Hang Seng Bank reports pandemic-induced losses
Hang Seng Bank has reported losses in net operating income and operating profit for 2020 due to the pandemic — down 17 percent and 30 percent respectively.
Its net operating income before change in expected credit losses and other credit impairment charges was HK$36 billion (US$5.57 billion), dropping 17 percent from the previous year, due to lower net interest income and non-interest income.
Net interest income was 17 percent lower, reflecting narrowing margins as global interest rates fell in response to the effects of COVID-19.
Wealth management business income also fell, due mainly to subdued levels of customer activity, a decrease in insurance business-related income because of lower investment returns and a decline in retail investment fund sales income, although these declines were partly offset by growth in income from securities broking related services, according to the financial results.
Lower transaction volumes hit the bank’s bottom line. Its operating profit slumped by 30 percent to HK$20.1 billion during the reporting period.
Hang Seng Bank said it continued to enrich its range of tax and retirement planning products as well as health-care solutions to suit different customer needs in the “challenging operating environment” and achieved strong digital business growth, recording a 89 percent increase in terms of policy count and a 59 percent rise in new premiums.
“While the difficult operating conditions in 2020 made it a challenging year for financial performance, there is positive progress in terms of our long-term strategy,” said Raymond Ch’ien, chairman of the bank.
The bank said it took proactive steps to improve agility and resilience, so that customers enjoyed uninterrupted access to convenient, reliable and safe banking services amid the pandemic.
Leveraging advanced data analytics and digital platform, it also deepened customer relationships, strengthened engagement and grew its portfolio, it said.
Thanks to these efforts, the bank saw its deposit and loans balances grow by 7 percent and 3 percent, respectively, compared with the end of 2019.