the growth potential is not great.
Banking activities can be highly profitable, and The Wing On Bank seem to be bouncing back from its near demise.
With the help of the $HK330 million injection of capital from Hang Seng Bank, The Wing On Bank seems to be stabilizing its position and returning to profitability.
The Wing On Bank, therefore, has the potential to be highly profitable for the Group, if it is not sold off first.
The Balance Sheet
The Balance Sheet of The Wing On (Holdings) Ltd looks much sounder as at December 31, 1987 than it did in the previous 2 to 3 years.
Turnover for the Group increased 15.55 percent, from $HK1.04 billion in 1986 to $HK1.21 billion in 1987.
The Group's Profit Attributable to Shareholders de- creased from $HK88.12 million in 1986 to $HK51.41 million
in 1987.
This drop was due to the lack of any windfall profits in 1987 as opposed the roughly $HK104 million in windfall profits in 1986.
Earnings Per Share decreased from 49 cents per share in 1986 to 28 cents per share in 1987.
Exchange Gains and Adjustments due to the Group's overseas ventures contributed substantially to Retained Profits in 1987, contributing $HK25.94 million compared with an Exchange Loss in 1986 of $HK11.73 million.
The Group utilised its resources more efficiently in 1987
than in 1986.
The more efficient use of resources in 1987 is shown by the increase in the Turnover to Total Assets Ratio (as calculated by dividing Turnover by Total Assets at Book Value). It rose from 0.50 times in 1986 to 0.57 times in 1987, an increase of 13.20 percent.
The Group also made more effective use of its borrowed funds in 1987 and 1986 than for the period from 1983 to 1985. In 1987, the Return on Net Worth for the Group was 5.38 percent, of which 3 percentage points were due to the Return on borrowed funds employed.
In 1986, the benefit gained from the employment of borrowed funds was 5.95 percentage points, increasing the Return on Equity of the Group, in 1986, from 4.75 percent to 10.70 percent.
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