Hong Kong mortgage securities company: Net loss narrowed to HK$109 million in 2025, a year-on-year decrease.

On June 3, Hong Kong Mortgage Securities Limited released its annual report for 2025, with a net loss of 109 million Hong Kong dollars for the year, compared to a net loss of 418 million Hong Kong dollars in 2024. The improvement in performance was mainly due to foreign exchange fund investment income rising due to increased annuity premium, capital injection into the Hong Kong Pension Company in 2025, and capital injection into the Insurance Company by the end of 2024; the recovery of the property market benefited the elderly mortgage business; an increase in net interest income; and an increase in revaluation gains from holding US Hong Kong dollar cash and debt investments. Some of the income was offset by higher accounting losses due to increased new policy underwriting and a decrease in discount rates affecting the revaluation of insurance liabilities. The group recorded net interest income of 786 million Hong Kong dollars, an increase of 168 million Hong Kong dollars compared to 2024. This increase was mainly attributed to the improvement in net interest margins and the expansion of the debt investment portfolio. The net interest margin was 0.5%. The performance of insurance services reflects the insurance income minus the insurance service expenses (taking into account the impact of reinsurance contracts held), resulting in a loss of 1.409 billion Hong Kong dollars in 2025 (compared to a loss of 1.627 billion Hong Kong dollars in 2024). Asset quality remained sound, with the mortgage loan portfolio's delinquency ratio at a low level of 0.36%. Impairment provisions of 11.4 million Hong Kong dollars were made in 2025 in accordance with approved reserve policies. There were no loan write-offs this year, while loans previously written off were recovered for 200,000 Hong Kong dollars. According to the Insurance Industry Rules, the embedded value of the pension business is approximately 24.4 billion Hong Kong dollars, including equity of 21.5 billion Hong Kong dollars and the present value of future profits of 2.9 billion Hong Kong dollars, demonstrating the sound financial condition of the long-term development business. The group's solvency ratio stood at a robust level of 18.1%, with reserves set aside for business development. The solvency ratios, calculated under the Risk-based Capital System's Insurance (Valuation and Capital) Rules chapter 41R, for the insurance subsidiaries engaged in general insurance business and the insurance subsidiaries engaged in pension business as of December 31, 2025, were approximately 3.9 times and 2.0 times, respectively, both well above the minimum regulatory requirements.