The Mortgage Corporation and its subsidiaries reported an audited profit after tax of $600.6 million for 2005, a drop of 9.5% compared with the record profit after tax of $664 million in 2004.

Return on shareholders' equity was 13.6%, compared with 17.1% in 2004. The capital-to-assets ratio improved to 12%, over 2004's 9.3%, equivalent to a capital adequacy ratio of 24% when computed in accordance with the Banking Ordinance. The cost-to-income ratio rose from 12.2% in 2004 to 14.6%.

The amount of mortgage loans purchased was $2.9 billion, compared with $11.4 billion in 2004. Given the high mortgage prepayment rate, the outstanding principal balance of the retained mortgage portfolio was $29.5 billion at December 31, 2005, lower than the $34.9 billion in 2004.

The board recommended, and shareholders approved, a final dividend of $250 million or $0.125 per share, representing a dividend payout ratio of 41.6% for the year. Payment of the dividend will be made in May.

Directors appointed

The corporation held its 9th Annual General Meeting today. Ten Directors were reappointed by the Financial Secretary for another term, including Ronald Arculli, Chan Kam-lam, Ambrose Lau, Edward Lau, David Li, Frederick Ma, Abraham Shek, Sin Chung-kai, Michael Suen and David Sun.

Four new directors have been appointed to replace Professor Andrew Chan, Cliff Forster, David Lam and Kenny Lam.

The new Directors are Professor KC Chan, Geoffrey Mansfield, Nick Sibley and Eddie Tan.