Hong Kong's classified loan ratio, or the ratio of bad and doubtful loans, could increase in 2025 due to high interest rates and the uncertainty of the US Federal Reserve's rates, The Standard reported Thursday, citing Hong Kong Monetary Authority Deputy Chief Executive Arthur Yuen Kwok-hang.
The city's classified loan ratio was at 1.99% as of the third quarter of 2024, according to data from the HKMA released Wednesday. The figure was close to the 2% long-term average, The Standard said.
Hong Kong's classified loan ratio associated with mainland China's property industry reached 2.79% as of last September, the report said.
The HKMA will ensure that banks adhere to risk management practices and allocate provisions to hedge against exposure to China's real estate sector, the report said.
Loans and deposits in the city increased 7.1% in 2024, while total loans fell 2.8% during the year.
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