Non-Banks Financial Institutions - China: Cross-border financial services tightening: Limited credit risk; prefer FWD over AIA

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Non-Banks Financial Institutions - China: Cross-border financial services tightening: Limited credit risk; prefer FWD over AIA

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Non-Banks Financial Institutions - China

Cross-border financial services tightening:

Limited credit risk; prefer FWD over AIA

Credit Analysis

MCV uncertainties appear manageable for HK insurers 11 June 2026

In May’26, Hong Kong and mainland regulators tightened regulations on cross‑border Global Emerging Markets | Corporate

financial services. During our recent conversation with credit clients, we heard concerns Credit

about MCVs’ bank account establishment in Hong Kong and negative implications on the Asia | China

Non-bank Financial Institutionsgrowth and credit profiles of AIA and FWD with USD bonds outstanding. The risk

appears overall manageable in our view, given: 1) the tightening policy for Hong Kong Lefu Li, CFA

banks currently is only for investment accounts with restriction on Chinese ID holders to Research Analyst

Merrill Lynch (Hong Kong)

establish bank accounts in Hong Kong (see our equity reports: HK banks tighten +852 3508 2142

investment account; limited impact, potential flow redirection and China’s regulations lefu.li@bofa.com

that may impact cross-border retail business ); 2) both AIA and FWD have a diversified

customer base across Asia, with MCVs accounting for 21% and 13% of their respective

group VONB in 2025 (Exhibits 1 and 2). FWD’s MCV-related business has higher capital

intensity, so a slowdown in this segment is unlikely to have a significant impact on its Abbreviation

solvency position; while AIA’s VONB growth could be more sensitive, its solvency ratio is

still sufficient, in our view, with little credit rating implications. For USD bonds, we still AIA: AIA Group Ltd (ticker: AIA)