Bank of East Asia’s profits up 75.8% to HK$2.63b in H1

Higher interest rates pushed up profits, but non-interest income fell.

Bank of East Asia (BEA) reported a profit attributable to owners of the company of HK$2.63b in the first half of 2023, a 75.8% jump compared to the just HK$1.5b reported in 2022.

Basic earnings per share were HK$0.87 in H1, almost 50 cents higher than the hK$0.39 in the corresponding period in 2022.

Interest rates and the reopening of Mainland China’s borders pushed up profits, the group said in its latest financial report. This was offset by non-interest income recording a decline.

Net interest income rose 38% to HK$8.04b during the period, an over HK$2b rise from a year ago. Net interest margin widened to 2.03% from 1.42% on the back of rising rates.

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Net fee and commission income rose by 0.6% to HK$1.45b. Fees and commissions from BEA’s lending business and sales of third-party insurance policies rose 17.3% and 15.7%, respectively. This was offset by a drop in commissions from investment products and securities brokerage.

In total, non-interest income fell by 2.5% to HK$2.23b. 

“With weak market sentiment, customer investment activity remained slow, although momentum improved compared to the second half of 2022,” BEA said in its interim financial results released on 24 August.

Other operating income was impacted by its disposal of Blue Cross (Asia-Pacific) Insurance Limited in August 2022. 

Taken together, net trading and hedging results and net results from other financial instruments increased by 18.5% to HK$642m. 

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Overall, total operating income increased by 26.6% to HK$10,276 million.
 
Total operating expenses rose by HK$182m, or 4.1%, to almost HK$4.59b.