Protocols against democracy have harmed Hong Kong's economy, but the chief executives of two major banks said that their business in the city has not been affected in a big way.
The Singaporean bank DBS on Monday said its net profit for the Hong Kong business jumped 14% year-on-year in the July to September quarter. The results came on the back of a 15% increase in total profit from the quarter to $ 1.63 billion ($ 1.2 billion), which beat analyst estimates compiled by Refinitive.
Hong Kong contributed around 334 million Singapore dollars, or 20%, of DBS & # 39; total profits in the third quarter of this year.
Piyush Gupta, CEO of DBS, told CNBC's Tanvir Gill that he did not expect a "serious problem" with the bank's loan book in Hong Kong. But the bank has set aside some money as a pre-settlement for losses in the Hong Kong business, he added.
"The underlying portfolio, we do not see any stress: criminals will not pick up, payment rates are on track and the portfolio is extremely well secured," he said at the Singapore FinTech festival.
"So I don't expect (a) a serious problem with the credit portfolio in the coming year, just to be very careful we kept some money aside just in case," he added.
Protests in Hong Kong, which have lasted for more than five months, have harmed the retail and tourism industries. This led in part to the city's technical recession, defined as two consecutive gross domestic product declines in the first quarter.
Gupta said that the "biggest" problem that could affect the bank's Hong Kong portfolio is a "massive correction" in property prices. But that cannot happen given the government's new housing policy, which would support property prices, he explained.
Hong Kong's attractiveness
Bill Winters, chief executive of London's Standard Chartered headquarters, said that Hong Kong generally has despite the protests.
As with DBS, Winters said that StanCharts earnings in Hong Kong were higher in the third quarter compared to the same period a year ago.
"It did not affect Hong Kong's attractiveness as a global trade center … nor did it affect the extent to which Hong Kong is a gateway to China," Winters told CNBC's Gill at the Singapore FinTech Festival on Monday.
"It doesn't & # 39; That means there are no problems in the future, but my observation is that through a very difficult time in Hong Kong in the third quarter when the protests really peaked, our business was very robust, "he added. [1