OWNERSHIP PATTERN OF COMMERCIAL BANKS IN SINGAPORE : ISSUES AND IMPLICATIONS

Abstract

This academic exercise studies the performance of the Singapore commercial banking sector between 1983 and 1987. The banks are grouped according to their nationality and the type of licence they hold. Four on-balance-sheet variables : total assets, loans and advances, deposits and net profits, are analysed to reveal how the international trends towards computerisation, globalisation, deregulation and securitisation of debt have affected the rate and direction of growth and profitability of the commercial banks. The study was made more interesting by the fact that 1985 was a recession year for Singapore. This study have revealed some interesting observations. Technological improvements have allowed the big banks to increase their market share over the years. Securitisation has resulted in the decline of loans to assets ratios of most banks but the Japanese banks have actually increased their share in the loans market. It was also found that the full banking sector has the greatest profitability while the offshore sector has the greatest potential for growth. The comparison of the performance of the banks of the various nationality groups revealed the overwhelming dominance of the Big Four in the retail banking sector while the European and Japanese banks dominate the restricted and offshore sectors respectively. The study ends with a discussion on the implications of these findings on the future growth of Singapore's financial sector, followed by some suggestions for further research.