Hong Kong Banks Face Higher Credit Risks in Midterm, KPMG Says
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Hong Kong banks’ credit quality may be at risk over the medium term because of short supply of the local currency caused by strong loan growth last year and rising yuan demand, KPMG LLP said.
The city’s banks expanded their gross loan portfolio by 29 percent last year, while total customer deposits only grew 7.5 percent, boosting their loan-to-deposit ratio to 62 percent from 52 percent, KPMG said in a report today. The report follows a Hong Kong Monetary Authority request in April that local lenders reassess credit growth and funding plans.