Volkswagen Financial Holdings (00626) issued an announcement. The group predicts that for the year ending December 31, 2023, the company will...
Zhitong Finance App News, Dazhong Financial Holdings (00626) issued an announcement. The Group predicts that the profit attributable to the company owner for the year ended December 31, 2023 will drop sharply compared with the profit attributable to the company owner of HK$329 million for the year ended December 31, 2022.
The main reasons for predicting a possible decrease in profit attributable to company owners are: expected credit loss preparation to increase by about HK$195 million, mainly from a large commercial borrower and several rental and purchase loans in the face of a significant drop in commercial property prices and public vehicle license values; a decrease of about HK$140 million in net interest income due to rising capital costs; and a decrease in the fair value of investment properties by about HK$30 million in 2023.
The Group's capital and liquidity position remains strong and far above regulatory requirements to meet its business operations needs. The consolidated common equity Tier 1 capital ratio and total capital ratio of the Public Bank (Hong Kong) Group (including the Company's main subsidiaries, Public Bank (Hong Kong) Limited and Dazhong Finance Limited) were above the levels of 23.5% and 24.0%, respectively. The General Liquidity Maintenance Ratio and Core Capital Ratio of the Public Bank (Hong Kong) Group were above 55% and 130%, respectively.
The Group's financial position is on a sound footing, and the projected decline in profit for the year ended 31 December 2023 is mainly due to significant impairment losses due to the temporarily unfavorable economic environment in Hong Kong, China.
The Group carried out credit reviews on its large borrowers, and there was no objective evidence that the remaining large borrowers had impaired value. With the US Federal Reserve's latest interest rate forecast, the company also expects the Group's capital costs to gradually decline in 2024.