Loan growth remains weak in Hong Kong

Loans inched forward at the tepid pace of 1.5% in the second quarter reflecting the economic slowdown gripping Hong Kong.

The government said the slight growth was broadly the same pace as in the previous quarter. Loans for use trade finance, residential mortgage loans and the wholesale and retail sector continued to expand, while lending to financial institutions and loans for building, construction, property development and investment fell.

For the month of June, total loans and advances rose 1.1%. Loans for use in Hong Kong grew 0.8% and loans for use outside Hong Kong rose 2%. As Hong Kong-dollar loans expanded faster than deposits, the Hong Kong-U.S. dollar loan-to-deposit ratio rose to 84% at the end of June.

Total deposits rose 1.4% in June, with a 0.3% rise in Hong Kong dollar deposits, and a 2.4% rise in foreign-currency deposits, said the Monetary Authority.

Renminbi deposits rose 0.7% to RMB557.7 billion. Total renminbi remittance for cross-border trade settlement amounted to RMB241.4 billion in June, compared to RMB223.4 billion in the previous month.

Seasonally adjusted Hong Kong-dollar M1 increased 1.7% in June and rose 7.2% year on year. Unadjusted Hong Kong-dollar M3 increased 0.3% during the month and expanded 6.1% on a year earlier.