One of Hong Kong’s largest banking groups posted a sharp drop in profits today as it struck a cautious tone following months of protests in the region and a global economic slowdown from the US-China trade war.
Bank of East Asia (BEA), which is based in Hong Kong, reported a 75 per cent drop in net profits during the first six months of 2019 after writing down property loans in mainland China.
The group warned of potential threats to the Asian economy amid mass demonstrations in Hong Kong, where protests have erupted during the last 11 weeks over controversial plans to change extradition laws.
A tit-for-tat tariff war between Beijing and Washington, D.C. has also taken its toll on the continent’s economy, the firm said.
“The recent situation in Hong Kong has caused signs of concerns for local SMEs. If the current condition continues it shall affect tourism, retail trade as well as investor confidence,” Adrian Li, co-chief executive, Bank of East Asia, said today.
BAE’s impaired loan ratio for its mainland China operations rose from 1.73 per cent to 4.89 per cent when compared to the end of to last year.
The bank, which is one of two remaining family run Hong Kong banks, is one of many high-profile companies to have closed outlets within the vicinity of the Hong Kong demonstrations in recent weeks, amid violent clashes between police and protesters.