The Hong Kong Mortgage Corporation Limited ("HKMC") reported its 2024 annual results, highlighting a steady growth amidst market complexity. Key activities included loan asset purchases, debt issuances, and the continuation of mortgage insurance and SME financing programs. The HKMC's annuity and reverse mortgage businesses saw significant growth, with improved financial performance despite challenges in the property market. The report emphasized the company's strong financial health and commitment to developing the retirement planning market in Hong Kong.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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The Hong Kong Mortgage Corporation Limited ("HKMC") today (26 May) announced significant achievements in its annual results for 2024. This year, HKMC and its subsidiaries maintained their core missions and social objectives, contributing to Hong Kong's economic growth amidst evolving market conditions.
Under Asset Purchase and Securitisation, HKMC acquired HK$3.9 billion of loan assets (2023: HK$2.8 billion), purchased HK$5.1 billion of loans from the Special 100% Loan Guarantee under the SME Financing Guarantee Scheme ("SFGS") and HK$52 million from the Dedicated 100% Loan Guarantee Schemes ("DLGS"). Furthermore, HKMC completed the second issuance of infrastructure loan-backed securities worth US$423.3 million.
For Corporate Debt Issuance, HKMC issued HK$103.5 billion worth of bonds (2023: HK$98.3 billion), being the most active issuer in Hong Kong's domestic HKD corporate bond market. Notably, HKMC successfully completed the issuance of multi-tenor HKD benchmark bonds valued at HK$12 billion, and the third social bond issuance of approximately HK$23.8 billion in a triple-currency mix of HKD, Renminbi, and US dollars, the largest social bond issuance in the Asia Pacific.
In the Mortgage Insurance Programme ("MIP"), new loans amounting to HK$47.9 billion were drawn down, with 56% secured on secondary market properties. Since its launch in 1999, MIP has facilitated home purchases for approximately 235,000 families, with an aggregate loan drawdown of HK$869.8 billion.
Concerning the SME Financing Guarantee Scheme, 80% Guarantee Product saw over 27,400 applications approved with a total loan amount of approximately HK$118.4 billion. For the 90% Guarantee Product, over 14,700 applications were approved with a total loan amount of approximately HK$26.5 billion. The Special 100% Loan Guarantee had more than 67,000 applications approved with a total loan amount of approximately HK$143.7 billion, benefiting over 40,000 local SMEs and 400,000 related employees.
Under Dedicated 100% Loan Guarantee Schemes, the DLGS for Travel and Cross-boundary Passenger Transport Trade had 227 applications approved with a total loan amount of approximately HK$0.22 billion. The DLGS for Battery Electric Taxis had more than 100 applications approved with a total loan amount of approximately HK$36.3 million.
The Annuity Business saw 10,830 policies taken out (2023: 2,205 policies), with total premiums amounting to HK$4.4 billion (2023: HK$1.6 billion). Since 2018, this business has helped approximately 22,000 senior citizens convert their savings into lifelong stable income.
In the Reverse Mortgage Programme ("RMP"), 1,033 applications were approved (2023: 797 applications), with an average property value of HK$4.7 million and an average monthly payout of HK$11,300. Since its launch in 2011, RMP has approved a total of 7,924 applications.
The audited consolidated loss after tax for HKMC in 2024 was HK$418 million, up from HK$260 million in 2023. The increase was due to property price drops in the fast-growing reverse mortgage business, partially offset by increased net interest income and returns from the Exchange Fund. Adjusted for various factors, HKMC reported an adjusted profit after tax of HK$787 million, a 4.8% return on equity, and a 27.6% cost-to-income ratio.
At the end of 2024, the embedded value of the annuity business was about HK$12.4 billion, indicating a solid financial position. The capital ratio of HKMC remained robust at 19.9%, above the minimum requirement of 8%. Both HKMC Annuity Limited ("HKMCA") and HKMC Insurance Limited ("HKMCI") exhibited strong solvency ratios, signifying their financial health.
To navigate uncertain market conditions, HKMC adopted a prudent prefunding strategy and proactively communicated with local and international investment communities for debt issuance. This strategy ensures resilience in core operations and the ability to cope with future financial turbulence. The detailed 2024 Annual Report will be published on the HKMC’s website.
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