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UBS: HK Banks' Shr Prices Already Reflect Positive Impact of HIBOR Rebound on Net Interest Income; Cautious View on HK CRE Reiterated
Recommend 40 Positive 61 Negative 38 |
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Helen Li, Equity Research Analyst of Greater China at UBS Investment Bank, wrote that, after the Hong Kong Monetary Authority (HKMA)'s intervention, the total balance of Hong Kong's banking system has decreased from a high of $174 billion in May to $54 billion, marking a turning point in the SOFR-HIBOR spread, and will return to the mean. UBS believed that the positive impact of HIBOR rebound on net interest income is largely reflected in the share prices of Hong Kong banks. For 2025, the broker expected the net interest income for BOC HONG KONG (02388.HK)/ HANG SENG BANK (00011.HK)/ BANK OF E ASIA (00023.HK) to decline by 7%/ 9%/ 11%, respectively. UBS reiterated its cautious view on Hong Kong commercial real estate (CRE). The broker remained cautious about the asset quality of Hong Kong banks, as the HIBOR rebound may exacerbate the risk of non-performing loans from banks' exposure to Hong Kong CRE, further increasing provisioning pressure. AASTOCKS Financial News Website: www.aastocks.com |
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