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Euromoney, March 20 2017

The annual results announcements of Singapore’s three banks all followed a common theme: exposures to oil and gas service businesses are coming back to haunt them; and, for two of them at least, wealth management is the future.

OCBC reported an 11% drop in net profit year-on-year of S$3.47 billion ($2.45 billion). With it came news that the non-performing loans ratio has more than doubled since March 2015, from 0.6% to 1.3%. Almost all of that is the result of the oil and gas support sector, which accounts for 0.61 percentage points of the 1.3%. It was negligible less than two years ago.

Over at DBS the bank’s annual net profit, at S$4.24 billion, was down 2% on the previous year. Here, NPLs have risen from 0.9% a year ago to 1.4% today and allowances have doubled in a year to S$1.43 billion; again, oil and gas support services were the culprit.

UOB’s S$3.1 billion profit was down 3.5% for the year. NPLs grew from 1.4% to 1.5% over the year, although at least they were better than the previous quarter. Specific allowance on loans more than doubled to S$969 million – again, mainly due to oil, gas and shipping.

Read the whole article here

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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