There is usually a time-lag between asset yields and funding costs catching up. “DBS has the highest CASA (current account savings account) and hence should have the least relief from CASA repricing while UOB has the lowest CASA and hence has the most room to see support from funding cost,” Credit Suisse says.
SINGAPORE (Oct 29): United Overseas Bank is due to report 3QFY2019 earnings on Nov 1, Oversea-Chinese Banking Corp on Nov 5 and DBS Group Holdings on Nov 11.
With the US Federal Reserve cutting the Fed Funds Rate twice this year, the banks’ net interest margins are likely to be flat-to-lower q-o-q, says Credit Suisse in a curtain raiser to the banks’ reporting season. As a result of Fed rate cuts, the average three-month Singapore interbank offered rates and three-month swap offer rates have decline by 6bps and 20 bps respectively, q-o-q. This could put downward pressure on asset yields, Credit Suisse says in a report dated Oct 24.
