Hang Seng Bank, the Hong Kong-based lender owned by HSBC, saw a 12 per cent rise in its 2011 net profit mostly on strong lending revenues. 

Net income for the year to 31 December went up from HK$14.9 billion in the previous year to HK$16.7 billion ($2.15 billion). The positive result happened despite a decline in lending volume in the second half as the European debt crisis continued to dampen activity in most global markets. 

Despite the volatile financial environment, Hang Seng's net interest income grew 10 per cent to HK$15.7 billion, while net fee income dropped slightly by 1.2 per cent to HK$4.8 billion. The net interest margin remained unchanged from 2010 at 1.78 per cent.

Concurrent with the result is the announcement that Margaret Leung will be retiring from her position as vice chairman and chief executive of the bank after the scheduled annual general meeting in May. Leung departs after the 34 years of service with the HSBC group, the majority owner of Hang Seng Bank, and will be replaced by Rose WM Lee, currently the advisor for China and Hong Kong at HSBC.

The results come in the wake of a positive performance at its parent in 2011, announced earlier this week.For the year to 31 December, HSBC posted a $2.8 billion rise in profit before tax to $21.9 billion from the previous year, with the Asia-Pacific region recording a 15 per increase in pre-tax earnings to $13.3 billion. (See related report here.)