Two earnings reports this week should shed light on how much the pro-democracy protests and the police response, as well as the U.S.-China trade war, have hurt Hong Kong's position as one of the world’s most profitable banking markets.
Banks HSBC and Standard Chartered are both listed on the Stock Exchange of Hong Kong. HSBC reports quarterly earnings on Monday, Standard Chartered on Wednesday.
"It's the start of the end of an era of super profitability in Hong Kong," global head of bank research at Citigroup Ronit Ghose told the Wall Street Journal.
And it's not just protests that have hit Hong Kong's economy.
The trade war between China and the United States, combined with the demonstrations, have put Hong Kong in a "technical recession," according to the city's chief executive Carrie Lam.
A technical recession occurs after two consecutive quarters of economic decline, and a weaker economy generally leads to more defaults on loans.
To make matters worse for Hong Kong's banking industry, the city must match interest-rate cuts made by the U.S. Federal Reserve, causing lending to become a less profitable venture due to the city’s fixed exchange rate with the U.S. dollar.
Meanwhile, the ongoing protests do not appear to be abating anytime soon, despite the government meeting one of the protestors' demands by withdrawing the China extradition bill last week.
Pro-democracy protesters barricaded roads, hurled firebombs and set a subway entrance on fire as they used hit-and-run tactics against phalanxes of riot police.
The Associated Press contributed to this report.