The Hong Kong Mortgage Corporation Limited said its unaudited consolidated profit after tax rose sharply in the first half of 2026, helped by a reversal of reverse-mortgage accounting losses, a smaller annuity-related loss and higher investment income from placements with the Exchange Fund. The government-owned lender also reported higher corporate debt issuance and a larger digital-bond debut across Hong Kong dollar and renminbi tranches, according to its interim-results highlights released on 26 October 2026.
Financial results and balance-sheet trends
HKMC said unaudited consolidated profit after tax for 1H 2026 was HK$3.0 billion, compared with HK$53.3 million in 1H 2025. The company said the increase was primarily driven by the reversal of an accounting loss from the reverse mortgage business amid a property market rebound, a narrower accounting loss in the annuity business, and higher investment income from an enlarged placement size and higher returns, according to the release dated 26 October 2026.
To better reflect core performance, HKMC said adjusted profit after tax was HK$1,083 million in 1H 2026, versus HK$874 million a year earlier, after excluding the results of HKMC Annuity Limited, property-price effects on the long-term reverse mortgage business and consolidation adjustments related to loan portfolios with insurance cover from HKMC Insurance Limited. On that basis, the annualised return on equity was 7.2%, up from 6.2%, while the cost-to-income ratio improved to 11.7% from 14.2%, the company said.
The group said its capital adequacy ratio remained solid at 18.6% as at 30 June 2026, above the 8% minimum requirement set by the Financial Secretary. HKMC also said the solvency ratios of HKMC Annuity Limited and HKMC Insurance Limited were about 2.4 times and 4.4 times, respectively, both above regulatory minimums under the Insurance Authority regime. As at 30 June 2026, the embedded value of the annuity business was about HK$30.1 billion, comprising HK$27.7 billion of total equity and HK$2.4 billion of present value of future profits.
Debt issuance, mortgage and guarantee programmes
In the first half, HKMC said it issued HK$24.8 billion of corporate debt, compared with HK$23.3 billion in 1H 2025, and remained one of the most active issuers in the domestic Hong Kong dollar corporate bond market. It also completed its inaugural digital-bond issuance across three tranches in Hong Kong dollars and offshore renminbi totalling about HK$12 billion equivalent, which it said was the largest digital-bond issuance globally at the time and made HKMC the first public-sector entity in Hong Kong to issue digital bonds. HKMC added that the five-year Hong Kong dollar tranche was the longest tenor ever for an HKD-denominated digital bond.
The outstanding balance of debt securities issued stood at HK$141.5 billion at 30 June 2026, down from HK$155.2 billion at 31 December 2025. The outstanding balance of the loan portfolio was HK$74.1 billion, compared with HK$78.6 billion at the end of 2025. HKMC said it acquired HK$2.9 billion of loan assets in 1H 2026, up from HK$2.7 billion a year earlier, and bought HK$115 million of loans under the Dedicated 100% Loan Guarantee Schemes, versus HK$46 million in 1H 2025.
Under the Mortgage Insurance Programme, new loans drawn down totalled HK$15.5 billion in 1H 2026, compared with HK$17.5 billion in 1H 2025, with 73% secured on properties in the secondary market. Since launch in 1999, the programme has facilitated home purchases for about 245,000 families with cumulative loan drawdowns of HK$920.5 billion, HKMC said.
SME and retirement products
HKMC said that since launch, more than 30,400 applications had been approved under the 80% Guarantee Product for a total loan amount of about HK$129.6 billion, while over 20,400 applications had been approved under the 90% Guarantee Product for about HK$35.5 billion. The application period for the 80% product was extended to end-March 2028, while the 90% product expired at end-March 2026. Under the Special 100% Loan Guarantee, more than 67,100 applications were approved for about HK$143.9 billion, with an equivalent amount of loan assets purchased by HKMC; that application period expired at end-March 2024.
HKMC said the 80% and 90% guarantee products had benefited around 26,300 local SMEs and more than 422,000 related employees since inception, while the Special 100% Loan Guarantee had benefited more than 40,000 local SMEs and around 400,400 related employees. Under the Dedicated 100% Loan Guarantee Schemes for the travel sector and cross-boundary passenger transport trade, 227 applications were approved for about HK$220 million since launch in 2023; those schemes expired in October 2024. For the Dedicated 100% Loan Guarantee Scheme for battery electric taxis, more than 1,000 applications were approved for about HK$330 million.
In its retirement-related businesses, HKMC said the annuity business had taken 3,528 policies in 1H 2026, down from 11,531 in 1H 2025, with total premiums of about HK$2.8 billion versus HK$5.4 billion. Since launch in 2018, the annuity programme has helped over 36,000 senior citizens convert savings into lifelong income, according to the company. The reverse mortgage programme approved 484 applications in 1H 2026, compared with 488 a year earlier, with an average property value of HK$4.4 million and an average monthly payout of HK$10,000. Since launch in 2011, 9,345 applications have been approved.
HKMC said it continued to use a prudent prefunding strategy and maintained contact with local and international investors to support loan purchases and refinancing needs. The company said its core operations remained resilient amid uncertain market conditions, but the timing of any next catalyst was not specified in the release.
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