The lender reported a full-year net profit of HK$3.50 billion ($447.8 million), while net interest income slid 7.3% to HK$15.32 billion. The sharp market reaction reflects growing investor anxiety over the bank's exposure to the cooling property markets in mainland China and Hong Kong.

Real Estate Impairments and Losses

Credit quality remains the primary concern for the group. According to the bank's financial statement, provisions for the commercial real estate sector accounted for 77% of total loan-loss provisions. Furthermore, valuation losses on investment properties ballooned to HK$723 million, a significant jump from the HK$145 million recorded in the previous period.

Despite the bottom-line pressure, BEA saw some resilience in its diversified revenue streams. Noninterest income rose 28% to HK$5.70 billion, supported by a 15% uptick in net fee and commission income. However, these gains were insufficient to offset the structural headwinds facing the bank's loan book.

Analysts at Citi Research had previously cautioned that credit costs would likely remain elevated due to persistent impairments in the Hong Kong property sector. The firm noted that declining property prices through the second half of last year and exposure to mainland Chinese developers continue to pose significant risks to the bank's valuation.