Asians more averse to borrowing, prefer local banks - survey

HONG KONG, June 29 (Reuters) - Asians are becoming increasingly averse to borrowing and now prefer local banks since the global financial crisis battered confidence in international lenders, a study showed on Wednesday.

About 70 percent of Asians now believe that "borrowing is always risky", a 27 percentage point jump from 43 percent in 2007, according to a survey of nearly 20,000 Asian consumers by consultancy McKinsey & Company.

"While banks may not be experiencing drops in loan volumes, consumers are becoming much more cautious on what they borrow for and how much they borrow," said Kenny Lam, McKinsey's head of marketing and sales practice for financial institutions in Asia.

Those surveyed also showed a growing preference for local banks, with a vast majority of respondents in China, Hong Kong and Taiwan saying they preferred to deal with a local institution.

About 87 percent of those in China prefer to deal with a local bank, compared with 75 percent in 2007. Taiwan and Hong Kong also showed a similar trend, with a rise of more than 17 percentage points in both places.

"We're witnessing a consistent theme across Asia of the desire among consumers for the localisation of banks," Lam said.

Foreign banks have been trying to expand in China, with a study released earlier this month by PriceWaterhouseCoopers showing that their overall market share rose to 1.83 percent in 2010 from 1.7 percent in 2009.

China is home to some of the world's biggest banks, including the world's most valuable lender Industrial and Commercial Bank of China Ltd , which is valued at $250 billion. By comparison, Citigroup has a market capitalisation of $117 billion. (Reporting by Kelvin Soh; Editing by Chris Lewis)