Single-digit loan growth looms over Singapore banks in 2013

November 2012 saw growth stalling to 15.9%.

According to UOB, loan growth moderated as economic growth slowed in 2H12. Loan growth averaged 24.9% in 1H12 but decelerated to 15.9% in Nov 12.

The slowdown was mainly driven by loans to businesses, which moderated from the average expansion of 31.6% in 1H12 to 15.3% in Nov 12. From an industry
perspective, the slowdown was driven by general commerce, transport & storage, and non-bank financial institutions & holding companies.

Here's more from UOB:

We forecast the banking industry to register high single-digit loan growth of 8-10% for 2013. We expect growth to be evenly balanced between loans to businesses and consumers.

The slowdown in loans to businesses could be near a bottom. We estimate growth in loans to consumers to be sustained due to continued drawdown for private residential properties already sold and newly-completed HDB flats.

Singapore banks have taken a conservative approach to strengthening their balance sheets given the turmoil in Europe. They have boosted their core equity tier-1 capital adequacy ratio (CET-1 CAR) through retained earnings.

In addition, OCBC also got a boost from divesting its holdings of F&N and APB shares in 3Q12. NPL ratios have remained relatively unchanged despite external turbulence while loan loss coverage ratios are significantly above 100%. We expect subdued credit cost to be maintained in 2013.

For more banking stories, visit Asian Banking & Finance.



More From Singapore Business Review

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.172+0.001+0.58%
    N21.SI
    0.920.000.00%
    G13.SI
    0.167+0.003+1.83%
    5DM.SI
    0.86-0.01-1.15%
    Y92.SI
    0.187+0.002+1.08%
    40E.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.33+0.05+15.79%
    K29.SI
    0.56+0.06+12.00%
    AZA.SI
    0.58+0.05+9.43%
    BHU.SI
    0.215+0.015+7.50%
    BCV.SI
    0.50+0.03+5.26%
    573.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.305-0.255-45.54%
    MR8.SI
    0.164-0.020-10.87%
    5MQ.SI
    0.255-0.020-7.27%
    S29.SI
    0.23+0.01+4.55%
    PH0.SI
    0.205-0.015-6.82%
    AXH.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.4200+0.0042+0.29%
    USDSGD=X
    1.5173+0.001+0.07%
    EURSGD=X
    1.7517-0.0039-0.22%
    GBPSGD=X
    79.7770+0.199+0.25%
    SGDJPY=X
    5.4603-0.0157-0.29%
    SGDHKD=X
    3.1296-0.0219-0.69%
    SGDMYR=X
    9,393.7275-68.3203-0.72%
    SGDIDR=X
    4.8358-0.0031-0.06%
    SGDCNY=X
    1.0711+0.0009+0.08%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,211.80-1.10-0.09%
    GCG17.CMX
    17.14-0.01-0.05%
    SIH17.CMX
    89.10+2.06+2.36%
    ^XAU
    2.620.00-0.06%
    HGH17.CMX
    52.68+0.20+0.38%
    CLG17.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    -1.88
    ^FVX
    -2.38
    ^TNX
    -2.98
    ^TYX