IPO loans boost bank lending by 0.9% in June

IPO loans were estimated at $15.3b.

Total loans and advances at Hong Kong banks inched up by 0.9% YoY in June amidst sustained lending for initial public offerings (IPOs), according to a government release.

IPO loans as of end-June were estimated at $15.3b. In fact, the Hong Kong Monetary Authority (HKMA) notes that monthly loan growth would have fallen to 0.7% if IPO loans in June were excluded. 

Also read: Hong Kong could break into the top three IPO destinations by year end

In a breakdown, loans for use in Hong Kong (including trade finance) picked up by 1.3% MoM. This was largely driven by loans to financial concerns, manufacturing and residential mortgage loans. 

On the other hand, loans for use outside Hong Kong edged down by 0.1%.

Total deposits also dipped by 0.2% in June, following a downtrend across all segments.

In a breakdown, Hong Kong-dollar deposits decreased by 0.2% over the same period, as the decline in demand and savings deposits exceeded the increase in time deposits. Overall foreign-currency deposits also dipped 0.3% in June whilst renminbi deposits in Hong Kong slipped by 2.7% to $85.7b (RMB584.5b) as of end-June.

The Hong Kong-dollar loan-to-deposit ratio rose from 83.9% in May to 85.4% at the end of June, as Hong Kong-dollar loans expanded whilst Hong Kong-dollar deposits declined.