Asean banks likely to absorb weakening asset
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THE ASSET quality of banks in the Asean region could weaken over the next 12-18 months, but their strong performance over the past few years should enable them to absorb the impact, says Standard & Poor's Ratings Services.
Those conclusions appeared in the S&P report “Asean Banks Will Remain Resilient to Rising Risks” published Tuesday.
“The healthy recurring profits and adequate capital cushions of Asean banks and the strong government support for these banks will underpin rating stability and buffer against downside risks,” said S&P credit analyst Ivan Tan.
The report notes that risks have been building up for Asean banks after several years of smooth sailing. These include credit risks due to rising property prices and household indebtedness, funding pressure from tight liquidity, and market risks from rising interest rates in certain countries.
The analysis focuses on the six key Asean markets: Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam.
