Singapore’s top 3 banks brace for lower earnings

Flat interest margins and low loan growth are expected to take their toll on Singapore’s leading banks.

DBS Bank Ltd, United Overseas Bank Ltd (UOB) and OCBC Bank face moderate earning growth stemming from government measures to cool the heated property market. Their non-interest income growth is also likely to be muted owing to lower stock broking and investment banking activities.

"Our outlook for the banking sector remains neutral as we expect interest margin to remain flat and loan growth to slow down after last year's increment and recent property cooling measures," said Ng Kian Teck, lead analyst at SIAS Research.

DBS Group Research said core earnings for Singapore’s banks may climb about 5% this year due to lingering weakness in offshore demand.

OCBC is the largest local bank in Singapore by market capitalization but the smallest local bank in Singapore by global presence. DBS Bank is the largest bank in Southeast Asia by assets while UOB has a network of 500 offices in 19 countries around the world.

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