The Mortgage Corporation and its subsidiaries made a record profit after tax of $740.7 million last year, up 8.5% on 2006.

Return on shareholders' equity fell from 13.9% in 2006 to 13.7%, while the capital-to-assets ratio remained unchanged at 11.2%. The cost-to-income ratio was 13.6%, compared with 13.5% in 2006.

The board of directors recommended, and the shareholders approved, a final dividend of $250 million or 12.5 cents per share, representing a dividend payout ratio of 33.8% for the year.

Loans purchased grew from $6.4 billion in 2006 to $9.6 billion last year. They included $3 billion of residential mortgage loans, $1.1 billion taxi and minibus hire-purchase assets in Hong Kong, and overseas purchase of US$700 million worth of residential mortgage loans from South Korea.

The corporation has maintained its strong commitment to risk management and did not purchase any sub-prime mortgage loans or invest in any sub-prime-related products.

Taking into account loan repayments and prepayments due to competitive refinancing in the local mortgage market, the outstanding principal balance of the loan portfolio was $34.5 billion as at December 31, compared with $32.4 billion in 2006.

The Mortgage Insurance Programme continued to enjoy good public acceptance. Mortgage insurance coverage for newly originated mortgage loans rose from $9.2 billion to $13.2 billion last year and the market penetration ratio was around 12%. 

The corporation issued a total of $16.4 billion corporate debts under its Debt Issuance Programme and Retail Bond Issuance Programme last year, making the corporation the most active corporate debt issuer in the Hong Kong dollar market for the seventh consecutive year.

At December 31 the total amount of outstanding debt securities and mortgage-backed securities issued were $33.3 billion and $4.2 billion.

Appointments made

Meanwhile, the corporation held its 11th Annual General Meeting today. David Lam has been appointed as a new director to replace Andy Hon.

Thirteen directors have been reappointed for another term - Ronald Arculli, Prof KC Chan, Chan Kam-lam, Chan Kin-por, Eva Cheng, Prof Anthony Cheung, Eddy Fong, Andrew Leung, Dr David Li, Geoffrey Mansfield, Abraham Shek, Sin Chung-kai and Eddie Tan.