HK banks' mainland sales to slow on new tax rules

Banks will see their fee incomes dip temporarily, S&P said.

Hong Kong banks and insurers will see slower sales to mainland China following new tax rules, said S&P Global Ratings.

Banks will see a temporary dip in fee income.

“We expect a temporary slowdown in sales to mainland customers as they weigh the tax implications of offshore insurance and investment products,” it said.

Overall banks should be able to manage this temporary dip, S&P said.

“Banks will manage a temporary dip in fee income, in our view, given diversified wealth management platforms and a shift in product mix,” it said.

Life insurers will be able to maintain their growth at about 8% to 10% over the next two years, S&P said.