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| Moody's: SARS impact on Chinese banks limited |
| CCTV.COM 2003-05-05 13:05:40 |
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One of the leading global credit rating and risk analysis firms, Moody's says in its latest report that the SARS epidemic impact on banks in the Chinese mainland, as well as the Hong Kong and Taiwan regions may prove to be transient, although noticeable.
The report says SARS is weakening consumer sentiment as the local economy continues to reel from several years of deflation.
The Moody's report says SARS is likely to exert a minor but noticeable impact on Hong Kong's bank earnings and asset quality. It adds the exact extent of the impact will differ form institution to institution, but ultimately, they will be able to recover from the situation. Furthermore, the pace of recovery will depend on the process of Hong Kong's economic re－structuring, the global economy and growth in the Chinese mainland.
The report says the Chinese government is now trying to deal more forcefully with SARS to regain consumer and investor credibility in the mainland. If SARS is effectively contained, the impact will be limited.
Moody's also says SARS has so far not exerted as serious an impact on Taiwan as it has on the mainland and Hong Kong.
Moody's said in the report that bank profitability and asset quality in these regions were expected to deteriorate in the coming months as a result of SARS. But, liquidity should strengthen due to the uncertainties the illness is generating, along with the resulting decrease in consumption. The report adds that the extent of the negative impact will depend on the severity and duration of SARS.
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Editor: Han Ling CCTV.com
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