HKMA frets over doubled loan growth

Fears credit and funding risks rising.

The Hong Kong Monetary Authority has talked to the city’s banks after loans jumped suddenly by an annualized rate of almost 40% in June compared to 20% in May.

Hong Kong bank loans in June leapt by 3% from May, boosting outstanding loans by US$22.8 billion to US$753 billion. The surge in loans, equivalent to an annual rate of almost 40 percent, is the biggest in three years. Bank lending grew 9.6% last year and 20% in 2011.

Analysts said a cash crunch in China’s interbank lending market in late June reduced the availability of funding. They believe that loan growth will drop to a more moderate level in the remaining months of this year.