NON-DOMESTIC NON-PERFORMING LOANS (Status)

Mrs Lim Hwee Hua asked the Deputy Prime Minister what is the status of non-domestic non-performing loans (i) in absolute terms; (ii) as a percentage of non-domestic loans; and (iii) as a percentage of total loans; and whether recent capital control measures in Malaysia and further deterioration in regional economic conditions will raise the level of non-performing loans.

Mr Shriniwas Rai asked the Deputy Prime Minister if he will give an update on the latest position of the exposure of banks in Singapore as a result of the further decline in the property value and economic conditions in neighbouring countries.

Mr Lim Hng Kiang (for the Deputy Prime Minister): Mr Speaker, can I have your permission to take Question Nos. 7 and 8 together?

Mr Speaker: Yes.

Mr Lim Hng Kiang: As at 31st August 1998, the six local banking groups had exposure of S$37.3 billion (or 15% of their total assets) to Malaysia, Indonesia, Thailand, Korea and the Philippines. Excluding the assets of Thai Danu Bank acquired by DBS in March 1998, the total exposure of the six local banking groups was S$31.3 billion. This is a 16% drop from the December 1997 figure. The non-performing loans of the six local banking groups to these five countries amounted to 17% (S$5.9 billion) of their loans to these countries as at 31st August 1998. As a percentage of the local banks' total loans, the ratio was 2.7%.

Including domestic loans and other global loans, the total non-performing loans of the local banks amounted to 6.1% as at 31st August 1998.

In view of the public's and market's interest in the level of non-performing loans of the local banks, MAS will release such data henceforth on a quarterly basis.

The Singapore banks' non-performing loans in the region are likely to rise. The banks have set aside substantial provisions for this reason, and are likely to make further provisions so as to maintain their conservative stance towards possible loan losses and to preserve market confidence. The level of non-performing loans, present or projected, does not threaten the financial health of any of the local banks.

Mr Shriniwas Rai (Nominated Member): Mr Speaker, Sir, may I ask the Minister what he thinks is the percentage of the projected non-performing loans in the next six months or so?

Mr Lim Hng Kiang: I do not have the figure with me. But even if I do, I am not likely to release it.