Rising household debt threatens Asian banks: S&P

October 30, 2013 Leave a comment

Rising household debt threatens Asian banks: S&P

BANGKOK, OCT 29:  

Rising household debt in East Asia could undermine the creditworthiness of some of the region’s banks, ratings agency Standard & Poor said on Tuesday. The warning was made in an S&P report evaluating the asset quality of banks in Malaysia, Thailand, Singapore, Korea, Hong Kong, and China. “Rising household debt fuelled by rapid loan growth and easy monetary conditions could weaken the credit quality of banks in Asia,” said S&P’s credit analyst Ivan Tan. “Potential asset bubbles and imbalances are building up in some countries, and could put the banks at risk.” Malaysia, Thailand, Singapore, and Korea have the highest household debt in Asia, according to the report, with banks in Malaysia and Thailand deemed the most vulnerable to non-performing loans in the household segment. The international credit rating agency said it did not anticipate “a sharp unwinding of household balance sheets” but warned that “a severe economic downturn leading to a rise in unemployment and a significant fall in property prices would hurt financial institutions.” It added that Asia’s major banks have generally healthy financial positions by global standards.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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