Dah Sing Financial Holdings (440) H1 2024 earnings summary

Executive summary

• Profit attributable to shareholders rose 21% year-over-year to HK$1,112.4 million for the six months ended 30 June 2024, driven by higher asset yields, strong personal banking and insurance performance, and robust wealth management and bancassurance fees.

• Net interest income increased 11.2% year-over-year to HK$2,594.6 million, supported by a stable net interest margin of 2.09% and prudent funding cost management.

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

• Interim dividend declared at HK$0.92 per share, payable on 26 September 2024, up from HK$0.36 in 1H2023.

• Credit impairment losses increased significantly, reflecting higher credit costs, especially in Hong Kong real estate and unsecured lending.

Financial highlights

• Net interest income: HK$2,594.6 million, up 11.2% year-over-year; net fee and commission income: HK$594.8 million, up 61.2%; net trading income: HK$99.9 million, up from HK$4.8 million.

• Operating profit before impairment rose 40.8% to HK$1,769.9 million.

• Profit attributable to shareholders: HK$1,112.4 million, up 20.7% year-over-year; basic EPS: HK$3.49 (2023: HK$2.92).

• Combined ratio for general insurance improved to 92.4% from 97.8% year-over-year.

• Credit impairment losses increased sharply to HK$543.9 million from HK$158.4 million.

Outlook and guidance

• The US Federal Reserve is expected to cut rates in the second half of 2024, potentially supporting external demand and investment.

• Loan demand remains soft, but potential rate cuts may gradually improve economic and credit conditions.

• Credit costs are expected to remain high for the rest of 2024; the group will continue to manage business conservatively.

• Prudent credit risk management and reduced exposure to Mainland China commercial real estate.

• Capital and liquidity positions expected to remain robust.