Ge Long Hui·2025-08-20 02:25Core Viewpoint - UBS expects HIBOR to stabilize between 2% and 2.5% by the end of Q3, indicating a cautious outlook for Hong Kong banks in the short term [1] Group 1: Bank Ratings and Preferences - UBS maintains a "neutral" rating on Bank of China (Hong Kong) and East Asia Bank, while rating Hang Seng Bank as "sell" [1] - Bank of China (Hong Kong) remains the preferred choice among the covered Hong Kong bank stocks, despite a potential short-term price decline [1] Group 2: Interest Income and Market Expectations - The rebound in HIBOR is beneficial for banks' net interest margins and net interest income, but the market has already priced in HIBOR's stability for the remainder of the year [1] - UBS anticipates that the pressure on net interest income in Q3 will be greater than in Q2, as the negative impact in Q2 lasted only about a month [1] Group 3: Loan Growth and Future Projections - After a 2% growth in loan balances during May and June, the sustainability of this growth momentum remains uncertain [1] - For 2025, UBS projects net interest income declines of 7%, 9%, and 11% for Bank of China (Hong Kong), Hang Seng Bank, and East Asia Bank, respectively [1]