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Singapore bank results show promising outlook for Covid bad debts

OCBC, UOB and DBS are among the first lenders in Asia to report 2020 numbers. They’re in surprisingly good shape.


If Singaporean lenders are a barometer of the broader industry, the banking sector in Asia may be coming through Covid in better shape than we had any right to expect.

The annual results of OCBC and UOB in consecutive days this week, after DBS two weeks ago, show some strikingly cheerful conclusions about asset quality.

OCBC’s non-performing loan (NPL) ratio, at 1.5%, is flat year-on-year, and UOB’s up just one 10th of a percentage point at 1.6%, the same ratio as at DBS.

OCBC’s total non-performing assets (NPA) were up only 3% year-on-year, a period including the beginning of the pandemic, and actually declined 6% quarter-on-quarter. UOB’s total NPA book, at S$4.6 billion, is not much different to its pre-pandemic level a year ago of S$4.2 billion.

The catch

There is a catch, of course: moratoria and government relief programmes to borrowers, and the question of how much bad news has been kicked down the road that will have to be digested later – but the banks are getting a much better handle on this, too.

UOB, which has prided itself on living up to its ‘right by you’ brand and not abandoning clients through the crisis, saw the amount of its lending book under government relief programmes drop from S$11 billion in December to S$3 billion in January.


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