Rising household debt in East Asia could undermine the creditworthiness of some of the region's banks, ratings agency Standard & Poor said on Tuesday.
The warning was made in an S&P report evaluating the asset quality of banks in Thailand, Malaysia, Singapore, Korea, Hong Kong, and China.
"Rising household debt fuelled by rapid loan growth and easy monetary conditions could weaken the credit quality of banks in Asia," said S&P's credit analyst Ivan Tan.
"Potential asset bubbles and imbalances are building up in some countries, and could put the banks at risk."
Thailand, Malaysia, Singapore, and Korea have the highest household debt in Asia, according to the report, with banks in Malaysia and Thailand deemed the most vulnerable to non-performing loans in the household segment.
The international credit rating agency said it did not anticipate "a sharp unwinding of household balance sheets" but warned that "a severe economic downturn leading to a rise in unemployment and a significant fall in property prices would hurt financial institutions."
It added that Asia's major banks have generally healthy financial positions by global standards.