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Business Times
2 days ago
- Business
- Business Times
DBS, OCBC, UOB Q2 results likely to be weighed down by lower interest rates
[SINGAPORE] The trio of local banks will likely post weaker results for the second quarter of 2025, weighed down by lower net interest income from falling interest rates, analysts said. They are expected to post their Q2 financials next month, beginning with OCBC on Aug 1 and followed by DBS and UOB on Aug 7. Net interest margins (NIMs) will probably be 'materially lower' in Q2, said Thilan Wickramasinghe, head of research and regional financials at Maybank Securities Singapore. He noted that the Singapore Overnight Rate Average (Sora) was down 50 basis points – due to 'massive' domestic liquidity, partly because of safe haven inflows – while the Hong Kong Interbank Offered Rate (Hibor) was at its lowest since 2022. The Sora decline provided only partial relief in funding costs, as banks 'weigh off preserving market share', he said. DBS Group Research analyst Lim Rui Wen also expects NIMs to fall quarter on quarter by a high single digit, due to the lower Sora and Hibor. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The rates' impact will likely be more pronounced as more loans get repriced against reduced benchmark rates throughout Q2, she added. However, she noted that OCBC's and UOB's repricing of their fixed-deposit and flagship deposit account interest rates should buffer falling asset yields in subsequent quarters. Wickramasinghe also pointed out that loan growth was better than expected in Q2, probably due to front-loading demand ahead of the expiry of US President Donald Trump's tariff moratorium. While this may partially offset downsides in net interest income, it is unlikely to arrest sequential decline, the researcher said. Trump impact Analysts also said that Trump's 'Liberation Day' tariffs in April likely weighed on market sentiment, impacting wealth management fees in turn. Tay Wee Kuang, an analyst at CGS International, said that macroeconomic uncertainty could continue to dampen fee income in the second half of the year, despite equity market sentiment having slowly recovered. Nevertheless, Lim of DBS expects wealth management income to remain a tailwind for Singapore banks in the medium term, as wealth management activity began recovering in May. This is also supported by ongoing growth in assets under management (AUM), she said. 'The investible portion of AUM is expected, as clients reallocated funds from fixed-deposit rates and (treasury-bill) rates, which continue to see declining rates through Q2.' Wickramasinghe likewise expects sequential improvements in wealth management fees, given falling domestic benchmark rates and risk-on market conditions. He added that significant volatility around foreign exchange, trade and interest rates would likely have supported trading income in Q2, which could surprise on the upside, especially for DBS and UOB. Higher credit costs Meanwhile, the three banks' credit costs could trend towards the higher end of their respective 2025 guidance, due to weakness across Asean economies such as Thailand and Indonesia , said Tay. 'However, we do not expect total credit costs to change drastically quarter on quarter, as we believe the pre-emptive general provisions recognised by the Singapore banks in Q1 should remain sufficient amid the current credit cycle,' he added. Ongoing reviews of second-order impacts from the US tariffs may also lead the banks to maintain or increase their general provision buffers, said Lim. Therefore, general provisions write-backs are unlikely this year, she noted. CGS International and Maybank Securities kept their 'neutral' call on the Singapore banking sector, with Tay noting that the lenders lack growth catalysts in an uncertain economic outlook. The analysts expect UOB to restore its guidance for 2025, which it had suspended in Q1. They are also awaiting more clarity from OCBC on its strategy, following its failed bid to privatise its insurance arm, Great Eastern . Clarity around returns may also take longer to resolve due to the lender's 'unexpected leadership change ', Wickramasinghe said. But Lim, who has 'hold' calls on OCBC and UOB, expects the banks' dividend yields of up to 6.5 per cent to continue supporting share prices. 'As asset quality remains largely benign, and dividend yields stay attractive, comparable to Singapore real estate investment trusts, we expect share prices to remain well-supported in a low interest-rate environment and due to the safe haven appeal of the Singapore dollar,' she said.
