This report does not constitute a rating action. ALAC--Additional loss-absorbing capacity. CRA--Comparable ratings analysis. GRE--Government-related entity. ICR--Issuer credit rating. SACP--Stand-alone credit profile. Overview Key strengths Key risks Entrenched franchise in mainland China and Hong Kong, with better geographical diversification than peers. Profitability pressure from continued net interest margin (NIM) compression. Large customer deposit base that supports funding and liquidity. Asset-quality pressure from geopolitical tensions and strains in mainland China's property sector. Extremely high likelihood of receiving extraordinary support from the Chinese government. We expect the bank's risk-adjusted capital (RAC) ratio to decline moderately to 7.2%-7.6% over the next two years, from 7.8% at end-June 2025. Our forecast assumes mid-to-high single-digit loan growth per annum over the next 24 months. A
