Asia: Gloomy ratings for Singapore’s banking sector

Fitch Ratings, one of the big three credit rating agencies has downgraded the outlook on the Singaporean banking sector in the upcoming year. The “negative” rating was based on soft economic conditions that will continue into 2017. Economic conditions such as low commodity prices and currency exposure risk will affect the region’s banking sector with Singapore being more prone to the uncertainty in the oil and gas sector. However, another rating from Fitch rates Singapore’s banks outlook as stable. Singapore’s bank’ hold a sold credit profile with steady funding and liquidity positions, strong loss-absorption buffers and healthy profitability, prompting the credit rating agency to give individual banks a stable outlook. RFi Group data for Singapore council H2 2016 show that most banking customers in Singapore are right to rank stability of the banking sector as their second most concerning issue with 59% of the banking population ranking it as the second most concerning issue.

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