Hong Kong banks' total deposits inched 2.9% higher

Thanks to an increase in the monetary base.

According to Maybank Kim Eng, Hong Kong banks' total deposits grew faster by 2.9% MoM in Sep 2013 (+12.2% YoY) compared with +0.5% YoY in Aug 2013, partly due to the increase in the monetary base (+HKD10b MoM). 

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HKD deposits grew robustly by 3.6% MoM. RMB deposits (including CDs) in Hong Kong also regained growth momentum and rose 4.0% MoM to CNY908b in Sep 2013, mainly due to continued appreciation of the RMB against the HKD.

Hong Kong’s share of RMB cross-border trade settlement remained 82.7% in Sep 2013. The USD/RMB 12-month NDF rate fell from 6.2 in Sep 2013 to 6.16 in Oct 2013. We believe anticipated RMB appreciation should help boost RMB deposit growth in Hong Kong in Oct 2013.

Overall, we project deposit growth of 9-10% YoY for Hong Kong-listed banks in 2013 and 2014 each. We keep our forecast total RMB deposits in Hong Kong of CNY1t by end-Dec 2013 and CNY1.3t by end-Dec 2014.