Credit ratings of Asian banks are not at risk of being downgraded. Even if the eurozone crisis blows out, Asian banks are well positioned to absorb the shock, according to US-based ratings agency Fitch Ratings.
A potential break-up of the eurozone and the end of the single euro currency may cause a credit crisis globally.
Experts said this may send global banks reeling due to the large debt that they may have to swallow.
However, Fitch Ratings said they are confident that Asian banks will remain resilient amid the crisis.
At its Singapore Global Banking Conference today, Fitch said Asian banks are well capitalized with solid funding capacities.
Mark Young, managing director, Financial Institutions Group, Fitch Ratings, said: “Banks in the region have reasonably good absorption capacity both with regards to their level of profitability and capital. Another strength in the region is the funding structure of the banks, which are better structured to absorb potential market instability.”
Still, the ratings firm highlighted potential risks faced by some banks in China.
Fitch analysts said some of these Chinese banks lack the crisis management expertise.
This has prompted Fitch to take a slightly more cautious view on Singapore and Hong Kong banks due to their exposure in China.