Hong Kong’s banks posted the slowest profit growth in three years, as lower net interest margins and rising bad debts offset income from wealth management.
The aggregated pre-tax profit among the city’s 30 retail banks increased by 8.4 per cent in the first nine months of 2024, slower than the 62 per cent jump in 2023 and 18.7 per cent in 2022, according to data from the Hong Kong Monetary Authority (HKMA).
The banks’ net interest margin (NIM) – the gap between the rate charged on loans and the interest paid for deposits – narrowed to 1.5 per cent in the first nine months last year, compared with 1.67 per cent in 2023, the data showed. The NIM was 1.31 per cent in 2022, 0.98 per cent in 2021 and 1.18 per cent in 2020.
“Profitability remained good among the banks, but we will have to focus more on bad debt issues and the increasing trend of financial scams this year,” the HKMA’s deputy CEO Arthur Yuen Kwok-hang said in a media briefing on Wednesday.
Yue said the preliminary data collected from banks in the fourth quarter was similar to the trend in the first nine months, so the full-year data may be similar to the first nine months.