HKMC’s Financial Results and Business Performance for the first half of 2011

The Hong Kong Mortgage Corporation Limited (HKMC) today (Monday) announced the highlights of its unaudited financial results and business performance for the first six months of 2011 (“1H 2011”). 

2011 Half-Year Financial Results Highlights 

• Unaudited profit after tax for 1H 2011 increased by 19% to HK$705 million (1H 2010: HK$592 million)
• Annualised return on equity (ROE) of 18% (1H 2010: 17.4%)
• The increases in profits and ROE were mainly attributable to the favourable interest rate environment, excellent loan quality, prudent prefunding strategy and strong commitment to risk management
• Capital-to-assets ratio of 12% as at 30 June 2011, well above the minimum of 5% stipulated by the Financial Secretary
• Cost-to-income ratio of 9.9% (1H 2010: 10.7%)
  
  

2011 Half-Year Business Highlights

Asset Purchase

• Asset purchase of HK$5 billion (1H 2010: HK$1.5 billion)
• Outstanding principal balance of the loan portfolio of HK$33.1 billion as at 30 June 2011

Mortgage Insurance Programme (MIP)

• New mortgage loans drawn down under the MIP of HK$17.1 billion (1H 2010: HK$19.0 billion)
• MIP usage rate of 12% (the amount of MIP loans drawn down as a percentage of the total new mortgage loans drawn down in the local property market) (1H 2010: 13%)
• 97% of the MIP loans drawn down were secured on properties in the secondary market, demonstrating the importance of the MIP to homebuyers in the secondary market

SME Financing Guarantee Scheme (SFGS)

• New facility drawdown amount under the SFGS of about HK$300 million, which represented about 100 loans being guaranteed during 1H 2011

Debt Issuance

• Issued HK$13.5 billion corporate debts in 1H 2011 - the most active corporate debt issuer in the Hong Kong dollar debt market (1H 2010: HK$4.2 billion)
• As at 30 June 2011, the outstanding debt securities and mortgage-backed securities stood at HK$36.3 billion and HK$1.4 billion respectively
• Excellent credit ratings of AAA (stable) from the Standard & Poor’s and Aa1 (positive) from the Moody’s, same as the ratings of the HKSAR Government 

Further details of the HKMC’s consolidated financial results and financial review for 1H 2011 are set out at the Annex.

Outlook for 2011

Notwithstanding the HKMC’s solid financial performance during the first half of 2011, there are considerable challenges in the second half of the year.  The HKMC’s financial results for the full year of 2011 will be subject to the uncertainties and imbalances of the global economy, the credit tightening measures on the Mainland and the potential impact on the local residential property and mortgage markets due to the prudential measures by the Government and the Hong Kong Monetary Authority.  Nevertheless, the HKMC will continue to perform its role to help banks to meet their needs for liquidity, capital and prudent balance sheet management. 

The Hong Kong Mortgage Corporation Limited
19 September 2011