Singapore banks to suffer from mortgage pressure for up to 1.5 years

Continued downward re-pricing looms.

According to Phillip Securities, continued downward re-pricing, from re-pricing of mortgage loans taken 3 years ago (mainly OCBC), and from the drawdown of previously committed loans (mainly UOB), is expected to continue for 1 to 1.5 more years.

DBS attribute lower mortgage pricing pressure due to the success of the recently launched HDB Loans promotion, which leverages on their higher quantum of CASA deposits.

"While Singapore Mortgage loans continue to reduce interest margins, higher loans growth from their regional offices, which are higher yielding, is expected to stabilize NIMs moving forward."