Singapore’s NBFI assets rise 4% in 2024

The increase was driven by expansion of insurers and investment funds.

The total non-bank financial institutions (NBFI) assets in Singapore rose 4% in 2024 driven by expansions of insurers and investment funds, the Monetary Authority of Singapore (MAS) reported.

A liquidity stress simulation exercise showed that most investment funds have sufficient liquid assets to meet redemption needs under a severe redemption shock. Only 7% of fixed income funds would face a liquidity shortfall of between 2% and 16% of their total net assets (TNA) under the redemption shocks.

Hedge funds' gross leverage remained within global norms at 8.7 times net asset value (NAV), whilst financial leverage was 0.43 times NAV.
As of December 2023, assets under management (AUM) in private credit funds rose to $55b, up from $45b in 2022, accounting for 1.0% of the total industry AUM.

MAS stated that private credit funds currently pose minimal risk to Singapore's broader financial system, as banks and insurers have limited exposure to private credit, and is further mitigated by risk management policies.

In addition, the total gross notional stock of derivatives outstanding in Singapore's OTC derivatives market amounted to $74.9t as of September, rising 16% year-on-year (YoY).

Meanwhile, synthetic leverage undertaken by NBFIs through OTC derivatives transactions dropped in 2024 but rose slightly after June. Gross notional exposure stood at 9.1 times the gross market value as of September.

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