S'pore banking system hit with negative rating
Play
A rapid rise in loans and soaring property prices in Singapore have led ratings agency Moody's to lower its outlook for the country's banking system to "negative" from "stable".
Years of low interest rates and healthy economic growth have led to an increase in borrowings and asset inflation in Singapore, Moody’s said on Monday.
Given an impending rise in interest rates, these trends could spell trouble for the country’s banks, it added.
Moody’s noted that household debt has risen to 77.2 per cent of gross domestic product as of March this year, from 64.4 per cent at end-2007.
Over the same period, private home prices grew 1.2 times and Housing Board flat prices rose 1.7 times, Moody’s added.
