HKMC’s Financial Results Highlights for the First Half of 2013

The Hong Kong Mortgage Corporation Limited (HKMC) today (Friday) announced the highlights of its unaudited consolidated financial results and business performance for the first six months of 2013 (“1H 2013”).

2013 Half-Year Financial Results Highlights

• Unaudited consolidated profit after tax for 1H 2013 was HK$508 million (1H 2012: HK$521 million)
• Annualised return on shareholders’ equity was 10.7% (1H 2012: 11.8%)
• Capital adequacy ratio was 23.1% as at 30 June 2013 (31 December 2012: 20.2%)
• Cost-to-income ratio was 16% (1H 2012: 15.3%)

2013 Half-Year Business Performance Highlights

Asset Purchase

• Purchased HK$82 million loan assets (1H 2012: HK$495 million)
• Outstanding principal balance of the loan portfolio was HK$21.9 billion as at 30 June 2013 (31 December 2012: HK$25.9 billion)

Debt Issuance

• Issued HK$12 billion corporate debts (1H 2012: HK$15.3 billion)
• Outstanding balance of debt securities issued was HK$33.3 billion as at 30 June 2013 (31 December 2012: HK$36.6 billion)
• Credit ratings of AAA (stable) from Standard & Poor’s and Aa1 (stable) 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$7 billion (1H 2012: HK$10.5  billion)
• MIP usage rate was 8% (the amount of MIP loans drawn down as a percentage of the total new mortgage loans drawn down in the local market) (1H 2012: 13%)
• 84% of the MIP loans drawn down (in terms of the loan amount) 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)

• Approved around 2,000 applications for the 80% guarantee products under the Special Concessionary Measures with a total loan amount of HK$7.5 billion in 1H 2013

Reverse Mortgage Programme

• Approved 96 applications, with an average property value of about HK$5.2 million and average monthly payout of HK$13,900

Microfinance Scheme

• Approved 30 loans with a total loan amount of HK$8.3 million

Further details of the HKMC’s consolidated financial results and financial review for 1H 2013 are set out at Annex.

Review and Outlook

The HKMC has maintained robust operation and secured a respectable return in the first half of 2013.  The global economic and financial outlook is unclear and it is possible that Hong Kong will continue to see high volatility in the financial markets in 2013.  Moreover, with market expectations about the US Fed’s exit from quantitative easing, it is expected that the housing and financial markets will continue to be volatile.  The HKMC will remain vigilant and stand ready to face any challenges ahead in performing its strategic policy roles and social objectives.

The Hong Kong Mortgage Corporation Limited
13 September 2013