Hong Kong's banking system held up well amid the fifth wave of Covid outbreak, as deposits and loans increased during the first quarter, according to data from the Hong Kong Monetary Authority (HKMA).
The amount of Hong Kong dollars deposited into the city's banks swelled to HK$7.58 trillion (US$965 billion) by the end of March, up 2.2 per cent from the beginning of the year and 1 per cent from a year earlier.
Total deposits - which include Hong Kong dollars, US dollars and other currencies - stood at HK$15.35 trillion, rising 1.1 per cent in the quarter and 4.5 per cent from a year earlier.
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Total loans in Hong Kong reached HK$7.87 trillion, up 1.9 per cent from January 1 and 3.3 per cent year on year.
Mortgage loans approved in March increased by 31.6 per cent from February to HK$34.7 billion, while the related loan drawdowns rose 7.1 per cent to HK$25.7 billion.
"The pandemic peaked in early March, and business activities and property transactions gradually returned to normal in the second-half of March. This has supported the mortgage market," said Eric Tso Tak-ming, chief vice-president of mReferral Corporation.
"The mortgage loan market is likely to continue to be stable in April after the relaxation of social distancing. Other sectors should see improvement in April as a result of the consumer vouchers and other relief measures by the government."
Hong Kong banks' lending to stockbrokers and their clients, however, recorded a sharp fall of 54 per cent year on year to HK$52.39 billion in the first quarter, as loan activities fell victim to the slump of initial public offerings (IPOs) during the period.
"It is not a surprise, as the few new listings mean investors had no need to borrow money for the IPOs, while the market sentiment discouraged margin financing," said Tom Chan Pak-lam, chairman of the Hong Kong Institute of Securities Dealers.
A total of 11 companies raised US$1.72 billion on the main board of the Hong Kong stock exchange in the first quarter, down 90 per cent from a year earlier, according to data from financial data provider Refinitiv.
"Large-scale IPO activities at the end of March 2021 led to a high base effect," the HKMA said in a statement.
The mega IPO of Chinese video-sharing platform Kuaishou Technology raised US$6.2 billion in January last year, making it the world's third-biggest IPO in 2021.