Moody's sees lower S'pore bank profits

THE jury is still out on whether Singapore banks, like their Asian peers, can reap strong benefits from a regional expansion, as issues of margin pressures, higher provisions and a lack of scale are weighed against ambitions to capture strong intra-regional trade flow.

This was suggested in a set of Moody's reports yesterday, which highlighted that local banks are expected to post weaker profits over the next 12-18 months on higher loan-loss provisions for overseas operations and a modest uptick in interest rates next year.

The banks' margins - measured on a net interest basis - are also among the thinnest compared with those of their Asian peers in advanced economies that include Australia, China and Hong Kong.