The Mortgage Corporation and its subsidiaries recorded a fall of 18% in after-tax profits to $605 million last year.

The corporation also produced a return on equity of 10.5% and the capital-to-assets ratio remained strong at 8.7%. The cost-to-income ratio was 17.5%. A final dividend of $250 million was declared, representing a dividend payout ratio of 41.3%.

Benefiting from the expansion of the loan portfolio, net interest income rose $61 million to $710 million. The net interest margin of the average interest-earning assets dropped to 1.3% due to rising costs for hedging and funding.

With solid growth in secondary market activities the new loans underwritten under the Mortgage Insurance Programme soared 54.5% to $20.4 billion. The risk-in-force borne by the corporation rose 62.6% to $5.7 billion due to the surge in loans underwritten and the increase in risk retention.

Included in other income, net mortgage insurance premiums earned was $93 million after adjusting for additional provisions for outstanding claims of $41 million amid weakness in the job and property markets.               

Total operating expenses rose 9.9% to $142 million mainly due to the expansion of risk management functions.

As a result of the decline in property prices and rising unemployment, a prudent loan provisioning of $36 million was made in the year.

Meanwhile, 10 directors of the corporation have been reappointed for another term. They are Prof KC Chan, Chan Kin-por, Eva Cheng, Prof Anthony Cheung, Eddy Fong, Andrew Leung, Dr David Li, Geoffrey Mansfield, Abraham Shek and Eddie Tan. Tanya Chan, Louisa Cheang, Lester Huang and Starry Lee have been newly appointed.