Rating agency S&P Global Ratings has affirmed the credit ratings of all three local Singapore banks at AA- with a stable outlook.
It affirmed the AA- long-term issuer credit rating on DBS Bank and OCBC Bank yesterday, and United Overseas Bank (UOB) last Friday.
The rating refers to a bank's capacity to meet its financial commitment as "very strong", and a stable outlook "means that a rating is not likely to change".
The stable outlook on the banks also reflects the outlook on the sovereign credit rating on Singapore.
This comes after Fitch Ratings affirmed the ratings of Singapore banks at AA- with a stable outlook on June 1, and Moody's Investors Service revising its outlook on large Singapore banking groups from "stable" to "negative" on March 31.
S&P Global Ratings credit analyst Rujun Duan said: "The affirmed ratings reflect our view that DBS will maintain its strong market position, sound capital and earning capability, and satisfactory risk management track record over the next 18 to 24 months, despite ongoing external headwinds."
She expects DBS and its peers to face increasing downward pressures on their financial profile, noting that DBS' loan growth fell quickly to 2.8 per cent last year, from 10 to 20 per cent in previous years.
Ms Duan estimates that DBS' loan growth will remain at low single digits over the next 24 months.
She added: "Our more subdued outlook on DBS' loan growth reflects the sluggish credit demand in the domestic housing market and the corporate sector, as well as the ongoing unwinding of the China-related trade finance portfolio."
Of OCBC, S&P Global Ratings credit analyst Ivan Tan said the bank has a "strong business position, adequate capital and earning, adequate risk position, as well as strong funding and liquidity positions in the next 18 to 24 months".
He noted that the bank has a strong domestic franchise and dominant market share in loans - about 14 per cent - and 16 per cent of deposits "in its core Singapore market".
He also said OCBC's presence in private banking through Bank of Singapore, and in insurance through Great Eastern Holdings, complement "its traditional strength as a commercial bank in its core domestic market".
UOB's ratings also reflect S&P's expectations that it "will maintain its adequate capitalisation, strong funding and liquidity profile, and a high likelihood of extraordinary government support by virtue of its high systemic importance in Singapore".
The agency said the UOB management has pursued regional expansion cautiously, mainly through organic growth. "This is reflected in its strong domestic core, with loans in Singapore accounting for about 56 per cent of total loans."
Of the three names, Ms Duan added that DBS will benefit most in the ongoing rising interest rate cycle. She said this is due to DBS' predominant market share in low-cost deposit funding in Singapore.
S&P also said the three banks will maintain their "high systemic importance in Singapore".