Moody's Investors Service says that the long positive credit cycle that has benefitted banks in the Southeast Asian region may be on the verge of peaking, introducing new challenges for lenders as pockets of asset-quality risk emerge due to tighter global monetary conditions.

"Our central scenario is that banking systems in ASEAN will be broadly resilient to the financial impact of a shift in interest rates, but we expect an uptick in nonperforming loans (NPLs), particularly in the household segment," said Simon Chen, a Moody's Assistant Vice President and Analyst.

Moody's report shows that household debt has risen significantly in ASEAN in the past several years, with growth in bank loans to households outpacing loan growth to other borrowers.

Household leverage as a percentage of GDP is at historically high levels in Malaysia (A3 positive) (87% at end-2013) and Thailand (Baa1 stable) (82% at end-2013), and close to its five-year high in Singapore (Aaa stable) (75% at end-2013).

Although household debt has also risen significantly in Indonesia (Baa3 stable) and the Philippines (Baa3 positive), the growth in these countries is from a low base.

"Our analysis shows that within the ASEAN region, the Malaysia and Thailand banking systems are the most exposed to increased asset-quality pressure in the household segment when rates rise," Chen added.

This is primarily because the ability of households in these countries to service their debt in a rising interest-rate environment will be negatively affected by consumers' high leverage at a time when the housing market in Malaysia may be peaking and Thailand faces elevated political risks.

However, as Moody's report points out, ASEAN bank asset-quality risk from residential property price corrections is mitigated by legal frameworks that support bank creditors.