The Bank of East Asia said Thursday it plans to buy back HK$500 million shares in the market depending on conditions in the financial markets. The buyback would help improve return on equity.

In April this year, BEA completed an off-market share buyback amounting to HK$2.9 billion at HK$11.78 per share.

For the six months ended June 30, the BEA Group reported that profit fell by 44 percent to HK$1.51 billion, from HK$2.69 billion the year before, largely because impairment losses related to the Chinese mainland property sector increased by HK$949 million to HK$1.20 billion. BEA said impairment losses in Hong Kong and the Chinese mainland increased significantly. Some sizeable accounts were downgraded and the bank made provisions to cover the exposure.

BEA China, which operates in 38 cities, reported a 59.6 percent year-on-year increase in non-performing loans to HK$1.56 billion, as a number of real estate accounts were downgraded

BEA China, which operates in 38 cities, reported a 59.6 percent year-on-year increase in non-performing loans to HK$1.56 billion, as a number of real estate accounts were downgraded. It reported impairment losses soared by 211.3 percent year-on-year to HK$990 million. The impaired loan ratio for Chinese mainland operations grew from 1.54 percent to 2.12 percent. 

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In Hong Kong, its loans for property development was HK$35.22 billion and lending for property investment was HK$49.8 billion.

The group’s impairment losses on financial instruments swelled from HK$581 million in the first half of 2021 to HK$2.13 billion in the first half of 2022.

The group’s impaired loan ratio increased from 1.09 percent at the end of December 2021 to 1.58 percent at the end of June 2022. The impaired loan ratio for Hong Kong operations increased from 1.09 percent to 1.76 percent.

The bank declared an interim dividend of 16 HK cents per share.

The basic earnings per share were 39 HK cents in the first half, compared with 78 HK cents the year before.

Annualized return on average assets fell to 0.2 percent, while the annualized return on average equity dropped to 2.2 percent.

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The group’s net interest income was up by HK$307 million, or 5.6 percent, to HK$5.83 billion, with a 2.4 percent increase in average interest bearing assets. Its net interest margin widened from 1.38 percent to 1.42 percent due to global monetary policy tightening.

Net fee and commission income fell by 6.5 percent to HK$1.44 billion, the BEA reported.

Overall, total operating income fell by 3.5 percent to HK$8.11 billion.