...The ratings on Standard Chartered Bank (Hong Kong) Ltd. (SCBHK) reflect its status as a core subsidiary of Standard Chartered Bank (SCB; A+/Stable/A-1), its good franchise in Hong Kong, and good financial profile. These positive factors are offset by the bank's geographic concentration in its mature and saturated home market, Hong Kong, which is characterized by keen competition and strong pressure on interest margins. The bank has high exposure to property-related lending in Hong Kong, but the majority is in the form of residential mortgage loans that have currently low delinquency rates. In addition, the bank is able to offer fee-related activities to this large client base. Its Hong Kong operations encompass other operating activities and responsibilities than just those related to SCBHK. These include prime credit and China operations. Hong Kong remains the largest single market in terms of profit contribution for the SCB group, and has a key role to play in the group's expansion in...
