S'pore's banking system outlook stable, as property market eases, credit growth moderates: Moody's

[SINGAPORE] Moody's Investors Service has revised its outlook for Singapore's (Aaa stable) banking system to stable, reflecting the domestic property market's soft landing, and moderating domestic and cross-border credit growth. The outlook was previously negative since July 2013.

Moody's analysis is contained in its just-published report 'Banking System Outlook: Singapore' by Eugene Tarzimanov, a Moody's vice president and senior credit officer.

Moody's rates Singapore's three major banking groups - that account for around 60 per cent of domestic system assets at end-2014 - DBS Bank (Aa1 stable, aa3), Oversea-Chinese Banking Corporation (Aa1 stable, aa3) and United Overseas Bank (Aa1 stable, aa3). Moody's also rates Bank of Singapore (Aa1 stable, a3), the private-banking subsidiary of OCBC.

Moody's expects that Singapore banks will continue to benefit from healthy - although lower - economic growth both domestically and in their regional operations. While real GDP growth in Singapore will slow to around 3 per cent in 2015 and 2016 as a result of slower growth in China, this will be offset somewhat by the recovering US economy.