Glasgow Times
23-07-2025
- Business
- Glasgow Times
Judicial system needs ‘shake-up' after trader convictions, says Sir David Davis
Tom Hayes and Carlo Palombo were found guilty over benchmark interest rate rigging in 2015 and 2019 respectively, but had their convictions quashed at the Supreme Court on Wednesday. The former UBS trader and the ex-vice president of euro rates at Barclays bank were said to have manipulated the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). Speaking at a press conference following the Supreme Court judgment, Sir David described the two men as 'scapegoats for the sins that led to the financial crisis'. Former traders Carlo Palombo and Tom Hayes had their convictions quashed by five Supreme Court justices (Jordan Pettitt/PA) He said: 'The implications are far-reaching and of course have been devastating for those caught up in it. 'There were several other people convicted of rate rigging, dozens of others who were either prosecuted, acquitted or not prosecuted. Their lives were upended too. 'This scapegoating exercise happened as a result of collusion between the banks and government agencies, including the SFO (Serious Fraud Office) and FCA (Financial Conduct Authority) and we're not done with that. 'This scandal also highlights the need for urgent reform within our justice system on a range of issues – the handling of expert witnesses right through to the rigidity of the appeals system.' In an 82-page judgment, with which Supreme Court president Lord Reed, Lords Hodge and Lloyd-Jones and Lady Simler agreed, Lord Leggatt said judges' misdirection to the juries had led to the men's wrongful convictions. He said: 'The history of these two cases raises concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error.' Sir David said the Supreme Court justices 'did not unpack' why the appeal system fell into error in these cases. He said: 'I think the judicial system needs a shake-up, and this is the latest demonstrator of it, and we will be returning to it in the future.' Mr Hayes said he believes the trials of the two men became caught up in the politics of the financial crisis, adding that there was a 'big desire from institutions and politicians, acting in their own interest largely', for traders to go to prison. Asked about his thoughts on what role juries play in cases like his and Mr Palombo's, he said it was a 'dangerous idea' for complicated fraud and financial cases to be heard only by a judge. The former trader added: 'The jury is the last defensive barrier that every citizen in this country has between them and a wrongful conviction. 'And are juries perfect? No, they're not. Do they make mistakes? Yes, they do. And you know, it's the best of a whole load of options, none of which is perfect.' Ben Rose, part of Mr Palombo's legal team, said Wednesday's Supreme Court judgment is 'likely to offer a route' by which others who have been convicted in similar circumstances 'can right the wrong that has been done to them'. He also said there was a 'fundamental error' in the way the case was prosecuted and that the role of the jury was 'overridden and usurped' by the judges. The lawyer added: 'That should not happen in a country that abides by the rule of law.'
South Wales Guardian
23-07-2025
- Business
- South Wales Guardian
Judicial system needs ‘shake-up' after trader convictions, says Sir David Davis
Tom Hayes and Carlo Palombo were found guilty over benchmark interest rate rigging in 2015 and 2019 respectively, but had their convictions quashed at the Supreme Court on Wednesday. The former UBS trader and the ex-vice president of euro rates at Barclays bank were said to have manipulated the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). Speaking at a press conference following the Supreme Court judgment, Sir David described the two men as 'scapegoats for the sins that led to the financial crisis'. He said: 'The implications are far-reaching and of course have been devastating for those caught up in it. 'There were several other people convicted of rate rigging, dozens of others who were either prosecuted, acquitted or not prosecuted. Their lives were upended too. 'This scapegoating exercise happened as a result of collusion between the banks and government agencies, including the SFO (Serious Fraud Office) and FCA (Financial Conduct Authority) and we're not done with that. 'This scandal also highlights the need for urgent reform within our justice system on a range of issues – the handling of expert witnesses right through to the rigidity of the appeals system.' In an 82-page judgment, with which Supreme Court president Lord Reed, Lords Hodge and Lloyd-Jones and Lady Simler agreed, Lord Leggatt said judges' misdirection to the juries had led to the men's wrongful convictions. He said: 'The history of these two cases raises concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error.' Sir David said the Supreme Court justices 'did not unpack' why the appeal system fell into error in these cases. He said: 'I think the judicial system needs a shake-up, and this is the latest demonstrator of it, and we will be returning to it in the future.' Mr Hayes said he believes the trials of the two men became caught up in the politics of the financial crisis, adding that there was a 'big desire from institutions and politicians, acting in their own interest largely', for traders to go to prison. Asked about his thoughts on what role juries play in cases like his and Mr Palombo's, he said it was a 'dangerous idea' for complicated fraud and financial cases to be heard only by a judge. The former trader added: 'The jury is the last defensive barrier that every citizen in this country has between them and a wrongful conviction. 'And are juries perfect? No, they're not. Do they make mistakes? Yes, they do. And you know, it's the best of a whole load of options, none of which is perfect.' Ben Rose, part of Mr Palombo's legal team, said Wednesday's Supreme Court judgment is 'likely to offer a route' by which others who have been convicted in similar circumstances 'can right the wrong that has been done to them'. He also said there was a 'fundamental error' in the way the case was prosecuted and that the role of the jury was 'overridden and usurped' by the judges. The lawyer added: 'That should not happen in a country that abides by the rule of law.'
