Hong Kong Monetary Authority

Press Release Hong Kong Banking Sector's Exposure to non-bank Chinese Entities   The Hong Kong Monetary Authority today announced the results of its quarterly survey on authorised institutions' exposure to non-bank Chinese entities as at end-September 1999. According to the survey, total exposure of the banking sector to non-bank Chinese entities at end-September 1999 amounted to HK$244.6 bn, compared with HK$254.8 bn in the previous survey at end-June 1999. This represents 3.6% of the total assets of the banking sector. At end-September 1999, on-balance sheet exposure amounted to HK$219.3 bn and off-balance sheet exposure (including guarantees, letters of credit issued on behalf of the Chinese entities by authorised institutions, and replacement costs of foreign exchange and derivatives contracts) amounted to HK$25.3 bn. Compared to the position at end-June 1999, the total exposure of the banking sector to non-bank Chinese entities declined by HK$10.2 bn or 4.0%. The reduction was due to a combination of factors, including repayments, transfer of exposures to head office or overseas offices by some foreign institutions and reporting errors made by institutions in the previous survey. After adjusting for reporting errors in the June quarter, the actual reduction was HK$11.6 bn. The local banks' total exposure to non-bank Chinese entities amounted to HK$74.5 bn, a reduction of HK$3.8 bn or 4.9% from the previous survey. The total exposure was spread among 176 institutions, including both local and foreign institutions.   Hong Kong Monetary Authority 20 December 1999     Annex Banking sector's exposure to non-bank Chinese entities (as at end-September 1999)   (in HK$ bn) Total exposure   All AIs Local banks   30/9/99 30/6/99 Change (%) 30/9/99 30/6/99 Change (%) GITIC and its subsidiaries 4.9 5.2 -5.8% 1.2 1.2 - Other ITICs and their subsidiaries 34.6 35.3 -2.0% 9.7 9.8 -1.0% All others* 205.1 214.3 -4.3% 63.6 67.3 -5.5% Total: 244.6 254.8 -4.0% 74.5 78.3 -4.9% As % of total assets 3.6% 3.8% 3.5% 3.7% * includes red-chips, H-shares, other state, provincial or municipal government owned entities and other entities known to be owned or controlled by Chinese interests.

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