Arthur Yuen, deputy chief executive at Hong Kong Monetary Authority, said troubled loans have risen due to the coronavirus pandemic and geopolitical tensions, but the second-quarter growth is slower than that of the first quarter.
He added troubled loan issues would be put off due to the HK$600 billion worth of pre-approved principal payment holiday scheme, while the financial situation of the local banking sector remains robust.
Yuen said there are HK$4.8 trillion London Interbank Offered Rate-linked assets, HK$1.6 trillion Libor-linked debt and HK$34.7 trillion Libor-linked derivative contracts in Hong Kong.
Among them, 35 percent to 50 percent is due after the end of 2021 when Libor ceases. He urged banks to convert these assets as soon as possible.
He also suggested banks should increase investment in technology and talents, introducing data and cloud technology to manage related risk, adding HKMA will release related proposals.