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Singapore banks have good dividend visibility, but non-performing loans pose an increasing risk: Maybank

Uma Devi
Uma Devi9/12/2019 04:42 PM GMT+08  • 3 min read
Singapore banks have good dividend visibility, but non-performing loans pose an increasing risk: Maybank
 
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SINGAPORE (Sept 12): Singapore banks seem to be a cut above the rest in Asean, offering some of the highest dividends and ranking among the cheapest in price-to-equity (PE) terms, bolstered by strong balance sheets.

But a recent report from Maybank Kim Eng which uses artificial intelligence, has revealed that the biggest threat to the appeal of Singapore banks appears to overseas lending – which accounts for 63% of incremental loan growth for Singapore banks. In turn, this affects the banks’ non-performing loan (NPL) figures.

“The banks' loan growth has been fueled by non-SGD lending in the last three years, which is among the major factors in determining NPL rates,” says Maybank Kim Eng.

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