- KPMG says Hong Kong banks head into 2026 well-capitalised and liquid, with growth supported by stronger wealth-management flows and revived capital markets.
- HKEX led global IPO fundraising in 2025 with HK$274.6bn from 106 listings and about US$66bn more from follow-on offerings.
- Reforms and HKEXs TECH channel are expanding the listing pipeline, especially for biotech and specialist tech firms.
- Banks are prioritising AI-driven automation and digital-asset/tokenisation opportunities, while tightening governance for regulatory, cyber and third-party risks.
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As of January 2026, Hong Kong’s banking sector is riding strong tailwinds driven by an IPO renaissance, surging equity market activity, and increasing demand for wealth management services. According to KPMG’s Hong Kong Banking Outlook 2026, banks are well-capitalised and liquid, with structural inflows—especially through wealth management—and revitalised capital markets forming the backbone of expected growth. HKEX figures corroborate this: as of 19 December 2025, 106 new listings raised ~HK$274.6 billion (~US$35 billion), and listed firms raised an additional US$66 billion in follow-on offerings. The daily cash equity turnover rose sharply, gap-closing with peaks seen earlier in the decade.
On institutional and regulatory developments, the launch of HKEX’s Technology Enterprises Channel (TECH) has attracted biotech and specialist tech firm listings, with 88 such companies listing in 2025 following reforms like Chapters 18A/18C of the listing rules. These reforms have improved IPO debut performance: underpricing rates have fallen and first-day returns surged (EY report indicates a ~38% average first-day return after reforms). A+H listings remain popular, contributing a meaningful share of proceeds.
Technology and digital assets are moving from trilogy to core banking strategies. KPMG forecasts that AI shifts from support functions to central competitiveness drivers across operations, particularly corporate banking (e.g. eliminating physical signatures and batch processing). Tokenisation, stablecoin issuance, digital-asset custody are expected to gain traction, supported by ongoing projects such as the HKMA’s Project Ensemble. However, this also raises regulatory, AML, cybersecurity, and third-party risk concerns which banks must address rigorously.
Strategic implications for banks include: accelerating tech investments—not just for efficiency, but for competitive edge; cultivating expertise in digital assets; hiring talent in cyber risk, AI and operations automation; ensuring governance frameworks evolve alongside business innovations; and engaging proactively with regulatory developments. Open questions include how regulatory clarity—especially around stablecoins and tokenised assets—will evolve, the degree of adoption by customers/market of tokenised products, and the resilience of banks’ cyber defenses in an environment where threats are increasingly automation-enabled.
Supporting Notes
- HKEX raised HK$274.6 billion from 106 IPOs by 19 December 2025, with four of the top global IPOs coming via Hong Kong, and US$66 billion raised in follow-on offerings.
- Average daily turnover in Hong Kong’s cash equity market (first 11 months 2025) reached HK$230.7–255.8 billion, up roughly 43-95% year-on-year depending on measurement period.
- Reforms such as Chapters 18A/18C and creation of TECH Channel have resulted in 88 biotech and specialist technology companies listing in 2025.
- EY reports that fewer IPOs traded below issue price, with average first-day returns near 38%, marking the highest in five years.
- KPMG highlights banks as well capitalised and liquid, expecting rising investment and hiring, and sees digital-asset monetisation including tokenised deposits, stablecoins, and tokenised gold becoming more mainstream.
- Cyber risk elevated: KPMG expects threat actors to use AI/automation to detect vulnerabilities faster; recommends banks focus on real-time threat detection, governance for third parties, and integration of tech, risk, and operations.