2019 was a challenging year for Hong Kong. Externally, ongoing uncertainties regarding the future of the international trade order and other geopolitical factors weighed on the global economy. On the domestic front, business sentiment and the economy were adversely affected by social unrest.
In this fluid operating environment, Hang Seng abided by its customer-centric principles in conducting business. We continued to deliver best-in-class services and experiences. Our investments in people and technology enabled us to achieve better user friendliness at all customer touchpoints across all channels, physical and digital, and deliver continuously improving economic efficiencies for customers and the Bank. Our enhanced capabilities underpinned the resilience of our financial performance.
CHAIRMAN'S
STATEMENT
2019 was a challenging year for Hong Kong. Externally, ongoing uncertainties regarding the future of the international trade order and other geopolitical factors weighed on the global economy. On the domestic front, business sentiment and the economy were adversely affected by social unrest.
In this fluid operating environment, Hang Seng abided by its customer-centric principles in conducting business. We continued to deliver best-in-class services and experiences. Our investments in people and technology enabled us to achieve better user friendliness at all customer touchpoints across all channels, physical and digital, and deliver continuously improving economic efficiencies for customers and the Bank. Our enhanced capabilities underpinned the resilience of our financial performance.
Attributable profit to shareholders increased by 3% to HK$24,840m. Earnings per share rose by 2% to HK$12.77.
Return on average ordinary shareholders’ equity was 15.2%, compared with 16.0% for 2018. Return on average total assets was 1.5%, compared with 1.6% for the previous year.
The Directors have declared a fourth interim dividend of HK$4.00 per share, bringing the total distribution for 2019 to HK$8.20 per share, compared with HK$7.50 per share in 2018.
Economic Outlook
The various external and domestic factors that affected the Hong Kong economy last year look set to continue to influence economic performance during 2020.
Hong Kong’s economic output shrank by 1.2% in 2019 after expanding by 2.9% in 2018. Businesses operating in retail, trade and other related sectors have been tested by the slowdown in the global economy as well as weaker consumer sentiment. An uptick in the unemployment rate in recent months is another indicator of the potential challenges facing the city’s economy. The overhang of continuing social unrest and public health concerns over the novel coronavirus outbreak that came to light in mainland China in early 2020 also have the potential to further increase downside risk. We forecast a mild contraction in Hong Kong’s GDP for 2020.
The Mainland economy expanded by 6.1% in 2019, down from a growth rate of 6.7% in the previous year, reflecting the softening of trade activity and a drop in exports demand, which held down growth in industrial production and manufacturing investment. These economic headwinds may become stronger in the months ahead, exacerbated by the impact of the novel coronavirus outbreak. The government’s ongoing initiatives to support growth through new fiscal and monetary policy measures may help moderate the adverse effects of these challenges. We expect to see a slowdown in full-year GDP growth for 2020 compared with 2019.
Our actions to build a more agile and resilient organisation have improved our ability to thrive in all types of market conditions and act quickly on new opportunities.
Backed by our well-established competitive strengths, our drive to stay ahead of the curve of the rapid expansion and diversification of the financial needs and preferences of customers will allow us to grow market share. This will underpin our long-term sustainability and ensure our ability to deliver value for shareholders.
Raymond Ch’ien
Chairman
18 February 2020
