Singapore banks scratch and claw to maintain lending volume as they tone down China lending

Greater China lending by DBS was down to 30%.

Singapore’s banks are now struggling to maintain their lending volumes as they aggressively tone down their lending to greater China amid rising uncertainty.

According to a report by Maybank Kim Eng, after the Global Financial Crisis, China attracted large capital flows from DBS and OCBC.

“This worked well for the two from 2008 to 2014, bumping up their ROEs. Current subdued Chinese growth and high scepticism over the sturdiness of China’s banking system give cause for concern,” the report noted.

Meanwhile, trade loans have become much quieter as onshore borrowing turns more attractive, the report said.

“Greater China lending by DBS was down from 36% of its book in 2014 to 30% in 2Q16. DBS’ trade loans dived 67% from 2Q14 levels to SGD12b in 2Q16,” the report added.

Additionally, OCBC’s and UOB’s lending exposure to China retreated more modestly, from 26%/13% of their loan books in 2014 to 24%/11% in 2Q16.

“We think China exposures may be further downsized. All this capital has to find a new home,” the report said.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia