Dah Sing Banking Group (2356) H1 2024 earnings summary

Executive summary

• Profit attributable to shareholders rose 26% year-over-year to HK$1.4 billion, driven by higher net interest and non-interest income, with a strong contribution from Bank of Chongqing and reduced impairment on this investment.

• Net interest income increased 12% year-over-year, supported by a higher net interest margin and mild loan growth.

• Non-interest income surged 77% year-over-year, mainly from higher fee, commission, and trading income.

• Wealth management and SME-related retail business showed strong growth.

• Credit impairment losses increased, driven by higher credit costs, especially for Hong Kong real estate and unsecured lending, though lower for Mainland China property exposures.

Financial highlights

• Net interest income: HK$2,595 million for 1H24, up 11.9% year-over-year.

• Non-interest income grew 77% year-over-year, with strong contributions from wealth management, bancassurance, and trading.

• Profit attributable to shareholders: HK$1,396.1 million, up 25.6% year-over-year.

• Interim dividend per share: HK$0.27 (up from HK$0.11 per share).

• Basic EPS: HK$0.99 (2023: HK$0.79).

Outlook and guidance

• Anticipates potential interest rate cuts in the second half of 2024, which may stimulate demand and improve credit conditions.

• Credit costs are expected to remain high for the rest of 2024.

• The Group will continue to manage business conservatively amid ongoing economic uncertainty.