The Mortgage Corporation and its subsidiaries made a record profit after tax of $682.7 million last year, up 13.5% on 2005.

Return on shareholders' equity rose from 13.6% in 2005 to 13.9%, while the capital-to-assets ratio fell from 12% to 11.2%. The cost-to-income ratio was 13.5%, compared with 14.7% in 2005.

The board of directors recommended, and the shareholders approved, a final dividend of $250 million or $0.125 per share, representing a dividend payout ratio of 36.6% for the year.

Loans purchased by the corporation grew from 2.9 billion in 2005 to $6.4 billion last year.

Taking into account repayments and run-off due to competitive refinancing in the mortgage market, the outstanding principal balance of the loan portfolio was $32.4 billion as at December 31,compared with $33.5 billion in 2005.

Insurance scheme

The Mortgage Insurance Programme continued to enjoy good public acceptance, despite the subdued property market environment.

For 2006, the programme achieved a business volume of $9.2 billion and the market penetration ratio was around 13%. As 90% of the drawdown in 2006 were on properties in the secondary market, this demonstrated again the importance of the programme to help homebuyers in the secondary market.

The drawdown volume under the programme is expected to increase further in 2007 with recovery in the property market.

In terms of debt issuance, the corporation issued a total of $13.3 billion corporate debts under its Debt Issuance Programme and Retail Bond Issuance Programme in 2006, making the corporation the most active corporate debt issuer in the Hong Kong dollar market for the sixth consecutive year.

Meanwhile, the corporation held its 10th Annual General Meeting today. Ten directors have been re-appointed by the Financial Secretary for another term.

They are Ronald Arculli, Professor KC Chan, Chan Kam-lam, Dr David Li, Frederick Ma, Geoffrey Mansfield, Abraham Shek, Sin Chung-kai, Michael Suen and Eddie Tan.