Forex to badger DBS' loan growth

US$ and HK$ have weakened 3.7% against S$.

Whilst DBS is expected to report a positive underlying loan growth on a sequential basis in 1Q17, foreign exchange rate may negatively affect such improvement.

According to a report from UOB KayHian, the US$, and HK$, which comprise 33.4% and 11.7% of DBS' total loans, respectively, have weakened by 3.7% against the S$.

"[This] may drag overall loan growth into the negative territory," the brokerage firm said.

This would then be compensated by NIM expansion of 6bp qoq to 1.77% due to the recent pick-up in SIBOR and SOR.
 

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