Total loans rise 4% in June: HKMA

This was partially due to IPOs during the month.

The total loans and advances rose by 4% in June, which the Hong Kong Monetary Authority (HKMA) linked in part to initial public offerings (IPO).

Of the total loans, those for use in Hong Kong (including trade finance) increased by 5.9%, whilst loans for use outside Hong Kong decreased by 0.3%.

Excluding the IPO-related loans, total loans, and advances rose by 1.4% in June and increased by 4.4% in the first half of the year.

The Hong Kong dollar loan-to-deposit ratio increased to 84.2% at the end of June from 82.6% at the end of May, as Hong Kong dollar loans increased at a faster pace than Hong Kong dollar deposits.

For the second quarter of 2021 as a whole, loans for use in Hong Kong, including trade finance, grew by 5.8% following a 3.6% increase in the previous quarter.

The increase in loans during the second quarter was mainly led by trade finance and loans to stockbrokers.

Total deposits and Hong Kong dollar deposits with authorised institutions during the month inched up by 0.3% and 0.7%, respectively, if IPO-related loans are excluded.

For the first half of 2021 as a whole, total deposits and Hong Kong dollar deposits grew by 4.6% and 7.6%, respectively. Excluding IPO-related loans, each increased by 2.7% and 3.7%.

“The monetary statistics in June are subject to distortions caused by fund flows associated with large-scale IPO activities,” the HKMA said in a statement.

Total deposits and Hong Kong dollar deposits increased by 2.2% and 4.5%, respectively in June, partly driven by the deposits created by IPO-related loans straddling end-June.