Standard Chartered Says Hong Kong Yuan Loans May Surge Fivefold

Commodities companies and medium-sized Hong Kong manufacturers are among those that need yuan-denominated financing, Benjamin Hung, the bank’s chief executive officer for Hong Kong, said in an interview yesterday.

Availability of Hong Kong dollars for lending has tightened, with banks’ loan-to-deposit ratio in the currency rising to 85 percent at the end of October, from 74 percent a year earlier, according to the Hong Kong Monetary Authority. Chinese Vice Premier Li Keqiang pledged in August to bolster Hong Kong’s position as a center for the offshore yuan trade.

“If one currency is tight, people will tend to borrow in another currency,” Hung said. “That is why we see a very good increase in demand for yuan loans. That is a good alternative.”