Global banking sector well capitalised amid uncertainty, but China is still a risk factor for Apac players

THE global banking sector will likely remain resilient in the face of next year’s macroeconomic risks, thanks to strong capitalisation and asset quality across most banks, analysts said. Singapore banks, in particular, are well positioned as they have strong fundamentals and net interest margins (NIMs).

But China’s economic uncertainty will be a crucial factor determining the health of the Asia-Pacific banking sector – and it is no small contributor to the revenue of local banks.

In a webinar on Tuesday (Nov 22), S&P Global Ratings senior director Geeta Chugh noted that the direct impact of China’s property market downturn on banks in the Asia-Pacific region still looks manageable at this stage.