Chart of the Week: APAC banks not reliant on market-sensitive income

Further drops in prices of financial assets are likely if the COVID-19 outbreak persists.

Asia Pacific banks do not have an outsized reliance on market-sensitive income, reports Moody’s Investors Service.

Further drops in prices of financial assets are likely if the COVID-19 outbreak persists, even if markets have recovered from sell-offs.

Whilst short-term volatility can be good for bank earnings from financial markets, longer declines will be credit-negative for banks due to market-to-market losses on financial investments and revenue drops.