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      In this year’s annual Banking Report we take a look at the financial performance of banks in Hong Kong in 2022 and share our insights on the outlook for the sector. Looking ahead, we believe the focus for banks should be Back to Business, Seizing Opportunities. Now that the city has returned to normal operations after the pandemic, banks are in a good position to strengthen Hong Kong’s role as an IFC and pursue key and emerging growth areas.

      I hope you enjoy our perspective on the banking sector in 2022 and beyond, and would welcome the opportunity to discuss the banking results and the current industry landscape.
      Paul McSheaffrey

      Senior Banking Partner, Hong Kong SAR

      KPMG China


      In our annual report we review the financial performance of banks in Hong Kong in 2022 and look at some of the key topics and growth areas...


      Financial performance

      Banks in Hong Kong see balance-sheet and profit growth in 2022 despite global and domestic headwinds and a rise in impaired loans

      In a competitive environment, the city’s new virtual banks are building their brands and exploring new opportunities

      Exposure to struggling property developers has helped to drive up expected credit losses and highlighted the importance of good lending practice



      Hong Kong as an IFC

      Now that the city has fully reopened, Hong Kong should seize the opportunity to strengthen its status as a global hub for finance

      In an increasingly complex global environment, Hong Kong’s tax regime remains a key part of the city’s advantages as an IFC

      As cross-border financial activity revives, Hong Kong branches also serve as a connector for Chinese banks’ overseas expansion plans

      Hong Kong set to benefit from the Chinese Mainland’s economic recovery as well as tourism recovery in the city



      Growth opportunities

      Banks can act as agents for change with three priorities for strategic competitiveness, sustainability and future profit growth

      Banks are embedding climate risk management practices across different areas and taking the opportunity to drive value

      Regulatory developments in Hong Kong provide greater certainty for global investors while some cryptocurrencies recover in value

      Policy changes, growing wealth across the region and new generations of investors are creating new opportunities for Hong Kong’s wealth managers



      Business Transformation

      Generative AI can offer a range of benefits to banks in areas beyond customer service, but will also introduce new risk considerations

      Taking a strategic approach to using managed services can add value to banks, increase efficiency and improve user experience

      New laws on cross-border data transfer affecting foreign banks operating in the Chinese Mainland take effect



      Risk and Regulatory Trends

      Banks should ensure that they have the capability to make use of the new types of data sets that are emerging as technology evolves

      Preparations for OR-2 regulatory regime strengthen banks’ ability to withstand disruption to their operations and in third party service providers

      New proposal to streamline selling processes and clarify guidance aims to boost the wealth management sector

      Concentration risk and failure to manage assets and liabilities contributed to demise of a number of banks globally



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      Hong Kong Banking Report 2023

      Report on the 2022 financial performance of banks in Hong Kong



      Key Contacts

      Paul McSheaffrey
      Paul McSheaffrey

      Senior Banking Partner, Hong Kong SAR

      KPMG China

      Jianing Song
      Jianing Song

      Head of Banking and Capital Markets, Hong Kong SAR

      KPMG China


      About KPMG

      KPMG in China has offices located in 31 cities with over 14, 000 partners and staff, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, Xiamen, Xi'an, Zhengzhou, Hong Kong SAR and Macau SAR. It started operations in Hong Kong in 1945. In 1992, KPMG became the first international accounting network to be granted a joint venture licence in the Chinese Mainland. In 2012, KPMG became the first among the “Big Four” in the Chinese Mainland to convert from a joint venture to a special general partnership.

      KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited ("KPMG International") operate and provide professional services. "KPMG" is used to refer to individual member firms within the KPMG organisation or to one or more member firms collectively.

      KPMG firms operate in 142 countries and territories with more than 275, 000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.


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