Budget 2024 is good for banks

Budget 2024's measures to support SMEs are good for banks with SME portfolios.

A swathe of measures were rolled out to help SMEs. Companies that hired at least one local employee in 2023 will receive a minimum of $2,000 in cash payouts as part of the new $1.3 billion Enterprise Support Package, which also includes an enhanced Enterprise Financing Scheme.

Under the enhanced Enterprise Financing Scheme, the government will help small- and medium-sized enterprises (SMEs) adopt green solutions.

"The enhanced enterprise financing scheme, income tax rebates and an extension of SkillsFuture Enterprise Credit to 2025 were announced in Singapore's 2024 budget on Feb. 16. This could help local SMEs cope with rising business costs and funding needs and in turn boost their competitiveness, offsetting risks to local banks' risk profile amid global interest rate volatility and slowing growth. The banks' solid asset quality is a bright spot, supporting the safe-haven characteristics of their bonds," notes Rena Kwok, Credit Analyst, Bloomberg Intelligence.

Read more about Budget 2024 on The Edge Singapore.

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