SG banking Sector

1. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
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SG Banking Sector

2. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Discussion Points
Macroeconomics
-Economic Slowdown in a high interest rate, high inflation environment
-Failed banks in US destroyed confidence in banking system
-SG banks have insignificant exposures to failed banks in US.SG banks are
well-capitalised. Liquidity positions are healthy underpinned by a diversified
funding base.

3. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Discussion Points
Credit Environment
-Loans contracting in Q4 2022 due to concerns over economic slowdown &
borrowers repayment in loans.
-Credit costs expected to increase due to intense competition for deposits,
however NIM expected to rise due to rate hike cycle.
-Non-performing loans may increase due to economic slowdown.

4. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Federal Reserve
• Federal Reserve sets up a US$25 billion bank term funding
programme to offer banks one year loans with collaterals valued
at par.
• Federal Reserve increases balance sheet to boost liquidity.

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Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Federal Reserve increases Fed Balance sheet to
boost liquidity.

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Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Not a QE
• It does little in creating new money that flows into the economy,
as Fed is lending to banks,not buying from banks.
• Bank borrows from the Fed,it is expanding its own balance
sheet to increase liquidity ratio.
• QE is Fed buys the security from bank,the bank has balance
sheet available for renewed expansion e.g new loans.

7. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Key things to look out for in banking sector report
• Net Interest Margin(NIM)
• NIM growth
DBS OCBC UOB
NIM
Growth
21% 24% 19%
DBS OCBC UOB
Net
Interest
Margin
2.11% 2.43% 2.22%

8. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Key things to look out for in banking sector report
• Non-performing Loans
• CET1 Ratio
DBS OCBC UOB
NPL 1.10% 1.20% 1.60%
DBS OCBC UOB
CET1
Ratio
14.6 15.2 13.3

9. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Key things to look out for in banking sector report
• CASA Ratio
• Return on Equity
DBS OCBC UOB
Return
on
Equity
15% 11% 12%
DBS OCBC UOB
CASA
Ratio
60% 52% 48%

10. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.

11. Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2023. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.