Rising interest rates, adverse economic conditions and the continued disruptions caused by the pandemic took their toll on some of the bank's financial numbers.

Hang Seng Bank, the Hong Kong-based lender, yesterday said its wealth management and personal banking business reported a sharp drop in its net operating income to HK$7.080 billion ($901 million), from HK$9.669 billion a year before.

Total operating income stood at HK$18.585 billion, against HK$17.452 billion in the same half-year period for 2021, it said. 

Pre-tax profit stood at HK$2.521 billion, down from HK$5.577 billion, it said. 

Weakening financial markets caused a large amount of the slide in net operating income. Within the insurance products business, interest rate increases caused higher discount rates being used to determine the present value of profits on in-force insurance business. Hong Kong and other parts of North Asia have been hit by continued severe anti-COVID-19 policies.

Wealth management income fell year-on-year, reflecting unfavourable macro-economic and investment conditions, the bank said. 

“Nevertheless, we made good progress on a number of fronts. In insurance, we maintained our market position for annualised new premiums in the first quarter. Supported by a 241 per cent year-on-year increase in digital insurance policies sales, we achieved the leading market position for digital insurance,” the bank said.

“With investors becoming more cautious amid the market downturn, our investment services income dropped year-on-year. However, more activities were recorded in basic investment products such as bonds and FX-linked investments, with turnover growing by 40 per cent and 24 per cent respectively year-on-year,” it said. 

Across all the bank’s divisions, Hang Seng Bank said profit attributable to shareholders slumped by 46 per cent to HK$4.704 billion (HK$8.767 billion for the first half of 2021); down 9 per cent from a year before.