According to the financial news app, Zhitong Finance, Goldman Sachs released a research report stating that after the inclusion of the expected losses of Hang Seng Bank, the average forecasted earnings per share for local bank stocks in Hong Kong for the 2024 to 2025 fiscal years decreased by 5%-8%, while the earnings per share for the 2026 fiscal year remain relatively unchanged. It maintains a 'buy' rating for Standard Chartered (02888), BOC Hong Kong (02388), HSBC Holdings (00005), and a 'sell' rating for Hang Seng Bank (00011).

The report points out that due to the risk exposure of commercial real estate in Hong Kong, China, and the mainland, the non-performing loans of local banks in Hong Kong have been rising, with Hang Seng Bank's non-performing loan ratio reaching a 30-year high in the first half of this year. In terms of commercial real estate in Hong Kong, the implied non-performing loan ratio has generally increased, accounting for 14% of the total debt of commercial real estate in Hong Kong, with 55% for small and medium-sized enterprises. In addition, if the bank assumes the worst-case scenario, with EBIT declining by 25% or 50% from the 2023 fiscal year level, the implied non-performing loan ratio could further rise to 22% and 39%, exceeding the peak of the Asian financial crisis.

The report also states that, taking into account the experience of HSBC in the Asian financial crisis and other factors, it is expected that the expected credit losses for commercial real estate loans in Hong Kong will rise to 3.5% from the 2024 fiscal year to the 2025 fiscal year. This means that under the base case and bear market forecasts, the unadjusted earnings per share will have a downward risk of 8% and 25% respectively, with the smallest impact on local small banks in Hong Kong, whereas Standard Chartered will have the least impact.