HKMC Reports HK$3 Billion H1 Pre-Tax Profit Amid Property Market Recovery
On.cc · 1 SOURCESabout 2 hours ago6 MIN
Summary
The Hong Kong Mortgage Corporation Limited (HKMC) has reported a substantial improvement in its financial performance for the first half of 2026. The company announced an unaudited consolidated after-tax profit of HK$3 billion for the period ending June 30, 2026, representing a dramatic increase from HK$53.3 million in the same period last year . This remarkable turnaround was primarily attributed to three key factors: a rebound in Hong Kong's property market that led to reversals of accounting losses in the reverse mortgage business, narrower accounting losses in the annuity business, and increased investment income from the Exchange Fund .
Key Points
- HKMC reported HK$3 billion in unaudited consolidated after-tax profit for H1 2026, compared to only HK$53.3 million in H1 2025, representing a more than 56-fold increase
- The property market rebound enabled reversals of previously recognised accounting losses in the reverse mortgage (安老按揭) business, significantly boosting profitability
- The annuity business saw narrowed accounting losses, partly due to fewer new policy issuances in H1 2026 compared to the prior year when optimization products drove increased losses
- Expanded investment scale and improved investment returns led to higher income from Exchange Fund deposits, contributing to overall profit growth
- After adjusting for the Hong Kong Annuity Company, mark-to-market effects on long-duration reverse mortgage portfolios, and insurance reserve adjustments, the adjusted after-tax profit reached HK$1.083 billion
- Annualised return on equity stood at 7.2% with a cost-to-income ratio of 11%, indicating efficient operations
- As of June 30, 2026, the annuity business embedded value reached approximately HK$30.1 billion, comprising equity of HK$27.7 billion and present value of future profits of HK$2.4 billion
Why It Matters
HKMC's strong H1 results demonstrate how the company's core retirement planning business remains resilient even as it navigates market-linked accounting volatilities inherent in long-duration financial products . The company's robust embedded value of HK$30.1 billion in its annuity operations provides a solid foundation for supporting Hong Kong's growing retirement planning market as the population ages .
HKMC's strong H1 results demonstrate how the company's core retirement planning business remains resilient even as it navigates market-linked accounting volatilities inherent in long-duration financial products . The company's robust embedded value of HK$30.1 billion in its annuity operations provides a solid foundation for supporting Hong Kong's growing retirement planning market as the population ages .