HK lenders strongest in region
Hong Kong banks are among the most resilient in the region, according to new assessment criteria by ratings agency Standard & Poor's.
Lenders in Hong Kong, Singapore, Australia and New Zealand received above-average ratings in the Bank Fundamental Strength Ratings survey designed to measures banks' abilities to cope with financial distress without seeking outside help.
The agency looked at financial and risk management skills and the ability to seek income from other than interest-bearing products.
'We see the Hong Kong banking sector as having good fundamentals,' said S&P director of financial services ratings Ryan Tsang.
'Most local banks have levels of risk management that are satisfactory compared with others in the region. They are also doing a good job in expanding their income source to more non-interest items, making their earnings less volatile.'
Not all banks were included in the survey.
HSBC and Hang Seng Bank were present, while Standard Chartered and Wing Lung Bank were omitted.
HSBC and Hang Seng both received a B-plus - the highest score - while DBS (Hong Kong) earned a B. Other local banks received a C-plus.
Mainland lenders received lower ratings due to their reliance on state capital injections and questions over their ability to deal with issues such as corporate governance.
Bank of Communications, Bank of China, China Construction Bank and the Industrial and Commercial Bank of China were rated D-plus or below.
'The mainland banking sector has improved a lot in the past couple of years,' Mr Tsang said. 'But ... they are coming from a very difficult situation and still have much to address, such as internal controls and corporate governance.'
