DBS, UOB, OCBC must brace for nastier net interest income pressures

Don't neglect an analyst's warning.

Barclays analyst Sharnie Wong expects ongoing pressure on net interest income for the Singapore banks due to: 1) slowing loan volumes driven by weakening corporate loan demand; and 2) lower margins driven by fierce loan and deposit competition.

"As loan growth slows, the Singapore banks’ abundant liquidity will likely become an increasing drag on margins. We turn neutral on the Singapore banks sub-sector (from positive previously), which is in line with our Neutral view for the Asia-ex Japan Banking industry," she adds. 

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