Hong Kong banking sector remained resilient in 2010

Total loans recorded a 28.6% increase last year, according to Hong Kong Information Services Department.

Monetary Authority Deputy Chief Executive Arthur Yuen said, "Hong Kong’s banking sector remained resilient last year despite uncertainties in the global landscape."

During a year-end review today, Mr Yuen told the media the banking sector’s profitability has increased due to improved asset quality but net interest margins remained under pressure, dropping to the historic low of 1.33% in the first three quarters of 2010.

Total loans recorded a 28.6% increase last year, significantly higher than the 0.1% increase in 2009 over 2008. Last year’s residential mortgage loans rose 15.1% last year when compared with 2009, higher than the 9% increase in 2009 over 2008. Total deposits recorded a 7.5% year-on-year increase last year, while the 2009 figure was 5.3%.

Mr Yuen said the authority is concerned about the credit expansion and will look into underwriting standards, loan use and review provisioning with the industry in the coming year.