Connect with us
intralinks

News

Climate change raises asset risks for banks in Asia-Pacific

Climate change and related government policies raise asset risks for banks in Asia-Pacific, while legal and reputational risks are growing while large, diversified banks in the region are better able to cope with these risks and preserve their credit strength

Published

on

Climate change and related government policies expose Asia-Pacific banks to physical climate risks, as well as risks that stem from sudden changes in asset values as economic priorities shift, according to Moody’s Investors Service in a new report.

New standards and regulations will increase compliance costs for banks, while engaging in or facilitating activities with a significant negative environmental impact can inflict reputational damage on banks and tarnish their brands.

“Asia-Pacific economies with weak infrastructure are particularly vulnerable to physical climate risks, which can hurt banks’ asset quality because a natural disaster can damage borrowers’ assets or disrupt their cash flow. Many banks in the region also face asset risks from large exposures to sectors susceptible to carbon transition risks,”

Alka Anbarasu, a Moody’s Vice President and Senior Credit Officer

In addition, legal and reputational risks are increasing for banks in Asia-Pacific as governments advance guidelines and regulations for sustainable financing and disclosure requirements related to climate risks. Meanwhile, investors are increasing pressure on banks to stop financing carbon-intensive projects.

Large, diversified banks in the developed economies of Singapore, Australia and Japan, along with major pan-Asia Pacific banks, are better positioned to cope with climate risks and preserve their credit strength. Fundamentally, their exposures are more diversified across different countries and industries, reducing their vulnerability to climate risks from a single location or borrower group. What’s more, they have started incorporating climate factors into their strategic plans and operations as they face pressure from stakeholders to take steps early.

Governments’ sustainable development goals will also create financing opportunities for banks. Bank lending will be the largest source of funding for clean energy projects that will require enormous amounts of investment.

Subscribers can access the report “Banks – Asia-Pacific: Climate risks are growing, with large, diversified banks better positioned to cope” at: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1239143

Loading...

News

Latest Covid-19 News in Southeast Asia

Published

on

Coronavirus disease 2019 (COVID-19) WHO Thailand Situation Report - 22 February 2021

Singapore remains far and away the most vaccinated country in Southeast Asia, with nearly 30 percent of residents having received both doses. But the city-state has also seen an aggressive rise in local cases in recent weeks.

(more…)
Continue Reading

Asean

ASEAN economies poised for robust recovery with 6% real GDP growth in 2021

The six largest ASEAN nations (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) are expected to witness positive real GDP growth rates in 2021 according to Global Data

Published

on

Receding daily COVID-19 cases, rollout of vaccines, increased spending by the governments along with easing of monetary restrictions will help revive the Association of Southeast Asian Nations (ASEAN*) economies in 2021 with their real GDP forecasted to rise by 6%, says GlobalData, a leading data and analytics company.

(more…)
Continue Reading
Wise

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 14,086 other subscribers

Recent