Finance

Fri, Feb 28, 2020 – 1:35 PM

UPDATED Fri, Feb 28, 2020 – 4:17 PM

Bank lending ticked down by 0.2 per cent in January on a month-on-month basis amid declining business loans, preliminary Monetary Authority of Singapore data showed on Friday.

However, economists say that last month's bank lending numbers may not be a good gauge of the economic impact of Covid-19, given that the virus outbreak started in earnest only in late January while the Chinese New Year holidays may also have distorted data.

Loans through the domestic banking unit – which capture lending in all currencies, but reflect mainly Singapore-dollar lending – stood at S$691.15 billion in January, compared with S$692.4 billion in December 2019. But from a year ago, it rose 3 per cent.

Business loans fell 0.3 per cent from December to S$428.35 billion, amid a drop in loans to financial institutions, manufacturing, general commerce and business services firms.

Consumer loans remained largely steady at S$262.81 billion compared with December's S$262.79 billion, but fell 1 per cent year on year.

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Within consumer loans, housing and bridging loans was mostly flat from a month ago at S$200.83 billion in January – an improvement after 12 straight months of declines – compared to S$200.74 billion in December. On a year-on-year basis, however, it was down 1.7 per cent. Housing and bridging loans makes up about three quarters of consumer spending.

OCBC economist Selena Ling flagged that February and March data may be a better reflection of whether the virus outbreak has translated into greater caution in loans as the full brunt of Covid-19 may not have been felt in January. The Chinese New Year holidays also further muddied data due to the shorter month.

On the Read More – Source

Finance

Wed, Feb 26, 2020 – 1:12 PM

DBS unveiled a second round of relief measures on Wednesday to help businesses in Singapore cope amid the virus outbreak, in a move that pushes companies to go digital at the same time.

These measures include financial relief packages and digital initiatives for companies to fast-track their digital adoption to carry out transactions online instead of relying on physical processes.

It is offering a collateral-free digital business loan of up to S$50,000, to be disbursed within 24 hours of loan acceptance, which comes with an automatic processing fee waiver.

It has also upped the number of free FAST (Fast and Secure Transfers) transactions to 50 a month from 30 previously, to promote reduced physical handling of cheques.

DBS has also digitalised 11 common trade financing processes to reduce the need to be reliant on physical over-the-counter trade processing – said to be the first bank here to do so.

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This will apply immediately to 11 everyday trade financing solutions such as letters of credit, import bills, trust receipts, bankers guarantees and shipping guarantees.

Customers can now access a one-stop portal through DBSs Corporate Banking platform IDEAL to upload all their trade financing applications and supporting documents, instead of getting them done at trade counters or bank branches.

They will be able to get instant notifications of their application status through email and SMS. Clients will also be able to retrieve their historical supporting documents online and submit their documentation and applications round the clock instead of depending on the DBS trade counters and branch banking operating hours.

From March 2, webinars and customised teach-ins to train customers on how to use and benefit from its new digital capabilities will also be rolled out, said the bank.

Courses in DBSs SME Academy, its training arm for business owners, will also go digital so that customers can still learn and upskill at their own time.

Tan Su Shan, group head of institutional banking, DBS said: “Both the short-term financing relief packages and the longer-term digital adoption plans that are being made available to clients now will help businesses with their immediate cash flow needs Read More – Source

Finance

Tue, Feb 25, 2020 – 11:50 AM

HOSPITALITY player Park Hotel Group has secured a S$237 million green loan from United Overseas Bank (UOB) to refinance the refurbishment of Grand Park City Hall, a hotel it owns and manages.

The loan was issued under the UOB Real Estate Sustainable Finance Framework, the bank said in a joint statement on Tuesday.

In its refurbishment plans in 2017, Grand Park City Hall sought to incorporate sustainable and smart features. The hotel also retained 90 per cent of its building structure to minimise waste during construction.

The hotel had also reduced its water, energy consumption and carbon emissions by installing a number of features. This includes a rainwater harvesting system, water and energy-efficient fixtures, a centralised chilled water system, a high performance air-to-water heat pump and mechanical ventilation fans.

Grand Park City Hall received the Singapore Building Read More – Source

Finance

TONIK Financial has closed its first institutional round of funding, led by Singapore-based venture capital firms Insignia Ventures Partners and Credence Partners.

The US$6 million round also saw "significant" participation from regional family offices and angel investors, Tonik said in a press statement on Tuesday.

It will use the fresh funds to launch its digital bank in the Philippines, and is targeting to start commercial operations in the third quarter this year.

The Philippines' banking regulator had recently granted the startup a bank licence. "This makes Tonik the first digital bank in South-east Asia and one of the very few globally to be operating on the basis of its own bank licence," Tonik said.

The company is led by founder and chief executive officer Greg Krasnov, who previously co-founded four fintech startups in the consumer finance space in Asia.

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In the press statement, Mr Krasnov said that over 70 per cent of the adult population in the Philippines remains unbanked, with market research indicating that more than half of existing bank clients will bRead More – Source

Finance

Tue, Feb 25, 2020 – 11:18 AM

THE Housing and Development Board (HDB) has issued S$700 million worth of seven-year notes carrying a fixed coupon rate of 1.76 per cent per annum.

They are rated Aaa by Moodys Investors Service and will mature on Feb 24, 2027, Singapores public housing authority said in a media statement on Monday night.

The notes are in denominations of S$250,000 and were offered by way of placement to investors.

They were launched under HDBs S$32 billion multicurrency medium-term note programme, under which HDB may from time to time issue bonds to finance its development programmes and working capital requirements as well as to refinance existing borrowings.

