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Singapore banks' cost of deposits among the lowest in Asia


It stood at 0.9% vs Asia's 2.8%.

According to Barclays, for 2003-11, reduced the cost of deposits led to widening of funding gap, defined as Cost of Deposits (COD) for large banks over small banks. The funding gap for banks in Asia ex- China and Japan widened from 40bps in 2003 to 110bps in 2011.

The higher funding gap translated into improved margins for large deposit banks vs. smaller counterparts, prompting large banks to vouch for increased CASA-led deposit market share.

Here's more from Barclays:

For Singapore, given limited data disclosure of COD by small deposit banks (including Standard Chartered’s Singapore operations and HSBC’s Singapore operations), we have left it untouched. 

Although the funding gap for large Singapore and Hong Kong banks is not exactly comparable with rest of Asia ex-Japan, the COD/COF for the two economies stood among the lowest in the region at 0.9% and 0.6% vs. 2.8% for the region in 2011.

In 2011, Indian large banks recorded the highest funding gap (-1.6%), followed by Indonesian banks (-1.5%). The funding gap for China large banks remained muted at -0.1%, suggesting marginal difference between COD for China large banks vs. small banks.

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