Hong Kong's offshore RMB loans soared 36% to CNY107b

But here's the catch.

According to Maybank Kim Eng, offshore RMB loans increased to CNY107b in Sep 2013 (+36% YTD) but the loan-to-deposit ratio remained low at 11.8%.

They believe the continued appreciation of the RMB against the HKD/USD has crimped demand for offshore RMB loans during 9M13.

Here's more from Maybank Kim Eng:

With potential US QE tapering, the exchange-rate risk of foreign companies on borrowing offshore RMB loans should decline in 2014.

Besides, the Qianhai Development Authority in Shenzhen has an initial infrastructure investment plan of CNY390b during 2013-2015. We expect RMB loans in Hong Kong will surge to CNY390b in 2014.

This,together with a larger deposit pool and increased deposit utilisation, will raise the operating profit contribution of Hong Kong’s offshore RMB business to 6.4% in 2014.