HANG SENG BANK(00011)2025-03-11 08:34Financial Performance - The net operating income before expected credit loss changes and other credit impairment provisions for 2024 was HKD 41,537 million, an increase of 1.75% from HKD 40,822 million in 2023[6]. - Operating profit for 2024 reached HKD 21,558 million, up 8.0% from HKD 19,946 million in 2023[6]. - Profit attributable to shareholders for 2024 was HKD 18,379 million, representing a 2.97% increase from HKD 17,848 million in 2023[6]. - The average return on ordinary shareholders' equity remained stable at 11.3% for both 2024 and 2023[6]. - The cost-to-income ratio for 2024 was 36.6%, slightly higher than 35.8% in 2023[6]. - Earnings per share for 2024 increased to HKD 9.33 from HKD 8.97 in 2023, reflecting a growth of 4.02%[6]. - Pre-tax profit rose by 5% year-on-year to HKD 21.014 billion, with earnings per share growing by 4% to HKD 9.33[32]. - The bank's total operating expenses increased to HKD 15.193 billion from HKD 14.624 billion year-on-year[53]. Asset and Liability Management - Total assets as of December 31, 2024, were HKD 1,795,196 million, an increase from HKD 1,692,094 million in 2023[6]. - The bank's total liabilities for 2024 were HKD 1,625,600 million, compared to HKD 1,523,900 million in 2023[8]. - Customer loans decreased to 860,406 million in 2023, a decline of 4.8%[185]. - Financial investments increased significantly to 401,732 million in 2023, an increase of 33.6%[185]. - Customer deposits grew by HKD 86 billion, or 7%, to HKD 1,267 billion, with the loan-to-deposit ratio decreasing to 64.7% from 72.9%[101][102]. Income Sources - Non-interest income increased by 26% year-on-year, reaching HKD 10.753 billion, improving its share of total operating income from 21% in 2023 to 26% in 2024[30]. - Net interest income decreased by 5% due to weak market loan demand, with a net interest margin maintained at a healthy level of 2.20%[23]. - Life insurance-related income increased by 17% to HKD 31.19 billion, with insurance service income rising[31]. - Non-interest income in the global capital markets business grew by 33% to HKD 3.214 billion, with a 55% increase in net interest income[49]. Customer Growth and Engagement - The number of affluent customers grew by 15%, with new affluent customers increasing by 75% year-on-year[23]. - The number of new retail accounts from mainland customers increased significantly by 81% year-on-year[23]. - Active users of mobile wealth management and online banking increased by 24% and 6% year-on-year, respectively[45]. - The bank established 9 cross-border wealth management centers in major cities of the Greater Bay Area, with new account openings for mainland customers increasing by 81% year-on-year[80]. Risk Management - The bank's risk management framework is regularly reviewed by the board to ensure alignment with strategic objectives[106]. - The bank employs a three lines of defense model for risk management, with clear accountability and responsibilities defined[116]. - The bank's risk management approach includes proactive identification, assessment, monitoring, and reporting of risks[116]. - The company has identified geopolitical and macroeconomic risks as primary and emerging risks for 2024, particularly due to uncertainties surrounding the upcoming elections and subsequent government transitions in the U.S.[129]. Economic Outlook - The central scenario reflects lower economic growth expectations across major markets, with Hong Kong's GDP projected to grow by 1.7% in 2025[193]. - The unemployment rate in Hong Kong is forecasted to rise to 3.3% in 2025 and 3.7% in 2026, with China's unemployment rate expected to be 5.2% and 5.4% for the same years[198]. - Housing prices in Hong Kong are anticipated to decline by 0.5% in 2025 and 5.9% in China, with a gradual recovery expected in subsequent years[198]. - The commercial real estate sector in major markets is facing challenges, particularly in office space demand, leading to valuation declines[196].