Asia banks may face difficulty bolstering capital via AT1s

Citi said in its note that it expected the Credit Suisse fallout to trigger a re-pricing of AT1 across Asian banks’ capital structures. — Reuters

HONG KONG: Asian lenders may find it difficult to replenish their capital by issuing Additional Tier-1 (AT1) bonds, Citigroup says after the Swiss authorities move to wipe out Credit Suisse bonds as part of its takeover deal.

The challenge will be particularly acute for a large number of smaller banks in Asia that are more reliant on AT1s compared with their Western peers due to tighter regulatory liquidity requirements.