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Singapore banks face uneven recovery in near term, beat Q3 estimates

Published Fri, Nov 5, 2021 · 11:07 AM

ANALYSTS are flagging an uneven recovery for the Singapore banks in the short term, even as the trio posted better-than-expected results in the third quarter of 2021.

The concerns reflect the wobbly reopening of economies in this region, as Covid-19 continues to spread.

On OCBC, CGS-CIMB noted that its Malaysia consumer book turned out to be a key asset quality pain point; the group's collateralisation level of 89 per cent for moratorium portfolio buffers this risk.

"A mixed bag," said Andrea Choong on the results.

"A pickup in loan growth and sturdy fee income momentum offset the steep 6 basis point (bps) net interest margin (NIM) decline."

The NIM decline reflects the impact of interest reversals from the downgrade of Malaysia and Indonesia loans to a non-performing status, as well as stronger competition among banks to lend to good-quality companies given the excess liquidity, said OCBC's chief finan…

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