CICC: The return on capital of listed banks in Hong Kong is expected to remain at the level of 10% to 17% this year

The Zhitong Finance App learned that CICC released a research report saying that the Bank of Hong Kong's stock price performance in the past year was mainly due to an increase in ROTE's return on tangible net assets that exceeded expectations. Looking ahead to 2026, CICC expects that the return on capital of listed Hong Kong banks may still maintain a high level of 10% to 17%. The return on dividends and repurchases will still be around 7%, with allocation value.

CICC also expects the market to still cut interest rates this year. The Federal Reserve's December bitmap shows that interest rates may be cut 1 to 2 times in 2026, 0 to 1 time in 2027, and then to the 3% level. Based on this background, it is expected that the net interest spread of the Bank of Hong Kong may continue to narrow, but with interest rate cuts in line with expectations, compounded by a slight increase in assets, the net interest income will drop or remain low in units.

CICC estimates that the Hong Kong banking wealth management business will continue to grow this year. The growth rate is affected by domestic and foreign investment return expectations and the global economy. Singapore, India, and the Middle East are also regions where wealth business is growing rapidly, and the Bank of China's branch layout in these regions will also drive revenue growth.

CICC continued that credit costs for banks in Hong Kong are expected to rise slightly this year, but they can still be controlled within the range of 30 to 50 basis points. It mainly focuses on the evolution of mainland real estate and the Hong Kong real estate market, diffuse risk exposure in an overseas medium- and high-interest rate environment, and potential risks brought about by financial market fluctuations. However, it is expected that the cost-revenue ratio of Hong Kong banks may continue to decline.