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DBS's NPLs for offshore services at 1.3%; chief to say this is 'not a Lehman moment'

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DBS chief executive Piyush Gupta is expected on Monday to say that its non-performing loans (NPLs) ratio for the offshore support services segment stood at 1.3 per cent for 2015.

DBS chief executive Piyush Gupta is expected on Monday to say that its non-performing loans (NPLs) ratio for the offshore support services segment stood at 1.3 per cent for 2015.

He is also expected to say that this is "not a 'Lehman' moment", and that while economic growth is slower, the figures do not point to a recession.

A presentation meant for media and analysts, found on the bank's website, showed loans to the support services segment made up about 40 per cent of its total oil-and-gas (O&G) portfolio - or S$7 billion out of the total S$17 billion. The bank has also stress-tested the overall portfolio at US$20 per barrel, the presentation showed.

The group's overall NPL stood at 0.9 per cent, unchanged for seven straight quarters.

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All of OCBC's net new NPLs in the last year were from the O&G segment. OCBC's total oil-and-gas portfolio stood at S$12.4 billion, or 6 per cent of total customer loans, its chief executive Samuel Tsien said.

Of this, 47 per cent comprised loans to offshore support services. This amounted to S$5.8 billion in loans to these upstream companies. Just over S$800 million in loans have been classified as NPLs.

UOB said its outstanding loans to upstream industries made up S$3.8 billion or 49 per cent of its S$7.7 billion in total O&G lending. Its O&G lending accounted for 3.6 per cent of total loans. UOB chief Wee Ee Cheong said that if oil prices stay low, 20 per cent of the bank's S$12 billion O&G exposure may show weakness.

NPL ratios for both OCBC and UOB rose from a year ago. OCBC's NPLs as a ratio to all loans rose to 0.9 per cent from 0.6 per cent a year ago. UOB's NPL ratio rose to 1.4 per cent from 1.2 per cent a year ago.

DBS's Mr Gupta is expected to say that Singapore's financial system is robust, and that the bank's portfolios are healthy.

He is expected to speak to the media around 11am on Monday.

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