SINGAPORE – Some Asian countries have hit back at the economic pain of the coronavirus pandemic, which according to DBS CEO Piyush Gupta predicts the 2021 outlook.
He told CNBC’s Tanvir Gill that there was ‘quite clearly’ an economic downturn in most of the bank’s markets, and this gave him confidence.
“I’m a little more optimistic about the quality of assets and the credit environment than I was a few months ago,” he said on Wednesday.
Gupta said the recovery could be observed through an increase in demand for loans, consumer spending and commodity prices.
“In fact, oil has recovered fairly well, and some vulnerable sectors are showing better signs of strength,” he said.
Piyush Gupta, CEO of DBS Group Holdings.
Paul Miller | Bloomberg | Getty Images
The largest credit provider in Singapore is also seeing borrowers start repaying their loans instead of continuing with extended moratorium schemes. Many banks have allowed customers to defer repayments or last year only pay interest on their loans as part of Covid relief packages.
Only a ‘very small percentage’ of individuals and businesses are switching to the new programs, and those who left the moratoriums could pay their debts, Gupta said.
“It gives me some comfort, that things in SMEs and in the individual space are not so bad,” he said.
He also noted that the sharp increase in loan crimes for unsecured consumer credit had slowed ‘quite noticeably’ by the end of the year.
Earlier Wednesday, DBS reported that its net profit fell 33% in the fourth quarter, according to analysts’ analysis, amid the coronavirus pandemic.
Like many banks worldwide, DBS has set aside billions to quell the economic pandemic. In the fourth quarter, the bank said it had set aside another 577 million Singapore dollars (about $ 435 million) for potential losses. This brings the total grants of DBS for 2020 to 3.07 billion Singapore dollars (about $ 2.32 billion).
Shares of DBS rose slightly on Wednesday to around 0.27%.