SINGAPORE - The Big Three banks in Singapore will likely continue to see narrowed net interest margin , deteriorating asset quality and slowing loan growth, as experienced in the third quarter this year, according to a report by Fitch Ratings on Tuesday .
The banks' results for Q3 ended Sept 30 indicated rising asset-quality risk. For instance, OCBC downgraded two Singapore corporate accounts in the offshore support services and transport sectors. UOB was also affected by some small building construction accounts and one small oil and gas account, all of which were Singapore accounts.
In 2020, all three lenders are likely to see higher credit costs - the amount set aside for bad loans - according to Fitch."We see greater vulnerability in Hong Kong SME loans, with DBS and OCBC having higher exposure than UOB," it added. In terms of their overall exposures to Hong Kong, the Big Three's impaired-loan ratios in the city rocked by protests are still at less than 1 per cent, although this could worsen if the unrest drags on.