[CC may contain inaccuracies] In terms of the growth momentum is that sustainable going forward or will that be impacted by a slowing China. Given their
exposure to the Chinese market. Thanks
for having me on the show. Absolutely. I think there are some risks to growth but on the flip side we are seeing very
sustained creed being trade loans so holding up quite well. Singapore property
market is doing well. We have both mortgages holding up. Developers are building Land Bank and even the logistics sector
is. Looking quite good. This significant credit demand. So what we
are seeing. Yes there are risks. There are risks across the board especially with slowing China.
But on the flip side there are very significant alternatives. I mean we're also seeing a lot of banks telling us that the deep
DAX is starting to move up now in bits and bobs but it looks like it's heading in the right direction in large
part of South and Southeast Asia. So while we acknowledge the risks. My sense is the guidance that we got from the banks seems
to suggest mid to high single digit loan growth which I think will maybe end up in that range remains to be seen. But it looks
like we are heading in the right direction. Yes. Which is the largest lender in Southeast Asia has been making acquisitions to
help its growth. Do you see as building on its acquisition plan after acquiring cities assets.
If I kind of dig a step back and think about acquisitions it's a function of three things. For any bank capital and the extent of
liquidity on the balance sheet and opportunities over the last two years what we saw was very significant rejig of multiple
business groups. A lot of banks did rethink their strategy and they were not great at any particular geography. They chose to
make it. And that is where I think it opened up a portion of these for all the three Singapore banks. And we saw a couple of
acquisitions across a devious you'll be over last few months. I suspect that over the next two to three years the pace of
acquisitions across all the three banks may be slower than what we had in last couple of years primarily because we do not have
very large scale exists anymore. That's one second though. The organic growth is starting to come up for all the banks and they
are starting to return capital. Regulators are more open to the idea of returning capital. Hence I think the focus is going to
be more on how much earnings accretion can we get from the deals rather than necessarily adding to the deals. We may see more
capital being allocated to the markets where the banks have bought franchises but not necessarily on anything meaningful. At
least that's my sense for now. But we'll wait and watch. Harsh. What is the key metric you're gonna be looking at in
earnings from these banks and how will that inform you as to which one is the best positioned.
Thanks Rich. The single largest driver for the Singapore banks. The next 3 6 12 24 36 months is going to be net interest margin.
They have very low cost of funds. A large part of deposit base is what we called castle current
and savings account because they are essentially transaction accounts very low rate sensitivity and ISE rates move up while
the asset the yields will go up. Loan yields will go up but cost of funds will lag very meaningfully. And to the extent the banks
can manage the asset yields while still sustaining the market share and credit the risk while limiting the increase in deposit
rates. That's what going to show up in NIMs. And that I think is the single largest driver. And in fact what we have seen across
Singapore banks of the lost. Almost 24 months now beyond the last 18 months actually. Is that
expectation that rates have started bottoming out. Asset quality is good. And so now it's very firmly in favor of margins. And we
are very well positioned here. Harsh. I'm getting to know the ones which are best positioned
just on top of that. Just looking at something you said security you mentioned organic growth earlier. Let's take the example of
CBS. You made an acquisition of a few cities retail operations. Do you think they need to make more acquisitions in that
particular realm in order to get themselves more critical mass and also of course directly then help their names or their
interest rate on their net interest margins very quickly. Kevin Cirilli I think that's the inherent franchise in Singapore
for the three bands that actually underpins that strength on them. So it's less to do with acquisitions and more to do with
how well they can manage the full franchise. And that's the reason why I think the focus is going to be managing the
franchise rather than acting more at this point in time.