Hang Seng Bank (0011) saw its net profit for the first half of 2025 slump by 30.5 percent year-on-year to HK$6.88 billion, as provisions and expected credit losses surged to HK$4.9 billion.
The increased provision was driven by the threat of trade tariffs, sustained high interest rates, and prolonged downturn in the commercial property market, said Diana Ferreira Cesar, executive director and chief executive of HSB.
She highlighted that it was cycle-driven provisions, while the pressure on the commercial property market would remain in the next half of the year.
The possibility of additional provisioning could not be excluded if the operating climate fails to improve in the future, she added.
Earnings per share came to HK$3.34, and the company declared an interim dividend of HK$2.60 per share, according to an exchange filing.
Revenue for the first six months increased nearly 3 percent to HK$20.9 billion, with operating profit down 25 percent to HK$8.55 billion.
The bank also announced the share buy-back of up to HK$3 billion, which is expected to be completed in six months.
The lender recorded net interest revenue of HK$14.3 billion during the first half, dropping 7.4 percent from a year before, driven by a 3 percent reduction in average gross customer loans and a lower market interest rate, as well as the decline in the Hong Kong interbank offered rate.
Non-performing loans also went up to 6.69 percent, due to ongoing credit pressure in the property market. But the lender said the bank's collaterals and provisions could cover over 100 percent of its non-performing loans.
HELEN ZHONG
