News: Property-related loans to fall by $1b in 2H 2018: DBS

Aug 3, 2018

Mortgages to home buyers and loans to property developers are expected to decline following the new property cooling measures.

Due to the new property curbs, DBS Group Holdings expects its mortgage business to grow by 6.0 to 7.0 percent for the whole of 2018, down from its initial forecast of eight percent, reported the Business Times.

Specifically, mortgages to home buyers and loans to property developers are projected to decline by around $500 million each for a total of $1 billion in the second half of 2018.

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“We originally anticipated putting on about $4 billion consumer mortgages,” said DBS Group Holdings’ CEO Piyush Gupta during the company’s Q2 earnings briefing on Thursday (2 August).

“With the slowdown and given what happened in the last set of tightening measures, I anticipate we’ll probably give up about half a billion dollars in new-loan booking in the second half of this year, so we’d probably come in at $3.5 billion instead (for loans to home buyers only).”

For the second quarter, the net profit of DBS jumped 20 percent year-on-year to $1.37 billion thanks to an 18 percent growth in net interest income to $2.22 billion and an 11 percent rise in net fee and commission income to $706 million. But these were offset by weak trading income.

In particular, the firm’s housing loans for consumers in Q2 increased by 14.06 percent to about $73.97 billion on an annual basis, while loans for building and construction to property developers climbed by 16.31 percent to $70.42 billion.

DBS is considered the biggest home lender in Singapore with a market share of 31 percent.

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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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