After struggling stresses from fighting the gas and oil sector last year, Singapore’s 3 major banks –Oversea-Chinese Banking Corp (OCBC), United Overseas Bank (UOB) and DBS Group Holdings – are probable to increase from the successful property market, reported CNBC.
This comes as the raised purchasing activity in the city-state increased petition for housing loans, which account for 15-20% of the said banks’ overall loans, based on the approximations of Jeremy Teong, expert at Phillip Securities Research.
As a matter of fact, data from the Credit Bureau Singapore presented that mortgage loan applications raised over 20 percent quarter-on-quarter in Q1 2017 in place of private housing deal raised to a close four-year high in Q1 2017.
“Given the substantial weight of [the housing loans] section, the respected Singapore banks will profit from an extreme Singapore mortgage system loans progress,” said Teong.
Nevertheless, the tight rivalry in the lending space could bound the borders of banks from the vigorous domestic property area, mentioned by Maybank Kim Eng specialist Ng Li Hiang.
“There is typically a 2-3 months interval between mortgage disbursements and mortgage applications… We envision a development in housing loan progress in the following few quarters,” said Ng. “(Nevertheless) banks are equipped to constrict pricing to entice new borrowers, hypothetically limiting the benefit to earnings.”
In addition, while banks may have struggle corresponding the “remarkably robust” performance recorded in the first quarter, that was maintained by increases in wealth and trading management income, the moderately low assessment base from last year possibly will help all three banks to post net income growth in Q2 2017, said the specialists.