Like most sectors of Singaporean economy in the year 2016, the banking sector had her fair share of financial downturn. The once bubbling sector, thriving with billions of dollars in trade was severely hit. The financial tide that swept the little country that once had a healthy banking system which is envied by neighbors.
The three banks had a year to forget. The year was full of disturbances and worries. With a bad economic meltdown, regional political unrest and manufacturing industries market challenges. It is not a surprise to see these banks post fall in net profits that are massive. This can be a threat if the Nation’s economic policy is not proactive enough to arrest the repeat of such a monstrous financial year.
Major Banks post drop in net profits
The market experience a decline in profit by the three banks. It varies as the banks’ count losses ahead of a promising but tricky 2017. From DBS to OCBC and UOB, the story is almost the same concerning asset issue that has to do with quality. In addition to that, not too promising manufacturing industry, which is one of the major industries. This is aside of oil and gas that demands heavy financial needs from the banks.
DBS suffer the worse fall in net profit in many years that was up to 5%. Comparing to the 2015 profit post by the bank. Though the profit is above four billion dollars, the loss is not something to repeat in another year of great uncertainty.
If DBS cries over five percent lower net profit, perhaps OCBC needs a miracle to be able to get over the shock 11% lower profit. Though the bank records over 3 billion profit which is eleven percent short of the previous year.
Though the pains were mild at UOB, which records lower net profit of 3.5% compares to 2015, the final profit still stood at just above 3 billion dollars.
Banks have different targets for 2017
Due to ambivalence in oil and gas sector, the banks in Singapore have no choice than to target growth in loans and the marginal improvement as they carry out their financial adventure for the new year.
The non-performing loans related to the under pressured oil and gas industry was a major blow to the banking sector, as the banks paid a massive amount in credits. Therefore, the future of the banking sector lay away from the oil industry and efforts should be to improve loans growth and extend more facilities to electronics, medical and biomedical sectors that are enjoying the massive business boom.
For the year 2017, banks need to do more than just extending loans to oil sick, and a risky sector to investor fortune. The looking elsewhere maybe the way to regain the market efficacy of banks, electronics, biomedical, and medical sectors are the brides of the Singaporean economy who are enjoying success in export, so loans to this sector maybe a better way to have a bumper year.
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