APAC Banking Outlook 2022: How will the industry manage trends and risks amid a pandemic resurgence?

At the Asia Pacific Banking Industry 2022 Outlook virtual session, chief economists and industry experts discussed key challenges and risks confronting the banking sector in the region. The dialogue covered the state of the global economy and financial systems, impact of the COVID-19 pandemic resurgence, and how banks in APAC will perform in 2022.

Alicia Garcia Herrero of Natixis, Taimur Baig of DBS, Bert Hofman of National University of Singapore, Eugene Tarzimanov of Moody’s, and Oleg Patsianskiy of BPC shared their insights and analysis of the industry outlook in 2022. Foo Boon Ping, managing editor of The Asian Banker, was the session moderator.

The session began with an optimistic forecast from Herrero as she projected an economic recovery for Asia Pacific as the US eases off its fiscal and quantitive tapering. However, she also warned that the new COVID-19 variants may lead to more restrictions on domestic and international mobility and impact supply chains. In terms of credit risks, the banking industry in the region would see a moderate increase in 2022

Meanwhile, Baig tackled the reopening dynamics in emerging markets, clouded by US monetary policy moves and reflected by high inflation rates and quantitative tightening. “We're beginning to see the dollar strengthens against emerging market currencies and around that narrative, we will see a broad range of implications for emerging markets… Asian central banks will not match one for one.”

Hofman delved into how China is taking a different track by signalling an increase in infrastructure spending and lowering banks' statutory reserves that will help stimulate the economy. Meanwhile, Tarzimanov, spoke about the downside risk of increasing private household debt impacting banks' asset quality. Patsianskiy discussed the growing competition between fintechs, digital banks and the traditional banks. Although the banking and economic outlook may be stable in 2022, the panelists emphasised that geopolitical risks persist and appear to be escalating and may result in significant unintended consequences. They also discussed the risk to financial markets and currencies should an over hawkish or mis-perceived inflation-induced rate hike materialised in the US, that will especially impact emerging markets and create a contagion in global markets.

The following key points were discussed:

  • The high inflation rates’ impact on the stability of the banking sector
  • The pressure from the rising interest rates in the US on currency and capital outflows in Asia
  • The effects of the competition between the digital banking sector and traditional banking model
  • The moderate increase in the credits risk in the banking sector in Asia Pacific
  • The potential geopolitical risks and their impact on the financial industry and payments
Panelists include:
Taimur Baig

MD and Chief Economist DBS Bank




Alicia Garcia-Herrero

Chief Economist, APAC, Natixis




Bert Hofman

Director, East Asian Institute, National University of Singapore


Eugene Tarzimanov

Vice President, Senior Credit Officer, Moody's



Oleg Patsianskiy

Head of Digital Banking, BPC



Host:
Foo Boon Ping

Managing Editor, The Asian Banker



About The Asian Banker RadioFinance:

The Asian Banker RadioFinance aims to enhance understanding of the finance industry globally by bringing together thought leaders, industry experts, practitioners and futurists to examine current, critical issues through a discussion facilitated by visual and web-based platforms. Through the use of interactive technology, participants do not have to take time out from their crowded schedules or leave the comfort of their own desks.

View Past Sessions View all

Image
APAC Banking Outlook 2022: How will the industry manage trends and risks amid…

At the Asia Pacific Banking Industry 2022 Outlook virtual session, chief economists and industry experts discussed key challenges and risks confronting the banking sector in the region. The dialogue covered the state of the global economy…

Image
Crypto experts on regulatory compliance and building trust in the industry

In this conversation with Emmanuel Daniel, founder of The Asian Banker, industry experts Eric Anziani, COO of Crypto.com, and Anson Zeall, founding chairman of IDAXA, discussed their perspectives on the risks, challenges, regulatory uncertainties…

Image
Puzzle2Pay’s Kauer on the challenges of building a ubiquitous payments system…

Bernhard Kauer, founder and CEO of Puzzle2Pay, talked about the challenges faced by companies that want to enter the micropayments sector, the use of technology to achieve scalability and profitability, and the payments culture in Germany.

Image
"Crypto regulation must stay ahead of innovation"

J. Christopher Giancarlo, former Commodity Futures Trading Commission chairman and author of “CrypotoDad: The Fight for the Future of Money”, speaks to Emmanuel Daniel on the evolution of US regulation and policymaking on cryptocurrencies…

Image
Fortinet Secure FSI Summit 2021
Virtual Conference

Fortinet Secure FSI Summit 2021
Virtual Conference