FINANCIAL SERVICES | Staff Reporter, Hong Kong

Banks' problem loan ratio to remain stable over the next 18 months

The banks' asset quality is expected to be resilient.

Moody's expects Hong Kong banks' problem loan ratio to remain relatively stable over the coming 12-18 months. For certain banks whose asset quality indicators weakened more than their peers in 2015 and 2016, their problem loan ratio should improve in 2017 and 2018.

"For the most part, Hong Kong banks reported good headline asset-quality metrics in their full year 2016 results. The system's classified loan ratio was at 0.70% at the end of March 2017, and special-mention loan ratio was 1.35% in the same period," added Moody's.

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