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Singapore banks face scrutiny on asset quality at upcoming Q2 results

As companies struggle to cope with virus fallout, potential loan default risk from SMEs may weigh on earnings

Singapore

MOUNTING concerns over asset quality are likely to take centre stage at the upcoming quarterly results of Singapore's banking trio as companies brace for a prolonged crisis.

With businesses facing a triple whammy of lockdowns, a deep recession and the gradual unwinding of relief support measures, analysts say there is already potential loan default risk from virus-battered small and medium-sized enterprises (SMEs) that will, in turn, weigh on banks' earnings in the second quarter.

Net profit is widely expected to come down for Singapore banks, with growing pressure as well to pull back on dividend payouts amid the regulator's call to shore up capital.

Citi analyst Robert Kong said Q2 is...

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