“We assume a loss rate of 3% on loans to data centres, which was the peak rate for the banking sector to [the] information and communications sector since 2021 - 2025,” she adds.
Singapore banks will be able to “easily absorb” a 3% loss rate on data centre loans should the worst happen, says Rena Kwok of Bloomberg Intelligence.
“Singapore banks have solid capital cushions that could, if necessary, absorb significantly higher default rates to lending to data centres, our stress-test model shows,” Kwok writes in a Nov 24 note.
