Loan growth slowed for Singapore banks in 1Q15

Aside from this, though, things are fine.

It has been noted that for Singapore banks in 1Q15, loan growth slowed for all.

According to a research note from Maybank Kim Eng, further, with weaker loan growth in 1Q15 and likely to
stay weak, guidance has either been lowered or skewed to the lower ends of earlier ranges.

Trade loans to China should remain a swing factor, particularly for DBS and OCBC. Short term, a narrowing of on- and offshore spreads may affect the economics of China trade loans.

Weak commodity prices and a slowing Chinese economy do not augur well.

Here's more from Maybank Kim Eng:

NIMs down but should turn better. There were two extreme surprises:

Negative. OCBC’s NIM contracted 5bps QoQ and 8bps YoY to a trough of 1.62%.

Positive. UOB’s NIM reached its highest since 4Q12. It was the only bank with sequential expansion.

While NIM was marginally weaker than expected for DBS, management sounded the most optimistic. It guided for fatter NIMs ahead.

UOB expects to hold up its NIM in 2H15, after a small blip in 2Q15. OCBC was the most cautious, believing upside may be constrained by a rollover of currently higher-yielding trade loans from China.

No asset-quality hiccups but sufficient buffers, anyway. Other than weakness in specific accounts especially in the shipping industry, asset quality was steady.

Singapore housing NPL ratios stayed low. While the credit outlook is dimming, we believe risks will be contained by banks’ proactive NPL classification.

Also, more buffers for bad times have been set aside. UOB’s outsized general-provision ratio was raised preemptively in the past two years to counter potential slippages.