HONG KONG MONETARY AUTHORITY Annual Report 1996
HONG KONG MONETARY AUTHORITY
| Table 2: |
| HONG KONG DOLLAR INTEREST RATES MOVEMENT (PERIOD AVERAGE FIGURES) |
Time Deposits |
HIBOR |
Best SavingsLending |
||||||
| 1-month | 3-month | 12-month | 1 -month | 3-month | 12-month | Deposits | Rate | |
|
|
||||||||
| Q4 1995 | 5.22 | 5.34 | 5.53 | 5.81 | 5.92 | 6.06 | 4.24 | 8.99 |
|
|
||||||||
| Q1 1996 | 4.67 | 4.80 | 5.02 | 5.29 | 5.41 | 5.67 | 3.84 | 8.59 |
|
|
||||||||
| Q2 1996 | 4.55 | 4.72 | 5.15 | 5.21 | 5.36 | 5.90 | 3.75 | 8.50 |
|
|
||||||||
| Q3 1996 | 4.69 | 4.91 | 5.38 | 5.34 | 5.56 | 6.06 | 3.75 | 8.50 |
|
|
||||||||
| Q4 1996 | 4.66 | 4.81 | 5.20 | 5.34 | 5.50 | 5.87 | 3.75 | 8.50 |
|
|
||||||||
| 1995* | 5.56 | 5.79 | 6.26 | 5.97 | 6.17 | 6.64 | 4.20 | 8.95 |
|
|
||||||||
| 1996* | 4.65 | 4.81 | 5.19 | 5.30 | 5.46 | 5.88 | 3.77 | 8.52 |
|
|
||||||||
| * annual average figures | ||||||||
of Hong Kong dollar deposits during the year ( Chart 11, Table 3) with demand deposits and savings deposits showing faster growth. Negotiable Certificates of Deposits (NCDs) as an alternative source of funds remained popular among the banks. Banks continued to use NCDs to further improve their maturity profile and match the expansion of their Hong Kong
| Table 3: |
| HONG KONG DOLLAR CUSTOMER DEPOSITS |
| (HK$ billion) | Demand | Savings | Time (a) | Swap | Total |
|
|
|||||
| 1992 | 87 | 245 | 293 | 59 | 684 |
| 26.2 | 6.8 | 10.5 | 45.9 | 13.2 | |
|
|
|||||
| 1993 | 105 | 282 | 400 | 72 | 858 |
| 20.4 | 15.1 | 36.3 | 22.3 | 25.5 | |
|
|
|||||
| 1994 | 100 | 275 | 538 | 104 | 1,016 |
| (4.7) | (2.5) | 34.5 | 44.6 | 18.4 | |
|
|
|||||
| 1995 | 100 | 301 | 721 | 50 | 1,172 |
| 0.2 | 9.5 | 34.1 | (52.0) | 15.3 | |
|
|
|||||
| 1996 | 122 | 366 | 873 | 39 | 1,400 |
| 21.4 | 21.8 | 21.2 | (22.7) | 19.5 | |
|
|
|||||
| Figures in italic show the percentage change from a year ago. (a) Excluding swap deposits |
|||||
dollar assets. With average funding costs decreasing faster than the best lending rate, banks enjoyed wider interest rate margins during 1996. However, the value of banks' interest-free funds declined in line with the decrease in average funding costs.
About 68% of Hong Kong dollar denominated NCDs were held by the banking sector. Banks also increased their investment in Exchange Fund Bills and Notes. This reflected their wish to hold a stock of paper eligible for the intra-day repo under the newly introduced Real Time Gross Settlement system.
MARKED GROWTH IN DOMESTIC LENDING
The growth in total customer lending slowed markedly to 4.7% in 1996 from 14.5% in 1995. This was mainly attributable to the slowdown in both offshore lending and trade finance, which was only partly offset by stronger growth in loans for use in Hong Kong.
Boosted by the resurgence of the property market (Charts 12, 13), loans for use in Hong