Agency Moody's Investors Service announced that it downgraded the forecast for Singapore's banking sector from stable to negative on the background of the growing risks to corporate profits in the energy sector and high levels of corporate debt.
Conditions for creditors worsen because of slowing economic growth and trade in Singapore, as well as more broadly in Asia - said in a statement, Moody's. Rating the company expects growth in Singapore to fall to 1.6% in 2016 and to 1.5% in 2017, below the average of 4.5% achieved in the period between 2011 and 2014. The slowdown of domestic productive sector and weaker economic activity of key trading partners, including Greater China and Malaysia, will present significant challenges for Singapore - said the rating agency in a statement. On the other hand, Moody's Investors Service reported that Singapore banks have solid capital adequacy, high bank reserves and government support. Moody's reported a negative outlook on five separate banks in Singapore, including DBS Bank Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd.