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Mainland Ties Give Hong Kong's Banks An Edge - Fitch Ratings

Editorial Staff

29 March 2021

Hong Kong’s closer ties to mainland China will help the jurisdiction’s banks compete with rival wealth management hubs such as Singapore, rating agency said late last week. The organisation said it may upgrade its outlook on such banks, depending on how well Hong Kong contains the pandemic. 

“Hong Kong's relative wealth management strength, in our view, is its China connectivity. Closer economic and capital market integration over the years have led to more mainland entities setting up their regional headquarters in Hong Kong and increased market shares by Chinese banks. These factors have strengthened and stabilised Hong Kong's banking system liquidity,” the agency said in a note. 

However, Fitch said that it has a negative outlook on Hong Kong’s banks, reflecting the economic uncertainties that it said have lingered since 2019. The agency said that it “may revise the outlook on the score to stable if Hong Kong is successful in containing the pandemic and the local economy's recovery is sustained.”