Singapore banks flag cautious growth due to COVID-19 after booking quarterly gains

News February 21, 2020 No Comments

Singapore banks flag cautious growth due to COVID-19 after booking quarterly gains

SINGAPORE: Singaporean lenders have provided a cautious outlook due to the coronavirus outbreak, after Oversea-Chinese Banking Corp (OCBC) reported earnings that beat estimates and United Overseas Bank (UOB) posted a small profit growth.

The epidemic, which has claimed more than 2,100 lives in China and infected hundreds in dozens of other countries, has rattled financial markets and raised concerns about its impact on economic growth.

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“Looking ahead, the global economic outlook is expected to be weaker than originally expected,” OCBC chief executive Samuel Tsien said in a statement on Friday. Loan growth is likely to be low this year, he also said, after expanding 3 per cent last year.

Singapore’s second-biggest listed lender by assets after DBS Group Holdings, OCBC reported a 34 per cent rise in net profit at S$1.24 billion for October-December, helped by improvement in its net interest margin.

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That compared with the S$1.13 billion average of five analyst estimates compiled by Refinitiv.

Singapore, one of the countries hardest hit by the virus outside of China, has already cut its economic growth outlook this year and flagged the possibility of recession.

READ: Singapore cuts 2020 GDP forecast range to -0.5% to 1.5% due to COVID-19 outbreak

UOB, the country’s smallest listed lender, reported a 10 per cent gain in fourth-quarter net profit, in line with estimates.

“Many signs point to more challenging times ahead including the unfolding impact of the COVID-19 epidemic,” said CEO Wee Ee Cheong, citing the medical name of the illness caused by the coronavirus.

Last week, DBS said it expected the outbreak to pull down full-year revenue by as much as 2 per cent, after it reported quarterly profit that topped estimates with 14 per cent growth. 

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