HKMC reports HK$3b interim profit on property rebound, digital bond debut
Hong Kong Mortgage Corporation posted a HK$3 billion after-tax profit for the first half of 2026, driven by a property market recovery and narrowing annuity losses. It also completed the world's largest digital bond issuance at the time, totalling about HK$12 billion equivalent.
Hong Kong Mortgage Corporation (HKMC) on 26 October reported an unaudited consolidated after-tax profit of HK$3 billion for the first half of 2026, a sharp rise from HK$53.3 million in the same period last year. The state-owned entity attributed the increase mainly to a property market rebound that reversed accounting losses in its reverse mortgage business, narrower annuity losses and higher investment returns from Exchange Fund deposits.
Excluding the financial results of its wholly owned life insurance arm, property-price effects on reverse mortgages and consolidation adjustments, HKMC's adjusted after-tax profit stood at HK$1.083 billion, compared with HK$874 million a year earlier. The adjusted annualised return on equity reached 7.2 per cent, up from 6.2 per cent, while the cost-to-income ratio improved to 11.7 per cent from 14.2 per cent.
During the period, HKMC purchased HK$2.9 billion in loan assets, including HK$115 million under the 100 per cent Guarantee Loan Special Schemes. Its total loan portfolio outstanding fell to HK$74.1 billion as of 30 June from HK$78.6 billion at end-2025. The corporation issued HK$24.8 billion in corporate bonds, maintaining its role as one of the most active Hong Kong dollar bond issuers.
Notably, HKMC completed its first digital bond issuance totalling about HK$12 billion equivalent in Hong Kong dollars and renminbi, which it said was the world's largest digital bond offering at the time. The issuance made HKMC the first public institution in Hong Kong to issue digital bonds. Among the tranches, a five-year Hong Kong dollar digital bond set a new benchmark as the longest-tenor Hong Kong dollar digital bond ever issued.
HKMC's mortgage insurance programme saw HK$15.5 billion in new loans drawn, with 73 per cent used for secondary-market properties. Since its 1999 launch, the programme has helped about 245,000 families purchase homes, with total loans drawn reaching HK$920.5 billion. Under the SME Financing Guarantee Scheme, the 80 per cent and 90 per cent credit guarantee products have benefited about 26,300 local SMEs and over 422,000 employees since inception.
The corporation's annuity business wrote 3,528 policies with total premiums of about HK$2.8 billion, down from 11,531 policies and HK$5.4 billion in the first half of 2025. Since 2018, it has helped more than 36,000 seniors convert savings into stable lifelong income. The reverse mortgage programme approved 484 applications, with an average property value of HK$4.4 million and average monthly annuity of HK$10,000.
As of 30 June, HKMC's capital adequacy ratio stood at 18.6 per cent, well above the 8 per cent minimum set by the Financial Secretary. Its life and general insurance subsidiaries posted solvency ratios of about 2.4 times and 4.4 times respectively, far exceeding regulatory requirements. HKMC said it maintained prudent pre-financing strategies and strong liquidity to fulfil its policy role amid uncertain market conditions.