Why Singapore banks are more defensive than Hong Kong banks

Thanks to greater pricing discipline.

According to Barclays, based on their analysis of the banks’ loan books, they find, overall, Singapore banks’ nonhousing personal loan exposure is more defensive than the Hong Kong banks’.

Singapore banks are largely secured and have greater pricing discipline. Singapore’s growth in non-housing personal loans historically has mostly been on a secured basis (backed by deposits or investments) as unsecured personal lending rates have been high (11%+).

Here's more from Barclays:

Moreover, the MAS restricts the loan size on unsecured personal lending to 4 times monthly salary (and even lower for low-income earners). In contrast, Hong Kong’s non-housing personal loans are mostly unsecured as lending rates can be as low as 2-3%, and loan size can be up to 18x monthly income.

Singapore households – high savings rate and access to pension funds Singapore has a high savings rate of 24% (vs Hong Kong’s 14%), Singaporeans can access pension funds (through the mandatory CPF scheme) to repay mortgage debt (Hong Kong’s equivalent, the MPF, cannot be used for housing debt) and Singapore households have a high proportion of liquid household assets (19% in cash and deposits).

Moreover, despite Singapore’s higher consumer debt/GDP relative to Hong Kong, Singapore’s household debt to GDP is not high by historical standards, while Hong Kong’s is at a record high.