| Abstract | Despite the banking sector's operating environment being adversely affected by the economic slow-down -- especially in the second half of the year -- banks in Hong Kong generally achieved appreciable growth in both business and profits in 1995. The outlook for the Hong Kong banking sector in 1996 and 1997 remains positive. However, the possibility of unfavourable interest-rate movements is of concern to the accelerating economy. In view of the banking sector's strong reliance on interest income and the relatively large amount of staff costs in operating expenses, banks should expedite the diversification of their income sources, and continue to exercise prudent control over costs. |
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