(C) Reuters. FILE PHOTO: A general view of the central financial district, in Hong Kong, China March 11, 2021. REUTERS/Tyrone Siu/File Photo
HONG KONG (Reuters) – The risks to Hong Kong banks from heavily indebted Chinese property developers are manageable, a top executive at the city’s banking regulator said on Tuesday.
The debt crisis engulfing China Evergrande Group has begun to dent homebuyer sentiment in China and force developers to cut prices. With liabilities of $305 billion, Evergrande has sparked concerns its problems could spread through China’s financial system and reverberate around the world – a worry that has eased as damage has so far been concentrated in the property sector.
Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority, told a conference these problems were unlikely to have a major effect on banks in the Asian financial hub.
“Both the industry and the media has been focusing a lot of attention on highly-leveraged borrowers, in particular some of the developers in mainland China. On that one, both the industry and ourselves have been paying a lot of attention to industry sectors that are under relatively greater stress in the past few years, so our banking system’s exposure to these highly-leveraged borrowers is not that high.”
“The risk there is pretty much manageable at the moment, but nonetheless we would urge the industry to remain vigilant,” Yuen said.
Hong Kong banks have limited exposure to stressed Chinese developers – regulator
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.