The three largest Singapore-listed banks are expected to report another quarter of lackluster financial results due to the coronavirus pandemic and ultra-low interest rates globally.
Low interest rates globally would squeeze net interest margins or NIMs, a measure of lending profitability, by 11 to 26 basis points compared to the previous quarter, said Krishna Guha, an equity analyst at Jefferies.
Singapore's "circuit breaker" will hit fees from credit cards, wealth management and investment banking, said Rui Wen Lim, equity research analyst from DBS. All in, net profit at the three Singapore-listed banks could fall by between 19% and 33% in the second quarter, according to Refinitiv estimates. OCBC is expected to be hit the least because its insurance arm likely recorded gains in its investment portfolio, analysts said.after the country's financial regulator called on banks to limit dividend payouts for 2020.
"Significant uncertainty exists in terms of the length and depth of the pandemic," he wrote in a note last week.
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