Table of Contents

COVID-19 Update

Impact Assessment

Retail Deposits

Total Consumer Loans

Mortgage Loans

Credit Card Loans

Other Consumer Loans

Appendix

Supplementary Data

Definitions

Methodology

About GlobalData

Contacts

Retail Banking in Hong Kong: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

Anti-government protests and the US-China trade war shrunk the country’s economy by 1.2% in 2019 - the first contraction in 10 years. The battered economy will further plunge due to the effects of the Coronavirus outbreak. The country’s unemployment reached a nine-year high of 3.7% in February 2020.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in Hong Kong. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- The impact of the coronavirus outbreak has spread to all parts of Hong Kong’s economy. High social tensions arising due to anti-government protests, coupled with the timing of this outbreak, have dealt a heavy blow to the banking sector.
- An extended disruption to economic activities and a second wave of the disease would weaken banks’ asset quality and profitability. A sharp increase in the unemployment rate will also have a negative impact on banks’ credit card receivables and residential mortgages. However, conservative underwriting and supportive government measures, including stimuli that targets retail consumers and SMEs, will cushion the economy and the banking sector.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Hong Kong's retail lending and deposit industry.
- Understand the key market trends, challenges, and opportunities in the Hong Kong's retail lending and deposit industry.
- Receive a comprehensive insight into the total consumer loans in Hong Kong, including mortgages, personal and credit card loans as well as retail deposits balances.