Three of Singapore’s biggest banks release their income reports. Offshore marine sectors prospered from stronger global oil prices. Market analysts believe that influential banks from Southeast Asian countries are in trials due to the on-going debts among gas and oil. However, they are prepared for oil scarcity by allotting money for possible losses.
Oversea-Chinese Banking Corporation (OCBC), DBS Group Holdings and United Overseas Bank (UOB) are due to report their fourth quarter earnings this week; OCBC on Tuesday, DBS Group Holdings on Thursday and UOB on the following day.
According to Eugene Tarzimanov, a senior credit officer at Moody’s Investors Service, the NPL coverage of banks might slightly decline below 100 percent driven by the slump in gas and oil books. This profit dilemma might be blocked by following specific provisions they implemented.
Due to Ezra Holdings’ problem with their joint ventures, there is a possibility that it could write down $170 million galvanized by its gas and oil industry deteriorating earlier this month, says EMAS Chiyoda Subsea.
DBS Group Holdings, Southeast Asia’s biggest bank, has an S$637 million ($447 million) liability to Ezra. OCBC’s is at S$300 million ($211 million), while UOB’s liability is estimated to be S$166 million ($117 million).
Loan restrictions, rising interest rates and cooling measures have take-up housing loans and swing home sales. These are charged by the Singapore government since 2009. According to Woon Tian Wong, investment analyst from Philip Futures, Singapore’s banking sectors should also keep an eye on the rising interest rates this 2017. It can potentially slow down the countries domestic growth and also aggravate quality of bank credits loan portfolio.
Despite Singapore’s bank dilemma, their oil price edged up $50 per barrel due to the Organization of the Petroleum Exporting Countries (OPEC) moved to cut manufacture.