- DBS Group Research economists expect the Fed to hike once more during 2Q2023 to 5.25%, the terminal rate for the current rate hike cycle.
- As Fed comes close to a peak in this interest rate cycle, we believe there are limited upside for NIMs going forward for Singapore Banks, especially as pressures from funding costs continue. Increasing downside risks from potential rate cuts in FY23F are also on the cards should a recession force the Fed to cut rates.
- - Read this at SGinvestors.io -
Loan growth and non-interest income recovery may be weaker than hoped for in a more uncertain macroeconomic environment.
- Industry loan growth continues to be weak as system loans contracted by -1.1% year-to-date as of end-Feb. We expect Singapore Banks to see muted loan growth of 0 to 1% q-o-q during 1Q23.
- - Read this at SGinvestors.io -
- While net new money inflows has been strong since 2022 across the banks, we believe market activities are unlikely to rebound back to 2021 levels in the near term, in part due to increasing economic uncertainties globally.
Asset quality risks continue to be on the rise.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Rui Wen LIM DBS Group Research | https://www.dbs.com/insightsdirect/ 2023-04-20
More reports on banking & finance sector:
Analyst Reports on Singapore Banking & Finance Sector
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