Hang Seng Bank: Navigating Uncertainties with Sustained Growth

Hang Seng Bank, a leading financial institution in Hong Kong, has delivered a strong business performance in 2024, demonstrating sustained growth momentum despite geopolitical and macroeconomic uncertainties. The bank's strategic focus on diversifying revenue streams and growing its target customer base has been instrumental in maintaining its financial stability and resilience.



Diversifying Revenue Streams and Growing Customer Base

Hang Seng Bank's 2024 financial results reflect the bank's commitment to diversifying its revenue streams and expanding its customer base. The bank reported a notable 26% increase in non-interest income, a result of deliberate efforts in these areas. This growth was driven by a 75% jump in new-to-bank affluent customers and a 15% increase in affluent customer numbers, both in Hong Kong and mainland China. Additionally, new account openings for retail mainland China customers surged 81% year-on-year, as integrated banking and wealth management services enhanced cross-boundary business.



Maintaining Steady Returns and Improving Earnings

Despite the challenging market conditions, Hang Seng Bank managed to maintain a steady return on shareholders' equity (ROE) of 11.3% and improve earnings per share (EPS) by 4%. This can be attributed to the bank's proactive risk management approach, which enabled it to de-risk its portfolio and keep growing. The bank's prudent and forward-looking risk management strategy provided a solid foundation for future growth.

Expansion into Mainland China

Hang Seng Bank's expansion into mainland China, particularly in retail banking and wealth management services, has significantly impacted its overall business performance and customer base. The growth in mainland China's retail banking and wealth management services has contributed to the bank's overall performance, with operating profit increasing by 8% year-on-year to HK$21,558m, and profit before tax increasing by more than HK$900m year-on-year.

Looking ahead, Hang Seng Bank must navigate the opportunities and challenges in the mainland China market. The growing middle class and government support provide opportunities for growth, while competition, regulatory environment, and economic uncertainties pose potential risks.

In conclusion, Hang Seng Bank's strategic focus on diversifying revenue streams and growing its target customer base, coupled with its proactive risk management approach, has enabled the bank to maintain a strong financial performance despite challenging market conditions. As the bank continues to expand its presence in mainland China, it must effectively manage the opportunities and challenges in this market to maintain its growth momentum.