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Fitch Expects HK Banks’ CRE Exposure to Remain Under Pressure, But Sees Downgrade Risk Limited
Recommend 31 Positive 54 Negative 30 |
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Despite ongoing pressure in the local commercial real estate (CRE) loan market, the viability ratings (VRs) of Hong Kong banks are expected to remain resilient this year, rating agency Fitch said. Fitch anticipated that Hong Kong’s property market, particularly office and retail properties, will continue to be under pressure this year. Unless overall commercial momentum recovers, vacancy rates are unlikely to decline, and the impaired loan ratios of local banks may deteriorate more than previously expected by the agency. In its assumed stress scenario, Fitch noted that the inherent credit profiles of Hong Kong banks are supported by strong capital buffers, which help absorb potential credit losses. As a result, the likelihood of a downgrade in the ratings of local banks remains quite limited. AAStocks Financial News |
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