Chart of the Day: Can Singapore banks handle credit growth in 2018?

Loan/deposit ratios remained below 100%, allowing the banks to accommodate credit growth.

This chart from Moody's Investors Service shows that for DBS, OCBC, and UOB, loan/deposit ratios remain comfortably below 100% for both the Singaporean and the US dollar.

"This provides them with a sufficient liquidity buffer to accommodate our credit growth assumption of 7%-8% in 2018," said Moody's Investors Service vice president-senior analyst Simon Chen.

Banks also reported net stable funding ratios (NSFR) that were comfortably above the 100% minimum that domestic systemically important banks need to comply with from 1 January 2018 onward. 

Moreover, the banks' profitability is expected to improve not only due to wider margins but also credit costs as low provisions will further contribute to net profit.