Compared to a year ago, most sectors registered either unchanged or better asset quality. In particular, NPL ratios for the construction; transport and storage; and electricity, gas and water sectors have improved, although they remain relatively high at 6.4%, 5.2% and 4.5% respectively, says MAS.
Banks in Singapore have remained resilient over the past year despite heightened risks, with strong capital and liquidity positions supported by healthy profits. That said, higher credit costs in 2024 could be an issue for banks as borrowers cope with “persistently high” interest rates, says the Monetary Authority of Singapore (MAS) in its latest Financial Stability Review, released on Nov 27.
Higher interest rates have had limited impact on asset quality so far, as seen from “persistently low” non-performing loan (NPL) ratios, says the central bank and regulator in its annual assessment of the resilience of Singapore's financial system.
