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  • Commercial Banking Industry Performance

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    Alexander Hoo Zi Yang
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    The commercial banking industry saw increased performance in emerging markets like China in 2010, with turnover increasing 8% and employment up 2.1%. Mature markets like the US saw smaller gains. Singapore specifically saw strong 14.5% GDP growth, making it the 2nd fastest growing economy, with its three major banks representing 90% of the market and outperforming estimates. Overall, 2010 saw strong earnings growth averaging 30% across banks, though future earnings growth is expected to slow down. Loan growth was seen across all sectors, fueled by housing and business expansion, while non-performing loans continued falling thanks to economic recovery. The outlook for 2011 is positive but new property cooling measures may put earnings under some pressure.

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    The commercial banking industry saw increased performance in emerging markets like China in 2010, with turnover increasing 8% and employment up 2.1%. Mature markets like the US saw smaller gains. Singapore specifically saw strong 14.5% GDP growth, making it the 2nd fastest growing economy, with its three major banks representing 90% of the market and outperforming estimates. Overall, 2010 saw strong earnings growth averaging 30% across banks, though future earnings growth is expected to slow down. Loan growth was seen across all sectors, fueled by housing and business expansion, while non-performing loans continued falling thanks to economic recovery. The outlook for 2011 is positive but new property cooling measures may put earnings under some pressure.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    10 views8 pages

    Commercial Banking Industry Performance

    Uploaded by

    Alexander Hoo Zi Yang
    The commercial banking industry saw increased performance in emerging markets like China in 2010, with turnover increasing 8% and employment up 2.1%. Mature markets like the US saw smaller gains. Singapore specifically saw strong 14.5% GDP growth, making it the 2nd fastest growing economy, with its three major banks representing 90% of the market and outperforming estimates. Overall, 2010 saw strong earnings growth averaging 30% across banks, though future earnings growth is expected to slow down. Loan growth was seen across all sectors, fueled by housing and business expansion, while non-performing loans continued falling thanks to economic recovery. The outlook for 2011 is positive but new property cooling measures may put earnings under some pressure.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 8

    Commercial Banking Industry

    Performance
    Matured economies and emerging economies

    United States China


    Turnover increase 3.4% in 2010
    Turnover increase 8% in 2010
    2.6% Employment increase
    2.1% Employment increase
    Structural problems 1.3 billion population market

    Turnover is due to contract by 1.1% Turnover is due to increase by 6.7%

    • Banks in emerging markets are generally


    expected to perform better
    Singapore Performance

    • 14.5% GDP growth in 2010


    • 2nd fastest growing economy in the World
    • 3 local banks represent 90% of the market
    • DBS and UOB beating analysts’ estimates
    Overview of the Industry
    Earnings growth trends

    • Strong earnings in 2010


    • Earnings grew by average of 30%
    • Earnings growth expected to slow down
    Loan growth trends

    • Growth in loans was seen in all sectors


    • Fueled by the increase in housing loans
    and general commerce loans.
    • Optimistic economic environment
    • Buying new houses
    • Expanding their businesses.
    Non-performing loans

    • Continues to fall
    • Aided by economic recovery
    • OCBC’s NPL all time low
    • Boost banks’ bottom lines
    Outlook for 2011

    • Low SIBOR still in sight


    • Estimated uptick in Q4 2011
    • SIBOR rates positively correlated with
    NIM
    • 10bps increase in NIM could result in
    3-7% earnings
    • New Property cooling measures
    • Earnings likely to be under pressure

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