HKMC Reports Significant Decline in Profit for First Half of 2024
The Hong Kong Mortgage Corporation Limited (HKMC) has recently announced a notable drop in profit for the first half of 2024, citing adverse property price impacts on its reverse mortgage business as the primary reason.
The unaudited financial results released by HKMC for the first half of 2024 revealed a significant decline in profit, with the profit after tax amounting to HK$9 million. This represents a sharp decrease from the HK$1,175 million recorded in the same period in 2023. The adverse impact of the drop in property prices on the reverse mortgage business was a key factor contributing to this decline, in stark contrast to the favorable conditions of the previous year.
Financial Performance and Adjustments
Despite the reported loss, when excluding certain variables like HKMC Annuity Limited results and property price changes, the adjusted profit after tax for the period was HK$468 million. This resulted in an annualized return on equity of 6.2% and a cost-to-income ratio of 22.4%, showing improvement compared to the previous year’s figures.
The annuity business’s embedded value stood at approximately HK$14 billion as of June 30, 2024, indicating a strong financial position. Additionally, the Capital Adequacy Ratio (CAR) of HKMC was a robust 20.7%, exceeding regulatory requirements set by the Financial Secretary.
Business Activities and Market Engagement
During the first half of 2024, HKMC acquired HK$2.1 billion in loan assets and purchased HK$4.6 billion in loans under the SME Financing Guarantee Scheme. The institution also emerged as the most active issuer in the Hong Kong dollar corporate bond market, displaying strong credit ratings from S&P Global Ratings and Moody’s.
Mortgage and Loan Guarantee Programs
HKMC’s Mortgage Insurance Programme and SME Financing Guarantee Scheme witnessed significant activity, with new loans and applications approved. The Dedicated 100% Loan Guarantee Schemes and Reverse Mortgage Programme also demonstrated increased engagement.
Despite market uncertainties, HKMC has showcased resilience in its core operations, supported by prudent strategies and transparent communication. For a more detailed analysis, the full financial report is available on the Hong Kong Monetary Authority website.
As a leading platform for investors interested in crypto, blockchain, and financial markets, Extreme Investor Network is committed to providing cutting-edge insights and analysis on the latest industry developments. In this exclusive blog post, we delve into the recent announcement by the Hong Kong Mortgage Corporation Limited (HKMC) regarding a significant drop in profit for the first half of 2024.
The unaudited financial results released by HKMC paint a concerning picture, with the institution recording a sharp decline in profit, attributing it to adverse impacts on its reverse mortgage business due to plummeting property prices. This downturn stands in stark contrast to the favorable conditions experienced in the previous year, highlighting the challenges faced by HKMC in navigating the volatile market environment.
Despite the reported loss, HKMC’s financial performance reveals certain positive adjustments when excluding specific variables, showcasing an improved return on equity and cost-to-income ratio compared to the previous year. The institution’s strong financial position, as evidenced by the embedded value of its annuity business and Capital Adequacy Ratio, indicates resilience amid challenging market conditions.
In terms of business activities and market engagement, HKMC has been actively involved in acquiring loan assets, participating in the corporate bond market, and facilitating various guarantee programs to support borrowers. The Mortgage Insurance Programme, SME Financing Guarantee Scheme, and other initiatives have demonstrated significant traction, underlining HKMC’s commitment to providing financial support to businesses and individuals in need.
Despite the challenges posed by market uncertainties, HKMC remains steadfast in its core operations, driven by prudent strategies and transparent communication with stakeholders. Investors can access the full financial report on the Hong Kong Monetary Authority website for a comprehensive understanding of HKMC’s performance and prospects moving forward.
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