ASIAN banks' published performances do not correspond to their true value in terms of credit risks, says a credit rating agency which has just surveyed the annual reports of 250 banks.
''There is little correlation between banks' performances as revealed in their annual reports and the credit risks they are actually exposed to,'' said Philippe Delhaise, director and senior financial analyst of bank rating agency Capital Information Services.
He said published figures made Asian banks look healthy, but the actual picture could be different.
''For instance, in Indonesia loan-provisioning can be offset by the bank selling one of its branch premises to its own subsidiary, thus recording a book profit,'' Mr Delhaise said.
In Hong Kong, the practice of maintaining inner reserves blocked investors from knowing the banks' actual performances, he said.
''We warn analysts that there is a danger in using the crude figures as a tool to make decisions,''he said.