The city-state's leading businesses are striking an extremely cautious tone about the second half this year as they battle to hold their ground in an increasingly difficult trading environment.
As banks, insurance companies and property players report their interim results, executives are downplaying already low expectations about the economy, which slipped into recession in the first six months of the year.
With demand continuing to falter in many sectors, hiring freezes and project cancellations have become the norm in a drive to pare back what executives term 'unnecessary expenditure'.
The moves come ahead of this Friday's release of more accurate figures for gross domestic product growth in the April-June quarter. The initial estimate, issued last month, showed that GDP contracted 10.1 per cent quarter on quarter and 0.8 per cent year on year.
Alexander Au Siu-kee, chief executive of Oversea-Chinese Banking Corp (OCBC), said that the fortunes of the city-state's third-largest lender were firmly tied to performance of the wider economy. He added, however, that his ability to comment was circumscribed by regulatory restrictions imposed during OCBC's S$5.4 billion (about HK$23.67 million) takeover offer for rival Keppel Capital.
'In essence, a bank is but a reflection of the economy in which it operates. If the economy does not perform, there's not much that it can do. Of course we will continue to try our best in terms of growing our revenue, in terms of controlling our costs,' Mr Au said at the company's interim results presentation.
In anticipation of tougher times ahead, OCBC jacked up its provisions for bad or doubtful loans, restraining its overall first-half performance. Net profit slipped 2.7 per cent to S$433 million, as total provisions rose 131 per cent to S$125 million.
