By Ronnie Harui


Hang Seng Bank Ltd. reported a 27% drop in its 2022 net profit due to the increase in expected credit losses to reflect higher risks for borrowers in mainland China's commercial real estate sector.

Net profit for 2022 dropped to 10.165 billion Hong Kong dollars (US$1.30 billion) from HK$13.960 billion in 2021, the bank said in a Hong Kong stock exchange filing on Tuesday. Net interest income rose to HK$28.98 billion in 2022 from HK$23.82 billion in 2021. Net operating income before changes in expected credit losses and other credit impairment charges rose to HK$33.97 billion in 2022 from HK$33.18 billion in 2021.

"2022 has been a challenging year with market volatilities arising from new Covid outbreaks, international geopolitical tensions and global economic conditions," said Diana Cesar, Hang Seng Bank's executive director and chief executive, in a statement. "That said, the performance also reflects positive effects of the implementation of our long-term transformation strategy," she added.

As a bank with deep local roots and a long-term growth viewpoint, Hang Seng Bank is "well-positioned to capitalize on the opportunities" which China's Greater Bay Area offers, said Irene Lee, the bank's chairman.

Hang Seng Bank also reported a fourth interim dividend of HK$2.00 a share, which brings the total dividends for 2022 to HK$4.10 a share.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

02-20-23 2357ET