Hong Kong bank loans grow +7.0% year on year in August as the HKD loan-to-deposit ratio falls
Key points
- Total loans and advances rose +7.0% in the year to end-August, up from +6.6% in the year to end-July.
- Domestic lending led the month: loans for use in Hong Kong rose +0.4% (after -0.3% in July), while loans for use outside Hong Kong were virtually unchanged.
- Deposits grew faster than loans, so the HKD loan-to-deposit ratio fell to 69.3%, down from 70.7% at end-July.
Facts
The HKMA's monetary statistics for August 2026, released on 30 September, show total loans and advances up +0.3% in the month (after +0.2% in July) and up +7.0% in the year to end-August, up from +6.6% in the year to end-July. 1 Loans for use in Hong Kong, including trade finance, rose +0.4% (after -0.3% in July); loans for use outside Hong Kong were virtually unchanged (after +1.7% in July). 2
Total deposits rose +1.4% in August, with Hong Kong dollar deposits up +2.2%. 3 As a result the Hong Kong dollar loan-to-deposit ratio fell to 69.3% at end-August, down from 70.7% at end-July. 4 The July release had put annual loan growth at +6.6%. 5
Analysis
Loan growth has been building through 2026. Total loans and advances rose +6.4% over the first half 6, and annual growth edged up from +6.6% in July to +7.0% in August. The HKD loan-to-deposit ratio moved the other way: it was 71.5% at end-June (up from 71.0% at end-May) and has fallen for two months to 69.3%, because Hong Kong dollar deposits are growing faster than Hong Kong dollar loans.
The aggregate does not say how much of the growth reaches households. Household-facing indicators are mixed: new mortgage approvals fell to HKD 32.2 bn in August 7, while the HKMA reported household debt growth of 5.2% in the first half (against 2.7% in H2 2025). 8 A falling loan-to-deposit ratio means banks have more Hong Kong dollar funding than lending to deploy, which typically sharpens price competition for good-quality borrowers even after the base rate rose to 4.25% in September. 9
Implications
Counterpoints and uncertainties
The monthly figures are volatile: loans for use outside Hong Kong were virtually unchanged in August after a large gain in July, and single large corporate loans can move the totals. The release gives no split by borrower type, so the growth may come mainly from corporate or trade lending rather than households. Deposit inflows linked to fund-raising or interest-rate moves can reverse quickly and lift the loan-to-deposit ratio again.
Figures: see definitions
- Total loans and advances, year-on-year (August 2026): +7.0% (up from +6.6% in the year to end-July). Year-on-year change in total loans and advances of authorized institutions (HKMA monetary statistics). Authorized institutions in Hong Kong. Basis date: 31 Aug 2026. Source: Bastille Post (reproducing HKMA release of 2026-09-30): Monetary statistics for August 2026
- Loans for use outside Hong Kong, month-on-month (August 2026): virtually unchanged (after +1.7% in July). Month-on-month change in loans for use outside Hong Kong (HKMA). Authorized institutions in Hong Kong. Basis date: 31 Aug 2026. Source: Bastille Post (reproducing HKMA release of 2026-09-30): Monetary statistics for August 2026
- HKD deposits, month-on-month (August 2026): +2.2%. Month-on-month change in Hong Kong dollar deposits with authorized institutions (HKMA). Authorized institutions in Hong Kong. Basis date: 31 Aug 2026. Source: Bastille Post (reproducing HKMA release of 2026-09-30): Monetary statistics for August 2026
- HKD loan-to-deposit ratio (end-August 2026): 69.3% (down from 70.7% at end-July). Hong Kong dollar loans / Hong Kong dollar deposits, authorized institutions (HKMA). Authorized institutions in Hong Kong. Basis date: 31 Aug 2026. Source: Bastille Post (reproducing HKMA release of 2026-09-30): Monetary statistics for August 2026
- Total loans and advances, year-on-year (July 2026): +6.6%. Year-on-year change in total loans and advances of authorized institutions (HKMA monetary statistics). Authorized institutions in Hong Kong. Basis date: 31 Jul 2026. Source: HKMA via HKSAR Government (2026-08-31): Monetary statistics for July 2026
- Total loans and advances, growth in H1 2026: +6.4%. Change in total loans and advances of authorized institutions over January–June 2026 (HKMA). Authorized institutions in Hong Kong. Basis date: 30 Jun 2026. Source: Dimsum Daily (reporting HKMA release for June 2026)
- New mortgage loans approved (August 2026): HKD 32.2 bn (down 28.2% from July 2026). Value of new residential mortgage loans approved in the month (HKMA survey). Authorized institutions in the HKMA residential mortgage survey. Basis date: 31 Aug 2026. Source: HKMA via HKSAR Government (2026-09-30): Residential mortgage survey results for August 2026
- Household debt growth (HKMA): 5.2% (against 2.7% in H2 2025). Growth in household debt during H1 2026, as reported from the HKMA stability report. Households, Hong Kong (HKMA). Basis date: 30 Jun 2026. Source: AASTOCKS (2026-10-01), reporting the HKMA Half-Yearly Monetary and Financial Stability Report (September 2026)
Press reports do not state whether the half-year rate is annualised.
- HKMA Base Rate: 4.25% (up 25 bp from 4.00%). Base Rate of the Discount Window, set by a pre-set formula. Hong Kong Monetary Authority. Basis date: 17 Sep 2026. Source: on.cc (2026-09-17), reporting the HKMA announcement
The HKMA press release could not be read directly.
Sources
Reports are for information only and are not investment advice.