The CEO of Singapore's largest financial institution sees indicators of energy in most markets
SINGAPORE – Some Asian countries have recovered from the economic troubles of the coronavirus pandemic, which bodes well for the outlook for 2021, according to Piyush Gupta, chief executive officer of DBS.
He told CNBC's Tanvir Gill that most of the bank's markets were "clearly" recovering, which 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 on Wednesday.
Gupta said the rebound could be seen through a pickup in credit demand, consumer spending and commodity prices.
"Oil has rallied quite well indeed, so some sectors that have been more vulnerable are showing better signs of strength," he said.
Piyush Gupta, CEO of DBS Group Holdings.
Paul Miller | Bloomberg | Getty Images
Singapore's largest lender also sees borrowers starting to repay their loans instead of continuing the expanded moratorium regime. Many banks allowed customers to defer repaying debts or only pay interest on their loans as part of Covid aid packages.
Only a "very small percentage" of individuals and companies are switching to the new programs, and those who have left the moratoria have been able to service their debts, Gupta said.
"It gives me a certain level of comfort that it is not that bad in the SME area, in the individual area," he said.
He also noted that the sharp rise in unsecured consumer credit defaults had declined "quite significantly" at the end of the year.
Earlier on Wednesday, DBS reported that fourth-quarter net income fell 33% based on analyst estimates due to the coronavirus pandemic.
Like many banks around the world, DBS has put billions aside to cushion the economic blow from the pandemic. In the fourth quarter, the bank announced it had earmarked an additional $ 577 million (approximately $ 435 million) for potential losses. This brings the total DBS allowance for 2020 to $ 3.07 billion (approximately $ 2.32 billion).
DBS shares rose slightly on Wednesday, up 0.27%.