SINGAPORE – Some Asian countries have recovered from the economic pain of the coronavirus pandemic and this bodes well for the outlook for 2021, according to Piyush Gupta, CEO of DBS.
He told CNBC’s Tanvir Gill that there has been “quite clearly” an economic rebound in most of the bank’s markets, and that gives him some confidence.
“I’m a little more optimistic about asset quality and the credit environment than I was a few months ago,” he said Wednesday.
Gupta said the recovery can be seen through a rise in demand for loans, consumer spending and commodity prices.
“In fact, oil has recovered quite well, so some more vulnerable sectors are showing better signs of strength,” he said.
Piyush Gupta, CEO of DBS Group Holdings.
Paul Miller | Bloomberg | Getty Images
Singapore’s leading lender also sees borrowers start repaying their loans instead of continuing with extended moratorium systems. Many banks allowed customers to defer debt repayments or just pay the interest on their loans last year as part of Covid’s relief packages.
Only a “very small percentage” of individuals and businesses move into the new programs and those who have come out of the moratoriums have been able to meet their debt, Gupta said.
“This provides me with a certain degree of comfort, that in the SME space, in the individual space, things are not so bad,” he said.
He also noted that the sharp rise in delinquencies from credit to unsecured consumer credit fell “very markedly” at the end of the year.
Earlier Wednesday, DBS reported that its fourth-quarter net profit fell 33 percent, in line with analysts’ estimates, amid the coronavirus pandemic.
Like many banks around the world, DBS set aside billions to cushion the economic blow of the pandemic. In the fourth quarter, the bank said it spent $ 577 million more on Singapore (about $ 435 million) for potential losses. This brings the total DBS endowments for 2020 to $ 3.07 million Singapore (about $ 2.322 billion).
Shares of DBS rose slightly on Wednesday, gaining about 0.27%.