Dah Sing Banking Group (2356) H2 2024 earnings summary

Executive summary

• Profit attributable to shareholders rose 11% year-over-year to HK$2,060 million, driven by higher net interest and non-interest income, despite increased credit impairment charges.

• Net interest margin expanded by 16 basis points to 2.17%, supported by higher interest rates and effective funding cost management.

• Wealth management, especially bancassurance, and trading income delivered robust growth, with net fee and commission income up 53% and net trading income up 57%.

• Loan growth was weak, with overall loan balances declining 3% year-over-year due to subdued demand in core markets.

• Final dividend of HK$0.39 per share declared, total dividend for the year up 10% to HK$927.8 million.

Financial highlights

• Net interest income increased 9.8% year-over-year to HK$5,288 million.

• Operating income rose 17.2% to HK$6,935 million.

• Operating profit before impairment losses grew 30.9% to HK$3,595 million.

• Credit impairment losses surged 145% to HK$1,791 million, mainly due to increased provisions for Mainland China property developers and Hong Kong commercial real estate.

• Profit for the year attributable to shareholders reached HK$2,060 million, up 10.8% year-over-year.

• Basic earnings per share increased to HK$1.47 from HK$1.32.

Outlook and guidance

• Anticipates ongoing challenges with elevated credit risks and sluggish loan growth in the near term.

• Maintains a cautious approach to credit risk and expects to leverage a diversified revenue base and strong capital and liquidity positions to navigate market uncertainties.

• Continues to support SMEs and pursue growth opportunities in the Greater Bay Area through cross-border banking platforms.