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Operating Profit Reduced in Hong Kong
The unaudited interim results show that the operating profit after tax for the six months ending 30 June 2000 was 127 million HK dollars (16.3 million US dollars), a reduction of 26.4 million HK dollars (3.39 million US dollars), or 17.2 percent, compared with the same period last year, said the Hong Kong Mortgage Corporation Limited (HKMC) Thursday in Hong Kong.
The HKMC said the annualized return on averaged shareholder's equity was 10.4 percent (14.1 percent in 1999).
In the report of the half-year financial results, the HKMC said the total assets increased by 18.5 percent, from 10.6 billion HK dollars (1.36 billion US dollars) to 12.5 billion HK dollars (1.6 billion US dollars), compared with the corresponding period last year. There was a 1.5 million HK dollars (192,555 US dollars) write-back of provisions due to a reduction in the size of the mortgage portfolio and the maintenance of good asset quality. The capital-to-assets ratio remained strong at 11.4 percent.
Despite the difficult market environment, the HKMC has made good progress in mortgage purchase and the Mortgage Insurance Program (MIP) has gained wider acceptance by homebuyers as evidenced by the rising trend in the number of applications.
The Board of Directors of the HKMC approved today the framework for expanding the Mortgage Insurance Program (MIP) to cover mortgage loans with loan-to-value (LTV) ratio of up to 90 percent.
The MIP was launched by the HKMC in March 1999 with the aim of promoting home ownership in Hong Kong.
To prepare for the launch of the Program, the HKMC will conduct a series of briefing and training sessions for the Approved Sellers to help them familiarize with the new product. The HKMC plans to launch the new product before the end of August 2000.
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