Hong Kong banks' risk exposure to the Middle East is limited, while rising oil prices weigh on sectors like transportation and logistics, said Arthur Yuen Kwok-hang, Deputy Chief Executive of Hong Kong Monetary Authority.
He called for the banking sector to adopt a more accommodating approach when handling these impacted clients' short-term liquidity issues amid the geopolitical tensions.
Recently, the city has not seen the increasing trend of corporate loan repayment extension applications, Yuen said. However, given the weaker resilience of small and medium enterprises, the HKMA will discuss through the Taskforce on SME Lending whether targeted support measures are needed.
He added that the authority will closely monitor the situation and the conflict's impact on Hong Kong's economy.
Besides, a key priority for the Hong Kong Association of Banks this year is to support the development of Northern Metropolis, particularly in fundraising, with a planned visit to the area, Yuen noted.
He pointed out that local lenders seldom handle long-term financing required for pilot developments, which differs from conventional land development, so the banking sector needs to explore ways to tailor financing products to meet clients' demands.
He emphasized it's not a lack of willingness for banks to lend, adding that the banking sector strongly supports the Northern Metropolis development.
