The traditionally conservative loan underwriting policies, balance-sheet structure, strong capital levels, and underlying profitability of most Singapore banks is providing them sufficient flexibility to cope with asset quality problems in the domestic and regional markets. Despite the less buoyant environment, Singapore's banks are expected to again report strong profits in the second half of fiscal 1999. An emerging concern is the potential for banks to assume greater credit risks in response to financial sector liberalization. In other banking systems that have undergone liberalization, banks have sought to offset increased competitive challenges by adopting aggressive growth and diversification strategies. This has often resulted in increased balance-sheet leverage, narrowing of banking margins, and weaker credit underwriting standards, with a consequential increase in...
Companies mentioned in this report are:
- Singapore (Republic of)
- DBS Bank Ltd.
- Keppel TatLee Bank Ltd.
- United Overseas Bank Ltd.
- Overseas Union Bank Ltd.
- Oversea-Chinese Banking Corp. Ltd.
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