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Each year ASIAMONEY reveals which domestic banks, equity brokerages and debt houses stand out for excellent performance. In Singapore DBS strides ahead of its two rivals with an ambitious regional plan, while locally it retains its strength in both equities and bonds.
BEST DOMESTIC BANK
DBS
Judging the award for best domestic bank in Singapore is always difficult. The capitalisation and liquidity positions of all three lenders are the strongest in the region, but interest margins have been on a constant and persistent declining trend due to low interest rates that have persisted since 2009.
This has hurt the domestic operations of the Singaporean banks, which comprise around 60% of their overall loan books. In lieu of interest income, the three lenders have turned to market-related trading gains and overseas expansion to boost profitability. These plans concern some analysts.
"The growth potential a system such as Indonesia is very high so from a pure bottom line profitability standpoint that makes sense, but then you have to take on extra risk to earn the higher returns," says Ivan Tan, credit analyst at Standard & Poor's.
The key decision is whether to reward prudence and...