The Singapore Exchange has given approval in-principle for the listing and quotation of the new notes on the bourse.

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The joint lead managers and bookrunners are DBS Bank, Maybank Kim Eng Securities, Standard Chartered Bank (Singapore) and United Overseas Bank.

The new issuance comes about three months afRead More – Source

Finance

Tue, Feb 25, 2020 – 5:22 PM

THE Singapore arm of China Taiping Insurance has joined other insurers here in offering additional coverage for the Covid-19 outbreak, going a step further to offer a bonus of S$1,000 for insured customers upon their recovery from a Covid-19 infection.

On Tuesday, China Taiping Insurance (Singapore) (CTPIS) launched two new initiatives for new and existing customers: a Financial Aid Campaign for life insurance customers, and an enhanced Personal Accident plan.

The Financial Aid Campaign provides free additional benefits of a S$1,000 payout upon diagnosis of Covid-19 in Singapore, daily hospitalisation benefit of S$100/day for up to 30 days, a recovery bonus of S$1,000 and an additional S$10,000 death benefit payout on top of the insured person's death coverage under their existing policy.

New policies are to be submitted by May 29, and coverage extends until July 31.

Under the enhanced Personal Accident Safe plan, the new Covid-19 coverage provides a daily quarantine benefit of S$100/day for up to 14 days, medical expenses benefit of up to S$500 per policy year for one incident, and a S$10,000 death benefit payout.

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Said Lance Tay, general manager for life insurance at China Taiping Insurance (Singapore): "We want to give all our existing and new life insurance customers additional peace of mind during this challenging time with our complimentary insurance coverage which provides financial aid upon diagnosis, hospitalisation and recovery from Covid-19.

"Our recovery bRead More – Source

Finance

Tue, Feb 25, 2020 – 5:50 AM

Singapore

SINGAPORE banks have guided on the size of provisions that can cover the impact from the Covid-19 outbreak ahead, but analysts say the lenders may have to stomach more if the disruption to supply chains and consumer demand extends beyond the first half of this year.

Banks' guidance on the buffer set aside for souring loans is much lower than that of past crises. "The wildcard lies in the credit cost impact," said CGS-CIMB in a report.

The Sars (severe acute respiratory syndrome) outbreak in 2003 and the global financial crisis in 2009 saw credit costs – provisions as a percentage of total loans – peak at above 60 bps.

In a report on Monday, Citi analyst Robert Kong said the banks' overall expected credit cost uptick of five bps due to Covid-19 "may be met with scepticism from investors".

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He said the virus impact on gross domestic product is "worse than initially assessed", adding that China may see a first-quarter growth of just 3.6 per cent while the Hong Kong economy may remain in recession, with domestic banks there already seeing spikes in credit cost for the financial year ended Dec 31, 2019 (FY19).

Hong Kong and China are Singapore banks' key growth engines in the region, driving 10 to 26 per cent of 2019 group profit before tax, and 15 to 30 per cent of loans in FY19.

OCBC and UOB have guided credit cost to rise to about 25 to 30 basis points (bps), while DBS has flagged a potential 4 to 5 bps increase.

DBS Research has estimated that every five bps uptick in credit costs would impact sector earnings by about 3 per cent.

To be clear, Singapore banks' modest credit cost guidances largely assume that the Covid-19 outbreak will last till mid-2020, said Mr Kong. This is similar to the Sars outbreak in 2003, which lasted about a quarter.

UOB chief financial officer Lee Wai Fai said the bank's credit costs could jump to 80 bps if the outbreak drags beyond mid-2020, though he said this is "highly unlikely" given the various relief measures in place.

For DBS, most of its corporate customers in the "vulnerable" sectors are "more resilient", and include large businesses. OCBC's chief Samuel Tsien said the better credit quality now amid "prudent portfolio actions" last year could cushion credit costs due to Covid-19.

But analysts flagged concerns should the impact of the virus outbreak push beyond mid-2020. The second-order impact would become more entrenched, leading to "far higher" credit costs, said Mr Kong.

While credit costs are expected to tick higher in FY20 – single-digit impact for now – due to Covid-19, the banks have earlier built general cushion for the macro slowdown in Hong Kong and the US-China trade war. This would offer some buffer, noted CGS-CIMB analysts Andrea Choong and Lim Siew Khee.

There is also broad confidence that the recently unveiled relief measures by banks and the Singapore government are sufficient to alleviate cash flow pressures faced by affected corporates, analysts suggested.

"The general provisions undertaken by banks should be sufficient, in the context that the outbreak should be contained within two to three months," Phillip Securities analyst Tay Wee Kuang told BT.

DBS chief Piyush Gupta said the bank's general provisions (GP) in FY19 has been "very robust", as it had earlier set aside a cushion for ongoing macro issues. "With a little bit of luck, I don't think we'll see an impact on the cost of credit flowing through the P&L (profit and loss statement) because of the GP," said Mr Gupta at a results briefing earlier this month.

For OCBC, the projected absence of sizeable oil and gas provisions – which accounted for about two-thirds of total FY19 provisions – in FY20 should "keep headline credit costs relatively stable", said CGS-CIMB's Ms Choong and Ms Lim.

But in view of a prolonged virus outbreak, Maybank Kim Eng analyst Thilan Wickramasinghe guided credit cost of 20 to 34 bps for OCBC between FY20 and FY22. OCBC's allowances for credit losses in FY2019 were "significantly higher than our already bearish assumptions", said Mr Wickramasinghe in a broker's note. Though this mostly came from the bank's legacy oil-and-gas exRead More – Source