[Dah Sing Group Performance] Dah Sing Bank's earnings increased by 20% last year, with a final dividend of 49 cents. The scale of Hong Kong commercial real estate loans decreased by 4% to HKD 23.5 billion. Dah Sing Financial's final dividend is HKD 1.42.

Dah Sing Banking Group (02356)
announced its annual results, with a net profit of HKD 2.48 billion, up 20.2% year-on-year, basic earnings per share of HKD 1.76, and a final dividend of HKD 0.49, totaling HKD 0.80 for the year, an increase of 21%.

The parent company, Dah Sing Financial (00440)
reported a net profit of HKD 2.06 billion, up 22.9% year-on-year; basic earnings per share of HKD 6.45, with a final dividend of HKD 1.42, totaling HKD 2.58 for the year, an increase of 23%.

Dah Sing Banking Group’s Chief Financial Officer, Chow Chi Leung, stated that in the second half of last year, credit impairment provisions decreased by 15% year-on-year, and fell by 0.5% for the entire year. Credit impairment provisions primarily involved commercial real estate and unsecured consumer loans in Hong Kong. The operating environment in the Hong Kong commercial real estate market remained challenging last year, and the bank continued to reduce loans to related industries. As of the end of last year, the total scale of such loans was HKD 23.48 billion, a decrease of 4% year-on-year, accounting for less than 17% of total customer loans and advances, and 9% of Dah Sing Banking Group’s total assets. As of the end of last year, the bank’s impaired loans in Hong Kong commercial real estate amounted to HKD 2.02 billion, a decrease of 7% year-on-year.

Chow Chi Leung noted that the Hong Kong real estate market is gradually improving, and expects impairment to remain at a controllable level this year.

Additionally, management mentioned that the overall loan demand in Hong Kong remains weak this year, estimating that the bank’s overall loan growth will not see significant changes.

Dah Sing Banking Group stated in its earnings announcement that despite operating in an environment of generally declining interest rates, Dah Sing Bank’s net interest margin still expanded by 24 basis points to 2.41%, reflecting successful increases in current deposits and savings deposit balances, along with rigorous control over funding costs. Even though the local banking sector faces margin pressure following the Federal Reserve’s interest rate cuts, these measures still enable it to expand its net interest margin.

Driven by steady growth in interest and non-interest income, operating income increased by 14% to HKD 7.92 billion. Net interest income rose by 10% to HKD 5.83 billion, while non-interest income increased by 27% to HKD 2.09 billion.

Excluding non-cash impairment losses related to the acquisition of Macau Commercial Bank in 2005, operating profit after deducting credit impairment losses increased by 49% year-on-year, primarily driven by increased operating income, reflecting a significant increase in core business profitability. During the year, credit impairment losses recorded a slight decline, reflecting prudent asset quality management.

The group’s share of Chongqing Bank’s performance increased by 8% year-on-year to HKD 730 million, with no impairment losses recorded on investments in associates during the year.

Looking ahead to 2026, the group maintains a cautiously optimistic outlook. Benefiting from a relaxed monetary environment, continued growth in consumer demand, and policy measures to strengthen Hong Kong’s position as an international financial and wealth management center, the Hong Kong economy is expected to expand steadily. In the residential property market, further reductions in mortgage rates and sustained demand from local buyers and mainland Chinese investors are expected to support a continued recovery in property prices and transaction volumes. In the commercial real estate sector, the group holds a moderately positive outlook, anticipating an increase in demand.

As part of the group’s ongoing strategy, a new property in Wong Chuk Hang, which holds the naming rights, has recently been acquired to further strengthen the group’s network. This property acquisition will enhance operational efficiency by integrating several operational departments currently distributed across different locations, without affecting the overall operation of the Dah Sing Financial Center, while also providing necessary space for future business growth.

Recent events in the Middle East reflect that global risks still exist, and such risks are expected to remain high in the short term. The group will maintain a cautious and conservative approach, uphold a robust financial condition, and seek strategic opportunities to create sustainable returns for shareholders.

Source: Dah Sing Banking Group, Dah Sing Financial Announcement

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