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SINGAPORE: Ratings agency Fitch has given Singapore banks the thumbs-up in the face of the current financial crisis. It said Singapore banks are strong enough to maintain their high credit ratings.
Fitch said the local lenders do not have a liquidity issue because they have a strong diversified funding base and retail deposits form a large part of their funding sources.
The agency also noted the strong regulatory environment in Singapore, which requires banks to maintain a minimum level of liquidity.
But according to Fitch, asset quality – which has held up well so far – may start deteriorating in the coming quarters.
It said local lenders may have to be more cautious with their regional expansion, given the challenging environment.
- CNA/so
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