,Singapore

Will the Evergrande debt crisis affect SG banks?

A Jefferies report said Singapore banks have enough buffers.

In a report released by Jefferies, multiple Singapore-based banks positioned themselves with sufficient buffers to protect themselves from risk, such as the financial crisis caused by the hundreds of billions of debt owed by Chinese property giant Evergrande.

DBS, OCBC, and UOB were reported to have 30%, 25%, and 16%, respectively, of group loans from Greater China as of the first half of 2021. Slightly more than half of the loan is from Hong Kong.

According to releases from OCBC, onshore and offshore loans with credit risks that link to China make for another 40%, whilst the remaining is from Macau and Taiwan. Meanwhile, UOB poses the least exposure but has grown the fastest over the last three years at 8% annually.

The property sector, or the ex-residential mortgage, will make up for 40% of the Greater China loan and 20% NPL ratio for the sector’s worst case. Additional NPL from Greater China will amount to $17b across the banks, which would have a loss of $8.6b.

Despite this threat, however, the three banks have buffers in place through the expected generation of $16b of PPOP. This comes even after taking into note the 20% decline from current estimates for the financial year 2021. General reserves of $8.3b and excess capital of $10.7b also supplement this. These measures should help cushion the impact of these threats.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Module integration and completion are not part of its responsibilities.
The company says it will continue to welcome feedback from workers.
OneMap3D data from ERA will be incorporated into its RealtyWatch mobile apps
$500,000 was contributed to the library's Green Grove showcase.
He has over 25 years of experience in business and risk roles.
The country also won 'Best Seaport in Asia' for the 33rd time.
Flight bookings were made available on 22 October.
Sembcorp Industrialshowed the most growth.
Analysts said there are three factors that drove the price growth.
Prices of private residential properties rose by 1.1% in Q3, marking the sixth consecutive quarter of growth.
72% of Singaporeans were aware of the term 'ESG.'
This strong performance was due to the recent acquisitions by the company.