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Singapore questions top banks on exposure to Evergrande fallout

Monetary Authority of Singapore. (PHOTO: REUTERS/Darren Whiteside)
Singapore’s financial regulator has questioned the nation’s three banks about their exposure to China Evergrande Group. (PHOTO: REUTERS/Darren Whiteside) (Reuters)

By Chanyaporn Chanjaroen

(Bloomberg) — Singapore’s financial regulator has questioned the nation’s three banks about their exposure to China Evergrande Group, joining other global centers in examining the potential fallout from the property developer’s debt crisis.

The Monetary Authority of Singapore requested the information from the lenders last week, according to people with knowledge of the matter who asked not to be identified because they aren’t authorised to discuss private information. The inquiries were part of MAS’s regular bank monitoring, one of the people said.

While the troubles at Evergrande, with more than US$300 billion of liabilities, happened in China, all three Singapore lenders — DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. — have operations on the mainland and in Hong Kong.

Hong Kong’s central bank and the U.S. Federal Reserve have also asked lenders to report their financial commitments to Evergrande, China’s largest issuer of high-yield, dollar-denominated bonds. The developer missed interest payments due last week to at least two of its largest bank creditors, people familiar with the matter have said.

DBS, Singapore’s biggest lender, has no exposure to Evergrande and doesn’t see the crisis as a systemic risk to the region’s banking industry, Chief Executive Officer Piyush Gupta said in a Bloomberg Television interview on Monday.

Evergrande’s impact on other Chinese developers will also be rather limited, based on Singapore’s own assessment, Finance Minister Lawrence Wong said in separate Bloomberg Television interview.

“The question is whether there will be broader spillover effects on the Chinese economy,” said Wong, who is also deputy chairman of the city-state’s financial regulator. “That — we are monitoring closely but overall our assessment remains that China’s economy will still grow strongly this year.”

© 2021 Bloomberg L.P.