Chart of the Day: Singapore banks' system LDR dipped as deposits outpace loan growth

It's now 107.8% from record-high in February.

According to Barclays, the March monetary statistics from the Monetary Authority of Singapore (MAS) showed a rebound in deposit growth (+2% m/m) after a contraction in February and outpaced loan growth (+1.4% m/m), resulting in a mild decline in the system loan-to-deposit ratio (LDR) to 107.8% (from 108.4% in February, a record high level since 1999).

Banks are attempting to reprice up loans to pass on higher funding costs from greater deposit competition in 1Q14. 

Here's more from Barclays:

System deposits rebounded by 2% m/m in March, across both DBU (+1.5%) and ACU (+3% in US$ terms), following a contraction of 0.9% m/m in February. System loans rose 1.4% m/m, again led by ACU +2.6% m/m in USD terms, while DBU loans rose 0.6% m/m. In March, loan growth was driven by general commerce loans (+4.3% m/m) and non-housing retail loans (+4.3% m/m), despite the introduction of the Total Debt Servicing Ratio by the MAS last year. Non-housing retail loans are mainly secured loans for the local banks, according to our channel checks. Housing loan growth continues to slow (+0.4% m/m).

The system loan-to-deposit ratio moderated slightly to 107.8% from the record high in February as deposits outpaced loan growth. DBS (OW) is our top pick among the Singapore banks given its strong deposit franchise and positive leverage to rising rates, followed by UOB (OW) which has strong fee income generation capability and a solid risk management track record. We rate OCBC as UW as we believe OCBC will have to raise capital to fund the acquisition of Wing Hang Bank, which remains the major overhang.