Why investors should watch Singapore banks’ 4Q results closely

SINGAPORE (Feb 2): The likely two or three interest rate increases expected in the US for 2017 will likely benefit Singapore banks given the positive impact on their net interest margins, agrees Lim & Tan Securities in its daily note this morning.

However, the higher interest rate environment has also hit asset quality badly with the percentage of exposures classified as doubtful and loss categories being currently at the highest level since the global financial crisis of 2008/2009, cautions the research team.

In addition, given the still tepid GDP growth of 1-2% expected in 2017, loans growth is also expected to remain low.

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