FINANCIAL SERVICES | Staff Reporter, Hong Kong

3 factors that will cause Hong Kong banks' profits to decline

Subdued loan growth is one.

Fitch expects banks’ profit to decline moderately due to subdued loan growth, weaker trade flows and higher impairment charges. Gradually rising US and Hong Kong dollar interest rates would benefit the banks, given their large deposit bases.

Meanwhile, Fitch also sees a cyclical loan deterioration amongst Hong Kong banks. "We see a gradual increase in loan-impairment charges in the current environment, with a rising contribution from China-related exposure. Fitch considers that China- related NPLs could rise to above 2% in 2017; but overall, we believe that Hong Kong banks’ NPLs will remain moderate at around 1%," adds Fitch.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.