Banks' Exposure To Mainland China Borrowers Is Manageable, HKMA Says


News: On March 15 2014, the Hong Kong Monetary Authority (HKMA) Deputy CEO Arthur Yuen Kwok-hang addressed Hong Kong banks concerns over their HKD2.6trn (USD335.29mn) loans to mainland China borrowers. The official assured banks that their exposure to the mainland is manageable and claimed that the authority has taken steps to ensure liquidity in the system. Of the total lending, 50% was given to huge state-run firms and 31% to the mainland subsidiaries of big global companies. Only 19% was to private firms in the mainland, the borrowers most exposed to economic slowdown, according to Kwok-hang (South China Morning Post). The official also stated that HKD970bn (USD125.09bn) of the loans were from the Hong Kong divisions of huge global lenders that can tap into the resources of the group balance sheet if several of their mainland loans go bad.

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Geography: Hong Kong, China

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