Revenues of Hang Seng Bank’s wealth management business was HK$3.53bn ($460m) in the first half this year, which compares with the HK$5.62bn in revenues during the same period last year, according to the bank’s 2020 interim report.
“Wealth management business income was down by 38%, due mainly to subdued levels of customer activity given the challenging external market conditions, the decrease in insurance business-related income due to lower investment returns and a decline in retail investment fund sales income,” Louisa Cheng, the bank’s vice chairman and CEO, said in the report.
Customers were delaying long-term investment decisions due to the uncertain market environment, the report added.
Revenue from the sale of retail investment funds was HK$656m in the first six months, down 19.8% compared with HK$810m during the same period last year, according to the report.
Wealth management business revenues (HK$m)
| H1 2020 | H1 2019 | % change | |
| Investment services income | |||
| retail investment funds | 650 | 810 | -19.8% |
| structured investment products | 218 | 256 | -14.8% |
| securities broking and related services | 960 | 701 | 36.9% |
| margin trading and others | 42 | 42 | 0.0% |
| sub-total investment services | 1,870 | 1,809 | 3.4% |
| Insurance income | |||
| Life insurance | 1,542 | 3,746 | -58.8% |
| General insurance and others | 125 | 137 | -8.8% |
| sub-total insurance income | 1,667 | 3,883 | -57.1% |
| TOTAL | 3,537 | 5,692 | -37.9% |
Source: Hang Seng Bank
Cheng noted, however, that the decrease in wealth management revenues was partly offset by the growth in income from securities broking-related services, which was up 36.9%.
“Total investment services income grew 3%. Driven partly by the launch of our standalone securities trading app, year-on-year securities revenue and turnover grew 40% and 58%, respectively,” Cheng said.
Separately, Cheng noted that the bank launched online and in-app financial tools, including “Savings Planner, “SmartInvest”, and “SimplyFund”.
“These tools are designed to make budgeting and investing simple, particularly for younger customers,” Cheng said, adding that the bank’s digital investment customer base grew 23% year-on-year.
Meanwhile, the wealth management business’s insurance segment was largely hit, with revenues down 57.1%, according to the report.
In response, the bank said that the bank continues to provide new savings and protection offerings, as well as annuity products that enable customers to benefit from the Hong Kong government’s tax concession measures. In addition, the bank supported customers with special measures to provide additional coverage for Covid-19.
Overall, the bank reported that profit attributable to shareholders was down 33% to HK$9.1bn compared with the first half of 2019 (HK$13.6bn), while earnings per share declined by 34% to HK$4.64.
“The uncertainties of the external environment have caused businesses and individuals to refrain from making investment decisions, a deterioration in credit conditions and considerable volatility in local and international markets,” Raymond Ch’ien, Hang Seng Bank’s chairman, said in the report.
“Inevitably, this has had an unfavourable performance on our financial performance for the first six months of this year.”
