Loans by Hong Kong banks to Chinese borrowers, including branches of mainland lenders, surged 30 percent in 2013 thanks to tighter credit in China, the Wall Street Journal reported Tuesday.
Lower interest rates in Hong Kong also helped drive cross-border borrowing to HK$2.28 trillion (US$293 billion), the Hong Kong Monetary Authority (HKMA) was quoted as saying.
Hong Kong’s de facto central bank played down worries that the city is becoming dangerously exposed to Chinese borrowers who are grappling with a slowing economy, but said it has asked banks with higher than average increases in lending to make sure they have enough funds.
“We have stepped up our supervisory efforts on banks’ credit-risk management since 2010 in light of the significant credit growth” since then, deputy chief executive Arthur Yuen told WSJ. The risks of mainland-related loans are being properly managed and HKMA will continue to monitor how banks are handling the issue, he said.
The increase in lending continued in January, with overall loans for the month rising 44.5 percent from 2013 levels, the report said.
– Contact HKEJ at firstname.lastname@example.org