HKMC’s Financial Results and Business Performance For the First Half of 2012

The Hong Kong Mortgage Corporation Limited (HKMC) today (Thursday) announced the highlights of its unaudited consolidated financial results and business performance for the first six months of 2012 (“1H 2012”).

2012 Half-Year Financial Results Highlights

• Unaudited consolidated profit after tax for 1H 2012 was HK$521 million (1H 2011: HK$705 million)
• Annualised return on equity was 11.8% (1H 2011: 18%)
• Cost-to-income ratio was 15.3% (1H 2011: 9.9%)
• Capital adequacy ratio was 19.1% as at 30 June 2012, well above the minimum of 8% stipulated by the Financial Secretary

2012 Half-Year Business Performance Highlights

Asset Purchase

• Purchased  HK$0.5 billion assets (1H 2011: HK$5 billion)
• Outstanding principal balance of the loan portfolio was HK$29.5 billion as at 30 June 2012

Debt Issuance

• Issued HK$15.3 billion corporate debts (1H 2011: HK$13.5 billion)
• Excellent credit ratings of AAA (stable) from Standard & Poor’s and Aa1 (positive) from Moody’s, same as the ratings of the HKSAR Government

Mortgage Insurance Programme (MIP)

• New mortgage loans drawn down under the MIP amounted to HK$10.5 billion (1H 2011: HK$17.1 billion)
• MIP usage rate was 13% (the amount of MIP loans drawn down as a percentage of the total new mortgage loans drawn down in the local market) (1H 2011: 12%)
• Around 98% of the MIP loans drawn down were secured on properties in the secondary market, providing substantial assistance to homebuyers in the secondary market

SME Financing Guarantee Scheme

• Launched the special concessionary measures on 31 May 2012, with a total guarantee commitment of HK$100 billion from the Government and a nine-month application period
• Approved 555 loans with guarantee cover of 80%, amounting to more than HK$3 billion in total, and benefitting nearly 470 companies and approximately 13,000 related employees 
• Approved 53 loans with guarantee cover of 50% to 70%, amounting to about HK$188 million in total

Reverse Mortgage Programme

• Approved 83 reverse mortgage loans, with an average monthly payout of HK$11,500 

Further details of the HKMC’s consolidated financial results and financial review for 1H 2012 are set out at Annex.

Review and Outlook

The HKMC has maintained robust operation and secured a positive return in the first half of 2012, notwithstanding the challenging external economic conditions.  The decrease of profit after tax from the record high in the first half of 2011 was mainly due to the extra revenue of HK$60 million from disposal of investments in 1H 2011 over 1H 2012, loan portfolio rundown with tightened net interest spread and reduced premium contributions from the mortgage insurance business in the first half of 2012.  It is expected that the rest of 2012 will continue to be volatile and full of uncertainties.  The HKMC is committed to upholding its prudent commercial principles to fulfil its policy missions amid the challenging environment. It will also strive to promote the Microfinance Scheme launched in late June and implement enhancements to the Reverse Mortgage Programme.  

The Hong Kong Mortgage Corporation Limited
20 September 2012