Pursuits
Singapore’s Shrinking Economy Worsens Bank Risk as Loans Slump
Singapore national flags are displayed on a residential apartment block in Singapore.
Photographer: Bryan van der Beek/BloombergThis article is for subscribers only.
Slumping property and oil prices have dragged a gauge of Singaporean banks’ loan quality to the worst in six years, inflating their borrowing costs.
Lenders have placed 2.3 percent of their loan books in a “special mention” category that signals potential weakness, the highest since 2009. The extra yield investors demand to hold DBS Group Holdings Ltd. 2019 dollar notes over Treasuries surged to a record 87 basis points last month. Similar measures for United Overseas Bank Ltd. and Oversea-Chinese Banking Corp. are the highest in at least six months.