Hong Kong property bad debts build pressure on banks

Executives cautious on outlook, ratings agency warns of 'heightened asset risk'

Hong Kong's local property market is piling fresh pressure on the banking system, which is still processing bad loans from mainland Chinese developers three years into the onshore market crisis. (Photo by Shinya Sawai)

ECHO WONG

February 21, 2025 14:04 JST

Updated on February 21, 2025 20:03 JST

HONG KONG -- Hong Kong-listed banks have reported swelling bad debts tied to real estate developers in the city, where lukewarm property demand and sluggish consumption are weighing on the residential, retail and office sectors.

Hang Seng Bank, a core unit of HSBC Holdings, this week reported that bad loans on Hong Kong commercial real estate jumped 18-fold on the year in 2024. The figure stood at 19.81 billion Hong Kong dollars ($2.55 billion), compared to HK$1.08 billion in 2023.