The NPL nightmare might finally be over for banks

SINGAPORE (Nov 3): UOB Kay Hian is maintaining its “overweight” recommendation on the Singapore banking sector after the three local lenders posted healthy results for 3QFY16, on the back of strong non-interest income.

During the quarter, the banks had reported large new non-performing loans (NPL) from their exposure to the oil and gas sector. NPL ratios had worsened by 0.2 percentage points to 1.3% for DBS and 1.6% for United Overseas Bank.

OCBC, on the other hand, posted a moderate deterioration in asset quality, arising from upgrades of restructured NPLs that were recognised earlier, according to UOB Kay Hian analyst Jonathan Koh.

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