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Factoring in slow demand, banks likely to hold the line despite prospect of Fed easingHong Kong banks are expected to keep lending rates low for the rest of the year despite the possibility the US central bank may taper its quantitative easing programme.儲存倉Major commercial banks in the city, including Standard Chartered and HSBC, have said they expected slower loan growth for the rest of the year, partly because lending grew quickly in the first half. That credit expansion came off the back of demand from mainland companies.In the second half, as the mainland economy continues to cool, bankers expect loan growth to slow further in Hong Kong, forcing banks to compete over quality borrowers. This could hit lenders’ net interest margin (NIM), a measurement of profitability based on the difference between interest rates on loans and deposits. Banks’ NIM had widened in the first half compared with the end of last year.“Loan demand continues, but it is not a good time to chase rapid loan growth as the macro outlook is quite uncertain,” said Donald Lam Yin-shing, head of corporate and commercial banking at Hang Seng Bank.Total loans and advances in the city jumped 9.5 per cent in the first half of the year. Most of this growth was fuelled by foreign-currency loans for use outside Hong Kong, especially in trade finance. The Hong Kong Monetary Authority expects credit expansion to slow in the second half, after conducting meetings with 20 banks in the city that recorded rapid loan growth in May and June.A senior executive at the Hong Kong unit of a major mainland bank sai迷你倉沙田 the bank used to have many “big firms” borrowing from it. “But now we have to pitch loans to those big firms,” he said.He said that increasing competition for big corporate clients would make it unlikely for banks to impose higher lending rates.Bankers indicated that lending rates to large companies for a five-year loan in Hong Kong have recently come down to the interbank rate plus 1.6 per cent to 2 per cent – 0.3 to 0.5 percentage point lower than the same period last year.Since banks are willing to provide credit to big firms with strong balance sheets and growth momentum, some large companies enjoy a higher bargaining power over banks, said Ginger Cheng, managing director at DBS institutional banking group.All local banks reported improvement in the NIM for the first half, but some of them have signalled they expect dull growth in the second half. Standard Chartered said it expected its NIM to flatline at 1.7 per cent in the second half. Dah Sing Banking has also said it expects the margin to stay flat or grow more slowly.“Hong Kong cost of funds is set to rise in the coming months. If liquidity continues to tighten, it could push up borrowing costs and impact the mortgage market and potentially asset prices in Hong Kong,” UBS analyst Steve Ho said in a recent research report for clients.Standard Chartered Hong Kong’s chief executive Benjamin Hung Pi-cheng said the bank was gearing up on deposits in anticipation of a possible tightening in funds. When banks start taking more deposits by offering higher interest rates, margin growth is bound to be sluggish.迷你倉價錢