KUALA LUMPUR (Feb 15): Most of the rated Asia-Pacific banks are capable of withstanding pressures from the euro debt crisis at their current rating levels based on the sound financial profiles, says Standard & Poor’s Ratings Services.
“However, in the case of a more pronounced global economic slowdown, there could be increasing pressure on the banking sectors of some Asia-Pacific countries,” it said in a report on Wednesday.
S&P said under its base-case scenario and based on the assumption the global economy will avoid a severe recession; the Economic and Monetary Union will grow at an anemic 0.4% in 2012 and enter a mild recession; the U.S. economy will escape a recession; and China will manage to secure a soft landing with about 7.7%-8.0% growth in 2012.
The ratings agency said if the eurozone’s debt woes lead to a more severe global financial, it could lower its assessments of the banks, including those for their risk positions and capital and earnings.
S&P credit analyst Naoko Nemoto pointed out that considering the export-oriented structure of the Asia-Pacific region, a more pronounced global economic slowdown could have a larger impact on the region’s overall economy and the credit profile of the Asia-Pacific banking industry.
“Under this scenario, which differs from our base-case scenario, we would consider negative rating actions on the banking sectors of relevant Asia-Pacific countries,” she said.
“However, in the case of a more pronounced global economic slowdown, there could be increasing pressure on the banking sectors of some Asia-Pacific countries,” it said in a report on Wednesday.
S&P said under its base-case scenario and based on the assumption the global economy will avoid a severe recession; the Economic and Monetary Union will grow at an anemic 0.4% in 2012 and enter a mild recession; the U.S. economy will escape a recession; and China will manage to secure a soft landing with about 7.7%-8.0% growth in 2012.
The ratings agency said if the eurozone’s debt woes lead to a more severe global financial, it could lower its assessments of the banks, including those for their risk positions and capital and earnings.
S&P credit analyst Naoko Nemoto pointed out that considering the export-oriented structure of the Asia-Pacific region, a more pronounced global economic slowdown could have a larger impact on the region’s overall economy and the credit profile of the Asia-Pacific banking industry.
“Under this scenario, which differs from our base-case scenario, we would consider negative rating actions on the banking sectors of relevant Asia-Pacific countries,” she said.
