DBS Hong Kong reported non-performing loan ratio increased from 1.57 percent in 2024 to 2.16 percent in 2025, while provisions doubled to HK$1.78 billion, mainly due to a mainland private-owned enterprise's downgrading of mortgage loans to non-performing loans.
Speaking at a press conference on Monday, Sebastian Paredes, chief executive of DBS Hong Kong, said they do not expect provisions to increase significantly this year based on their careful considerations.
Jacqueline Chan Nap-Shan, managing director and chief financial officer at DBS Bank Hong Kong, added that the bank's current mortgage exposure in the mainland has decreased by 7 percent, of which 5 percent is from state-owned enterprises, alongside some foreign institutions, while privately owned enterprises account for less than HK$1 billion, indicating loan quality is relatively stable.
Chan said Hong Kong commercial real estate mortgage exposure currently accounts for around 27 percent of the bank's total loans, mostly from blue-chip companies or investment-grade property developers, and the bank will closely monitor how the external factors will affect portfolio loans and proactively conduct risk management.
Paredes further mentioned that Hong Kong's office and retail real estate markets will continue to face pressure in the next few years. Last year's related provisions were mainly for retail and small to medium enterprises, and he believed that bankruptcies among retail and SMEs would continue due to challenges in the macroeconomic environment and declining visitor spending. However, he was not worried about Hong Kong CRE and expected a single-digit increase in Hong Kong residential property prices this year.
DBS Hong Kong reported net profit rose 3 percent to HK9.6 billion.
DBS Group's fourth quarter net profit fell 10 percent year-on-year to HK$14 billion, as stronger fee income and treasury customer sales were more than offset by rate headwinds.
Gloria Leung
