Hong Kong banks to have a 'very good' capital buffer for the next 12-18 months: Moody's

That is in response to the move towards more stringent regulatory requirements.

Moody's says banks will also issue Basel III-compliant capital securities to meet overall regulatory requirements.

"Rated banks’ tangible common equity/risk-weighted assets (TCE/RWA) ratios improved in 2016 thanks to moderate loan growth and good internal capital generation. For the system as a whole, banks’ reported CET1 ratio improved to 15.4% at the end of 2016 from 14.6% at end of 2015, well above regulatory minimum capital requirements even after taking into account additional capital buffers. The HKMA has set countercyclical capital buffer at the top end of the range since 2016. The high end of the countercyclical buffer increases to 1.875% in 2018 from 1.25% in 2017," added Moody's.