Hong Kong Financials Cross-border tightening: sentiment hit, limited earnings risk for incumbent banks and insurers

Research evidence excerpt

Hong Kong Financials Cross-border tightening: sentiment hit, limited earnings risk for incumbent banks and insurers

Asia Pacific Equity Research

28 May 2026

Hong Kong Financials

Cross-border tightening: sentiment hit, limited

earnings risk for incumbent banks and insurers

Regulators in HK SAR and Mainland China have tightened the enforcement of Banks & Financial Services

cross-border regulation on securities, futures, and fund activities. This has raised AC Katherine Lei

growth concerns for HK financials and is therefore negative for trading sentiment; (852) 2800-8552

however, we believe the actual impact on fundamentals could be immaterial. For katherine.lei@jpmorgan.com

banks, as the tightening measures target new Mainland Chinese Visitor (MCV) J.P. Morgan Securities (Asia Pacific) Limited/

clients, we estimate that this would lower 2025-28e wealth income CAGR by only J.P. Morgan Broking (Hong Kong) Limited

0.6%/0.9%/1.7% for HSBC/STAN/BOCHK, respectively, with a negative impact MW Kim AC

on FY28e group revenue of less than 0.5% (Table 7). For insurance, we believe (852) 2800-8517

the tightening measures are unlikely to create a material near-term revenue mw.kim@jpmorgan.com

headwind for AIA or FWD. In fact, HK banks and insurance companies may see J.P.J.P. MorganMorgan SecuritiesBroking (Hong(AsiaKong)Pacific)LimitedLimited/

revenue tailwinds as Mainland Chinese clients redirect their funds AC Jemmy S Huang

(JPMe: >US$30bn) from online brokers to incumbent financial institutions. (886-2) 2725-9870

Nonetheless, if there is further tightening on existing MCV clients, the impact on jemmy.s.huang@jpmorgan.com

HK banks and insurers could be more meaningful, and this could remain an J.P. Morgan Securities (Taiwan) Limited/ J.P.

overhang in the medium term.