Citic Bank sees rise in yuan deposits
Citic Bank International, the offshore commercial banking arm of China Citic Bank, said yuan deposits increased in the first two months of the year, while many others struggled.
CBI expects yuan deposits in Hong Kong to rise to 850 billion yuan (HK$1.05 trillion) by the end of this year, driven by the city's leading status as an offshore yuan centre and growth in yuan trade settlements with the mainland, said Helen Kan, an executive general manager of CBI's retail banking group.
Yuan deposits in Hong Kong fell nearly 10 per cent to 566 billion yuan from November to the end of February, partly because of uncertainties over the appreciation of the yuan and slowing trade volumes.
CBI's yuan deposits, however, rose 4.2 per cent to 17.3 billion yuan by February from the end of last year, while the overall market in Hong Kong fell 3.8 per cent, Kan said.
Retail deposits rose 13 per cent, also beating market performances.
The bank aims to increase its share of the yuan deposit market by 2 percentage points to 5 per cent by the end of this year.
It will also increase its headcount in the retail banking business by about 100 people this year.
Kan expects unsecured loans to help boost lending profitability. Unsecured loans grew about 20 per cent last year across Hong Kong's banking sector.
With mortgage interest rates remaining stable, Kan said Hong Kong banks' net interest margins, a measure of lending profitability, would improve over last year. CBI's margins ended the first quarter at 1.35 per cent after falling 16 basis points last year to 1.22 per cent.
The bank will also strengthen co-operation with its parent, Citic Bank, and increase its credit-card business. It plans to increase the income contribution of insurance-related business by 5 percentage points to 30 per cent this year.
CBI said that over the past five years it managed to double its retail banking income and deposit market share, and increase the number of its retail banking clients to 200,000.
The bank's retail pretax profits rose 9.5 per cent to HK$620 million last year, boosted by 66 per cent growth in non-interest income. Trade-related loans to small and medium-sized enterprises rose 33 per cent, and non-trade-related SME loans grew 13 per cent.