Singapore Banking & Finance Industry Report - 2015

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Singapore Banking & Finance Industry Report - 2015

This report profiles Singapore’s banking and finance industry, covering market data and trends up to August 2015 as well as outlook for 2015 and beyond. The report also highlights leading players in the sector including United Overseas Bank Ltd (UOB), DBS Group Holdings Ltd (DBS) and Overseas China Banking Corporation Ltd (OCBC).

Singapore’s economy recorded moderate growth in 2014, and is expected to grow slowly in 2015 and 2016. Both domestic banking units and Asian currency units hence showed slightly lower loan growth in 2015. Loans for purchase of residential property dominated the portfolio of most of the domestic banking units. However, with a sluggish property market, loan growth remained slow.

Fixed deposits and savings deposits continued to dominate the total deposits of banks. Nearly three quarters of the deposits were in these two segments. The banking system remained stable with ample liquidity to meet demand for deposit withdrawals and other liquidity obligations. The MAS has kept the lending rates consistent to drive domestic consumption in the country as well as to help the small and medium enterprises.

The profitability of banks in the sector has taken a hit and is expected to stay the same in the coming year due to rising credit costs and sluggish loan growth weigh on margins. However, the outlook for Singaporean banking and financial services sector is stable owing to the strong financials of companies and stable economic environment. The country’s rating as a top-ranked international financial center bode well for the growth of this sector. Additionally, capital buffers are expected to stay strong and the three major banks in Singapore have healthy financial fundamentals.

Key Points:

• The asset base of domestic banking units (DBUs) in Singapore grew at a CAGR of 10.3% during 2004-14. The total assets of the system grew by 8.9% y/y in August 2015.

• The asset base of Asian Currency Units (ACUs) grew at a CAGR of 7.4% during 2004-14. The total assets of ACUs grew by 2.4% y/y in August 2015.

• Total loans and advances of DBUs grew by 5.7% y/y in August 2015, which was lower than its long term growth trend of 13.0%. Dip in economic growth and slow domestic property market led to a slight decrease in loan growth.

• Finance and insurance sector emerged as the fastest growing sector of the economy in June 2015, recording a growth of 9.5% y/y. However, this growth was much lower than that recorded during the last two quarters of FY14.


Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.2.1 Assets
1.2.2 Liabilities
1.3 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-Singapore
2.2 Interest rates
2.3 Statutory liquidity position of banks
2.4 Capital adequacy
2.5 Classified exposure
2.6 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading players
3.1.1 United Overseas Bank Limited (UOB)
3.1.2 DBS Group Holdings Limited (DBS)
3.1.3 Overseas-Chinese Banking Corporation Limited (OCBC)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts
Table 1: Types of banking and financial institutions in Singapore
Table 2: Functions of Monetary Authority of Singapore
Table 3: Interest rates in Singapore
Table 4: Capital adequacy requirements prescribed by MAS
Table 5: Key ratios of the leading players

Chart 1: Number of banking institutions in Singapore by type
Chart 2: Number of Banking and Financial Institutions in Singapore
Chart 3: Asset size of banking and financial institutions in Singapore
Chart 4: Asset share by type of bank and type of assets
Chart 5: Total assets of domestic banking units (DBUs)
Chart 6: Asset profile of DBUs in Singapore
Chart 7: Total loans and advances of DBUs
Chart 8: Distribution of loans approved by purpose-DBUs
Chart 9: Total assets of Asian currency units (Asian dollar markets)
Chart 10: Asset profile of Asian currency units (ACUs) in Singapore
Chart 11: Total loans and advances of ACUs to non-bank customers
Chart 12: Distribution of loans approved by purpose-ACUs
Chart 13: Liability profile of DBUs in Singapore
Chart 14: Total deposits of non-banking customers-DBUs
Chart 15: Liability profile of ACUs
Chart 16: Total interbank funds of ACUs
Chart 17: Constituent parties in parliament
Chart 18: Cost of business start-up procedures
Chart 19: Total assets of the Monetary Authority of Singapore
Chart 20: Singapore quarterly GDP growth rate-Y/Y change
Chart 21: Quarterly exports from Singapore
Chart 22: Annual trade balance of Singapore
Chart 23: Annual fiscal balance of Singapore government
Chart 24: USD/SGD exchange rates- Monthly average
Chart 25: Core inflation in Singapore-Y/Y
Chart 26: GDP by sectors at 2010 market prices
Chart 27: Percentage change over previous year- GDP by Sector
Chart 28: Singapore Overnight Rate Average
Chart 29: Liquidity ratio of banks in Singapore
Chart 30: Exposure of Singaporean banking industry
Chart 31: Net classified exposure ratio
Chart 32: Asset profile of UOB-annual
Chart 33: Profitability of UOB-annual
Chart 34: Non performing loans ratio of UOB
Chart 35: Asset profile of DBS-annual
Chart 36: Profitability of DBS-annual
Chart 37: Non performing loans ratio of DBS
Chart 38: Asset profile of OCBC-annual
Chart 39: Profitability of OCBC-annual
Chart 40: Non-performing loans of OCBC

Number of pages: 33
Release Date: Mon, 26 Oct 2015