HSBC Holdings, the largest bank in Hong Kong, warned that the city’s commercial property sector continues to face “downward pressure” after bad loan provisions jumped this year.

The bank posted about $700 million of charges related to the commercial real estate sector during the first nine months, up from just $100 million in the year-earlier period. That reflects “higher allowances for new defaulted exposures” and the impact of an over-supply of non-residential properties, the lender said.

The city’s banking sector is battling stress from the worst real estate slump since the Asian financial crisis in the late 1990s. HSBC’s subsidiary, Hang Seng Bank, which it has offered to buy out, has been hard hit by the slump.

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“We continue to closely assess and manage the risk in the portfolio, including through portfolio reviews and stress testing,” the lender said in its results statement. Vulnerable borrowers are subject to heightened monitoring, it said.

HSBC also said that over-supply in the office market has impacted rental and capital values.

“While local sentiment has improved in response to improved financial market performance, we are yet to see signs of a meaningful stabilization outside of the residential sector,” the bank said.

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Overall, HSBC’s Hong Kong business grew profits before tax by 2 percent to $7.12 billion in the first nine months of the year, driven by higher client activity across its wealth business.