Piyush Gupta sees strength in most DBS markets

SINGAPORE – Some Asian countries have rebounded from the economic pain of the coronavirus pandemic and that bodes well for the 2021 outlook, according to Piyush Gupta, CEO of DBS.

He told CNBC’s Tanvir Gill that there had “clearly” been an economic rebound in most of the bank’s markets, giving him some confidence.

“I am a little more optimistic about the quality of assets and the credit environment than a few months ago,” he said Wednesday.

Gupta said the recovery can be seen through a pickup in demand for loans, consumer spending and commodity prices.

“Oil has actually recovered quite well, so some sectors that were more vulnerable are showing better signs of strength,” he said.

Singapore’s largest lender is also seeing borrowers start repaying their loans instead of continuing to extend moratorium programs. Many banks allowed customers to defer debt repayments or only pay interest on their loans last year as part of Covid relief plans.

Only a “very small percentage” of individuals and businesses are switching to the new programs, and those who came out of the moratoria have been able to repay their debt, Gupta said.

“It gives me a certain comfort, that in the SME space, in the individual space, things are not so bad,” he said.

He also noted that the sharp increase in bad debts on unsecured consumer loans had declined “quite sharply” by year-end.

Earlier Wednesday, DBS reported that its fourth-quarter net profit had fallen 33%, according to analyst estimates, amid the coronavirus pandemic.

Like many banks around the world, DBS has set aside billions to cushion the economic blow of the pandemic. In the fourth quarter, the bank said it had set aside an additional 577 million Singapore dollars (approximately $ 435 million) for potential losses. This brings the total DBS allocations for 2020 to S $ 3.07 billion (approximately $ 2.32 billion).

DBS shares edged higher on Wednesday, gaining about 0.27%.