Singapore is only Asean country to have stable banking outlook as risks rise

SINGAPORE (Oct 6): Asean banks are facing slower GDP growth, a weaker operating environment and increasing downside risks – but most should have adequate loss-absorption buffers to support their current ratings, says Fitch Ratings.

In a Wednesday statement, Fitch notes that the operating environment for banks across much of Asean has become more challenging over the last couple of years, which  could potentially expose vulnerabilities created in Asean’s banking systems during the years of rapid credit growth that followed the 2008 global financial crisis.

Many of such institutions also face risks stemming from a sharp rise in debt during the last decade, and are relatively exposed to developments in China, adds the credit rating agency.

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