This report does not constitute a rating action. Overview Key strengths Key risks Second-largest bank in Hong Kong, with a well-established franchise and extensive branch network. High exposure to property sector, with strains in Hong Kong commercial real estate (CRE) and the mainland. Strong capitalization and robust funding and liquidity cushion the bank against market weakness. Profitability declines amid narrowing net interest margins (NIM). High systemic importance in Hong Kong and moderately high likelihood of government support. The bank's stage 2 loans increased to 2.24% at end-June 2025 from 2.04% at end-2024. Drivers were troubled CRE loans. That said, BOCHK's nonperforming loan (NPL) ratio fell to 1.02% from 1.05% over the same period and remained well below the industry average
