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Nikkei Markets

MARKET BUZZ: Singapore Banks To Face Higher Credit Costs As Oil Slumps-Maybank

By Singapore Newsroom
Nikkei Markets
SINGAPORE (Jun 29) -- Maybank Kim Eng Research says credit costs may scale higher for Singapore banks as crude slides to $46 per barrel, levels not seen since OPEC's output cut in Nov 2016. "We estimate FY17 credit costs to be 33-36bps for the banks," it says in investor note. More names could slide into NPLs this year, but pace of new NPL formation will ease as weakest and most chunky exposures have been recognized as delinquent, house says. Adds, "against sanguine economic prospects, asset quality is unlikely to be the focus unless the oil price slips below the $40 level". Preferred pick - DBS Group Holdings - due to its ability to manage liability costs to drive pre-provision operating profit.
- By Singapore Newsroom; sgeditorial@nikkeinewsrise.com; +65 6331 6250
- Edited by Lopamudra Bhattacharya
- Send Feedback to feedback@nikkeinewsrise.com
- Copyright (c) 2017 Nikkei NewsRise Asia Pte Ltd.

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