MOODY’S Investors Service said on Wednesday that it had a negative outlook for banks in Singapore, on the back of rapid loan growth and the surge in home prices.
Moody’s said credit quality in Asia had “generally peaked”. It put out a negative outlook for banks in India and Vietnam as well.
But the credit agency said it expected credit quality of financial institutions and corporations in both South and South-east Asia to be stable this year.
At a press briefing on Wednesday, Moody’s analysts noted that banks in Singapore are well capitalised and should be able to withstand a deterioration of credit quality. The fear comes as interest rates are set to rise with the anticipated end of quantitative easing (QE3) in the US.