US sanctions loom over banks with China connections: Fitch

September 25, 2020 11:50

Chinese banks and international non-US banks with connections to China could become ensnared in processes leading to US sanctions, Fitch Ratings has said in a new report.In the coming weeks, the US administration must initiate a process that will result in the submission to Congress of a list of foreign financial institutions deemed to have engaged in significant transactions with parties that have allegedly sought to undermine Hong Kong's autonomy.

"However, we do not expect material sanctions against systemic Chinese banks given the likelihood of retaliation from the Chinese state and the ensuing risk to bilateral trade and investment," said Fitch.

Large non-US banking groups with meaningful footprints in China or Hong Kong including HSBC and Standard Chartered are reviewing potential escalation scenarios.

US sanctions on Chinese or Hong Kong-based individuals, some of which are already underway, could lead to reputational risk for banks, said Fitch in the report.

Extension of sanctions to corporates with strong links to the Chinese state or Chinese state-owned enterprises could increase credit risk in banks' loan portfolios or limit their growth opportunities.

So far, foreign banks do not appear to be deterred from maintaining operations in China or Hong Kong and they continue to see growth opportunities in China, including from the Belt and Road initiative. -- ANI

« Back to LIVE

TOP STORIES

Top Mumbai school axes principal over social media activities

Shaikh, the principal of Somaiya School in Mumbai's Vidyavihar area, described her "termination" from the post as "completely illegal, drastic and unwarranted" and expressed shock over the "politically motivated" action.

Glorification of violence: India slams Canada over Khalistani float in parade

India also accused Canada of allowing "celebration and glorification" of violence, expressing concerns over the security of Indian diplomats in that country, and said it expects Ottawa to ensure that they are able to carry out their...

Mayawati sacks nephew Akash as party co-ordinator, heir

Announcing it on X, the former Uttar Pradesh chief minister said she has taken the decision in the interest of the party and the movement and till the time Anand gains "full maturity".

In Pictures - Modi to Kharge, famous faces at polling booths

Prime Minister Narendra Modi, Union home minister Amit Shah, Congress president Mallikarjun Kharge, and Nationalist Congress Party-Sharadchandra Pawar supremo Sharad Pawar were among the famous faces who queued up at the polling booths...

IPL PIX: Samson sizzles, but Royals lose to DC

Sanju Samson's entertaining half-century went in vain as Rajasthan Royals suffered a 20-run defeat against Delhi Capitals.