BOC Hong Kong (2388) saw its net profit rise 4.9 percent year-on-year to HK$40.1 billion in 2025, while the sluggish local commercial property sector still weighed on its loan quality.
The lender proposed a final dividend of HK$1.255 per share, bringing the total dividend to HK$2.125, up 6.8 percent.
Net interest income amounted to HK$52.9 billion, representing an increase of 1.1 percent.
Its net interest margin, one indicator of a bank's profitability, went down 6 percentage points to 1.4 percent, mainly due to a decline in asset yield amid a lower market interest rate environment.
Net fee and commission income grew 13.9 percent to HK$11.27 billion, driven by strong demand for wealth management services amid improved investor sentiment in the market.
However, the bank's net charge of impairment allowances surged 66.8 percent to HK$8.25 billion, of which impairment allowances at Stage 2 recorded 3.7 times expansion, resulting from downgrades to the internal ratings of certain customers in the real estate sector amid the weak commercial real estate market, as well as a stressed expected credit loss model being applied to certain higher-risk customers in the real estate sector.
The impaired loan ratio rose 9 percentage points to 1.14 percent, and impaired loans increased by HK$1.91 billion to HK$19.6 billion.
The lender said that the banking sector continued to face risk management challenges amid the elevated vacancy rate in Hong Kong's commercial real estate market.
