Hong Kong's total deposits fell by 6.8 percent in November, as large-scale initial public offering activities ended and issuers returned application monies, data from the Hong Kong Monetary Authority showed.

Excluding the effects of IPO activities, total deposits and Hong Kong dollar deposits with authorized institutions would have dropped by 1.2 percent and 2.2 percent respectively, in November 2020.

The recent large-scale IPO activities brought a 6.4 percent increase in total deposits in October. Hong Kong dollar deposits increased by 9.8 percent.

But in November, Hong Kong dollar deposits declined by 12.6 percent and overall foreign currency deposits edged down by 0.2 percent.

Yuan deposits increased by 5.6 percent to 718.3 billion at the end of November.

The total remittance of yuan for cross-border trade settlement was 526.3 billion yuan in November, compared with 414.2 billion yuan in October.

Excluding the effects of IPO activities, total loans and advances would have dropped by 1 percent in November. The recent large-scale IPO activities brought a 4.7 percent increase in total loans and advances in October. As these IPO activities ended and customers repaid subscription loans, total loans and advances fell by 8.7 percent in November, HKMA said.

Among the total, loans for use in Hong Kong (including trade finance) and loans for use outside Hong Kong fell by 11.7 percent and 0.8 percent respectively. The Hong Kong dollar loan-to-deposit ratio dropped to 82.7 percent at the end of November from 84.0 percent at the end of October, as Hong Kong dollar deposits decreased at a slower pace than Hong Kong dollar loans.

Hong Kong dollar M2 and M3 dropped by 11.7 percent and 11.6 percent respectively in November, but both grew by 6.5 percent compared to a year ago.

The seasonally-adjusted Hong Kong dollar M1 increased by 6.3 percent in November, and grew by 30.7 percent compared to a year ago, reflecting in part investment-related activities. Total M2 and M3 both declined by 6.2 percent in November, but expanded by 6.6 percent from a year earlier.

Excluding deposits created by IPO loans, Hong Kong dollar M2 and M3 would have fallen only by 2.0 percent and 1.9 percent respectively in November. Total M2 and M3 both would have dropped only by 1 percent in November.

HK dollar deposits shrink after initial public offerings