IPO loans worth $1.95b drove lending gains.
Total loans and advances at Hong Kong banks inched up by 0.9% YoY in June amidst sustained lending for initial public offerings (IPOs), according to a government release.
IPO loans as of end-June were estimated at $1.95b (HK$15.3b). In fact, the Hong Kong Monetary Authority (HKMA) notes that monthly loan growth would have fallen to 0.7% if IPO loans in June were excluded.
In a breakdown, loans for use in Hong Kong (including trade finance) picked up by 1.3% MoM. This was largely driven by loans to financial concerns, manufacturing and residential mortgage loans.
On the other hand, loans for use outside Hong Kong edged down by 0.1%.
Total deposits also dipped by 0.2% in June, following a downtrend across all segments.
In a breakdown, Hong Kong-dollar deposits decreased by 0.2% over the same period, as the decline in demand and savings deposits exceeded the increase in time deposits. Overall foreign-currency deposits also dipped 0.3% in June whilst renminbi deposits in Hong Kong slipped by 2.7% to $85.7b (RMB584.5b) as of end-June.
The Hong Kong-dollar loan-to-deposit ratio rose from 83.9% in May to 85.4% at the end of June, as Hong Kong-dollar loans expanded while Hong Kong-dollar deposits declined.
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