HKEX registers steep rise in earnings in H1 2023
HKEX today posted its financial report for the first six months of 2023.
For the six months ended 30 June 2023, the Group recorded total revenue and other income of $10,575 million and profit attributable to shareholders of $6,312 million, up 18 per cent and 31 per cent respectively from prior year.
The Board declared an interim dividend of $4.50 per share, payable in cash.
Revenue and other income for 1H 2023, of $10.6 billion, was the second highest reported half-yearly revenue, after the record 1H 2021 and was 18 per cent higher than 1H 2022.
The increase in revenue was mainly attributable to the record half-yearly net investment income of $2.7 billion, reflecting increased interest rates in 2022 and 1H 2023; and the strong performance of the External Portfolio. This increase was partly offset by the decrease in trading and clearing fees from lower Headline ADT and the decrease in Stock Exchange listing fees from a lower number of newly listed DWs and CBBCs. Operating expenses increased by 7 per cent against 1H 2022, mainly due to higher staff costs and professional fees relating to the LME.
Q2 2023 revenue and other income of $5.0 billion was a record second quarter high, boosted by very good net investment income as a result of the high interest rate environment. Compared with Q1 2023, core business revenue for Q2 2023 was 6 per cent lower, reflecting the 20 per cent drop in Headline ADT and lower net investment income of Margin Funds, partly offset by the seasonal increase in depository fees.
Total revenue and other income for Q2 2023 was 10 per cent lower than Q1 2023, due to the decrease in core business revenue, lower fair value gains of the External Portfolio (Q2 2023: $20 million; Q1 2023: $195 million), and lower investment income of Corporate Funds.
As operating expenses remained broadly in line with Q1 2023, profit was, overall, 15 per cent lower than Q1 2023.
Comparing Q2 2023 results with the same quarter last year, revenue and other income was up 18 per cent, EBITDA was up 25 per cent and profit was up 34 per cent, again reflecting the strong performance of net investment income.
Nicolas Aguzin, Chief Executive Officer said:
“A good half year for HKEX, despite continued global macro uncertainty and market fragility. Six-monthly Group revenue and other income was up 18 per cent, core business revenue was up 5 per cent and profit attributable to shareholders was up 31 per cent against the comparable period last year.
This strong half-yearly and quarterly financial performance was matched by further significant strategic progress in Q2, including the launch of Swap Connect, the launch of our new Dual Counter Model and the opening of HKEX’s first North American office. The Group also continued to benefit from the positive impact of its diversification strategy, with robust growth in derivatives volumes, a strong performance from Stock Connect and good returns from a burgeoning ETF market.
Looking forward, whilst the macro landscape will continue to shape market sentiment, we are pleased to see encouraging signs of a revival in our IPO market, matched by a very healthy pipeline. We are also excited about the increasingly broad portfolio of markets, products and opportunities that we now offer our clients around the world and the positive progress we are making to deliver on our strategy”.