The risk in which banks face within the oil as well as gas sector can be currently “contained,” nevertheless the outlook for the segment remains far through certain, according to the CEO of Singapore’s oldest bank.
OCBC’s Samuel Tsien said in which rising oil as well as gas prices indicate a more optimistic picture for the market, nevertheless banks would likely likely remain cautious for the foreseeable future.
“The recovery can be not yet very certain,” Tsien told CNBC on Wednesday. “I would likely describe the risks in which the banks have from the oil as well as gas sector as at This particular point contained.”
The industry crossed a significant milestone late last year when oil traded above $60 per barrel for the 1st time since mid-2015.
However, Tsien said OCBC had yet to see the increased outlook translate into sufficient real activity from the industry, which influences a bank’s willingness to lend.
“The recovery can be not yet very certain,” he continued, “which explains why, across the board, I think most of the banks have taken more provisions against their portfolio.”
“We know in which This particular can be probably in which, nevertheless, on the some other hand, we’re not certain when the recovery can be going to come,” Tsien said.
OCBC announced in its full-year earnings report released Wednesday: “Given the prolonged uncertainty as well as the lack of firm visibility from the OSV (offshore support vessel) sector, the Group took a prudent stance to further downgrade its OSV exposures as well as made appropriate allowances.”
Despite in which, the bank reported a net profit after tax of 4.15 billion Singapore dollars (about $3.17 billion) for the full calendar year 2017.