The Hong Kong Mortgage Corporation Limited (HKMC) made the following announcement today (Thursday):
Financial Results for 2003
The audited consolidated financial results of the HKMC for 2003 show that profit after tax (PAT) was HK$379.1 million, HK$111.8 million or 41.8% higher than that of 2002. Return on shareholder's equity was 11.5% (2002: 9.0%). The capital-to-assets ratio (CAR) remained strong at 7.7% (2002: 9.0%), which is equivalent to the capital adequacy ratio of 16.6% when computed in accordance with the Banking Ordinance. The cost-to-income ratio improved sharply to 17.4% (2002: 23.1%). The operating results and financial highlights of the HKMC are attached at Annex A.
Total assets of the HKMC increased substantially by 27%, from HK$32.2 billion in 2002 to HK$40.9 billion in 2003. Despite the difficult business environment, the HKMC was successful in purchasing a total of HK$15 billion of mortgage loans in 2003 (2002: HK$14.4 billion). As a result, the outstanding principal balance of the retained mortgage portfolio increased by HK$6.3 billion or 22.4% to HK$34.6 billion as at 31 December 2003. The growth in assets was facilitated considerably by the acquisition of HK$10.5 billion loans under various Government housing loan schemes. The purchase also assisted the Government in its programme to dispose of assets to improve its fiscal position.
Through continuous product innovation and effective marketing, the Mortgage Insurance Programme (MIP) achieved significant growth in 2003 both in terms of business volume (21% from HK$6.2 billion in 2002 to HK$7.5 billion in 2003) and market penetration ratio (from 8.5% for 2002 to 13.5% for 2003). Secondary market transactions accounted for 48% of the applications received. This reflects that the Programme has helped to enhance the liquidity of secondary property transactions. The Corporation intends to take further steps to promote the MIP through enhancing servicing support and product knowledge of participating banks' front line staff.
The HKMC raised over HK$13.9 billion in 2003 through 54 issues of debt securities and a largest-ever HK$3 billion issue under the Bauhinia MBS Programme, thereby further consolidating its status as the most active corporate issuer in the Hong Kong dollar debt capital market. The Corporation was also one of the most active corporate issuers of retail bonds with a total issued amount of HK$1.3 billion in 2003. The HKMC has issued a total of around HK$7.5 billion retail bonds through Placing Banks since October 2001 and up to December 2003, accounting for 19% of the total issuance of retail bonds and certificates of deposit in the same period. As at 31 December 2003, the HKMC had 116 issues of debt securities with a total amount of over HK$36.6 billion outstanding.
Appointment of Board of Directors
The HKMC held its 7th Annual General Meeting (AGM) today. Eleven Directors were re-appointed by the Financial Secretary for another term, including Mr Ronald Arculli, Professor Andrew Chan, Mr Bernard Chan, Mr Chan Kam Lam, Mr Cliff Forster, Mr Ambrose Lau, Dr David Li, Mr Frederick Ma, Mr Sin Chung-kai, Mr Michael Suen and Mr David Sun. Two new Directors were appointed by the Financial Secretary to replace the Directors who had not offered themselves for re-appointment. The new Directors are Ms Anita Fung Yuen Mei and Mr Andy Hon Hak Keung. The composition of the new Board of Directors is at Annex B.
Ms Anita Fung is the Treasurer, Co-Head of Global Markets, Asia-Pacific of HSBC. Mr Andy Hon is the General Manager, Mortgages and Auto, Consumer Banking of Standard Chartered Bank.
"On behalf of the Board, I would like to thank the outgoing Directors for their invaluable advice and contribution, without which the HKMC would not have been able to achieve the results it had accomplished," said Mr Henry Tang, Chairman of the HKMC. "I also want to welcome the new Directors and look forward to their support to further develop the business of the Corporation," added Mr Tang.
Directors of the HKMC are appointed by the Financial Secretary on a personal basis. According to the Articles of Association of the Company, at each Annual General Meeting, all those Directors who are not Executive Directors shall retire but shall be eligible for re-appointment. Hence, the term of appointment of the current Directors (other than the Executive Directors) will run until the next Annual General Meeting to be held around March/April 2005.
The Hong Kong Mortgage Corporation Limited
1 April 2004