Failure of big corporate could wipe out year's earning of South and Southeast Asian Banks: S&P Global

Chennai, Feb. 6 -- Loan concentration is a major risk, and any large loan default by a large corporate could wipe out the full-year earnings of some banks in India, Malaysia and Indonesia, said S&P Global Ratings in a latest report titled "South and Southeast Asia Stress Tests Show Loan Concentration Could Blindside Banks".

"Banks in Brunei, the Philippines, and Thailand are the most exposed to loan concentration risk," said Geeta Chugh, a credit analyst at S&P Global Ratings.

"In these countries, banks could lose more than a full-year's earnings before tax because of high concentration and, in some cases, due to relatively weak earnings. That said, extreme stress could wipe out the full-year earnings of some banks in Malaysia, India, and...