Search

NEWS
ECONOMY | Staff Reporter, Hong Kong
Published: 22 May 12
326 views


Hong Kong banks susceptible to massive Eurozone recession

A severe credit crunch could hammer Hong Kong’s banks and those in Singapore should there be a huge jump in non-performing loans.

On the other hand, a report from Standard & Poor's Ratings Services also believes Hong Kong’s banks will be resilient to a mild slowdown in the Eurozone. In a worst-case scenario, however, S& P said Hong Kong and Singaporean banks' stand-alone credit standing could be threatened by a fall in asset prices and a drop in the risk appetite of wealth-management customers.

It said banks would benefit from a buffer against an expected modest worsening in loan quality and credit losses. Profit could be wiped out and capitalization at risk from depletion for banks that suffer more severe credit losses and have a weaker income base.

The loan quality of Hong Kong and Singapore banks could substantially deteriorate if the the Eurozone experiences a prolonged and severe recession.

Property prices, currently at record highs, could quickly slump if concerns about Europe widened into severe global risk aversion.

While the threat in Hong Kong appears less acute, a drastic and rapid exit of Eurozone banks from Hong Kong in a severe recession could disrupt the availability of credit, S&P said.



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

Tags: Standard & Poor's Ratings Services, Hong Kong

LATEST ECONOMY JOBS »
  • No jobs posted on this category.
    PRINT ISSUE »

    Available at news stands now 

    Subscribe Now
    Cash-flush tourists in HK

    69 views

    Is Central Hong Kong a ghost town in the making?

    130 views

    As goes Singapore, so goes Hong Kong?

    111 views

    MOST READ EXCLUSIVES

    Hong Kong’s 10 most expensive hotel suites

    Hong Kong’s 10 most expensive hotel suites

    Guess which tops the list at HKD158,000 a night.

    by KRISANA GALLEZO
    26 May 2014 | 5421 views
     

    See how this fashion startup aims to fill the gap where Pinterest has failed

    See how this fashion startup aims to fill the gap where Pinterest has failed

    It plans to be the go-to site for future brides.

    by
    13 May 2014 | 421 views

    See how Zyppos allows you to hire travel experts for worry-free flights

    See how Zyppos allows you to hire travel experts for worry-free flights

    It helps you find the best flights and lowest fares.

    by KRISANA GALLEZO
    29 May 2014 | 94 views
     
    close Don't Show Again

    STAY INFORMED! Get our free weekly newsletter