Hong Kong banks can leverage AI and trade changes for growth amid global challenges: KPMG
Opportunities would arise as the financial performance of the city's banking sector this year might lack growth drivers, with 'interest rates, margins and loans unlikely to change significantly', said Paul McSheaffrey, senior banking partner for Hong Kong at the consultancy.
Last year, Hong Kong banks posted asset and profit gains as strict cost controls and an increase in customer deposits offset weak loan demand and rising credit risks amid global uncertainty, according to a KPMG report published on Wednesday.
The total assets of all licensed banks rose 4.5 per cent to HK$24 trillion (US$3.1 trillion) in 2024 from the previous year, while operating profit was up 7.8 per cent. Although loans and advances declined 2.3 per cent, customer deposits increased 4.1 per cent due to the limited interest rate cuts last year.
A file photo from September 2017 of Paul McSheaffrey, senior banking partner for Hong Kong at KPMG. Photo: Handout
The banks' average cost-to-income ratio declined by 38 basis points from 42.6 per cent in 2023 to 42.2 per cent in 2024.
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