According to statistics published today (29 April 1999) by the Hong Kong Monetary Authority ("HKMA"), total deposits grew while loans and advances decreased in March. Table 1 provides a summary and comparison with earlier months.
Deposits
Total deposits grew by 0.5% (HK$15.0 billion) in March, mainly due to an increase in HK$ deposits. As HK$ deposits increased (1.4%) while foreign currency deposits declined (-0.7%), the share of HK$ deposits to total deposits increased to 57.0% in March, compared with 56.5% in the preceding month.
The increase in HK$ deposits was mainly attributable to a shift from currency held by the public to bank deposits after the Chinese New Year holiday. Demand deposits increased substantially by 8.3%, while savings and time deposits rose by 0.2% and 1.3% respectively during the month.
Foreign currency deposits declined by 0.7% in March, as the decline in US$ deposits (2.1%) more than offset the increase in non-US$ foreign currency deposits (1.3%).
Loans and advances
Total loans and advances shrank for the fifth consecutive month, by 3.2% in March. In line with the slowdown of economic activity in the region, loans for use outside Hong Kong plummeted by 7.4%, while domestic loans fell by 1.0%. HK$ loan-to-deposit ratio decreased to 99.2% at end-March, compared with 101.2% at end-February.
Quarterly analysis of loans for use in Hong Kong by major economic sector
During the March quarter, domestic loans contracted further by 2.6%, following a drop of 2.3% in the previous quarter. Lending to the manufacturing sector and loans for trade financing contracted by 3.1% and 7.9% respectively. In line with the slack performance in retail sales, loans for wholesale and retail trades dropped by 4.2% in the March quarter, having shrunk by 4.9% in the December quarter. Loans for building, construction and property development and investment declined by 3.0%. Nevertheless, residential mortgage loans and electricity, gas and telecommunication-related lending increased by 0.7% and 2.4% respectively in the March quarter. Amid buoyant stock market activities, lending to stockbrokers increased substantially by 15.2%, after declining by 30.6% in the preceding quarter.
Money supply
HK$M1 rose by 1.5% in March, as the 8.3% increase in demand deposits offset the 5.2% decline in currency held by the public. Meanwhile, both HK$M2 and HK$M3 increased by 1.1% during the month. In the twelve months to March, HK$M1 fell by 2.0%, while HK$M2 and HK$M3 grew by 8.5% and 8.2% respectively.
Note to editor
For enquiries, please contact the Press Section, Hong Kong Monetary Authority. (Telephone number: 2878 8261)
Hong Kong Monetary Authority
29 April 1999
