atans1

S’pore banks under some pressure

In Banks on 28/04/2016 at 6:16 am

Too much capital: The average Tier 1 capital ratio at OCBC, DBS and United Overseas Bank was a unhealthy 14% at the end of last year.

Worse

each dollar of Oversea-Chinese Banking Corp.’s assets earns only 1.2 cents in operating revenue before provisions, compared with 1.6 cents for Hang Seng Bank in Hong Kong. 

The narrow wiggle room for liquidity calls for caution. Hang Seng Bank’s loan-to-deposit ratio is less than 72 percent, by Bloomberg’s calculations, and 85 percent for OCBC. It’s hard to see Singapore lenders aggressively expanding their loan books if deposit growth doesn’t keep pace. But as Bloomberg Intelligence analyst Diksha Gera noted recently, HSBC and Malaysia’s Maybank are joining Citigroup and Standard Chartered in locally incorporating their Singapore retail banks. Growing competition for deposits at home could whittle away margins. 

http://www.bloomberg.com/gadfly/articles/2016-04-06/singapore-s-broken-piggy-bank

Advertisements
  1. 14% T1 capital and still making nice money means Singapore banks are ripping off depositors. This explains why the MAS resisted implementing the deposit ratios under the Basle 3 regime and explain why the Singapore banks have little long term debt which is more expensive. This happens when MAS is both a regulator and a promotor, two contradictory objectives.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: