SINGAPORE (Jan 17): DBS Group Holdings is likely to face an increasing number of challenges this year, but none of them should involve the new digital banks. Glob­ally low interest rates may pressure the net interest margins of banks in general and a full trade deal between the US and Chi­na is far from a certainty. Whatever the case, supply chains have been upended, and Asean could be a beneficiary.

Meanwhile, the unrest in Hong Kong could still pose problems for DBS even though the bank has weathered the storm so far, says CLSA. For the first nine months of FY2019, DBS Hong Kong’s net profit rose 5.4% y-o-y, while DBS group’s net profit rose 13.3% y-o-y. DBS views Hong Kong as a conduit to China’s Greater Bay Area. At any rate, Hong Kong has a knack of bouncing back.

Mainly, though, perennially low interest rates could pressure net interest margins for DBS and global banks in general. Still DBS remains in a plum position despite low inter­est rates because its funding cost is the low­est among the banks.

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