Hong Kong Banking Sector's Exposure to non-bank Chinese Entities

The Hong Kong Monetary Authority today announced the results of its quarterly survey on authorised institutions' exposure to non-bank Chinese entities as at end-December 1999.

According to the survey, total exposure of the banking sector to non-bank Chinese entities at end-December 1999 amounted to HK$233.6 bn, compared with HK$244.6 bn in the previous survey at end-September 1999. This represents 3.4% of the total assets of the banking sector. At end-December 1999, on-balance sheet exposure amounted to HK$207.1 bn and off-balance sheet exposure (including guarantees, letters of credit issued on behalf of the Chinese entities by authorised institutions, and replacement costs of foreign exchange and derivatives contracts) amounted to HK$26.5 bn.

Compared with the position at end-September 1999, the total exposure of the banking sector to non-bank Chinese entities declined by HK$11.0 bn or 4.5%. The reduction was mainly caused by repayments and write-offs. After adjusting for reporting errors in the September quarter, the actual reduction was HK$10.6 bn. During 1999 as a whole, the exposure of the banking sector fell by HK$62.6 bn or 21.1% (after adjusting for reporting errors).

The local banks' total exposure to non-bank Chinese entities at end-December 1999 amounted to HK$72.9 bn, a reduction of HK$1.6 bn or 2.1% from the end-September survey.

The total exposure was spread among 166 institutions, including both local and foreign institutions.

Hong Kong Monetary Authority
21 March 2000

Annex

Banking sector's exposure to non-bank Chinese entities
(as at end-December 1999)

(in HK$ bn)

* includes red-chips, H-shares, other state, provincial or municipal government owned entities and other entities known to be owned or controlled by Chinese interests.