DBS CEO Piyush Gupta said he doesn’t anticipate a “serious problem” with the bank’s loan book in Hong Kong but the bank has set aside some money as a precaution for losses in the city. Meanwhile, the CEO of London-headquartered Standard Chartered, Bill Winters, said that in general, Hong Kong largely remains attractive as a place to do business in despite the protests.
Pro-democracy protests have hurt the Hong Kong economy, but the chief executives of two major banks said their businesses in the city have not been affected in a big way.
Singaporean bank DBS said on Monday that net profit for its Hong Kong business jumped 14% year-on-year in the July-to-September quarter. That performance came on the back of a 15% year-on-year rise in overall profit for the quarter to 1.63 billion Singapore dollars ($1.2 billion), which beat analyst estimates compiled by Refinitiv.
Hong Kong contributed around 334 million Singapore dollars, or 20%, of DBS’ overall profits in the third quarter this year.
Piyush Gupta, CEO of DBS, told CNBC’s Tanvir Gill that he doesn’t anticipate a “serious problem” with the bank’s loan book in Hong Kong. But the bank has set aside some money as a precaution for any losses in its Hong Kong business, he added.
“The underlying portfolio, we’re not seeing any stress: Delinquencies are not picking up, payment rates are on track and the portfolio is extremely well secured,” he said at the Singapore FinTech Festival.
“So I don’t really anticipate (a) serious problem with the credit portfolio in the coming year, it’s just to be abundantly cautious we kept some money aside just in case,” he added.
Protests in Hong Kong, which have lasted for more than five months, have hurt the retail and tourism industries. That partly led to the city’s technical recession, defined as two consecutive quarter-on-quarter decline in gross domestic product.
Gupta said the “biggest” problem that could hit his bank’s Hong Kong portfolio is a “massive correction” in property prices. But that may not happen given the government’s new housing policies, which would support property prices, he explained.
“If no one had an army, armies would not be needed. But the same can be said of most lobbyists, PR specialists, telemarketers, and corporate lawyers. Also, like literal goons, they have a largely negative impact on society. I think almost anyone would concur that, were all telemarketers to disappear, the world would be a better place.”
― David Graeber, Bullshit Jobs: A Theory