The city's retail lenders suffered an 18per cent aggregate pre-tax profit decline in the first nine months, the Hong Kong Monetary Authority said yesterday.
'The deterioration in the macro environment will present challenges for banks in the year ahead,' it said.
In a submission to the Legislative Council's panel on financial affairs, the HKMA also said banks would incur further impairment charges and investment losses as a result of the global credit crunch.
Separately, Wing Hang Bank said it would make a provision of HK$315 million for HK$377 million worth of bonds issued by two Icelandic banks.
The mid-tier lender said the bonds accounted for less than 0.27 per cent of its total assets and the impairment loss would not have any significant impact on its business.
However, analysts expected the bank's earnings would be dragged down by the provision. The bank reported a first-half profit of HK$938.12 million.
ICBC (Asia) said earlier this week that it decided to make a full provision for about HK$600 million worth of bonds issued by three major Icelandic banks.
