Electronic banking is becoming a significant profit generator for Hang Seng Bank (0011), a member of the bank's senior management said yesterday.
"Revenue generated from our personal e-banking alone is at HK$734 million in the first half, which is a 93 percent increase year-on-year," chief operating officer Dorothy Sit Kwan Yin-ping said.
Last month, the bank reported interim profit of HK$8.86 billion, up more that 43 percent, year-on-year. Sit said securities trading had been a major factor in the e-channel's growth.
Hang Seng Bank said its proportion of total trasactions in equity, initial stock offering subscriptions and fund transfers via the internet in the first half was 72 percent, 83 percent and 92 percent, respectively. This represented an increase of 5 percent, 8 percent and 5 percent, respectivele, over last year.
"The first priority for us is to continue to ensure the capacity of our platform. Maintaining reliability is not easy and requires investment," Sit said.
She said more customers are using the internet to apply for insurance and mortgages. The percentage of online transactions for all types of insurance recorded double digit increases over last year. For instance, personal insurance transactions through the internet jumped 56 percent year on year. Online applications for mortgages surged 249 percent year on year.
As of June, e-banking accounted for 51.3 percent of all transactions, which is a 10.9 percent increase over the same period last year.
And as the use of online services increased, branch transactions fell 2.9 percent over last year and accounted for just 7.2 percent of all exchanges.
"Despite the decrease in transactions [at branches] we have no plans to cut the number of branches or employees. We feel that the mix is good now," Sit said. "We will continue to divert simple transactions to our e-platform, while transactions that involve more complex interactions, like wealth management, will continue to be handled at branches."
In a survey last year, the Consumer Council noted that Hang Seng Bank had reduced the number of branches to 131 as of May 2006, from 147 in March 2001.
Overall, it found that banks had been raising fees and closing branches reducing retail outlets from 1,463 in 2001 to 1,209 in May last year, an overall reduction of 254 branches.