The banks' credit quality is still worsening.
According to Maybank Kim Eng, exposures to special mention, doubtful and loss categories have worsened to levels not seen since 3Q09. Sub-standard category is now at its highest level since disclosure started in 2009.
"Our credit costs estimate for Singapore banks is on average between 39-44bps for FY16-18E. For every 10bps decline in credit costs across Singapore banks, we estimate that FY17-18E net profits will increase by c.6-7%."
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