Hang Seng Bank grows in a slowing economy

A growth in lending income propels profits of Hang Seng Bank Ltd by 14%.

Hang Seng Bank, which is controlled by HSBC Holdings Plc, saw its net income rise to HK$9.3 billion from HK$8.2 billion year-on-year.

Net interest income rose 8.5% to HK$8.3 billion while net fee income, derived mostly from credit cards, stockbroking services and mutual funds, fell 5% to HK$2.41 billion.

The bank’s net interest margin, a measure of lending profitability, increased to 1.85% from 1.75 % year-on-year and 1.8% in the second half of last year.

The bank seems to be benefiting from China’s policy of encouraging use of the renminbi outside the country. Transactions that increase demand for loans and investment products denominated in renminbi between China and Hong Kong are also helping the bank’s bottom line.

Hang Seng Bank started offering the world’s first renminbi-denominated gold exchanged-traded fund last February.