New housing loan applications fall 30% for DBS, OCBC in Q3

New housing loan applications fall 30% for DBS, OCBC in Q3

    By Linette Lim
    POSTED: 01 Nov 2013 20:01

Following the announcement of new property loan curbs in June, Singapore banks DBS and OCBC said new housing loan applications have fallen 30 per cent in the third quarter.

SINGAPORE: Following the announcement of new property loan curbs in June, Singapore banks DBS and OCBC said new housing loan applications have fallen 30 per cent in the third quarter.

Still, both banks expect to continue to see positive loans growth, as previously contracted commitments are still in the loans pipeline.

However, OCBC said this momentum could taper off in the second half of next year.

The bank expects loans growth in the very "low-teens" for 2013, while DBS is forecasting total loans growth to come in at around 15 per cent.

Analysts said Singapore banks will also face external challenges ahead. They include earnings losses as a result of depreciating regional currencies like the Indonesian rupiah.

Alfred Chan, director of financial institutions at Fitch Ratings, said: "Market volatility has increased, particularly since the Federal Reserve announced its intention to taper off quantitative easing.

“Currencies in some of these emerging markets have been affected, asset prices also have been affected, and that is likely to contribute further pressure on Singapore banks in terms of earnings growth."

DBS and OCBC are the first two Singapore banks to report third quarter results.

The smallest local bank, UOB, will announce its results on November 5.

- CNA/nd

- wong chee tat :)