Singapore banks lift the Straits Times Index through resistance on margin surprise
Net interest margins came in ahead at all three local lenders. The index cleared a level it had failed at twice.
The Straits Times Index closed up 1.1 percent at 3,428, clearing a level that had turned it back twice in the past two months. The three local banks contributed most of the gain.
All three reported net interest margins ahead of consensus. The market had been positioned for compression as deposit costs caught up with loan repricing, and the compression was smaller than expected.
Why the margin surprised
Deposit competition eased. The aggressive fixed deposit pricing that characterised much of last year has faded as banks became more comfortable with their funding positions, and current and savings account balances stopped migrating to term deposits at the previous rate.
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