SINGAPORE (Bloomberg): All three of Singapore's banks are expected to see profit declines for the first time since 2016 as they set aside cash for a potential spike in bad loans stemming from the coronavirus-fueled economic slump.
Net income at each lender probably slid between 21 per cent and 28 per cent in the three months ended March 31 from a year earlier, according to the average estimates of six analysts surveyed by Bloomberg. DBS Group Holdings, the nation's largest bank, may post the steepest profit drop when it kicks off earnings season on Thursday , while Oversea-Chinese Banking Corp is forecast to report the smallest contraction.
OCBC and United Overseas Bank will report next week. The last time the trio all posted a profit retreat was in the final quarter of 2016, when many energy-related firms defaulted in the aftermath of an earlier oil slump. DBS may have booked a loan-loss buffer of $640 million in the quarter, up from $76 million a year ago, according to Morgan Stanley analysts. They see OCBC's provisions swelling 81 per cent to $451 million, and UOB's more than tripling to $380 million.
Net interest margins probably shrank only slightly in the quarter because the US Federal Reserve's interest-rate cut came late in the period, Citigroup analyst Robert Kong said in a note.
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