ASEAN banks' net interest margins feared to be stuck under pressure

Loan growth isn't likely to impress as well.

According to Credit Suisse, the primary driver behind an improvement in Group NIMs could be a much better loan growth profile in regional markets relative to Singapore (which is the lowest NIM market for Singapore banks). 

But given the increasing macro risks in the region, regional loan growth is unlikely to be much superior (partly market driven, but mostly due to banks' conservative approach) in the next few quarters.

Here's more from Credit Suisse:

Moreover, the NIM pressure in the regional markets could potentially experience further pressure in the near term. 

Much of the earnings optimism around Singapore banks post the 2Q13 results has been driven by the guidance from banks that NIMs are now probably closer to their cyclical bottom and could probably start improving in FY14.

This view has been further supported by the recent spikes in longer-term government bond yields, which in theory should help banks’ NIMs improve going forward.

But looking at the underlying drivers in various markets, we believe the consensus might be getting too bullish about FY14 NIM prospects.