23 June 2010
Straits Times
English
(c) 2010 Singapore Press Holdings Limited
THE outlook for Singapore banks continues to be stable, ratings agency Moody's said yesterday.
It said that rising residential property prices and concerns over a real estate bubble are not likely to disrupt DBS, OCBC or United Overseas Bank.
Their housing loan portfolios appear to be performing quite well, said Ms Christine Kuo at Moody's Singapore. And the measures introduced by the government to cool off the market have been working, added Ms Kuo, a vice-president and senior credit officer at the firm.
While housing prices have only recently been moving slightly ahead of GDP growth, Moody's found there was no sign of trouble yet as the movements were not considered excessive.
The Moody's outlook for Asian banking systems, particularly in South-east Asia, was upgraded to 'stable' in January but put at negative for banks in Japan, Mongolia, Vietnam and Cambodia. It said the upgrading reflected how well the region's banks did during the economic crisis. This was 'thanks to their strong capital levels, traditional banking franchises and customer deposit funded loan portfolios', said Ms Deborah Schuler, a senior vice-president and regional credit officer at Moody's Singapore.
Problems in the Euro zone are expected to have a limited effect on Asian banks, 'reducing, but not reversing growth in exports and GDP', added Ms Schuler.
More worrying are the potential credit-crunching effects that the crisis may have on banks in Australia, New Zealand and South Korea, which rely on global debt markets for funding.
Sovereign risk ratings in Asia improved, with ratings moving up for emerging market economies like Indonesia, the Philippines and South Korea.
The ratings agency is positive on China, Indonesia, India and Hong Kong but holds a negative view of Thailand, Vietnam and the Fiji Islands.
