Moody's: Singapore banks still negative

Moody's Investors Service said in a new report that Singaporean banks' outlooks remain unaffected by the 2009's second quarter results, despite them being better than expected.

The report noted that the banks - DBS Bank Ltd., Oversea-Chinese Banking Corp. Ltd. and United Overseas Bank Ltd. - reported higher operating profits than the previous quarter while their balance sheets remain well capitalized and liquid, Moody's said.

However, the banks also reported weakened asset quality and higher credit costs compared to a year ago, the agency said.

Despite the relatively good results, Moody's said it maintains a negative outlook on these three banks because the Singaporean economy, in common with many others in the region, has yet to recover even though there have been signs of improvement.

Until the economies begin to revive, Singaporean banks' asset quality and earnings are likely to remain pressured, Moody's said.

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