At present, Kwok sees that real estate risks remain manageable for OCBC and UOB in particular, with the losses in the banks’ loans to the commercial real estate (CRE) sector seeming “contained”. This is despite the near-term elevated interest rates and growth headwinds.
The overall property loan portfolios for all three Singapore banks, DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (SGX:U11
) (UOB) are likely to remain “solid” in 2024, says Bloomberg Intelligence credit analyst Rena Kwok.
“This is given their nature of lending, country of risk for exposures and tight underwriting,” Kwok writes in her March 26 report. “Still, OCBC's small- and medium-sized enterprise (SME) loans backed by Hong Kong property may need watching given its weaker-than-peers credit quality in that segment.”
