BOCHK posts higher profit as lower credit costs offset margin pressure

China" class="entity-link entity-organization" data-entity-id="26029" data-entity-type="organization">Bank of China (Hong Kong), one of the city’s three note-issuing banks, reported a 7.1 per cent year-on-year increase in first-half net profit, as lower impairment charges and a wider net interest margin helped offset continued pressure on lending margins from falling Hong Kong interbank rates.Profit attributable to shareholders came to HK$23.74 billion (US$3 billion) for the six months to June 30, or HK$2.2453 per share, according to a stock exchange filing on Friday. The result beat analysts’ average estimate of HK$22.94 billion.BOCHK’s net interest margin, including income from foreign exchange swap contracts, stood at 1.57 per cent, versus 1.54 per cent a year earlier.credit costs also eased during the period, supporting the lender’s bottom line after elevated impairment charges in recent years.For the first half, the net charge of impairment allowances came to HK$2.38 billion, down 26.9 per cent from about HK$3.26 billion a year earlier, with the impaired loan rate at 0.89 per cent, versus 1.02 per cent at the end of June 2025.Hong Kong lenders have navigated a broader transition as monetary policy pivots away from the elevated rate environment that had previously bolstered margins, while commercial real estate exposures in Hong Kong and mainland China continue to demand close monitoring.To mitigate margin pressure, lenders industry-wide had narrowed cost-to-income ratios and leaned further into fee-based business, according to a KPMG review of Hong Kong’s banking sector published in June, even as credit quality across the sector remained broadly stable.