HKMA CEO says rising bad debts to be offset by stock rally and Middle East opportunities
‘The recent stock market rally may have the wealth effect that people who gain from the stock market will go shopping and dining,’ Eddie Yue says
Several lawmakers expressed worry on Monday about an increase in the banking sector’s bad-debt ratio to 1.89 per cent in June from 1.5 per cent at the end of 2023. But Eddie Yue Wai-man had a more positive take on the situation.
Also, the default rate for the Special 100 Per Cent Loan Guarantee scheme, a lending programme to support small- and medium-sized enterprises (SMEs) during the Covid-19 pandemic, jumped to 10.25 per cent as of the end of September from 5.49 per cent a year earlier.
And according to government data, the amount of money that Hong Kong had to shoulder at the end of September was HK$14.72 billion (US$1.89 billion), up from HK$7.5 billion in unpaid loans a year earlier.
“The recent stock market rally may have the wealth effect that people who gain from the stock market will go shopping and dining, while China’s stimulus measures also support the economy,” Yue said in a meeting with members of the Legislative Council.
“In addition, there are also new opportunities arising for Hong Kong-based SMEs to develop in the Middle East market,” he said.