XN000022-1979-06-01 — Page 3

FRIDAY, JUNE 1, 1979

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ALTHOUGH THE RATE OF INCREASE IN BANK LENDING HAS NOT SLOWED DOWN THIS MAY BE DUE TO THE DRAWING DOWN OF LONG STANDING COMMITMENTS. IN THE FOUR MONTHS SINCE DECEMBER 1978 THE TOTAL HAS RISEN AT AN ANNUAL RATE OF 47 PER CENT (I.E. ALMOST THE SAME AS THE CHANGE OF APRIL 1979 ON APRIL 1978).

IN THE THREE MONTHS FEBRUARY TO APRIL 1979 AS COMPARED WITH THE SAME MONTHS OF 1978, THE AVERAGE LEVEL OF BANK LOANS GREW BY 46.2 PER CENT, ON THIS COMPARISON BANK LENDING HAS BEEN ACCELERATING EVERY MONTH SINCE OCTOBER 1977.

THE NET IDENTIFIABLE FOREIGN ASSETS OF THE BANKING SYSTEM FELL BY $690 MILLION TO $15,454 MILLION, DESPITE A RISE IN BANK LENDING OUTSIDE HONG KONG OF $465 MILLION TO $18,712 MILLION, 15.9 PER CENT ABOVE THE LEVEL OF APRIL 1978.

THE AVERAGE LIQUIDITY OF THE BANKS DURING APRIL ROSE FROM 45.9 PER CENT TO 48.25 PER CENT, ITS HIGHEST LEVEL SINCE JUNE 1976.

THIS MAY PARTLY REFLECT ANTICIPATION OF THE EXCHANGE FUND (AMENDMENT) ORDINANCE 1979, WHICH CAME INTO FORCE ON MAY 1, 1979, AND REQUIRES ANY BANK HOLDING EXCHANGE FUND DEPOSITS ON DÉMAND, AT CALL OR AT SHORT NOTICE TO HOLD LIQUID ASSETS EQUIVALENT TO 100 PER CENT OF THOSE DEPOSITS, INSTEAD OF A MINIMUM OF 25 PER CENT AS 'HITHERTO.

THE RATIO OF LOANS AND ADVANCES IN HONG KONG TO DEPOSITS ROSE FROM 82.7 PER CENT TO 83.8 PER CENT. TWO MORE RECENTLY- LICENSED BANKS BEGAN TO OPERATE DURING APRIL, BRINGING THE NUMBER OF REPORTING BANKS TO 97.

DEPOSIT-TAKING COMPANIES

DEPOSITS AT THE 244 REGISTERED DEPOSIT-TAKING COMPANIES ROSE IN APRIL 1979 BY $1,346 MILLION TO $15,362 MILLION, BUT THE AMOUNT ON-LENT BY THESE COMPANIES TO BANKS IN HONG KONG ROSE BY $1,853 MILLION TO $11,700 MILLION, SO THAT THE NET DEPOSIT LIABILITIES FELL BY $507 MILLION TO $3,662 MILLION.

LOANS AND ADVANCES IN HONG KONG BY DEPOSIT-TAKING COMPANIES ROSE BY $61 MILLION TO $10,428 MILLION, BUT AFTER TAKING ACCOUNT OF AN INCREASE OF $726 MILLION IN THE AMOUNT BORROWED FROM BANKS BY THESE COMPANIES, THEIR NET LENDING IN HONG KONG FELL BY $665 MILLION TO $2,186 MILLION.

LENDING TO THE PUBLIC BY BANKS AND DEPOSIT-TAKING COMPANIES TOGETHER HAS RISEN SINCE DECEMBER 1978 AT AN ANNUAL RATE OF 34 PER CENT (WHICH IS THE SAME ANNUALISED GROWTH RATE RECORDED IN MARCH): THIS IS A SUBSTANTIALLY LOWER RATE OF INCREASE THAN IS SHOWN BY THE FIGURES FOR BANKS ALONE.

NET IDENTIFIABLE FOREIGN ASSETS OF DEPOSIT-TAKING COMPANIES ROSE IN APRIL BY $435 MILLION TO $8,174 MILLION, LARGELY REFLECTING AN INCREASE OF $384 MILLION TO $21,037 MILLION IN THEIR LENDING ABROAD.

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