International ratings agency Moody's has revised its outlook downward for the banking sector of Singapore for the first time since the financial crisis.
The move has come after rapid loan growth in the country and rising property prices in south-east Asia and is a stark warning for the industry.
Domestic demand is now much more prominent in the region, which has previously relied on exports. This has been driven further by years of low interest rates.
Moody’s lowered its outlook for Singapore’s banking sector from stable to negative. Its rating had not changed since 2010.
Some of the city-state’s biggest institutions are included in the drop, including DBS, United Overseas Bank, Oversea-Chinese Banking Corporation and the Bank of Singapore.
Moody’s told the Financial Times: "We recognise that Singapore banks have strong financial metrics that explain why we continue to assign them the highest average ratings."
Earlier this month the ratings agency upgraded the UK banking sector from negative to stable.
By Claire Archer