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Press Releases

The Hong Kong Mortgage Corporation Limited

The Hong Kong Mortgage Corporation Limited (HKMC) made the following announcement today (Friday 11 September 2009).

Half-Year Financial Results for 2009

The HKMC and its subsidiaries (the HKMC Group) are pleased to announce the half-year financial results for 2009. The unaudited profit after tax (PAT) for the six months ended 30 June 2009 (1H 2009) was HK$464 million, HK$131 million or 39% higher than the first six months in 2008 (1H 2008) mainly due to the significant loan purchase during the peak of global financial crisis in late 2008 and favourable interest rates conditions year to date. The annualised return on shareholders' equity was 15.6% (1H 2008: 11.6%). The capital-to-assets ratio remained strong at 9.6% as at 30 June 2009, prudently above the minimum 5% stipulated by the Financial Secretary. The cost-to-income ratio was 11.9% for first half of 2009 (1H 2008: 15.1%). The financial results of the HKMC Group are at Annex.

The Corporation has proven to be highly efficient and resilient, meeting its objectives of contributing to banking and financial stability, promoting home ownership and developing the debt and securitisation markets. The HKMC has maintained its strong commitment to risk management in pursuing its business diversification in Hong Kong and overseas, and has not purchased any sub-prime mortgages or invested in sub-prime related products.


Business Performance

The loan purchased in the first half of 2009 amounted to HK$5.2 billion (1H 2008: total purchase was HK$6.8 billion). Taking into account loan repayments and prepayments, the outstanding principal balance of the loan portfolio decreased by 7% from HK$50.8 billion at the end of 2008 to HK$47.2 billion as at 30 June 2009.

The Mortgage Insurance Programme (MIP) continued to enjoy good public acceptance, mortgage insurance coverage for newly origination mortgage loans was HK$12.7 billion (1H 2008: HK$11 billion) and the market penetration ratio as of June 2009 was around 32%. As 85% of the loans drawdown in first half of 2009 was secured on properties in the secondary market, this demonstrated again the importance of the MIP to help homebuyers in the secondary market.

In terms of debt issuance, the HKMC issued a total of HK$12.4 billion corporate debts in first half of 2009, and remained as the most active corporate debt issuer in the Hong Kong dollar debt market. The Corporation is committed to promote the bond market development through regular debt issuance and product innovation such as the issue of HK$1 billion 15-year callable zero coupon bonds, the largest and longest so far in the local bond market. As at 30 June 2009, the total amount of outstanding debt securities and MBS were HK$38.6 billion and HK$3 billion respectively.

In June 2009, to promote financial cooperation with the mainland China and as part of its overseas diversification, the HKMC has set up a subsidiary, Bauhinia HKMC Corporation Limited, with Shenzhen Financial Electronic Settlement Centre, an associated company of the People's Bank of China, Shenzhen Central Sub-branch, in offering mortgage guarantees products.

The HKMC's long-term foreign and local currency debt ratings are Aaa from Moody's and AA+ from Standard & Poor's. The Corporation will seek to further improve its product range and diversify its businesses both locally and overseas to maintain its viability and strengthen its ability to provide liquidity to local banks and meet mortgage insurance needs of the homebuyers.

The Hong Kong Mortgage Corporation Limited
11 September 2009

Last revision date: 1 August 2011
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