Asian bank risk in troubled europe is ‘negligible,’ Citi says

Asian banks have “small or negligible” liabilities in debt-stricken European countries, according to Citigroup Inc analysts led by Simon Ho.

“Whilst detailed figures/disclosures are not available in most markets, we believe direct exposures to Portugal, Ireland, Italy, Greece and Spain are small or negligible for Asian banks,” Ho wrote in a report dated April 28.

Stocks plunged around the world this week after Standard & Poor’s cut its credit rating on Greece to junk and lowered its assessments on Portugal and Spain. Concern mounted that Greece’s struggle to repay debt may spread to other countries, halting a global economic recovery.

Fubon Financial Holding Co., Taiwan’s second-largest publicly traded financial-services company, holds about 270 million euros ($356 million) in Spanish government bonds, representing about 5 percent of equity, Citigroup said.

Japan’s biggest publicly traded banks, Mitsubishi UFJ Financial Group Inc, Sumitomo Mitsui Financial Group Inc and Mizuho Financial Group Inc, have no or very little liabilities in Greece and Portugal, the report said. They have some risk in Spain and Italy, with none related to sovereign bonds or loans, Citigroup said.

Bloomberg

Tags: Asia finance, Asian bank