Advertisement
Singapore markets closed
  • Straits Times Index

    3,287.75
    -5.38 (-0.16%)
     
  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     
  • Dow

    38,460.92
    -42.77 (-0.11%)
     
  • Nasdaq

    15,712.75
    +16.11 (+0.10%)
     
  • Bitcoin USD

    63,796.01
    -2,823.06 (-4.24%)
     
  • CMC Crypto 200

    1,358.50
    -24.08 (-1.74%)
     
  • FTSE 100

    8,095.67
    +55.29 (+0.69%)
     
  • Gold

    2,340.60
    +2.20 (+0.09%)
     
  • Crude Oil

    82.99
    +0.18 (+0.22%)
     
  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     
  • Nikkei

    37,628.48
    -831.60 (-2.16%)
     
  • Hang Seng

    17,284.54
    +83.27 (+0.48%)
     
  • FTSE Bursa Malaysia

    1,569.25
    -2.23 (-0.14%)
     
  • Jakarta Composite Index

    7,155.29
    -19.24 (-0.27%)
     
  • PSE Index

    6,574.88
    +2.13 (+0.03%)
     

Singapore banks' bad loan risks could moderate by end-2017

Government-aid for O&M firms will bring some respite.

DBS Vickers Securities believes that while there could be smaller accounts which have yet to be seen, the bulk of banks' non-performing loans (NPL) issues have already been addressed.

The research house remains cautious on asset quality at least till 1H17, but it notes that this should ease off by end-2017.

It also believes that enhanced government support for Singapore-based offshore marine companies will provide some help.

According to OCBC Investment Research, the Bridging Loan programme which was briefly introduced in 2008/2009 during the Global Financial Crisis, is precisely the kind of facility that beleaguered O&G players require (i.e. for working capital purposes). While it sees the loan quantum available – of S$5m per company (or S$15m per borrower group) – not exactly huge for small-mid cap names, it believes it is more useful in ensuring that the industry value chain keeps moving and small suppliers and contractors do not go bust.

ADVERTISEMENT

NPLs have started to creep up since 3Q15 with a substantial portion of the NPLs being contributed by the oil & gas (O&G) and commodities sectors. NPL formation up to 3Q16 remained high.

Positively, OCBC and UOB have indicated that no new names were identified in 3Q16.



More From Singapore Business Review