Source: CHANNEL NEWSASIA
Credit ratings agency Moody’s Investors Service
has lowered the outlook on Singapore’s largest banks to negative from
stable.
The affected banks are DBS Bank, its parent company DBS Group, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).
Moody’s said the rating reflects its expectation that a more challenging operating environment for banks in Singapore this year, and possibly beyond, will put pressure on the banks’ asset quality and profitability.
Credit conditions for banks in Singapore will likely continue to weaken against the backdrop of slower economic and trade growth, both domestically and in the region, Moody’s added.
However, the agency noted that Singapore banks maintain “very strong buffers” in terms of capital, loan loss provisions and pre-provision income. Their funding and liquidity profiles are also robust and there was a "very high" probability of government support, if needed.
As such, Moody’s said it has affirmed credit ratings for the four banks. DBS Bank, OCBC, and UOB are currently rated Aa1, while DBS Group is rated Aa2.
The affected banks are DBS Bank, its parent company DBS Group, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).
Moody’s said the rating reflects its expectation that a more challenging operating environment for banks in Singapore this year, and possibly beyond, will put pressure on the banks’ asset quality and profitability.
Credit conditions for banks in Singapore will likely continue to weaken against the backdrop of slower economic and trade growth, both domestically and in the region, Moody’s added.
However, the agency noted that Singapore banks maintain “very strong buffers” in terms of capital, loan loss provisions and pre-provision income. Their funding and liquidity profiles are also robust and there was a "very high" probability of government support, if needed.
As such, Moody’s said it has affirmed credit ratings for the four banks. DBS Bank, OCBC, and UOB are currently rated Aa1, while DBS Group is rated Aa2.
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