Hong Kong lenders were hit by weaker profitability in 2015, as margins were squeezed by rising deposits but slower loan growth, the SAR's de facto central bank said on Friday.

Classified mainland loans of Hong Kong banks were on the rise, but the banking system was faced with excess liquidity ahead of a turning credit cycle.

Operating profit for the Hong Kong banking sector declined by 2.8 percent last year, compared with a 3.7 percent increase in 2014, the Hong Kong Monetary Authority announced on Friday. The net interest margin of the sector edged down by 0.08 percentage point to 1.32 percent at the end of 2015, from 1.4 percent in 2014.

Total deposits grew at 6.7 percent last year — slower than the 9.7 percent in 2014 — but still outpaced the 3.5 percent on-year increase in total loans, the slowest rise the sector has seen in at least five years. In 2014, banks in Hong Kong recorded 12.7 percent growth in the loan book.