Wealth and capital markets to lift Standard Chartered HK profits

The bank’s net interest margin is expected to remain stable over the next two years.

Standard Chartered Bank’s Hong Kong (SCBHK) is expected to continue improving its profitability thanks to wealth management and capital market activities, said S&P Global Ratings.

“The higher profitability and a strong capital buffer will support the creditworthiness of the Hong Kong-based bank over the next two years,” the credit rating company said in a report on 23 October 2026, where it stated that Standard Chartered’s Hong Kong and China businesses are stable.

S&P expects SCBHK to log stronger fee income from affluent wealth management and higher trading income from increased client flows and capital market activities.

SCBHK is also expected to benefit from steady economic growth in the Asia-Pacific due to strong tech exports and generally steady domestic demand.

“SCBHK’s established presence in Hong Kong, mainland China, Korea, and Taiwan and the group’s strong global network will enable the bank to benefit from rising trade, investment, and wealth flows in the region,” S&P said.

The bank’s net interest margin is forecasted to remain broadly stable in 2026-2027. Derisking in the bank’s unsecured consumer lending portfolio will likely offset slightly higher interest rate expectations in many of its key markets, S&P said.

Return on average assets (ROAA) is estimated to fall between 0.85%-0.90% for the next two years, up from 0.78% in 2025 and 0.65% in 2024. This is lower than the industry average of about 1% in 2025.

The group’s digital asset initiatives—which include real-world asset tokenization, interoperable payments, stablecoin, and digital asset custody— will diversify SCBHK's revenue base over time, S&P said.

SCBHK is expected to maintain its selective focus on lower-risk assets such as mortgages and secured wealth lending in Hong Kong, Korea, and Taiwan, S&P said.

S&P estimates SCBHK’s annual loan growth to be 5% in 2026-2027, and an annual dividend payout ratio of 70% to 80% during this period.

SCBHK will likely maintain better asset quality than the industry average, according to S&P.

“The bank has a diversified loan portfolio with small exposure to commercial real estate and a controlled risk appetite to support this,” the credit rating company said.

The bank is expected to increase its loan loss provisioning to 0.35% of gross loans in 2026 from 0.33% in 2025.

As of end-June 2026, SCBHK reported a nonperforming loan (NPL) ratio of 1.33%, lower than the Hong Kong industry average of 1.82%.