PhillipCapital’s research analyst Tay Wee Kuang has maintained his “neutral” recommendation on the Singapore banking and finance sector, amid the “challenging” banking environment.

This, he says, comes as “investors look for clarity on loan quality with the expiry of loan moratoriums in Singapore”.

As net interest margins (NIMs) fell in 3Q2020 due to subdued interest rates, NIMs in 4Q2020 are expected to remain at 3Q2020 levels, for a full-year average of 1.60%, says Tay.

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