	hk bank expected to post to pct profit rise the hongkong and shanghai banking corp hkbh hk is likely to show a rise in profit of between and pct for reflecting stronger than expected loan growth share analysts polled by reuters said their estimates of the bank s net ings for last year ranged from to billion h k dlrs results will be announced on tuesday the net profit was billion they forecast a final dividend of cents for a total of cents for the year against cents in adjusted for a one for five bonus issue analysts said they expected the bank to recommend a bonus issue this year probably one for three or one for five the bank s pct subsidiary hang seng bank ltd hsgh hk is to report its results on friday analysts expect hang seng to announce net profit of more than one billion dlrs for the first time an increase of to pct they expect hang seng to pay a final dividend of dlrs for a total of dlrs for the year against in analysts said that while the use of undisclosed inner reserves by banks here makes forecasting very imprecise hongkong bank benefited from the unexpected strength of the hong kong economy in when gross domestic product grew by nearly nine pct against an initial forecast of pct they benefited considerably from the pickup in loan demand as their loan portfolio is well balanced an analyst at mansion house securities f e ltd said government figures show that total loans and advances rose by pct in compared with a pct increase in loans to finance hong kong s visible trade the mainstay of the local economy rose by pct against a decline of five pct in low interest rates also helped the bank interest received on loans was low with the prime rate at pct at end but interest paid on savings was two pct hongkong bank and hang seng bank control half of all deposits in the banking system giving them access to a large base of low cost funds the strength of the real estate market was another major income source for the bank group loans to finance property development and instalment mortgages rose sharply the hongkong bank group is still the leader in mortgage business despite tough competition from the bank of china group and other foreign banks one analyst said the high level of activity on the capital and equities markets in contributed to a sharp improvement in hongkong bank subsidiaries wardley ltd waia hk and james capel and co analysts said wardley had a tremendous year acting as financial adviser and underwriter an analyst said wardley was underwriter for last year s billion dlr flotation of cathay pacific airways ltd of which hongkong bank owned pct at the time the bank s stake has since been cut to pct in return for billion dlrs it also sold its entire pct stake in south china morning post ltd the larger of two english language daily newspapers here for billion dlrs the proceeds will go to reserves for acquisitions and will not show up in the profit and loss accounts analysts said analysts said the bank had also been helped by a reduced need to write off bad debts the need for provisions was much lower than the year before said tony measor of hong leong securities co ltd last year s profits should have been to billion dlrs if not for the huge provisions former hongkong bank chairman michael sandberg said the bank wrote off hundreds of millions of dollars against its shipping exposure in lesley nickolds of county securities asia ltd said she saw no major shipping writeoffs in she forecast profit of billion dlrs the bank s latin american exposure mainly through its pct owned marine midland banks inc mm appears to have improved substantially analysts said marine midland s fourth quarter loan loss provisions fell to mln u s dlrs from mln a year before its net profit rose to mln u s dlrs from mln in reuter 
