<\/p>\n
Banks have set plans to do so, says S&P.<\/p>\n
Singapore banks are likely to cut back on their capital buffers and have already set in motion short to medium-term plans to manage this, said S&P Global Ratings.<\/p>\n
Singapore banks have implemented capital distribution plans to pare back excess capital over the next two to three years, via periodic share buybacks, and special dividends, it said.<\/p>\n
\u201cWe expect management will return capital prudently, and scale back or halt it completely if loan growth picks up or other opportunities emerge,\u201d said S&P\u2019s Singapore primary credit analyst Ivan Tan.<\/p>\n
Loan growth in Singapore’s banking sector rose to about 5% in 2024, from a 3% contraction in 2023. Loan growth is projected to come at 5%-8% in 2025 and 2026.<\/p>\n
If it reaches the upper range, it will allow banks to use excess capital to partly alleviate the need for capital intervention, Tan said.<\/p>\n
Banks\u2019 capital ratios were boosted following Basel reforms in July 2024 and are now double the capital requirement. This healthy capitalization protects against unexpected losses and instils public confidence.<\/p>\n
However, very high levels could indicate that a bank is not effectively using its capital for growth and expansion, S&P said.<\/p>\n
A war chest of capital could also spur Singapore banks to sharpen their hunt for overseas acquisitions, Tan said.<\/p>\n
\u201cSingapore banks have made a string of bite-sized, bolt-on acquisitions in recent years to strengthen their regional footprint. For example, Oversea-Chinese Banking Corp. Ltd. recently acquired Bank Commonwealth PT to augment its Indonesian franchise,\u201d he said.<\/p>\n
\u201cWe believe Singapore banks will manage this capital transition such that at the end of five years, their fully phased in Tier 1 capital ratio will revert to historical norms of about 15%,\u201d he concluded.<\/p>\n
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Banks have set plans to do so, says S&P. Singapore banks are likely to cut back on their capital buffers and have already set in motion short to medium-term plans to manage this, said S&P Global Ratings. Singapore banks have implemented capital distribution plans to pare back excess capital over the next two to three […]<\/p>\n","protected":false},"author":1,"featured_media":3634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/03\/Singapore-banks-22-1140x445.jpg",1140,445,true],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/03\/Singapore-banks-22-463x348.jpg",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/03\/Singapore-banks-22-300x200.jpg",300,200,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/03\/Singapore-banks-22.jpg",1801,1200,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=3633"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3633\/revisions"}],"predecessor-version":[{"id":3635,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3633\/revisions\/3635"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/3634"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=3633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=3633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=3633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}