North Wales Chronicle
23-07-2025
- Business
- North Wales Chronicle
Judicial system needs ‘shake-up' after trader convictions, says Sir David Davis
Tom Hayes and Carlo Palombo were found guilty over benchmark interest rate rigging in 2015 and 2019 respectively, but had their convictions quashed at the Supreme Court on Wednesday. The former UBS trader and the ex-vice president of euro rates at Barclays bank were said to have manipulated the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). Speaking at a press conference following the Supreme Court judgment, Sir David described the two men as 'scapegoats for the sins that led to the financial crisis'. He said: 'The implications are far-reaching and of course have been devastating for those caught up in it. 'There were several other people convicted of rate rigging, dozens of others who were either prosecuted, acquitted or not prosecuted. Their lives were upended too. 'This scapegoating exercise happened as a result of collusion between the banks and government agencies, including the SFO (Serious Fraud Office) and FCA (Financial Conduct Authority) and we're not done with that. 'This scandal also highlights the need for urgent reform within our justice system on a range of issues – the handling of expert witnesses right through to the rigidity of the appeals system.' In an 82-page judgment, with which Supreme Court president Lord Reed, Lords Hodge and Lloyd-Jones and Lady Simler agreed, Lord Leggatt said judges' misdirection to the juries had led to the men's wrongful convictions. He said: 'The history of these two cases raises concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error.' Sir David said the Supreme Court justices 'did not unpack' why the appeal system fell into error in these cases. He said: 'I think the judicial system needs a shake-up, and this is the latest demonstrator of it, and we will be returning to it in the future.' Mr Hayes said he believes the trials of the two men became caught up in the politics of the financial crisis, adding that there was a 'big desire from institutions and politicians, acting in their own interest largely', for traders to go to prison. Asked about his thoughts on what role juries play in cases like his and Mr Palombo's, he said it was a 'dangerous idea' for complicated fraud and financial cases to be heard only by a judge. The former trader added: 'The jury is the last defensive barrier that every citizen in this country has between them and a wrongful conviction. 'And are juries perfect? No, they're not. Do they make mistakes? Yes, they do. And you know, it's the best of a whole load of options, none of which is perfect.' Ben Rose, part of Mr Palombo's legal team, said Wednesday's Supreme Court judgment is 'likely to offer a route' by which others who have been convicted in similar circumstances 'can right the wrong that has been done to them'. He also said there was a 'fundamental error' in the way the case was prosecuted and that the role of the jury was 'overridden and usurped' by the judges. The lawyer added: 'That should not happen in a country that abides by the rule of law.'
Leader Live
23-07-2025
- Business
- Leader Live
Judicial system needs ‘shake-up' after trader convictions, says Sir David Davis
Tom Hayes and Carlo Palombo were found guilty over benchmark interest rate rigging in 2015 and 2019 respectively, but had their convictions quashed at the Supreme Court on Wednesday. The former UBS trader and the ex-vice president of euro rates at Barclays bank were said to have manipulated the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). Speaking at a press conference following the Supreme Court judgment, Sir David described the two men as 'scapegoats for the sins that led to the financial crisis'. He said: 'The implications are far-reaching and of course have been devastating for those caught up in it. 'There were several other people convicted of rate rigging, dozens of others who were either prosecuted, acquitted or not prosecuted. Their lives were upended too. 'This scapegoating exercise happened as a result of collusion between the banks and government agencies, including the SFO (Serious Fraud Office) and FCA (Financial Conduct Authority) and we're not done with that. 'This scandal also highlights the need for urgent reform within our justice system on a range of issues – the handling of expert witnesses right through to the rigidity of the appeals system.' In an 82-page judgment, with which Supreme Court president Lord Reed, Lords Hodge and Lloyd-Jones and Lady Simler agreed, Lord Leggatt said judges' misdirection to the juries had led to the men's wrongful convictions. He said: 'The history of these two cases raises concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error.' Sir David said the Supreme Court justices 'did not unpack' why the appeal system fell into error in these cases. He said: 'I think the judicial system needs a shake-up, and this is the latest demonstrator of it, and we will be returning to it in the future.' Mr Hayes said he believes the trials of the two men became caught up in the politics of the financial crisis, adding that there was a 'big desire from institutions and politicians, acting in their own interest largely', for traders to go to prison. Asked about his thoughts on what role juries play in cases like his and Mr Palombo's, he said it was a 'dangerous idea' for complicated fraud and financial cases to be heard only by a judge. The former trader added: 'The jury is the last defensive barrier that every citizen in this country has between them and a wrongful conviction. 'And are juries perfect? No, they're not. Do they make mistakes? Yes, they do. And you know, it's the best of a whole load of options, none of which is perfect.' Ben Rose, part of Mr Palombo's legal team, said Wednesday's Supreme Court judgment is 'likely to offer a route' by which others who have been convicted in similar circumstances 'can right the wrong that has been done to them'. He also said there was a 'fundamental error' in the way the case was prosecuted and that the role of the jury was 'overridden and usurped' by the judges. The lawyer added: 'That should not happen in a country that abides by the rule of law.'
