The year of 2021 was still marked by volatility amidst the pandemic, delaying the effective economic and business recovery. Against this challenging backdrop, Haitong Bank was able to overcome the uncertainties and make significant progress in many fronts, both in terms of business performance and other important milestones.
One of those milestones achieved in 2021 was the effective opening of the Macau Branch. This Branch will play a strategic role in accelerating our cross-border business with a China Angle, improving the coordination with Haitong Group as well as gaining a foothold in the Greater Bay Area, one of the most dynamic economic regions in the world, comprising Guangdong (Canton), in Mainland China, as well as Hong Kong and Macau.
The Bank also succeeded in obtaining regulatory permission for Haitong Global Asset Management, an important driver for the future expansion of that business area.
During 2021, S&P has improved Haitong Bank's rating outlook in recognition of the Bank's Asset Quality that did not suffer any material impacts from COVID-19 and of the Bank's Operational Performance which S&P recognized as more sustainable.
More recently, Haitong Bank received another positive review, in this case from the Bank of Portugal, whose SREP report endorsed the Bank's resilience and consistency in executing its long-term plan and recognized the adequacy of its Control System.
Regarding the performance in 2021, Banking Income reached EUR 89 million, a 9.4% YoY growth, and Operating Profits climbed to EUR 29 million, a 23% YoY growth. Such growth was driven by the Bank's expansion in performing assets, with Credit Loans increasing by 48% and Net Interest Margin rising by 11%. The Bank maintained its profitability in 2021 with a EUR 3.6 million Net Income that compares to EUR 1.6 million in 2020.
A core principle of our Bank has been a focus on Capital preservation and Asset Quality. Haitong Bank maintains a strong capital position with a CET1 Ratio of 18.9% and Total Capital Ratio of 23.6%. The NPL ratio was 2.1% and the NPE ratio was 1%.
This trajectory has been well supported by the unwavering commitment from our Shareholder, who firmly trusts in the Bank’s future development. The recent return of Haitong Bank to the capital markets has benefitted from a Shareholder guarantee, therefore ensuring a solid investment grade rating on the notes issued by the Bank. This issuance contributed to lowering the Bank’s funding cost and optimizing its liability structure.
We are ready to continue meeting the challenges that affect the global banking business in the aftermath of the pandemic. This journey requires perseverance, resilience and an innovative mind as we also face other structural dynamics from technology to competition from the non-banking financial services. We have the resources to prevail and deliver growth in a still uncertain market environment.
Chief Executive Officer
Chairman of the Board of Directors