‘Deteriorating’ property market leads to 1% drop in Fubon Bank’s H1 net profit
Total impairment losses amounted to HK$279m.
Fubon Bank’s net profit dipped 1% year-on-year (YoY) to HK$442m in the first six months of 2024 compared to the same period in 2023 due to a rise in impairment losses.
Total impairment losses amounted to HK$279m as the local property market deteriorated, the Hong Kong-based bank said in a press release.
“Whilst most of the non-performing loans were secured by collaterals, the deterioration in the local property market resulted in a decline in collateral value, loan impairment losses increased accordingly,” Fubon Bank said.
Operating profit before other gains and losses was HK$805m for H1, a 43% YoY rise, thanks to higher net interest income, and net fee and commission income, the Hong Kong-based bank said in a press release.
Net interest income rose by 28% to HK$1.2b on the back of an improved net interest margin (NIM) and an expansion of average interest earning assets.
Net interest margin rose 22 basis points to 1.79% in end-June, versus 1.57% previously.
Non-interest income rose 10% to HK$201m thanks to insurance services and credit-related income recording a growth of 38% and 35%, respectively. This was partially offset by a decline in dividend income from unlisted equity securities following the disposal of its investment in China UnionPay Co Ltd.
Operating expenses rose 7% to HK$601m.
Total assets rose to HK$152.4b, 8% YoY higher than a year earlier.