...February 22, 2024 HONG KONG (S&P Global Ratings) Feb. 22, 2024--Bank of East Asia Ltd. (BEA) should withstand asset quality strain in 2024. The group's adequate capitalization, tightening risk control, and reducing exposure to commercial real estate (CRE) in mainland China will help it to navigate economic headwinds. This is amid weakness in the property sector and slowing economic growth in key markets of Hong Kong and mainland China. Hong Kong-based BEA (A-/Stable/A-2) will likely continue to prioritize credit risk management by lowering its exposure to CRE in the mainland and strengthening underwriting standards. In 2023, the group wrote down HK$4.8 billion of property-related loans, mostly in mainland China, which weighed on its profitability. Mainland CRE loans accounted for about 7% of the group's total loans as of end-2023, versus 9% as of end-2022. We believe BEA's asset quality and credit costs will remain under pressure over the next two years. This is because the group has a...
