Hong Kong banks eye higher interest income despite property drag

Commercial real estate remains a key focus of BEA.

Bank of China Hong Kong (BOCHK) and Bank of East Asia (BEA) are expected to report a higher net interest income (NII) for the H1 2026 period.

Bank of East Asia (BEA)’s earnings are expected to continue being weighed down by small local property developers, but pre-provisioning operating profit will grow 11%, said Jefferies Equity Research.

“[Commercial real estate (CRE)] de-risking process will still be a key area to focus, and we expect BEA's exposure to small local property developers to continue to weigh on its earnings,” the report said.

BOCHK will deliver a 4% growth in pre-provisioning operating profit on a resilient NII and fee income, Jefferies said.

BOCHK’s loan growth will be driven by improved corporate demand, personal laons pickup, and trade finance surge.

Hong Kong’s wealth and asset management remain intact, Jefferies said, despite some “near-term turbulence” from tax talks aroun offshore investment gain.

Sector-wide, total loans continued to improve in June 2026, when they grew 6.2% year-on-year (YoY), Jefferies said, based on data from the Hong Kong Monetary Authority.