Stronger global oil prices have yet to benefit the offshore marine sector, whose continued troubles are expected to dominate the narrative this week when Singapore's three largest banks release their earnings reports.
Analysts told CNBC that the continued struggles among oil and gas debtors could lead to the banks — among the largest in Southeast Asia — setting aside more money for potential losses, which threatens their bottom lines.
All three Singapore banks are due to report their fourth quarter earnings this week, starting with Oversea-Chinese Banking Corporation (OCBC) on Tuesday, followed by DBS Group Holdings on Thursday and United Overseas Bank (UOB) a day later.
"We expect the three banks' profitability in the fourth quarter to see negative pressure due to their exposure to the oil and gas sector. We see that the banks are not out of the woods yet with that exposure, which have led to the banks having higher NPL (non-performing loan) ratios," said Eugene Tarzimanov, senior credit officer at Moody's Investors Service.
"The deterioration in the oil and gas books means that the banks will require more specific provisions, but the impact on their profit and loss statement will not be severe as they will continue to utilize existing general provisions. This might bring down their NPL coverage level to slightly below 100 per cent — a still healthy level," he added.
Over the past year, the banks set aside hundreds of millions in extra Singapore dollars after offshore services firm Swiber Holdings unexpectedly filed for bankruptcy.
In the latest sign of a still-weak oil and gas industry, Ezra Holdings flagged earlier this month that it could possibly write down $170 million due to problems with one of its joint ventures, EMAS Chiyoda Subsea.