(Bloomberg) -- Hang Seng Bank Ltd. trimmed its mainland China commercial real estate exposure by a third last year to reduce its risk in the struggling sector.  

The bank has made “good progress” in “de-risking” in mainland China commercial real estate, with the exposure dropping 33% to HK$35 billion ($4.5 billion), the Hong Kong-based lender’s Chief Executive Officer Diana Cesar said at a press conference on Wednesday.

The exposure accounts for 4% of the total portfolio, with the secured portion increasing to 53% from 45%, she said.

The lender’s exposure had sparked concerns from its parent bank HSBC Holdings Plc, whose profit missed estimate for 2023. Earlier in the month, HSBC was said to tighten risk management at Hang Seng Bank over concerns about the lender’s rise in bad loans amid economic headwinds and property sector crisis in China. 

“We hold a positive outlook for risk management,” Cesar said, adding that the lender had already started to cut risks in 2022 and underscoring Hang Seng’s autonomy despite collaborating with HSBC to mitigate risks.

Hang Seng’s on Wednesday reported that full-year profit rose 58% to HK$17.8 billion.  

Shares of the bank jumped nearly 6% in Hong Kong on Wednesday afternoon after declaring a better-than-estimated dividend payout. 

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