The local household debt-to-GDP ratio decreased in the second half of last year while the asset quality of local banks’ loan portfolios slightly deteriorated during the period, the latest data from the Hong Kong Monetary Authority showed.
The de facto central bank said that the associated credit risk regarding household indebtedness is manageable and the asset quality of the Hong Kong banking sector stayed healthy.
Hong Kong’s household debt as a percentage of gross domestic product dropped to 92.7 percent in the second half of 2023 from 95.9 percent in the first half of the year.
Coupled with the fact that household net worth has stayed at a high level, the HKMA said it considers that the household balance sheet remains healthy.
Meanwhile, the classified loan ratio – or the non-performing loan ratio – among local banks rose 1.56 percent as of last year from 1.5 percent by the end of June 2023, causing a slight deterioration in asset quality. Among them, the ratio related to the mainland came in at 2.58 percent, an increase of 0.17 percentage points from the end of June.
In a related development, HKMA deputy chief executive Howard Lee Tat-chi said that Hong Kong will facilitate wider usage of the e-CNY, China’s central bank digital currency, and help residents set up and top-up e-CNY wallets through the faster payment system.
Since the launch of the FPS, the number of FPS registrations grew from over 2 million at the end of 2018 to 13.6 million at the end of 2023, marking an average annual growth of 46 percent, Lee said.
And HKMA chief executive Eddie Yue Wai-man told a Boao forum in the city that Hong Kong has many pilot projects in facilitating retail CBDCs.
He also suggested further developing the bond market in Asia, as the issuance in local currency could reduce reliance on US dollar bonds.
Hong Kong United Times丨香港聯合時報丨HKUT 