Singapore Regulator Warns of More Bank Job Losses in Second Half

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Pedestrians cross a street outside the Bangkok Bank building in the central business district of Singapore.

Photographer: Lauryn Ishak/Bloomberg

Photographer: Lauryn Ishak/Bloomberg

Singapores financial-services sector, which accounts for 4.5% of total employment, may see more job losses during the second half of the year as the country goes through its worst recession ever, the central bank warned Wednesday.

Banks, insurers and other financial institutions held up well during the first six months when the sector created about 1,500 jobs and retrenchment levels stayed “subdued,” the Monetary Authority of Singapore said. Locals snapped up three out of every four new jobs, Jacqueline Loh, MAS Deputy Managing Director for markets & development said in a speech.

“The economic environment continues to be challenging,” Loh said. “ We have to expect that new job creation in the financial sector will slow, while retrenchments are likely to pick up.”

The sector matters to Singapore, an Asian financial hub, as it employs more than 170,000 people and contributes 13% of gross domestic product. The economic downturn also triggered fears of job losses while the government asked companies to treat its citizens fairly when it comes to both employment and promotion.

Read how Singapore is scrutinizing firms on high percentage of foreign hires

The Singapore economy is headed for a contraction of between 5% and 7% in 2020, after shrinking by 13.2% on a year-on-year basis during April to June, according to government data.

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Supporting the local workforce in the financial sector during the crisis is a priority for the central bank, Loh said. The sector is also going through a shift toward new models including digital banking, as the MAS will award as many as five digital licenses to non-bank firms this year.

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Companies should help train employees so they can continue to work in the digital world, Loh said. So far, 25 local and international financial institutions have committed to train almost 5,000 employees with new skills, she added.

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MAS praised Bank of China Ltd., DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and its units, as well as Malayan Banking Bhd. and NTUC Income for avoiding redundancies.

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Loh also encouraged financial-services firms to groom local talent for leadership positions, even as they bring in foreigners to plug gaps.

“We have to remain open and will continue to welcome global talent that complement our workforce,” she said. “Employers must, however, hire in a responsible manner and commit to growing the local talent pool.”