From Singapore to Thailand, ASEAN banks tackle loan book risks

Fed's rate cuts overshadow lending margins as asset quality hits loom

20241108 SG banks

Banks in ASEAN face risk within their loan books as Fed rate cuts may cut into lender's margins. (Source photos by Reuters)

DYLAN LOH, Nikkei staff writer

SINGAPORE -- Pressure is building on the loan books of Southeast Asian banks as the U.S. Federal Reserve moves ahead with interest rate cuts that spell potentially lower margins for some of the bloc's lenders in the road ahead.

The Fed Thursday trimmed rates by a quarter percentage point after a larger cut in September of 0.5 percentage points, as cooling inflation gave the American central bank greater confidence to pursue easing after a season of monetary tightening.

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