, Australia
Photo by Hugo Heimendinger via Pexels.

US, Europe banking fiascos have little effect on Australian banks: analyst

They have different business models from banks in US and Europe.

Australian banks are unlikely to go down the same route as Silicon Valley Bank nor Credit Suisse, according to a report by S&P Global Ratings.

Australian banks should also be able to ride out the short-term disruption in the financial markets triggered by the recent events, the ratings agency noted.

"Australian banks have different business models to these banks," said Sharad Jain, a credit analyst at S&P Global Ratings. "They are mainly focused on conventional banking and operate with sound funding and liquidity under prudential regulations. That places the industry adequately to weather the current market instability."

ALSO READ: Singapore reaffirms creditor hierarchy following Credit Suisse AT1 wipeout

The recent collapse of the US-based Silicon Valley Bank and downgrade of First Republic Bank highlight the risks from an asset-liability mismatch and unstable deposits, the ratings agency noted. In addition, the write-off of AT1 capital instruments issued by Swiss banking giant Credit Suisse has startled many market participants.

Prolonged dislocation of financial markets, however, would erode the banks' earnings and pose risks to our ratings on smaller institutions, Jain warned.

Follow the links for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


Hong Kong’s livi bank launches game-changing app for SMEs
Going fully digital on opening accounts and approving quick loans to SMEs raises ‘livi Business’ disbursements to over HK$70m (US$8.9m) as of end-April.
3 principles guide Bank Aladin Syariah in tapping Indonesia’s customer segments
Within a year, the digital sharia bank got past low penetration to record 1.7 million customers and now targets multiple times growth by end-2023.
Bankers face sluggish hiring market, layoffs in Hong Kong
Industry insiders reveal how investment banks prioritize cost efficiency and productivity over hiring new employees.