Hong Kong banks to reap rewards of high interest rates until late next year, KPMG says
- The total assets of all licensed banks in the city last year rose by 2.7 per cent to HK$23 trillion (US$2.94 trillion), according to KPMG

Hong Kong’s banks saw moderate growth to their balance sheets last year as the high interest rate environment continued to boost profitability, according to a KPMG report on Wednesday.
The banking sector saw a significant rise in overall operating profit in 2023, and as interest rates are expected to remain relatively high and decrease gradually in the next year or so, banks will continue to reap rewards, the consultancy said.
“As the higher rates persist generally through the second half, that’s going to continue to be positive for banks in Hong Kong in terms of their ability to make money on that net interest margin,” said Paul McSheaffrey, senior banking partner at KPMG China.
The total assets of all licensed banks in the city last year rose by 2.7 per cent to HK$23 trillion (US$2.94 trillion), according to the KPMG report. Net interest margin rose by 30 basis points to 1.84 per cent, while operating profit before impairment charges increased by 34.7 per cent to HK$295 billion.
The Hong Kong government and regulator’s push to digitalise and develop fintech capabilities is also giving the city a major boost and will increase its attractiveness to banking customers, according to KPMG.
“Hong Kong is leading the charge globally on the exploration of central bank digital currencies [CBDCs],” said McSheaffrey, noting that they had the potential to be used in the future for cross border payments.
It would be a huge benefit to Hong Kong and boost the city’s attractiveness if it can facilitate faster and seamless digital payment systems across multiple jurisdictions in Asia and the rest of the world, he said.