What’s keeping DBS’ loan growth up?

It was hoisted by an unexpected factor.

With loan growth stagnating for Singapore’s banks as the bleak economic concern rears its ugly head, any boost banks can get could be uplifting.

According to UOB Kay Hian, even though loan growth in Singapore could be quite restricted to housing loans, it got a slight boost from currency appreciation.

“Nevertheless, there is a slight boost from the strength in the US dollar and HK dollar, which appreciated 5.3% against the Singapore dollar in 3Q15,” UOB Kay Hian said.

“The US$- and HK$ loans accounted for 31.7% and 12.2% of total loans respectively,” they added.

Meanwhile, UOB Kay Hian says DBS’ fee income is also set to moderate.

“Financial markets were volatile and fees from market-related sources, such as wealth management and investment banking, were likely to be affected. Investors could have held back from taking up fresh positions, which affected contributions from wealth management,” UOB Kay Hian said.