According to statistics published today (30 July) by the Hong Kong Monetary Authority, excluding the deposits created by the initial public offering (IPO)-related loans, total deposits and Hong Kong dollar deposits with authorized institutions increased by 0.3% and 0.7% respectively in June 2021. For the first half of 2021 as a whole, total deposits and Hong Kong dollar deposits grew by 4.6% and 7.6% respectively, and increased by 2.7% and 3.7% respectively if the deposits created by IPO-related loans were excluded.
The monetary statistics in June are subject to distortions caused by fund flows associated with large-scale IPO activities. Total deposits and Hong Kong dollar deposits increased by 2.2% and 4.5% respectively in June, partly driven by the deposits created by IPO-related loans straddling end-June. Overall foreign currency deposits decreased by 0.2%. Renminbi deposits in Hong Kong remained virtually unchanged at RMB821.2 billion at the end of June. The total remittance of renminbi for cross-border trade settlement amounted to RMB650.0 billion in June, compared with RMB482.3 billion in May. It should be noted that changes in deposits are affected by a wide range of factors, such as interest rate movements and fund-raising activities. It is therefore more appropriate to observe the longer-term trends, and not to over-generalise fluctuations in a single month.
Total loans and advances rose by 4.0% in June, partly driven by IPO-related loans straddling end-June. Among the total, loans for use in Hong Kong (including trade finance) increased by 5.9%, while loans for use outside Hong Kong decreased by 0.3%. Excluding the IPO-related loans, total loans and advances rose by 1.4% in June, and increased by 4.4% in the first half of the year. The Hong Kong dollar loan-to-deposit ratio increased to 84.2% at the end of June from 82.6% at the end of May, as Hong Kong dollar loans increased at a faster pace than Hong Kong dollar deposits.
For the second quarter of 2021 as a whole, loans for use in Hong Kong (including trade finance) grew by 5.8% following a 3.6% increase in the previous quarter. Analysed by economic use, the increase in loans during the second quarter was mainly led by trade finance and loans to stockbrokers.
Hong Kong dollar M2 and M3 both went up by 4.1% in June, and increased by 10.9% compared to a year ago. The seasonally-adjusted Hong Kong dollar M1 increased by 3.1% in June, and rose by 22.4% compared to a year ago, reflecting in part investment-related activities. Total M2 and M3 both increased by 1.9% in June, and expanded by 7.5% from a year earlier. Excluding the deposits created by the IPO-related loans, Hong Kong dollar M2 and M3 both increased by 0.6% in June, and went up by 3.2% in the first half of the year; total M2 and M3 both edged up by 0.1% in June, and increased by 2.2% in the first half of the year.
As monthly monetary statistics are subject to volatilities due to a wide range of transient factors, such as seasonal and IPO-related funding demand as well as business and investment-related activities, caution is required when interpreting the statistics.
Hong Kong Monetary Authority
30 July 2021