- Hong Kong-based Bank of East Asia Ltd (BEA) posted a 75% slump in first-half net profit after it wrote down loans in China because of a downturn in commercial property markets outside China’s top cities.
It also warned that social unrest in Hong Kong and a trade dispute between China and the United States could affect the economies of China and the former British colony.
“The tense atmosphere (in Hong Kong) is likely to weigh on consumer and business confidence, and on in-bound tourism, if there is no resolution soon,” it said in a statement.
Some Hong Kong companies have been dragged into controversy after 11 weeks of sometimes violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms.
Pilots and cabin crew at Cathay Pacific Airways described a “white terror” of political denunciations, sackings and phone searches by Chinese aviation officials.
BEA and its rivals have closed branches in the vicinity of protests on a number of separate occasions.
“The recent situation in Hong Kong causes signs of concerns for the local SMEs (small and medium-sized enterprises),” bank co-chief executive Adrian Li told reporters. “It is because you see that if the current condition continues, (it) shall affect tourism, retail trade as well as investors’ confidence.
Nevertheless, our Hong Kong asset quality remains very healthy.”
Protesters were preparing to gather on Wednesday at the suburban Yuen Long mass-transit rail station, one of a series of running demonstrations over 11 weeks that have sometimes turned violent, including the storming of the legislature and havoc at the airport.