the net interest income increased by 15.0% to HK$2,332,512, compared to HK$2,027,699 in 2022[5]. - The profit for the period rose by 7.4% to HK$1,206,845, compared to HK$1,124,154 in the same period of 2022[8]. - Basic earnings per share increased to HK$2.89 from HK$2.64, reflecting a growth in profitability[5]. - Total operating income for the period was HK$2,833,003, a 3.2% increase from HK$2,745,174 in 2022[5]. - Operating profit before impairment losses was HK$1,256,887, a slight decrease of 2.2% from HK$1,285,009 in the previous year[5]. - Total comprehensive income for the period, net of tax, was HK$1,457,633, compared to a loss of HK$555,802 in the previous year[8]. - The company reported a profit for the period of HKD 921.86 million, compared to HKD 24.54 billion in retained earnings, indicating a strong performance[12]. Income and Expenses - Net fee and commission income decreased by 22.4% to HK$368,967, down from HK$475,194 in the previous year[5]. - The operating expenses increased by 7.9% to HK$1,576,116, compared to HK$1,460,165 in the previous year[5]. - Interest income for the six months ended June 30, 2023, was HK$5,344,223, compared to HK$2,702,568 in 2022, representing an increase of 97.5%[33]. - Interest expense for the six months ended June 30, 2023, was HK$3,011,711, up from HK$674,869 in 2022, indicating a significant rise[33]. - Net fee and commission income for the six months ended June 30, 2023, was HK$472,779, compared to HK$564,056 in 2022, showing a decrease of 16.2%[35]. - The insurance service result after net insurance finance expense for the six months ended June 30, 2023, was HK$43,612, down from HK$54,932 in 2022[38]. Assets and Liabilities - Total assets decreased slightly to HKD 258.80 billion as of June 30, 2023, from HKD 259.16 billion at the end of 2022, representing a decline of 0.14%[10]. - Total liabilities decreased to HKD 220.51 billion from HKD 221.94 billion, a reduction of 0.65%[10]. - Cash and balances with banks decreased to HKD 16.94 billion, down from HKD 18.69 billion, a reduction of 9.36%[10]. - Customer deposits increased to HKD 201.36 billion, up from HKD 198.57 billion, reflecting a growth of 1.91%[10]. - Total equity attributable to the company's shareholders increased to HKD 38.30 billion from HKD 37.21 billion, marking a growth of 2.93%[10]. Cash Flow - Cash flows from operating activities showed a net cash outflow of HKD 1,622,156, compared to a net inflow of HKD 5,731,318 in the previous year[16]. - Net cash used in investing activities was HKD 38,598, a slight decrease from HKD 219,728 in the prior year[16]. - Net cash used in financing activities increased to HKD 601,917 from HKD 475,063 year-over-year[16]. - The total cash and cash equivalents at the end of the period decreased to HKD 20,261,149 from HKD 21,731,658 in the previous year[16]. Impairment and Provisions - Credit impairment losses significantly decreased by 48.2% to HK$158,386, down from HK$305,600 in 2022[5]. - New credit impairment losses were recorded at HK$198,180,000 in 2023, down from HK$335,696,000 in 2022, indicating a decrease of 41.0%[44]. - The Group recognized an additional impairment charge of HK$232,000,000 in the first half of 2023, reducing the value of the investment in Bank of Chongqing to HK$2,016,000,000[45]. - Stage 3 impairment allowances as of June 30, 2023, were HK$262,140, down from HK$632,380 as of December 31, 2022[70]. Regulatory and Compliance - The adoption of HKFRS 17, which requires a current measurement model for insurance contracts, is expected to impact the financial statements significantly going forward[22]. - The Group has applied a simplified premium allocation approach for qualifying short-duration insurance contracts, which may streamline reporting processes[24]. - The Group's regulatory reserve increased to HK$617,258,000 as of June 30, 2023, up from HK$438,466,000 as of December 31, 2022[115]. Risk Management - The Group's credit risk primarily arises from its credit portfolios, which include corporate and retail lending, equipment financing, and wholesale lending to financial institutions[198]. - The Group's market risk is mainly associated with its trading book and investment securities, managed by the Treasury & Global Markets Division[198]. - Liquidity risk is defined as the inability to fund increases in assets or meet payment obligations without incurring unacceptable losses[198]. - Operational risk involves potential losses due to inadequate internal processes, people, systems, or external events[198]. - The Board of Directors is responsible for the overall management of all types of risk, including the approval of strategies and policies to manage credit and other risks at both transaction and portfolio levels[200]. Future Strategies - The company plans to expand its market presence, focusing on increasing its debt securities portfolio and enhancing customer loans[88]. - Future strategies include leveraging new technologies and products to drive growth and improve operational efficiency[88]. - The company plans to continue expanding its market presence in Mainland China and Macau, focusing on enhancing its banking and insurance services[160]. - Future strategies include potential mergers and acquisitions to strengthen the company's market position and diversify its service offerings[160].