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Moody's retains negative outlook on Singapore's banking system

Published on Jul 8, 2014 9:22 AM
 
People use Development Bank of Singapore (DBS) and Oversea-Chinese Banking Corp (OCBC) automated teller machines at the airport in Singapore April 30, 2014. Ratings agency Moody's Investors Service has retained its negative outlook on Singapore's banking system over the next 12 to 18 months, it said on Tuesday. -- PHOTO: REUTERS

SINGAPORE - Ratings agency Moody's Investors Service has retained its negative outlook on Singapore's banking system over the next 12 to 18 months, it said on Tuesday.

The agency expects that a surge in lending by Singapore banks in recent years will raise the risk of problem loans when interest rates rise.

"Because the banks have rapidly grown both their domestic and cross-border loans in recent years, we expect a moderate increase in problem loans, as interest rates rise... and as asset prices are likely to fall," said Mr Eugene Tarzimanov, vice president and senior credit officer at Moody's.

"As a result, the banks will face a modest increase in their credit costs over the next 12-18 months," he added.

 
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