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FINANCIAL SERVICES | Staff Reporter, Hong Kong
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Hong Kong bank loans grow 3.03% in February

Trade finance loans fell for the sixth straight month to $477.7b.

Borrowing activities in Hong Kong remained subdued in spite of rallying risky asset prices as loan growth slowed to 3.03% in February to fall to its weakest point since August 2016, according to a note from OCBC Bank.

Trade finance fell for the sixth consecutive month by 7.4% to $477.7b as trade activities continued to take a heavy beating from weakening demand and lingering trade tensions. Loans for use in Hong Kong also rose at a slower pace by 3.5% to $6.36t. On the consumer front, approved mortgage loans fell for the fourth straight month by 19.8% to $26.05b to track the downward spiral in the property market.

Also read: Hong Kong banks' 2019 loan growth cut to 2% as trade and mortgage loans take hit

"Though eased concerns about higher interest rates as well as US-China trade truce helped to revive investment sentiment, loan demand remained cautious probably due to concerns about external uncertainties," Tommy Xie, vice president, head of Greater China research said in a report.

On the other hand, growth for loans outside Hong Kong recovered 4.0% in February from 3.8% in the previous month as China's monetary easing stoked demand back to the onshore market.

"All in all, we hold onto our view that total loan growth will remain benign against the backdrop of faltering global growth and lingering trade tension. For the total loans in 2019, we expect to see lower single-digit growth than last year’s 4.4% yoy," added Xie.   

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