Moody's Investors Service has lowered the credit rating outlook of Singapore banks to negative from stable, citing concerns over the banks' asset quality and profitability.

The affected institutions are DBS Bank, DBS Group Holdings, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB), Moody's said in a statement on Thursday (March 31).

"Moody's expects credit conditions for banks in Singapore will continue to weaken against the backdrop of slower economic and trade growth, both domestically and in the region," the rating agency said.

Moody's noted that the Singapore banks have very strong buffers in terms of capital, loan loss provisions and pre-provision income.

The banks' funding and liquidity profiles are also robust and there was also a "very high" probability of government support, if needed.

Moody's currently rates DBS Bank, OCBC, and UOB at Aa1, the second-highest long-term rating possible. DBS Group Holdings is rated at Aa2, a notch below the other banks.

(The Straits Times)