SINGAPORE: DBS Group, Singapore’s biggest lender, posted a 9 per cent decline in quarterly profit and like rival OCBC booked higher provisions for bad loans, underscoring debt payment stress among firms in the Singapore's oil services sector.
In what has become a test for Singapore's banks long lauded for their conservative lending standards, many firms in the city state's oilfield services industry are struggling to pay debt, hit by weak oil prices and charter rates as well as delays to projects.
Net profit at DBS, Southeast Asia's biggest bank by assets, came in at S$913 million in the three months ended December, the lowest in two years, and versus S$1 billion a year earlier. This was below an average forecast of S$936 million from six analysts polled by Reuters.
The bank said charges for bad loans rose 87 per cent to S$462 million from S$247 million a year earlier.
DBS's net interest margin, a key gauge of profitability, fell 13 basis points to 1.71 per cent as Singapore-dollar interest rates were lower compared to a year ago.
It expects mid-single digit growth in loan and income in 2017.
On Tuesday, OCBC reported an 18 per cent drop in quarterly net profit to a three-year low.
Last edited by Orionz; Today at 08:12 AM..
[BREAKING] DBS Q4 Profit drops 9%, Provision for bad debt surged 87%
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