First-half profit reaches HK$3 billion as accounting losses ease
Hong Kong Mortgage Corporation Limited (HKMC) reported unaudited first-half 2026 profit of HK$3.0 billion on October 26, up from HK$53.3 million a year earlier. Adjusted profit rose to HK$1,083 million from HK$874 million.
Property rebound lifts reported earnings
HKMC attributed the profit increase to a reversal of reverse mortgage accounting losses as property prices recovered, narrower annuity accounting losses and higher Exchange Fund investment income.
Larger placements and higher returns supported investment earnings.
Fewer new annuity policies reduced accounting losses; the comparison also reflected losses in 2025 from a 2024 payout enhancement and premium discount campaign.
Adjusted profit excludes HKMC Annuity Limited results, property-price effects on reverse mortgages and consolidation adjustments for portfolios insured by HKMC Insurance Limited.
Annualised return on equity reached 7.2 percent, versus 6.2 percent; the cost-to-income ratio fell to 11.7 percent from 14.2 percent.
Capital buffers exceed regulatory floors
At June 30, 2026, HKMC's capital adequacy ratio was 18.6 percent, against 18.1 percent at December 31, 2025 and an 8 percent minimum.
The calculation excludes regulated insurance subsidiaries and their investment cost.
Annuity and general insurance solvency ratios were 2.4 and 4.4 times, respectively, up from 2.0 and 3.9 times; both exceeded Insurance Authority requirements.
Annuity embedded value totalled HK$30.1 billion under the Insurance Ordinance, comprising HK$27.7 billion in equity and HK$2.4 billion in the present value of future profits.
Accounting gains dominate the comparison
The HK$3.0 billion headline profit and HK$1,083 million adjusted result capture different aspects of performance.
HKMC uses the adjustment to separate core earnings from retirement-business accounting volatility and insurance consolidation effects.
The reported profit increase therefore exceeds the improvement in adjusted earnings.