Five HK banks post higher fees but credit costs still elevated

Credit costs remained elevated due to provisions whilst loan growth improved.

Five of Hong Kong’s banks saw higher net interest income and fee income in the first six months of 2026, according to CreditSights by Fitch Solutions.

Bank of East Asia (BEA), Dah Sing Bank (DSB), China CITIC Bank International, Nanyang Commercial Bank, and Fubon Bank saw net profit increases across the board, although the expansion varied between 0.4% to 24.3% year on year (YoY).

Net interest margins (NIM) were broadly lower in H1 compared to H2 2025, but were mostly stable if compared to H1 2025, said CreditSights. This supported net interest income growth of between 5% to 16% YoY in H1.

Loan growth showed meaningful improvement, according to CreditSights, rising between 6% to 10% year-to-date at three banks, driven primarily by trade finance and retail lending within Hong Kong excluding credit cards.

Fee income remained an important earnings driver for the banks, rising between 10% to 37% YoY. This was primarily due to stronger investment product sales and bancassurance income despite credit card fees being broadly lower, said CreditSights.

The give banks’ credit costs remained elevated at around 100 basis points (bp) in H1, with provisions made primarily for commercial real estate in mainland China or Hong Kong, the report said. Only Fubon Bank bucked the trend with lower credit costs of 21 bp, although its coverage ratio is weaker than the other banks.

Hong Kong’s consumer credit market is expected to report continued improvement in lender and consumer confidence, according to an earlier report by TransUnion.