Profits slump for Hong Kong lenders

Finance | Winnie Lee 30 Sep 2020

Hong Kong banks saw pretax profits fall 20 percent in the first half of the year, with lower asset quality.

The profit before tax fell due to lower net interest income and an increase in provisions, offsetting the slight growth in non-interest revenue, the Hong Kong Monetary Authority's half-yearly monetary and financial stability report said. The gross classified loan ratio rose to 0.71 percent.

The return on assets dropped to 0.95 percent, down 0.32 percent from the first half last year. The net interest margin narrowed 26 basis points to 1.37 percent, as the Hong Kong Interbank Offered Rate fell significantly in the second quarter.

In response, some retail banks have raised mortgage rates and cut cash rebates since late June.

The total loans and advances of the banking sector grew by 3 percent.

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