Ongoing Hong Kong protests taking toll on city’s economy, Bank of East Asia warns Massive protests, which have disrupted life in Hong Kong for weeks, may drag the city’s economy down, one of the locally-headquartered lenders, Bank of East Asia, has warned after suffering massive profit losses.
Bank of East Asia (BEA) reported a drop in profits of almost 75 percent over the first six months of the year. Its profits totaled HK$1 billion (US$127.4 million) in the first half of 2019, while last year the figure stood at HK$3.99 billion.
All of China, not just the special administrative region, may feel the impact of the social unrest combined with the consequences of the trade war between Beijing and Washington, according to the bank which has operated for more than a century.
“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 on Wednesday, as cited by media. Thus the current turbulent situation may leave the city’s economy “constrained” through the end of the year.
The lender also said the rallies cause concern among local small and medium enterprises, adding that the continued unrest is set to further drag tourism down, as well as retail trade and investor confidence.
BEA had to shut some of its offices near the protest area, as did some of its local competitors over the past weeks. A customer alert on the bank’s website said that two branches will be closed on Wednesday, including one near the suburban Yuen Long mass-transit rail station, where people planned to gather to commemorate one month since violence broke out in the area.
Hong Kong is an internationally-recognized financial hub and the protests have already had an impact on its image. Some investors are seeking ways to move their money out due to concerns over asset security, while others will just stop taking their money to Hong Kong, investment guru Jim Rogers recently told RT.
Over the past month the Hong Kong stock-market index, the Hang Seng, fell nearly 8 percent. In another possible blow to the local stock market, China’s biggest e-commerce company Alibaba is rumored to have postponed its $15 billion listing in Hong Kong over the lack of financial and political stability.