Hang Seng Bank remains financially healthy, as the extra provisions and collateral provided by borrowers are sufficient to withstand the continued increase in non-performing loans (NPLs) at the HSBC unit, according to its CEO.

“The amount of collaterals and provisions for NPLs has exceeded 100 per cent,” executive director and CEO Diana Cesar said in the bank’s interim results announcement on Wednesday. “Based on what we know now and what we can see coming, we think the extra provisions and collateral we have got are enough to cover.”

Hang Seng, the largest among Hong Kong’s locally incorporated banks, made extra provisions to shield the loan books from the 0.57 percentage point rise in NPL, which reached 6.69 per cent of total loans at the end of June, from 6.12 per cent at the end of last year.

The provisions weighed on the bank’s interim profit, which fell 30 per cent to HK$6.88 billion, from HK$9.89 billion a year earlier. Earnings per share fell 34 per cent to HK$3.34 per share.

“The first half of 2025 was demanding with ongoing uncertainties including trade tariffs, sustained high interest rates and a prolonged downturn in the commercial property market,” Cesar said. “These have all adversely affected the broader economy.”

Hang Seng’s shares closed 7.4 per cent lower amid a declining market to a six-week low of HK$113.80 on Wednesday after reporting its biggest percentage drop in earnings since the first half of 2022.