Logo of Phnom Penh Post newspaper Phnom Penh Post - Singapore banks: No exposure to beleaguered Evergrande

Singapore banks: No exposure to beleaguered Evergrande

Content image - Phnom Penh Post
The Evergrande headquarters are seen in Shenzen, China on Sunday. AFP

Singapore banks: No exposure to beleaguered Evergrande

Singapore banks do not have any exposure to troubled Chinese property conglomerate Evergrande.

That is the message being put out by the three local banks as the Shenzhen-based property company faces potential bankruptcy, and is weighed down by some $300 billion in debt.

A DBS spokesman said that the bank “has no exposure to Evergrande”.

Meanwhile, in a Bloomberg TV interview, DBS CEO Piyush Gupta said he did not see the crisis that is enveloping the Chinese developer as a systemic risk to the region’s banking industry.

“I don’t think a lot of Asian banks have a lot of exposure,” Gupta said the interview with Bloomberg. “I don’t think it’s going to destroy the Asian banking industry.”

Separately, OCBC’s spokesman told the Straits Times that the bank could not comment on specific loans, but it is understood that Singapore’s third-largest lender has zero exposure to Evergrande.

UOB has previously that it has no lendings to Evergrande.

That said, the Evergrande debacle is weighing down heavily on Asian market sentiment.

While analysts do not see a contagion impact, as was the case in 2008 when Lehman Brothers sank under the weight of bad property debt and threatened to take down other lenders with it.

In contrast, Evergrande’s debt issues are considered unique and largely China-centric.

Kelvin Tay, chief investment officer for Asia-Pacific at UBS, noted that none of the US banks have any exposure. He also pointed out that China is injecting liquidity into the markets and would continue to do so in the near future, while also managing key lending rates.

Nevertheless, bondholders, equity investors and banks exposed to the company will likely take a hit.

What is also little known is the extent to which Singaporean investors are exposed to Evergrande’s bonds or stocks. However, market insiders here reckon the numbers could be negligible.

Meanwhile, the financial markets have been on edge, with Wall Street’s S&P 500 going through a turbulent week since the news flows intensified over the past month.

In the meantime, the Chinese property company, with more than 800 projects in 200 Chinese cities, is coming under increasing pressure from domestic suppliers, contractors, investors and property buyers as it tries to navigate its severe cash crunch.

As at late last week, Evergrande had outstanding interest payments of about $83 million due to bondholders. About $20 billion of its debts are owed offshore.

Its stock is down about 80 per cent in recent months.

There is increasing concern that Evergrande’s collapse could hit not just several Chinese banks but also impact China’s economy, which counts its property sector as one of its biggest components.

THE STRAITS TIMES (SINGAPORE)/ASIA NEWS NETWORK

MOST VIEWED

  • Cambodia unveils new quarantine regulations

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Cambodia sets new Covid-19 quarantine rules

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Hun Sen: Cambodia set to fully reopen

    Prime Minister Hun Sen concludes that the October 5-7 Pchum Ben public holiday, during which many people either flocked to their hometowns for family reunion or gathered at tourist attractions across the country, has not caused an outbreak of Covid-19. In a special address to

  • Will Evergrande change the way Chinese developers do business in Cambodia?

    China’s property sector policy has exposed the grim financial condition of real estate developers including those operating in Cambodia, which raises questions over the viability of their projects and business going forward The dark blue netting draping over one of Yuetai Group Co Ltd’

  • Cambodia resumes issuance of tourist visas

    The Ministry of Foreign Affairs and International Cooperation has announced the resumption of its tourist visa and visa exemption programme after a long hiatus due to the Covid-19 pandemic. In a letter dated October 20 and addressed to foreign embassies and consulates, foreign minister Prak Sokhonn

  • Cambodia voted ‘world’s friendliest country’ in Rough Guides reader poll

    Cambodia ranked number one among the “World’s Friendliest Countries”, according to a reader poll conducted by London-based international website “Rough Guides”. Taking submissions through Twitter and Facebook, “Rough Guides”, a well-known travel agency and publisher of guidebooks, said the Kingdom “was by far the