Fitch: Asia-Pacific Banks' China-Related Risk is Growing

Sun Jun 8, 2014 9:30pm EDT

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: APAC Banks: Chart of the Month, June 2014 here HONG KONG/SINGAPORE, June 08 (Fitch) Asia-Pacific (APAC) banks have accumulated about USD1.2trn of China-related exposure at end-2013, Fitch says in its Asia-Pacific Bank Chart of the Month report. Hong Kong accounts for USD798bn, with 34% of system assets in the territory exposed to China, which leaves its banks most vulnerable to a slowdown in China. It is followed by Macao (20%), Singapore (12%) and Taiwan (7%). Concentration for larger countries is low (Australia: 1.2%, Japan: 0.6%). In each of these markets, banks' China-related exposure as a share of system assets has been rising since 2009. For Hong Kong, claims on mainland banks are volatile, driven by Hong Kong's leading role in the offshore renminbi business, the rising interconnectedness of the two banking systems and their relative sizes. Lending and other activities with Chinese corporates, including trade finance, has developed more steadily at an average growth rate of 39% 2010-2013 compared with 78% for bank claims. The report "APAC Banks: Chart of the Month" is available at www.fitchratings.com or by clicking on the link above. Contact: Sabine Bauer Senior Director +852 2263 9966 Fitch (Hong Kong) Limited 2801, Tower Two, Lippo Centre 89 Queensway, Hong Kong Mark Young Managing Director +65 6796 7229 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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