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Fitch: HK Banks' Strong Capital Buffers to Cushion CRE Quality Issues
Recommend 12 Positive 15 Negative 14 |
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Hong Kong banks' strong capital buffers will support their Viability Ratings in the short term against sustained asset quality divergence stemming from local commercial real estate (CRE) stress, Rating agency Fitch said. However, the ratings could come under pressure if CRE-driven asset quality deterioration intensifies and persists amid a protracted market recovery. Loan quality deterioration from prolonged CRE stress varies across Hong Kong banks, and Fitch expected this divergence to persist in the near term, Fitch added. Banks with higher exposure to vulnerable small- to medium-sized CRE borrowers will likely face extended deterioration as lower interest rates will not resolve the structural issues over office and retail vacancies. However, capital buffers have strengthened broadly over the past year, aided by the Basel III final package implementation. AASTOCKS Financial News Website: www.aastocks.com |
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