HSBC and Hang Seng Bank recently announced their interim reports for 2025. They anticipated losses in commercial credit were HK$15 billion and HK$4.86 billion, respectively. HSBC booked the first half year’s earnings before taxes and interests fell about 26.65% and Hang Seng recorded the drop was 30 %. The collapse of the commercial property market has also led to a sharp rise in Banks bad debts.

For years, banks have been lending developers and investors at low interest rates to boost revenues during a low-interest rate environment. The property developers would certainly benefit from this banking policy as asset prices continue to rise, while banks themselves also earned substantial profits due to expanding the lending services. 

Banks gained the profits from the interest rates spread, while investors earn much from the prices appreciation. Each has its own gain. Years ago, DBS Bank might have been tempted by this benefit, so they had purchased eight floors of The Center. Last November, it bought two more floors on 66 and 75 floor, despite its costliness. As a result, they have been holding eleven floors of The Center in total. Unfortunately, The Center's valuation has been plummeting since then. Whatever the reason, DBS has to face significant impairment loss. 

DBS currently owns floors 10 to 12, 15 to 18, 50 to 73, 66 and 75 in The Center. Last year, it acquired 66th and 75th floor, the former price was HK$25,958 per square foot (psf.) and the latter was HK$27,028 psf. Based on the latest transaction price of 26th floor fell to HK$14,000 psf., the value of those floors held by DBS has likely declined by 50%. As an average per floor area of 25,000 square feet, this potential investment loss for DBS is estimated to be between HK$3 billion and 3.5 billion. Adding this loss to the bad debts in commercial credit business, DBS will suffer colossal decline in company performance.