On July 5th, Geelong News reported that commercial real estate (CRE) faced high interest rates and changes in work patterns, leading to an increase in commercial and residential building vacancies. According to media reports, rating agency Moody's believes that banks face challenges in CRE loans, although they will not cause widespread adjustments to the credit ratings of banks in the Asia-Pacific region, the survival ratings of individual banks in Hong Kong may be affected. However, Moody's maintains a stable outlook on the credit ratings and business environment of Hong Kong banks, and the industry outlook is "neutral." Jonathan Cornish, head of Moody's bank ratings in the Asia-Pacific region, said that although Hong Kong banks face challenges in real estate-related loan risks, Hong Kong banks have made a lot of provisions for Mainland commercial real estate loans last year. Although the situation is not expected to significantly improve this year, it is also not expected to significantly worsen. It is expected that credit costs (i.e. loan losses relative to the total loan amount) for related loans will still occur this year, but will moderately decrease compared to last year. He expects overall credit ratings of Hong Kong banks to remain stable, but banks with relatively high exposure to real estate risks, such as Hang Seng Bank and Shanghai Commercial Bank, may deteriorate.