Rising interest rates and loan growth are key factors.
The recent rise in the offered interest rates of Singapore banks, along with the steady climb of loans of the big three (DBS, OCBC, and UOB), should increase net interest margins in 2018, RHB Securities Research reports.
"The outlook for 2018 loans growth remains bright, with their managements guiding for mid-to-high single-digit loans growth. Recent activity in residential property en bloc sales is a contributor to loans expansion,” RHB Securities Research analyst Leng Seng Choon notes.
According to Leng Seng Choon, because of the strong 4Q17 gross domestic product, there would be more corporate investments in relevant sectors, which in turn would lead to strong loans disbursement.
He also forecasts continued rise in non-performing loan ratios, despite the troubles within the oil and gas sector.
Do you know more about this story? Contact us anonymously through this link.