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Singapore's Property Prices Are Up, But Credit Risks On Banks' Residential Property Loans Remain Subdued Jul 10
Standard & Poors, July 2010
Abstract
Mortgages represent the single largest industry exposure for Singapore banks, and a property bubble could send banks' credit loss risks soaring. The demand for private residential property has been strong since the first quarter of 2009, with upward spiraling home prices and low cost of funds fuelling fears of an asset bubble in Singapore. Improving economic prospects have whetted risk appetites and revived buying interest, while mortgage rates have been near historical lows. Consequently, home loans--which currently make up about 25% of Singapore banks' loan portfolios--have been growing rapidly. In Standard & Poor's Ratings Services' opinion, even if an asset bubble were to form, the credit loss risks of Singapore banks would be limited. This is due to the reasonable...
Companies mentioned in this report are: DBS Bank Ltd.,United Overseas Bank Ltd.,Oversea-Chinese Banking Corp. Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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