JPMorgan: Middle East geopolitical uncertainty is a short-term driver of Hong Kong banking stock prices

LootboxPhobia · 2026-03-08T09:27:29+00:00

JPMorgan research report shows that Hong Kong bank stocks outperformed the Hang Seng Index in February, with individual banks showing divergence. Despite the decline in interbank rates, a rebound in loan growth, and improved pre-provision operating profits indicating better performance, Middle East geopolitical uncertainties may impact stock prices.

LootboxPhobia

2026-03-08 09:27:29

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According to a report from JPMorgan, Hong Kong bank stocks in February outperformed the Hang Seng Index and the Hang Seng Financials Sub-index by 12% and 7%, respectively. However, individual bank performance varied significantly, with Dah Sing Bank Group (02356) rising 18% and Standard Chartered Group (02888) falling 1%, affected by FY2025 earnings and company-specific news. Overall industry trends indicate that, despite the continued decline in Hong Kong interbank rates and a still-loose liquidity environment, loan growth recovery remains ongoing amid generally stable asset quality.

The report states that so far, the FY2025 results announced by banks support JPMorgan’s expectation of improved pre-provision operating profits across the banking sector. Meanwhile, regional banks’ asset quality is becoming more stable. However, short-term geopolitical uncertainties in the Middle East could become a more significant driver of stock prices.

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