Debt issuance by banks in the Asia-Pacific region hit a 21-month low in September, amid uncertainties around interest rates.
According to data compiled by S&P Global Market Intelligence, lenders in the region raised $8.78bn in debt in September, down from $28.54bn in the same month a year earlier. The aggregate debt figures include bonds, senior debt and preferred securities.
A big part of the debt raised by Asia-Pacific banks in September was denominated in US dollars.
The institutions that raised the biggest amounts were the Asian Infrastructure Investment Bank, DBS Group Holdings and Bangkok Bank Public Company Hong Kong Branch. All other banks raised less than a billion dollars each.
Aside from Chinese banks, which are still expected to tap capital markets for lending and regulatory purposes, most banks in the region will wait to gain more clarity on the direction of interest rates and growth outlook.
Growth in Asia-Pacific’s advanced economies is slowing in the current tight monetary environment.
Aside from growth, real estate in the region could also become a source of financial stability risks, noted the International Monetary Fund in its Regional Economic Outlook published in October. In China, continued stress in the property sector may lead to material losses for smaller banks.
