Annual Report 2000/2001

Review of the Financial Sector

Following two previous years of weak performance, the financial services sector grew by a stronger 4.1% in 2000. The rebound was driven by stronger growth across the board: in banking, insurance and investment advisory activities. Growth in the insurance industry was spurred particularly by strong demand for investment-linked insurance products. (See Table 2.) The only sub-sector that declined was the stock, futures and commodity brokers sub-sector which was weighed down by weak market sentiments.

Table 2 - Financial Services Real Value-added, Year 2000

In the first quarter of 2001, the financial services sector grew by 3.0%. Total assets in the Asian Dollar Market (ADM) and the Domestic Banking Units (DBU) of banks were US$484.7 billion and $363.7 billion respective. New business in the life insurance industry grew by more than 300% while total gross premiums from general insurance rose by 25.4%. In the equity and derivatives markets, first quarter average daily turnover on SGX-ST dropped from 514.5 million units in 2000 to 350.3 million units in 2001, while first quarter average daily turnover on SGX-DT increased from 110,320 contracts in 2000 to 125,228 contracts in 2001. Foreign exchange trading activity recovered to an average of US$107.1 billion per day in the first quarter of 2001.

Reflecting an overall trend towards consolidation in the financial sector, the number of financial institutions, decreased across the board during the financial year, except for Restricted Banks, stockbroking companies and investment advisers. (See Table 3.) The number of commercial banks decreased from 140 to 133 in the previous year as six new banks were admitted and 13 ceased operations during the year, mainly on account of international mergers and alliances. Likewise, the total number of insurance companies reduced from 153 to 151 as at 31 March 2001.

Table 3 - Number of Financial Institutions in Singapore

The number of Restricted Banks increased from 16 to 20.The number of stockbroking companies increased to 35 SGX-ST member companies and 46 non-SGX-ST member companies. There was also an increase in the number of investment advisers by 14 to 168.


[The Financial Sector: Growth and Performance] [Review of the Financial Sector] [Banking] [Insurance] [Equity and Derivatives Markets] [Debt Market] [Foreign Exchange Market]

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