Morgan Stanley published a report saying that although the Bank of Hong Kong benefited from rising interest rates in the fourth quarter and second half of last year, it still faces the dual challenges of changing interest rates and slowing GDP prospects this year. China's commercial real estate (CRE) risk exposure remains a focus, so return on capital is important. According to the bank, compared to Hang Seng Bank and Bank of China Hong Kong, it is more optimistic about Foreign Exchange Control and Standard Chartered Group. The bank said that in a weak growth environment, the share repurchases of Foreign Exchange Control and Standard Chartered are expected to be US$9 billion and US$2 billion respectively this year; the dividend payout ratios of Hang Seng Bank and BOC Hong Kong are expected to be 69% and 55%, respectively. For BOCHK, the bank lowered its earnings estimates for each year from 2023 to 25 by 11%, 8%, and 10%, respectively, and the target price was lowered by 8% to HK$22.2 from HK$24.1, reaffirming the “in sync with the market” rating. According to the report, BOCHK's CRE exposure is at risk of further downside, and loan impairment expenses may rise significantly in the second half and final quarter of last year. The Bank of China's credit quality in Hong Kong may attract attention, but the bank believes it will remain strong.