That said, if the outbreak is stretched beyond a few months, the second-order impact would be more challenging, the ratings agency said.
"In this scenario, job losses in the tourism and general commercial sectors would cascade to higher delinquencies on credit card receivables and, to a lesser extent, residential mortgage portfolios." At this stage, there is uncertainty as to whether the authorities will be able to quickly contain the spread of the pathogen, making it difficult to quantify its potential impact, S&P added.
Nonetheless, the ratings agency believes that Singapore banks are facing"near-term headwinds from a position of strength", as they have consistently strengthened their balance sheet. "We also consider the government to be highly supportive of the banking sector, and believe it would provide extraordinary intervention to systemically important banks in the event of a prolonged and acute viral outbreak," S&P said., which are the most directly affected by the virus. Full details of the relief package will be unveiled at Budget 2020 on Feb 18.
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