Singapore banks may see margin squeeze in Q3

Singapore

MARGINS for the three Singapore banks are likely to be squeezed in the third quarter as the Singapore Inter-bank Offered Rate (Sibor) tracks south in line with the Fed's rate movement, even as loan growth is expected to remain steady.

With the Singapore trio due to report their Q3 results in November, analysts are also keeping a watchful eye on non-performing loan (NPL) ratios, given the weaker global economic environment.

Net interest margins (NIMs) for the banks are likely to see limited growth, if any, with the bulk of domestic mortgage repricing behind them, Maybank Kim Eng analyst Thilan Wickrama-singhe said in a report.

NIMs are a key gauge of profitability for banks, measuring the difference between i…