SINGAPORE: Malaysia’s central bank said on Monday (Aug 28) that banks incorporated in the Southeast Asian nation faced limited financial stability risk arising from exposure to China’s largest property developer, Country Garden.
Such banks’ exposure to Country Garden Real Estate (CGRE), the developer’s wholly-owned subsidiary in Malaysia, amounted to less than 0.1 per cent of total banking system loans and bonds by June 2023, the bank told Reuters in an email.
“CGRE is servicing their loans promptly and the local group of companies have adequate funds to meet their payment obligations,” Bank Negara Malaysia added.
On Monday, the Chinese firm said its US$100 billion project in Malaysia was proceeding as planned and it had sufficient assets, despite concerns over its financial strength.
The Malaysian central bank said it required financial institutions to consider the current and prospective property market conditions in their viability assessment for financing property development and construction projects.
“In the property sector, risks from unsold units from CGRE’s various projects in the country remain manageable,” it added.
“The current development with Country Garden Holdings Ltd in China is not expected to pose any material impact on the overall property market activity and prices in Malaysia,” it said.