Barclays issued a report that the financing cost of offshore currency in Hong Kong has been rising since June and has stabilized recently. BOC Hong Kong (Holdings) Limited's offshore currency financing cost is lower than that of his peers, and his dividend return is more attractive, with 5.6%. The capital is also more abundant than the industry, with a tier one capital adequacy ratio of 13%, upgrading BOC Hong Kong (Holdings) Limited's rating to "overweight" and raising the target price from 24.4 yuan to 26.1 yuan. On the other hand, the rating of Bank of East Asia was downgraded from "in step with the market" to "underweight" because of its current excess premium due to corporate actions, and the target price was slightly adjusted from 25.5 yuan to 25.7 yuan.

The bank also raised the target prices of Dah Sing Financial (00440-HK) and Dah Sing Bank (02356-HK) from RMB25.3 and RMB7 respectively to RMB31.90 and RMB8.50, with a rating of "in line with the market", while Hang Seng (00011-HK) and Wing Hang (00302-HK) rated "underweight" with a target price of 91 yuan and 71 yuan respectively.

Barclays said that capital continued to flow into Hong Kong, reducing the risk to Hong Kong dollar liquidity caused by the growth of offshore renminbi business. At the same time, capital inflows increased liquidity in the system, which was conducive to reducing banks' financing costs and driving moderate profit growth in the banking sector. However, due to reduced demand for loans and fierce price competition, banks' spreads will fall by 4 pips next year.

According to the bank, the growth of corporate and private mortgage loans will slow by 5 per cent next year, and Hong Kong's loan growth rate will be lowered from 7-8 per cent to 6-7 per cent in 2013-2014.