In Hong Kong, the reviewed comprehensive post-tax loss of the mortgage securities company in 2025 was HK$109 million.

On April 21, the Hong Kong Mortgage Securities Company announced its annual performance for the year 2025. The audited comprehensive after-tax loss for the year 2025 was 109 million Hong Kong dollars (compared to a loss of 418 million Hong Kong dollars in 2024). The improvement in performance was mainly attributed to an increase in annuity premiums, as well as capital injections into the Hong Kong Pension Limited Company and the Insurance Company, which led to an increase in income from foreign exchange fund deposits. The recovery in the property market benefited the elderly mortgage business, increased net interest income, and the revaluation gains from holding US dollar cash and debt investments also increased. Some of the gains were offset by higher accounting losses due to the surge in new annuity business policies and the negative accounting impact of the lower discount rate on the revaluation of insurance liabilities. To fulfill its mission of promoting the development of the retirement planning market in Hong Kong, the Mortgage Securities Company has been committed to promoting the development of annuity and elderly mortgage businesses, which have become increasingly sensitive and volatile due to market accounting practices. In order to better reflect its core financial performance, the adjusted after-tax profit for the Mortgage Securities Company in 2025, after excluding the financial performance of the Hong Kong Pension Limited Company, the impact of property price changes on long-term elderly mortgage business, and the comprehensive accounting adjustments from the loan portfolio provided by the Insurance Company, was 14.97 billion Hong Kong dollars (compared to 7.87 billion Hong Kong dollars in 2024). As a result, the return on equity and cost-to-income ratio were 5.2% and 19.3% respectively (compared to 4.8% and 27.6% in 2024). As of the end of 2025, the Hong Kong Pension Limited Company's embedded value, calculated in accordance with the Insurance Industry Regulations, was approximately 24.4 billion Hong Kong dollars, including total equity of 21.5 billion Hong Kong dollars and the present value of future profits of 2.9 billion Hong Kong dollars, reflecting the solid financial condition of the Hong Kong Pension Limited Company to support the long-term development of the annuity business. In accordance with the capital adequacy ratio guidelines, the capital adequacy ratio calculation follows the comprehensive basis of financial reports, excluding the subsidiary companies regulated and subject to other capital adequacy requirements by the Insurance Authority (i.e., the Hong Kong Pension Limited Company and the insurance Company). Excluding the investment costs of unconsolidated regulated subsidiary companies, the capital adequacy ratio for the Mortgage Securities Company was still at a robust level of 18.1% as of December 31, 2025 (compared to 19.9% as of December 31, 2024), far exceeding the minimum requirement of 8% set by the Hong Kong Financial Secretary. As of December 31, 2025, the solvency ratios calculated under the Principles-Based Capital Regime under the Insurance (Valuation and Capital) Rules for the Hong Kong Pension Limited Company and the Insurance Company were approximately 2 times and 3.9 times respectively (compared to 1.7 times and 4 times as of December 31, 2024), well above the statutory minimum requirements set by the Insurance Authority. Due to the uncertain market environment, the Mortgage Securities Company has adopted a prudent strategy of pre-funding its financing needs and has actively engaged with local and international investment communities on bond issuances to support loan purchases and meet refinancing needs. As of December 31, 2025, the Mortgage Securities Company's shareholder equity, cash and short-term investments, and securities investments were 51.2 billion Hong Kong dollars, 64.5 billion Hong Kong dollars, and 30.1 billion Hong Kong dollars respectively (compared to 38.9 billion Hong Kong dollars, 52.6 billion Hong Kong dollars, and 18.8 billion Hong Kong dollars as of December 31, 2024). With a strong financing capability, robust capital, and liquidity levels, the core business of the Mortgage Securities Company remains flexible and stable, prepared to address financial uncertainties and fulfill its strategic policy role and achieve social objectives. Business Summary In the increasingly complex and volatile environment of 2025, the Mortgage Securities Company and its subsidiaries continue to fulfill their core mission and social objectives, contributing to the stable growth of the Hong Kong economy. The mission of the Mortgage Securities Company is to promote stability in the banking