The Hong Kong Association of Banks expects limited room for a reduction in P, with a one-month HIBOR range fluctuation. Sun Yu: The overall risk in the banking industry is controllable

The Chairman of the Hong Kong Association of Banks and Vice Chairman and President of Bank of China Hong Kong (2388), Sun Yu, stated that the momentum of economic growth in the United States is gradually recovering, and the labor market remains resilient. He anticipates that the possibility of an interest rate cut in January is low, with a forecast of two rate cuts throughout the year. He also mentioned that the one-month Hong Kong Interbank Offered Rate (HIBOR) is fluctuating within a range, the interest rate curve is slightly steep, and the medium to long-term interbank rates are linked to the US dollar. The interest rate differential between Hong Kong and the US is expected to be between 80 to 100 basis points, and the chance of the Hong Kong dollar reaching the strong-side Convertibility Guarantee is low. The best lending rate (P) of local banks is already at a historical low, leaving little room for adjustment. Banks Prudently Manage Loan Risks Sun Yu indicated that the overall environment in Hong Kong is stable and improving, with a recovery in the residential market. However, due to the external environment still being full of uncertainties, the commercial real estate sector is still in an adjustment period. He noted that the industry continues to prudently manage loan risks, comprehensively assessing customers' financial conditions and repayment abilities, and making prudent provisioning arrangements, believing that the overall risks in the banking sector are controllable. Domestic Enterprises Going Abroad and the 14th Five-Year Plan Generate Financing Demand Sun Yu mentioned that last year, the overall economic recovery and improved financing environment led to the total amount of loans in the banking sector returning to HKD 10 trillion in the first 11 months, with a year-on-year growth of 1%. He stated that this year's loan demand will still depend on economic growth, with many mainland enterprises leveraging Hong Kong to go abroad and advancing the national "14th Five-Year Plan" and deepening the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, which is expected to generate various financing demands to support loan business. Banks Focus on Strengthening Offshore RMB Hub Regarding the Renminbi, Sun Yu pointed out that consolidating the offshore Renminbi business hub status is a key focus for the banking sector this year. With Hong Kong's unique advantages of connecting internally and externally, the banking industry will actively align with new policies, enrich offshore Renminbi products and application scenarios, expand cross-border financing services, and strengthen market hub functions and global radiation capabilities. Handling Mortgage Cases at Hong Fu Court with Compassion and Flexibility Regarding the support situation for Hong Fu Court in Tai Po, Sun Yu stated that the banking industry has launched two rounds of a total of 11 support measures in response to the fire, including a six-month mortgage repayment grace period. Subsequent plans, due to legal, insurance, and building restoration issues, are still pending discussions among all parties. The banking industry will handle each mortgage case with compassion and flexibility. Promoting Elderly-Friendly Guidelines to Enhance Financial Inclusion Additionally, the Hong Kong Monetary Authority and the Hong Kong Association of Banks announced the launch of the "Elderly-Friendly Banking Service Guidelines" and updated the "Accessible Banking Service Practical Guidelines." Sun Yu stated that the banking industry will continue to respond to social and technological developments, timely improving relevant guideline services to further promote financial inclusion