The latest report cards from Singapore three home-grown lenders reinforced expectations that the banking sector in one of the world’s primary financial centers has seen its worst.

Loan growth was strong, wealth management income expanded and fewer new bad loans were identified, results showed.

Yet, shares of all three banks were in the red on Friday after Southeast Asia’s largest lender, DBS Group Holdings, rounded up the sector’s earnings season with a warning that asset quality could deteriorate in the coming quarters due to continued weakness in the oil and gas segment.

Shares of DBS fell 2.31 percent by 3:11 p.m. HK/SIN, while its smaller rivals Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) slipped 0.53 percent and 0.62 percent, respectively.

“Asset quality pressures will continue and the risk of heightened credit costs in the oil and gas support services sector will persist with low oil prices,” DBS CEO Piyush Gupta said at media briefing on Friday.

Gupta added that the bank may have to set aside more money to cover for additional bad loans from the segment, and for the drop in collateral values as oil prices remain low.

His sentiment was shared by OCBC CEO Samuel Tsien last week, who said the oil and gas sector was at best “stable.”

“Being stable is not adequate for loans to be paid off as scheduled because you need to have continued strong cash flow to pay off those debts. We need the oil and gas sector to improve before the whole situation can be classified as recovering,” Tsien said.

The sector has been a drag for the Southeast Asian city-state’s banks over the past year. The sharp drop in oil prices forced firms such as Swiber Holdings and Ezra Holdings to seek bankruptcy protection.

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