These are the sectors that drove loan growth in 3Q

Loan growth is 1.9% q/q.

Based on the HKMA's quarterly loan disclosure by sector, loan growth of 1.9% q/q was driven mainly by loans to the wholesale and retail sector (+7.9% q/q).

According to a research note from Barclays, the manufacturing sectors (+7.0%) were also involved.

Meanwhile, mortgage loans were up 2.4% q/q, while overseas loans, which were mainly China-related loans, were up 3.2% q/q.

Meanwhile, composite interest rate, which is a measure of the system funding costs, dropped 2bp m/m to 40bp.
As year-end approaches, Barclays noted that it has already noticed deposit competition (particularly for RMB) in the market.

This may put pressure on the funding cost and mean funding cost is less likely to decline further in the coming two or three months.