1. According to statistics published today (Thursday, 31 July) by the Hong Kong Monetary Authority, deposits, loans and advances increased during June 1997. Table 1 gives a summary and comparisons with earlier months.
Deposits
2. Total deposits rose by 1.1% in June, having increased by 1.3% in May. The rise was mainly contributed by a 2.5% surge in HK$ deposits, which more than compensated for the fall of 0.9% in foreign currency deposits.
3. During the month, HK$ demand deposits fell by 2.7%, after declining by 0.5% in May. On the other hand, savings deposits were up by 1.9%, following a sharp increase of 4.2% in the previous month, while time deposits grew markedly by 3.4%, having increased by 0.9%.
4. US$ foreign currency deposits fell further by 1.2% in June, after decreasing by 0.7% in the previous month, while non-US$ foreign currency deposits declined slightly by 0.6%, reversing the rise of 2.3% in May.
Loans and advances
5. The growth of total loans and advances moderated to 2.4% in June, from 5.2% in May. During the month, domestic credit expanded more slowly by 1.5%, as the slowdown in other local loans more than offset the pick-up in loans for trade financing. Meanwhile, offshore loans grew by 3.3%, having increased strongly by 7.6% in the previous month.
6. Analyzed by currency, HK$ loans rose by 0.1% in June while foreign currency loans increased by 3.9%. As the expansion of HK$ loans was slower than that of HK$ deposits, the HK$ loan-to-deposit ratio fell to 107.6% at end-June, from 110.2% at end-May.
Quarterly analysis of loans for use in Hong Kong by major economic sector
7. Domestic credit grew at a rapid pace in the June quarter, although somewhat slower than the March quarter. For the June quarter as a whole, residential mortgage loans and other property-related lending rose by 8.7% and 11.5% respectively, along with the buoyant property market, while loans to stock-brokers expanded by a marked 19.1%, fuelled by the active stock market. In line with the pick-up of retail sales, loans for wholesale and retail trade rose further by 6.2%, after increasing by 6.6% in the preceding quarter. While loans for trade financing also rebounded by 6.5%, having dropped by 0.5% in the March quarter, lending to the manufacturing sector remained subdued, rising by a modest 1.7%.
Money supply
8. HK$M1 fell by 0.3% in June, as the decline in HK$ demand deposits more than offset the 3.6% rise in currency held by the public. HK$M2 and HK$M3 both expanded by 2.5% during the month. Compared to a year earlier, HK$M1, HK$M2 and HK$M3 rose by 15.5%, 24.1% and 23.8% respectively.
Note to editor
9. For enquiries, please contact the Press and Publications Section, Hong Kong Monetary Authority, at telephone 2878 8261.
Hong Kong Monetary Authority
31 July 1997
