Spore banks: no exposure to besieged Evergrande

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Evergrande’s headquarters can be seen in Shenzen, China on Sunday. AFP

Singapore banks have no exposure to struggling Chinese real estate conglomerate Evergrande.

That’s the message from the three local banks as the Shenzhen-based real estate company faces potential bankruptcy and is weighed down by some $ 300 billion in debt.

A spokesperson for DBS said the bank “has no exposure to Evergrande”.

Meanwhile, in an interview with Bloomberg TV, DBS CEO Piyush Gupta said he did not view the crisis enveloping the Chinese developer as a systemic risk to the region’s banking sector.

“I don’t think a lot of Asian banks have a lot of exposure,” Gupta said in an interview with Bloomberg. “I don’t think this is going to destroy the Asian banking sector.”

Separately, the OCBC spokesperson told the Straits Times that the bank could not comment on specific loans, but it is understood that Singapore’s third-largest lender has no exposure to Evergrande.

UOB previously reported that they did not have any loans at Evergrande.

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

While analysts do not see an impact of contagion, as it did in 2008 when Lehman Brothers sank under the weight of bad mortgage loans and threatened to bring down other lenders with it.

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

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

Nonetheless, bondholders, equity investors and banks exposed to the company are likely to suffer.

What is also little known is to what extent Singaporean investors are exposed to Evergrande bonds or stocks. However, market insiders believe the numbers could be negligible.

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

Meanwhile, the Chinese real estate company, with more than 800 projects in 200 Chinese cities, is under increasing pressure from domestic suppliers, contractors, investors and real estate buyers as it tries to weather its severe financial crisis. Treasury.

As of the end of last week, Evergrande had approximately $ 83 million in unpaid interest payments owed to bondholders. About $ 20 billion of its debts are owed abroad.

Its stock has fallen by around 80% in recent months.

There are growing concerns that the collapse of Evergrande will not only hit several Chinese banks, but also have an impact on the Chinese economy, which counts its real estate sector as one of its main components.

THE STRAITS TIMES (SINGAPORE) / ASIA NEWS NETWORK


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