Banks seen relying more on wholesale funding
Loan-deposit ratio at UOB hits 100% as retail funding shrinks from a quarter earlier
GIVEN shrinking deposits from a quarter ago, the three homegrown lenders are expected to rely more on the wholesale market to fund their operations, a Credit Suisse report said. And this makes the banks more vulnerable when liquidity dries up, as seen during the global financial crisis.
The comment comes as the loan-deposit (LDR) ratio in Singapore dollars of United Overseas Bank (UOB) hit 100 per cent in the second quarter - simply put, a dollar from deposits funds a dollar of loans. The LDR ratio is one way to show the extent banks can keep up with the pace that they grow the…
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