Int’l business of banks slightly up in 2016-end

2017/2/20

The share of international business in the local banking sector had decreased as at the end of last year from a quarter earlier, even though its total international banking assets and liabilities both recorded an increase, according to the official data released last Friday by the Monetary Authority of Macau (AMCM).
As at the end of December 2016, international assets held by local banks rose slightly by 1.6 per cent quarter-to-quarter to some MOP1.17 trillion (US$146.5 billion), which also represents an increase of 2.7 per cent compared to the same period of last year.
Of the total, external assets amounted to MOP822.7 billion, a decrease of 2.2 per cent year-on-year. In particular, external non-bank loans declined by 2.7 per cent quarter-to-quarter to MOP361.7 billion. But local assets in foreign currencies rose by 11.8 per cent quarter-to-quarter, or 16.8 per cent year-on-year, to MOP347.3 billion.
On the other hand, total international liabilities of the local banking sector also recorded an increase of 1.2 per cent quarter-to-quarter, or 1.4 per cent year-on-year, amounting to some MOP1.09 trillion.
External liabilities accounted for MOP509.8 billion of the total, falling by 9.5 per cent quarter-to-quarter, or 16.5 per cent year-on-year. Yet, local liabilities in foreign currencies grew by 12.9 per cent quarter-to-quarter or 24.9 per cent year-on-year to MOP584.2 billion.
According to AMCM, foreign currency deposits held by residents and the MSAR government in local banks were the major component of international liabilities in the period.
These types of deposits from the two sectors totalled MOP497.5 billion as at the end of the year, surging by 17.9 per cent as compared to some MOP422.1 billion one year earlier. On a quarter-to-quarter comparison, the amount also grew by 7.1 per cent.

Decreased share
Nevertheless, the share of international assets in total banking assets of local banks fell to 84.1 per cent, a slight decrease of 0.1 percentage points from the previous quarter, while that of international liabilities in total banking liabilities also fell by 0.3 percentage points quarter-to-quarter to 78.7 per cent.
Non-local currencies, primarily Hong Kong Dollars and U.S. Dollars, continued to be the dominant denomination of international banking transactions, which respectively accounted for 45.5 per cent and 42.7 per cent of total international assets; and 53.4 per cent and 35.8 per cent of total international liabilities.
Meanwhile, the share of total international assets and total international liabilities held in Patacas was only 0.8 per cent and 1.7 per cent, respectively.
According to AMCM, the majority of external assets and liabilities were related to Asia and Europe.
Particularly, claims on Hong Kong and Mainland China occupied 38.6 per cent and 26 per cent of total external assets, while claims on the United Kingdom and Portugal took up 2.9 per cent and 2.7 per cent, respectively.
In terms of external liabilities, Hong Kong and Mainland China accounted for 52.6 per cent and 20.2 per cent of the total, respectively, while Portugal and France each took up 0.8 per cent.

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