Dah Sing Banking sees net sink 14pc

Finance | Esther Yu 25 Aug 2016

Dah Sing Banking Group (2356) saw half-year profit slip 14 percent to HK$1.072 billion due to weaker fee and commission income.

Non-performing loan ratio increased to 1.03 percent from 0.75 percent last December. Chief executive Harold Wong Tsu-hing said the rise is mainly due to a worsening operating environment for the bank's small to medium sized corporate business in the mainland.

Factories and trading firms are among the sectors that caused a hike in provisions and credit cost, the bank said, and it is expected to turn around in the second half. An interim dividend of 10 HK cents was declared.

Net fee and commission income fell 24 percent to HK$399 million due to a weaker retail securities broking, as well as weaker wealth management product sales. Treasury product sales to corporate clients also dipped.

Net interest margin rose to 1.94 percent from 1.76 percent. Wong said loan growth in the second half will not see significant rise and he hopes NIM will remain flat.

Meanwhile, Dah Sing Financial (0440), majority owned by Dah Sing Bank, posted a 15 percent fall in net profit to HK$914 million. An interim dividend of 29 HK cents was declared.

With the sale of Dah Sing Life for HK$8 billion in June, Wong said a special dividend with be declared. "We are still in discussion about the payout amount," he said. The deal has made a profit of HK$4 billion and it is expected that all or part of it will go to the shareholders as dividend.

Wong said the firm will now focus on property and casualty insurance operations.

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