Bank lending will increase in Hong Kong more slowly this year amid concerns about shrinking liquidity arising from the winding down of the bond-buying programme by the Federal Reserve in the United States, Standard Chartered Bank (Hong Kong) chief executive Benjamin Hung Pi-cheng said.
"Banks will be more prudent in the lending business," he said. "I expect loans [in Hong Kong] to grow 10 per cent this year."
Outstanding loans rose 16 per cent last year, Hong Kong Monetary Authority figures showed. The authority has warned of accelerating credit growth and ordered banks to match their funding, such as deposits with longer tenures, to loans so as to reduce the risks of overlending.
Hung said he expected Standard Chartered's net interest margin to remain stable. It stayed flat at 1.6 per cent at the end of last year.
Income from the Hong Kong operation delivered 10 consecutive years of growth in 2013, but net income for the group declined 17 per cent from the year before, ending a decade-long run of profit growth.
Hong Kong remained the largest contributor to Standard Chartered's earnings, with pre-tax profit jumping 16 per cent to US$1.9 billion.
