The HKMA's September stability report shows credit growing again and asset quality improving slightly. For banks and lenders, the SME support figures matter as much as the headline growth.
The Hong Kong Monetary Authority published its Half-Yearly Monetary and Financial Stability Report for September 2026 at the end of the month. It is the HKMA's twice-yearly assessment of the economy, monetary conditions and the risks in the banking sector.
On credit, total loans and advances of all authorized institutions grew by 6.4% in the first half of 2026, reversing a 0.2% contraction in the second half of 2025. Asset quality improved slightly: the classified loan ratio of all authorized institutions declined to 1.82% in the second quarter of 2026. The report also notes that most surveyed banks expect loan demand over the next three months to stay about the same.
The SME section is the part with direct consequences for competitors. In April 2026 the HKMA and the banking sector launched new measures to help SMEs get bank financing. The 18 banks in the SME Lending Taskforce expanded their dedicated SME loan funds from HK$370 billion to over HK$450 billion. Sectors under pressure, such as transport and logistics, may receive credit relief, including flexible repayment arrangements, tenor extensions and more options to extend trade facilities.
For banks and lenders with 50 or more staff serving SMEs, this sets the backdrop. Bank capacity for viable SME borrowers has grown over the year, and relief on repayment terms is now an expected part of the offer in stressed sectors. Speed of decision and a clear record of why a case was approved are where lending teams differentiate, and where workflow automation for application, spreading, credit memo and approval does its work.
For bank SME teams, the figures are a reminder that dedicated funds only become loans if applications move through credit in reasonable time.
Covenant Desk publishes regulatory context for Hong Kong lending operations, not legal advice. Confirm how anything here applies to your licence with your own advisers.