...Manageable Impact from Tapering: Fitch Ratings believes the impact on Hong Kong banks from global monetary tightening and rising interest rates should be manageable, as they maintain strong liquidity. Risks are also mitigated by deposits remaining the key funding source (54% of system-wide assets at end-2013), together with substantial securities holdings. Reliance on foreign bank funding represents 24% of assets (of which the top five countries comprise 63%), but should remain stable ¡ as this reflects in part the foreign ownership. Robust Deposit Composition: Fitch-rated banks maintained a higher proportion of deposits relative to the system average, and concentrations are moderate, with the top 20 depositors accounting for only 10%-20%. More stable retail and resident deposits make up 80%-90% of total deposits. Less stable certificate of deposits stood at just 5% of assets at end-2013 (2009: below 1%). These included renminbi-denominated structured notes. Fitch believes longer-term funding...
