Korean banks face funding challenges due to eurozone debt crisis – RBS

Despite most Asian banks remaining insulated from the eurozone debt crisis, Korean banks are at greatest risk due to their reliance on high levels of external borrowing, according to RBS report. Meanwhile, the growth of the renminbi presents a liquidity challenge for Hong Kong banks, says KPMG report

The ongoing European sovereign debt crisis will have little direct impact on Asian banks as their primary source of funding is from domestic deposits, according to a Royal Bank of Scotland (RBS) Asia-Pacific Credit Strategy Report released on October 3. However, banks reliant on external borrowing may be subject to funding stress particularly in the short term, with Korean banks most at risk, says Kristine Li, author of the report and chief financial credit strategist, Asia ex-Australia, at RBS