Asian expectations

Asian expectations

 

By CHOW PENN NEE

 

AS bellwethers of the local economy, banks are usually the first to indicate if a country is headed for a downturn or an upswing. What we are witnessing now in Singapore – plunging income from trading and investments, a soon-tocome slowdown in loans growth – is a result of the US-led slowdown, brought about by the sub-prime crisis. Burgeoning expenses have also arisen from inflation and the relentless surge in oil price.

 

How protracted the slump in the US will be, is anybody’s guess, but some corporate chieftains are not hopeful, estimating the downturn to last anywhere from two years or more. What has the world learnt from this predicament? What are the mistakes that should never be repeated?

 

How much importance should an institution place on compliance, henceforth? Banking heads and consultants share their perspectives in this BT supplement.

 

The good news is that Asia and Singapore are still relatively shielded from the pain in the US. Bolstered by domestic and intra-regional demand, and the voracious appetites of China and India, Singapore can still count on these engines to drive growth. Multinational banks with a presence in Singapore say Asia still offers plenty of opportunities. New millionaires are being minted at a rapid pace, many million more are being lifted out of poverty and joining the ranks of the middle class.

 

Domestically, the much-talked about integrated resorts and Formula One race will continue to transform Singapore’s economy and fuel demand for myriad banking services. Private equity funds remain bullish on Asia and many have set up shop here to capitalise on the fund inflows. This period of volatility is just one of the many cycles the banking sector has weathered, bankers say. How well banks navigate through this period of uncertainty remains to be seen. There are bright spots amid the gloom and the crisis will provide lessons that will stand the banks in better stead.

 

Source: Business Times

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