Moody’s says Hang Seng Bank capital strength offsets loan risks

These loans made up 15% of total lending in June 2025.

Moody’s Ratings expects Hang Seng Bank to keep a strong capital position over the next one to two years. 

This is helped by slow loan growth in Hong Kong and new Basel III rules that raised its core capital ratio to 21.3% by mid-2025, up from 17.7% at the end of 2024.

Moody’s said the bank’s strong capital and liquidity will help absorb rising risks from its commercial real estate (CRE) loans in Hong Kong. 

These loans made up 15% of total lending in June 2025, with the share of problem loans climbing to 20.2%, pushing overall impaired loans to 6.7%.

Earnings are expected to stay weak, with return on assets slipping to 0.8% in the first half of 2025 from 1.2% a year earlier, mainly due to higher credit costs