Dah Sing Banking Group Limited announced that its net profit for 2018 rose 13.4% to HK$2,480 million with a cautious outlook for the next year.

 

The net interest profit grew by 7% to HK$4,164 million mainly due to volume growth, and the net fee and commission resulted up by 10.3% to HK$1,161 million mostly contributed by the increasing wealth management business. The total impairment charge of 2018 increased to HK$633 million, 22% lower than 2017 by HK$182 million. Key revenue lines of Dah Sing Bank all improved.

 

“Due to the write-down of our investment in Bank of Chongqing by HK$633 million in total in 2018 as a result of a lower Value in Use, our profit attribute to shareholders was up by 13.4% to HK$2,480 million,” the bank said in its corporate and business overview.

 

The return on assets of 1.4% and return of shareholder’s funds of 12.3% were slightly lower than prior year based on the net profit measured excluding impairment charge on Bank of Chongqing. Although the investment in Bank of Chongqing increased the impairment charge to reduce its carrying value, the operating performance still remains satisfactory. The share of its profit is HK$660 million, rising 5% year by year.

 

Concerning the uncertain impact of the trade war between China and US, such as higher tariffs and trade restrictions, Dah Sing Bank made cautious outlook for 2019 but expected to see at least modest loan growth. They prepared sufficient provisions to deal with the impairment charge and barring exceptional market developments. They also expected to expand the customer market to improve business with the developments of the Great Bay Areas. However, the current differential rates between US dollars and HK dollars may lay pressure on the assets and influence the net interest margin.