UOB, OCBC predicted to compete aggressively for SGD deposits

SGD liquidity concerns crucial to NIM expectations.

According to Credit Suisse, UOB and OCBC might have to compete more aggressively for SGD deposits.

Here's more:

Given the lowering growth expectations for Singapore banks' regional operations, the trajectory of Singapore geographical NIMs might become more critical to determine the NIM trajectory over the next few quarters.

The NIM pressure witnessed in Singapore (driven by mortgage repricing, trade finance and tighter corporate loan pricing) has been partly cushioned by the increasing Singapore dollar LDRs.

But with Singapore dollar LDRs (especially UOB and OCBC) already at above optimal levels, we are unlikely to see further support from stretching LDRs. This might mean UOB and OCBC might have to compete more aggressively for SGD deposits.