TEXT-S&P report:Southeast Asian banks brace for slowdown

(The following statement was released by the rating agency)

Aug 02 - Banks in Southeast Asia must brace for slower economic growth amid an uncertain

external environment in 2012, Standard & Poor's Ratings Services said in a report published

recently.

The report, titled "Southeast Asia Banks: Staying The Course Amid Challenging

External Environment," said the region's strong dependence on exports makes it

susceptible to any external deterioration, especially the European debt

crisis.

"Europe is an important trading partner for Southeast Asian countries and

further slowdowns in exports might lead to lower economic growth, weaker asset

quality, and higher credit costs," said Standard & Poor's credit analyst Ivan

Tan. "Despite these challenges, we believe most Southeast Asian banks and

economies are capable of withstanding external pressure under our base-case

scenario."

Standard & Poor's expects adequate financial profile and good systemwide

liquidity to help Southeast Asian banks navigate a difficult 2012. In

addition, some banks have adopted defensive strategies and selective growth to

manage their risk exposures while preserving capital, Mr. Tan said.

On a more positive note, we believe the retreat of European banks can also

present opportunities for Southeast Asian banks to expand their market share

and presence. In particular, the larger banks in Singapore and Malaysia are

already growing regionally, and are positioned well to meet the financing

requirements in these markets. However, we believe these banks are likely to

grow sensibly and manage their risks prudently.

The Southeast Asian region features a diverse spectrum of banks, from the

highly-rated, developed banking sector in Singapore, to the investment-grade

banking sectors of Malaysia and Thailand, to the emerging and higher-risk

systems of Vietnam and Cambodia. The report contains comments on 29 rated

banks across seven Southeast Asian systems.

Source: http://news.yahoo.com/text-p-report-southeast-asian-banks-brace-slowdown-085831267--sector.html

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