The Chinese commercial real estate crunch could push a number of Hong Kong banks to add more provisions for nonperforming loans, the South China Morning Post reported Tuesday, citing Citi.

The higher provisions are seen to impact second-half earnings, the SCMP said.

Both Bank of China (HKG:3988, SHA:601988) unit BOC Hong Kong (Holdings) (HKG:2388) and Bank of East Asia (HKG:0023) are the most exposed to Chinese commercial real estate, the report said.

BOC Hong Kong's exposure to Chinese commercial real estate reached HK$77.6 billion as of the end of 2025, while that of Bank of East Asia reached HK$29 billion, the report said.

While BOC Hong Kong's profit, seen to reach HK$16.6 billion in the second half of 2025, is in line with expectations, credit expenses could top 11% of consensus due to impairments, the report said.

BEA's credit costs are seen to be 2% above consensus, according to the report.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)