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2026 Predictions: Hong Kong Banks Face 50% Collateral Drop

2/26/2026

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Summary

Story summary

S&P Global Ratings predicts collateral values for Hong Kong banks' commercial property loans will fall in 2026.
The sector has been in a downturn since 2019, with falling rents and rising vacancies.
Bank of East Asia Ltd. reported HK$723 million valuation loss in 2025, up from HK$145 million in 2024.
S&P tested stress scenarios indicate collateral discounts of 30% to 50%, reflecting secondary-market sales.

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Story summary

S&P Global Ratings predicts collateral values for Hong Kong banks' commercial property loans will fall in 2026.
The sector has been in a downturn since 2019, with falling rents and rising vacancies.
Bank of East Asia Ltd. reported HK$723 million valuation loss in 2025, up from HK$145 million in 2024.
S&P tested stress scenarios indicate collateral discounts of 30% to 50%, reflecting secondary-market sales.