'Australia, NZ, S'pore banks least risky'

'Australia, NZ, S'pore banks least risky'

Agence France-Presse, Singapore

Banks in Australia, New Zealand and Singapore face the least risks in the Asia-Pacific, while those in China, Indonesia and Vietnam are the most vulnerable, Standard and Poor's said Thursday.

Hong Kong's banking sector was given a moderate risk profile, while India, the Philippines and Thailand were classified as "high risk", the ratings agency said in releasing its industry and economic risk profile for the region's banking industry.

The Japanese, South Korean, and Taiwanese banking sectors were given moderate to moderately high risk profiles, followed by Malaysia, which had a higher economic risk.

"Not surprisingly, the economic and industry risks of the Asia-Pacific banking systems vary widely," said Ian Thompson, managing director, financial services ratings.

"The banking industries in Australia, New Zealand, and Singapore stand out as having the lowest risk among the Asia- Pacific systems, while Hong Kong is next with a moderate risk profile," he said in a statement.

"The banking sectors of Japan, Korea and Taiwan have better economic risk than they do industry risk and hence have moderate to moderately high risk profiles. They are followed by the banking sector of Malaysia, which has higher economic risk," the statement said.

Standard and Poor's defines economic risk in the context of a banking system as the risk level of a country's economy as it affects financial institutions.

It factors in the economy's strength, diversity and volatility, the financial health of the corporate and individual sectors as well as the government's ability to manage the economy.

The industry risk category generally gauges the dynamics of the financial service industry and to what extent they lead to more or less risk from the point of view of debt holders.