But credit growth will still slow over the next quarters.
The pace of loans disbursed by Hong Kong banks rose to 13.1% y-o-y in April (compared with 8.8% y-o-y in January), and BMI Research analysts are raising their 2017 loan growth forecast to 5.5% (versus 3.0% previously) to reflect this as well as improvements they have observed in the Hong Kong economy in the first quarter of 2017.
"Despite our upgrade, the figure still reflects our expectation for credit growth to moderate over the coming quarters. Other than adopting a cautious approach towards lending to mainland state-owned enterprises (SOEs) due to the structural slowdown in Mainland China, we expect a slowdown in domestic property-related lending to weigh on overall loan activity for banks operating in the Special Administrative Region (SAR)," BMI Research said.
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