Singapore's banks showed record figures for 2018 last week. But all three firms face challenges. What's next?
Singapore was always like a bellwether for the impact of issues in global trade. It is the ultimate hub, for everything from shipping to private banking, «Euromoney» writes in a feature this week.
According to this article, the Lion City is a place of ease through which things both physical and virtual move. Any dent in the willingness of people to transact is going to hit Singapore – so is any slowdown in China.
Challenging Environment
All three banks – DBS, OCBC and UOB – recorded impressive full-year figures, as finews.asia (here, here, and here) had reported. But each result has something in the background reflecting a more challenging environment, «Euromoney» writes.
- At DBS, income in the treasury markets division declined 21 percent year-on-year, and fourth quarter income halved to S$92 million, the lowest figure on record.
- At OCBC, it was the drop in the overall fourth quarter number, and the underlying reason behind it: a plunge in the earnings contribution from its insurance arm, Great Eastern Holdings.
- At UOB, it was the drop in «other non-net interest income», down 20 percent year-on-year for 2018, and down 46 percent year-on-year in the fourth quarter.
Steadily Harder
So, do these observations indicate the beginning of a more difficult time? Singapore's bank are still in a very good shape but there is definitely an argument that the best times are behind them, concludes «Euromoney».
The mix of trade tensions, rising global interest rates, volatile asset prices, spooked high net-worth investors and the steady incursion of non-banks into the low-hanging fruit of financial services are going to make it steadily harder for these players to stay on top.
