Bank of China: Hong Kong's commercial real estate is still in an adjustment period, with limited room for adjustment of the best lending rates

The Chairman of the Hong Kong Association of Banks and Vice Chairman and President of Bank of China Hong Kong (02388.HK), Sun Yu, stated that the residential property market in Hong Kong is recovering; however, there are uncertainties in the external environment, and combined with the demand and interest rate environment, the commercial real estate sector in Hong Kong is still in a period of adjustment. Nevertheless, Hong Kong banks have been managing loan risks prudently and believe that the credit risk in the banking sector is controllable.

Regarding interest rates, he indicated that the demand for Hong Kong dollar funds remains stable, and the one-month HIBOR is expected to fluctuate within a range. The likelihood of the short-term Hong Kong dollar exchange rate reaching the strong-side guarantee is low, and the one-month Hong Kong-US interest rate spread is expected to maintain a normal level of 80 to 100 basis points, with Hong Kong interest rates gradually declining alongside the US dollar. The best lending rate is currently at a historical low, leaving little room for adjustment.

Additionally, he mentioned that the banking industry has launched two rounds of a total of 11 support measures in response to the fire at the Hong Fu Court in Tai Po, including a six-month mortgage repayment grace period. Due to legal, insurance, and building repair considerations, subsequent plans are still subject to discussions among all parties, and banks will handle each mortgage case with compassion and flexibility