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Arthur Yuen: HK Banks' NIM Below Int'l Levels w/ Limited Room for Further Prime Rate Cuts
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The US Fed is set to announce its monetary policy decision early Thursday (29th) morning Hong Kong time, with the market widely expecting US rates to remain unchanged. In Hong Kong, Arthur Yuen, the Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA), believed that there is limited room for banks to further cut their prime rates (P). The current P has returned to 2021 levels, and the net interest margin (NIM) for Hong Kong retail banks narrowed to 1.47% in 1-3Q25, compared to 1.5% in the same period in 2024, Yuen stated. Yuen described the NIM of Hong Kong banks as relatively low by international standards. If Hong Kong further reduces P without a corresponding decrease in deposit rates, it would exert additional pressure on NIM and could affect profitability. AASTOCKS Financial News Website: www.aastocks.com |
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