Hong Kong banks have reversed a year-long downtrend in lending, with loans and advances rising 3.3 per cent in October.
However, bankers said the rise did not reflect the end of the credit contraction.
The rise was mainly because of a 9.9 per cent increase in offshore loans resulting from the stronger yen, figures released yesterday by the Hong Kong Monetary Authority showed.
Domestic loans continued to drop, although at a slower pace of 0.5 per cent. Trade financing loans contracted a further 2 per cent. Other local loans declined 0.4 per cent.
Loans have been falling since October last year, when the regional financial crisis first hit Hong Kong.
Standard Chartered Bank regional treasurer Stanley Wong Yuen-fai believed the credit contraction had not ended.