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Mortgage Corp. first half profit up 19%

But the company expects "considerable challenges" in the second half, brought about by uncertainties in the global economy.

Unaudited profit after tax for the first six months of this year rose 19% to $705 million, while annualised return on equity was 18%, higher than the 17.4% recorded in the first half of 2010.

The Mortgage Corporation said Monday the increases in profits and return on equity were mainly attributable to the favourable interest rate environment, excellent loan quality, prudent prefunding strategy and strong commitment to risk management.

The capital-to-assets ratio of 12% as at June 30 was well above the minimum of 5% stipulated by the Financial Secretary. The cost-to-income ratio was 9.9%.

Notwithstanding the corporation's solid financial performance in the first half of the year, it forecast "considerable challenges" in the second half, according to a government report.

Its full-year financial results will be subject to the uncertainties and imbalances of the global economy, the credit-tightening measures on the Mainland and the potential impact on the local residential property and mortgage markets due to the prudential measures by the Government and the Monetary Authority.

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