Goldman Sachs released a research report indicating that Bank of East Asia (00023) reported a net profit of HK$947 million for the second half of 2025. This represents a 57% decline compared to the same period last year and a 58% decrease from the first half of 2025. The figure was 34% below Goldman Sachs' forecast, primarily due to a further impairment of HK$625 million on investment properties and a one-time loss recorded by its associated company, Guotong Trust, which operates in China. Goldman Sachs maintained its "Sell" rating on Bank of East Asia but raised its target price from HK$13.5 to HK$14.

The report noted that Bank of East Asia's credit costs remained high at 114 basis points in the second half of 2025. Approximately 77% of the cumulative provisions to date are related to commercial real estate exposures. On the revenue side, net interest income exceeded Goldman Sachs' forecast by 8%, benefiting from a recovery in Hong Kong's net interest margin driven by changes in the Hong Kong Interbank Offered Rate during the latter half of 2025.

Following the earnings announcement, Goldman Sachs raised its net profit forecasts for Bank of East Asia for the years 2026, 2027, and 2028 by 3.7%, 1.4%, and 2.3%, respectively. The revised forecasts are HK$4.079 billion, HK$5.081 billion, and HK$6.165 billion. These adjustments account for the higher realized net interest margin and non-interest income in the second half of 2025, as well as management's commitment to achieving stronger fee income growth. However, these positive factors were partially offset by a slight upward revision in operating expense forecasts.