industry, provide housing for citizens, develop the local bond market, and promote the development of the retirement planning market. Asset Purchases and Securitization Purchased loans worth 6.9 billion Hong Kong dollars (compared to 3.9 billion Hong Kong dollars in 2024). Acquired loans worth 158 million Hong Kong dollars under the 100% guarantee loan program (compared to 52 million Hong Kong dollars in 2024). Successfully issued the third batch of infrastructure mortgage-backed securities. The issued multi-tranche USD Asset Backed Notes, supported by cash flows from diversified projects and infrastructure loans across multiple regions and industries, had a total value of approximately 450.5 million US dollars. As of December 31, 2025, the outstanding balance of the loan portfolio was 78.6 billion Hong Kong dollars (compared to 95.5 billion Hong Kong dollars as of December 31, 2024). Bond Issuance Issued a total of 70.5 billion Hong Kong dollars in corporate bonds (compared to 103.5 billion Hong Kong dollars in 2024), maintaining its position as the most active issuer in the local Hong Kong dollar corporate bond market. Successfully issued four benchmark bonds with a total value of 25.3 billion Hong Kong dollars, setting a record for the largest public bond issuance in the history of the Mortgage Securities Company. The 30-year Hong Kong dollar social responsibility bond was not only the largest 30-year Hong Kong dollar bond in Hong Kong's history but also the first in the Asia-Pacific region to raise funds to support the Mortgage Securities Company's elderly mortgage plan, providing necessary financing for Hong Kong's elderly population. As of December 31, 2025, the outstanding debt securities amounted to 155.2 billion Hong Kong dollars (compared to 148.3 billion Hong Kong dollars as of December 31, 2024). Credit ratings maintained by Standard & Poor's Global Ratings at AA+ and Moody's at Aa3, consistent with the credit rating of the Hong Kong Special Administrative Region government. Mortgage Insurance Plan New mortgage loans amounted to 35.2 billion Hong Kong dollars (compared to 47.9 billion Hong Kong dollars in 2024), with 60% used for secondary market properties. Since its launch in 1999, it has facilitated approximately 242,000 families in homeownership, with a total loan amount of 905 billion Hong Kong dollars. Small and Medium Enterprise Financing Guarantee Program Since the launch of the "80% Credit Guarantee Product" in 2012, over 29,300 applications have been approved, with a total loan amount of approximately 125.7 billion Hong Kong dollars. Since the launch of the "90% Credit Guarantee Product" in 2019, over 18,600 applications have been approved, with a total loan amount of approximately 32.7 billion Hong Kong dollars. The application period for the "80% Credit Guarantee Product" has been extended by two years until the end of March 2028, while the application period for the "90% Credit Guarantee Product" ended in March 2026. Since the launch of the "100% Guarantee Special Financing Program" in 2020, over 67,100 applications have been approved, with a total loan amount of approximately 143.9 billion Hong Kong dollars. The loan assets have been acquired by the Mortgage Securities Company. The application period ended in March 2024. Since the introduction of various guarantee products, the "80% and 90% Credit Guarantee Products" have benefited approximately 25,100 local small and medium enterprises and over 409,000 employees, while the "100% Guarantee Special Financing Program" has benefited over 40,000 local small and medium enterprises and approximately 400,000 employees. 100% Guarantee Loan Special Programs Since the launch of the "Tourism Industry 100% Guarantee Loan Program" and the "Cross-Border Passenger Transport Industry 100% Guarantee Loan Program" in 2023, a total of 227 applications have been approved, with a total loan amount of approximately 220 million Hong Kong dollars. The application period ended in October 2024. Since the launch of the "Pure Electric Taxi 100% Guarantee Loan Program" in 2023, over 630 applications have been approved, with a total loan amount of approximately 210 million Hong Kong dollars. Annuity Business The annuity business involves over 16,530 policies (compared to 10,835 in 2024) with total premiums of approximately 9 billion Hong Kong dollars (compared to 4.4 billion Hong Kong dollars in 2024). Since its inception in 2018, it has helped approximately 34,000 seniors convert their savings into a stable lifetime income. Elderly Mortgage Plan 937 applications were approved (compared to 1,033 in 2024), with an average property value of 4.1 million Hong Kong dollars and an average monthly annuity of 9,400 Hong Kong dollars. Since its launch in 2011, a total of 8,861 applications have been approved.