The ongoing tariff war is expected to put additional pressure on banks in Hong Kong, which are already grappling with elevated non-performing loans due to a prolonged property sector slump, according to Fitch Ratings.
“Higher tariffs would reinforce our deteriorating banking sector outlooks for China and Hong Kong,” the rating agency said in a report on Thursday.
While government initiatives aimed at supporting China’s economy were likely to weigh on banks’ profitability, “Hong Kong will see the largest rise in non-performing loans in [Asia-Pacific] in 2025, due to a lingering property sector malaise”, Fitch said, without providing a figure.
The bad-loan ratio in Hong Kong’s banking sector stood at 1.96 per cent of total lending at the end of March, compared with 1.96 per cent in September 2024, according to the latest data from the Hong Kong Monetary Authority. The ratio stood at 1.5 per cent in 2023, 1.4 per cent in 2022 and 0.88 per cent in 2021.
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Trump says China’s talks with Vietnam are probably intended to ‘screw’ US
Trump says China’s talks with Vietnam are probably intended to ‘screw’ US
Earlier this week, the White House said China could face tariffs of up to 245 per cent on exports to the US. This includes a 125 per cent reciprocal tariff, a 20 per cent levy related to the fentanyl crisis, and additional duties ranging from 7.5 per cent to 100 per cent on specific goods. The White House has previously said that Hong Kong and Macau would be subject to the same tariffs as mainland China.
Xia Baolong, director of the Hong Kong and Macau Affairs Office, on Tuesday called Washington the “biggest sinister manipulator” attempting to undermine the prosperity of Hong Kong and contain China’s rise.
