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Hong Kong banks prove balance sheet resilience as Asia Pacific players suffer credit and profit stress

Bank of China (Hong Kong) emerges as strongest bank by balance sheet in Asia Pacific in 2020. While the majority of banks in the region maintained adequate capital and liquidity buffers, profitability has weakened amid the COVID-19 crisis.

January 27, 2021 | Wendy Weng
  • Banks in Australia, South Korea and Hong Kong demonstrated the strongest asset quality, while those in countries such as Indonesia, Pakistan, and Thailand saw deterioration in asset quality
  • The pandemic has exerted negative impact on the profitability of Asia Pacific banking sector
  • Overall, capital and liquidity buffers remain relatively resilient across most markets

Bank of China (Hong Kong) topped the annual ranking of The Asian Banker 500 (AB500) Strongest Banks by Balance Sheet, as it fared well on most indicators. The top 20 strongest banks in Asia Pacific comprise eight Hong Kong banks, four Chinese banks, three Japanese banks, two Malaysian banks and one each from Australia, Singapore and South Korea. Hong Kong banks occupy the first four places.

This is based on a detailed and transparent scorecard that evaluates commercial banks and financial holding companies (banks) on six areas of balance sheet financial performance; namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality and liquidity. This year, financial information in the first half of financial year 2020 (1H FY2020) was collated and incorporated into the assessment of how banks performed during the COVID-19 pandemic.

Overall, Hong Kong banks have once again achieved the highest strength score in this year’s AB500 Strongest Banks evaluation. Their weighted average strength score stood at 3.97 out of 5, followed by Singapore banks (3.67), Chinese banks (3.40) and Australian banks (3.36). The 500 largest banks in Asia Pacific recorded an average strength score of 3.27.

Hong Kong banks achieved high strength score in the areas of scale, risk profile, asset quality and liquidity. They have remained well capitalised and highly liquid. In 1H FY2020, their weighted average capital adequacy ratio (CAR) was 20.6% and liquid assets to total deposits and borrowings ratio stood at 49%. Their asset qualit...

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Categories:

Asian Banker 500

Keywords:Scorecard, Asset Quality, NPL, Profitability


Hong Kong banks prove balance sheet resilience as Asia Pacific players suffer credit and profit stress

Bank of China (Hong Kong) emerges as strongest bank by balance sheet in Asia Pacific in 2020. While the majority of banks in the region maintained adequate capital and liquidity buffers, profitability has weakened amid the COVID-19 crisis.

January 27, 2021 | Wendy Weng
  • Banks in Australia, South Korea and Hong Kong demonstrated the strongest asset quality, while those in countries such as Indonesia, Pakistan, and Thailand saw deterioration in asset quality
  • The pandemic has exerted negative impact on the profitability of Asia Pacific banking sector
  • Overall, capital and liquidity buffers remain relatively resilient across most markets

Bank of China (Hong Kong) topped the annual ranking of The Asian Banker 500 (AB500) Strongest Banks by Balance Sheet, as it fared well on most indicators. The top 20 strongest banks in Asia Pacific comprise eight Hong Kong banks, four Chinese banks, three Japanese banks, two Malaysian banks and one each from Australia, Singapore and South Korea. Hong Kong banks occupy the first four places.

This is based on a detailed and transparent scorecard that evaluates commercial banks and financial holding companies (banks) on six areas of balance sheet financial performance; namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality and liquidity. This year, financial information in the first half of financial year 2020 (1H FY2020) was collated and incorporated into the assessment of how banks performed during the COVID-19 pandemic.

Overall, Hong Kong banks have once again achieved the highest strength score in this year’s AB500 Strongest Banks evaluation. Their weighted average strength score stood at 3.97 out of 5, followed by Singapore banks (3.67), Chinese banks (3.40) and Australian banks (3.36). The 500 largest banks in Asia Pacific recorded an average strength score of 3.27.

Hong Kong banks achieved high strength score in the areas of scale, risk profile, asset quality and liquidity. They have remained well capitalised and highly liquid. In 1H FY2020, their weighted average capital adequacy ratio (CAR) was 20.6% and liquid assets to total deposits and borrowings ratio stood at 49%. Their asset qualit...

Please login to read the complete article. If you already have an account, you can login now or subscribe/register.

Categories:

Asian Banker 500

Keywords:Scorecard, Asset Quality, NPL, Profitability


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