After battling stresses from a floundering oil and gas sector over the past year, banks in one of the world's financial capitals are seeing a bright spot emerge: a booming property market.
The increase in home buying activity in Singapore has boosted demand for loans, recent data indicated. And the banks' upcoming second-quarter financial reports will show whether housing loans can actually lift earnings for the rest of 2017, analysts said.
Mortgages make up 15 to 20 percent of total loans at the country's three major banks — DBS Group Holdings, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB) — according to estimates from Phillip Securities Research analyst Jeremy Teong.
"Given the significant weight of [the housing loans] segment, the Singapore banks will benefit from a stronger Singapore mortgage system loans growth," Teong told CNBC, adding that he expected local banks to gain market share against international and non-bank competitors.
Mortgage loan applications were already up by 20 percent in the first quarter of the year from the previous three months, data from Credit Bureau Singapore showed.
The increase came as private housing transactions in the city state grew to a near four-year high in 2017's first quarter even though authorities have kept cooling measures intact, official data showed.
Should the housing market continue to be so hot, the banks are likely to grow their loan portfolios, especially considering the lack of other appealing short-term opportunities, analysts said.