TNAG-1649-FCO40-2296-Hong-Kong-Commissioner-of-Banking-s-annual-report-for-1986--1987 — Page 65

The Report

40.

The banking scene at the beginning of 1987

has changed in a dramatic fashion

with

the

This

compared

1986. Apart from January,

the problems of

individual banks already described, the industry generally had experienced 3 sluggish years following the collapse of the markets in 1982 and 1983. lack Of demand had meant that banks had found

difficulty in "jobbing" out of their difficult patch. Provisions had to be made in years of low demand and profits. There was therefore a cautious mood in January, 1986, aggravated by the knowledge of the problem banks and the fear that others might

follow.

41.

the

In the

the event, the banking sector found

considerable benefits in 1986. In the first place,

export general

performance brought a large increase in trade financing. Secondly, the general improvement in the economy brought an increase in demand for loans and advances in many sectors with the change in sentiment in the property and stock markets underlining the change in economic outlook. Thirdly, the policy of the Government in maintaining stability in the banking sector paid dividends in establishing confidence that orderly solutions were possible to difficult individual problems without

undermining the sector as a whole. objective set at the beginning of 1986 of maintain- ing stability was achieved.

The

main

22

22