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RETAIL BANKING | Staff Reporter, Singapore

OCBC's loan yields may be under pressure: analyst

Competitive pressures will offset the loan re-pricing interval benefits.

According to Maybank Kim Eng, despite positive loan growth, the stable NIM reflected: 1) loan competition as banks are now going after better quality credit; and 2) increased appetite to gain market share.

"Management guided FY17 NIM to be at least 1.67% or slightly better, which also seems to indicate that the pass through effect for rising SGD rates on NIM is likely to be marginal and no widening of credit spreads. This also affirms our view that competitive pressures will offset some of the benefits from the loan re-pricing interval."

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