Hong Kong Banking Sector's non-bank China exposures

Press Releases

16 Mar 2007

Hong Kong Banking Sector's non-bank China exposures

The Hong Kong Monetary Authority (HKMA) announced today (16 March 2007) the results of its quarterly analysis of the non-bank China exposures (NBCE) of Authorized Institutions (AIs) based on the enhanced prudential reporting criteria adopted since the end of September 2006.

The HKMA began collecting the data of AIs' exposures to specified non-bank Chinese entities in 1998. With the increasing economic integration between Hong Kong and the Mainland, the HKMA considered it desirable to obtain more comprehensive data on the banking sector's NBCE and accordingly expanded the scope of reporting after consultation with the industry. The major changes are the introduction of new reporting items covering exposures to "other" Chinese entities (those not specified under the previous reporting criteria) and exposures to non-Chinese entities where the credit is granted by AIs for use on the Mainland. AIs are required to adopt the enhanced reporting criteria to compile the relevant prudential return starting from the position of the end of September 2006.

Annexed is a summary of the major changes arising from the enhanced reporting framework. As expected, there was a significant increase in the level of NBCE reported by AIs as at end-September last year compared with the previous quarter due to the inclusion of new items. On the other hand, the change in NBCE during the fourth quarter of 2006 was moderate. The industry's aggregate NBCE as at end-December last year amounted to HK$545.7 billion, compared with HK$535.3 billion at end-September. The figure stood at HK$219.6 billion at end-June, which was based on the previous scope of reporting. On-balance-sheet exposures amounted to HK$430.5 billion or 4.7% of the industry's total assets at end-December, while the two new items jointly accounted for 59.8% of the aggregate NBCE.

The HKMA will continue to release the analysis of NBCE in its Quarterly Bulletin.

For further enquiries, please contact:
Hing-fung Wong, Officer (Press), at 2878 1802 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
16 March 2007

Annex

Banking sector's non-bank China exposures

In HK$ Billion Jun-06 Sep-06 Dec-06
Change (%)
Sep vs. Jun Dec vs. Sep
On-balance-sheet exposures 173.8 423.2 430.5 +143.5% +1.7%
Off-balance-sheet exposures 45.8 112.1 115.2 +144.8% +2.8%
Total direct exposures 219.6 535.3 545.7 +143.8% +1.9%
Breakdown by counterparties          
ITICs, red-chip and H-share companies, other Mainland government-owned entities, and their subsidiaries (no change in the reporting criteria) 184.6 193.8 199.6 +5.0% +3.0%
Other entities incorporated or established in China (new)   132.4 122.7   -7.3%
Companies and individuals outside China where the credit is granted for use in China (new)   188.1 203.5   +8.2%
Others 35.0 21.0 19.9 -40.0% -5.2%
Total 219.6 535.3 545.7 +143.8% +1.9%
Latest Press Releases
Last revision date : 16 March 2007