Malaysia’s central bank warned that Southeast Asian banks’ exposure to Country Garden, China’s largest property developer, poses modest financial stability risk.

The bank stated that exposure to Country Garden’s Malaysian subsidiary was less than 0.1% of total banking system loans and bonds by June 2023.

The bank stated that CGRE is servicing loans promptly and the local group has adequate funds to meet payment obligations.

The bank mandated financial institutions to analyze property development and construction project viability based on existing and future market circumstances.

The property developer raised concerns that the country’s property debt crisis could slow economic recovery and spread abroad.