MAS reports net profit of S$19.7 billion due to healthy returns on investments

However, it added that the uncertainties about the inflation outlook remain high because of increased risks in the global environment.

“We are alert to risks on both sides,” said Mr Chia.

“Disinflationary impulses could be stronger if the impact of tariffs on economic activity is more severe, while inflationary pressures could re-surface if geopolitical conflict or supply chain dislocations or disruptions escalate,” he said.

Mr Chia also said that MAS applied a more severe scenario when stress testing the domestic financial system’s stability this year.

It found that corporates and households are generally resilient. “Nonetheless, there are segments of businesses and households that are more vulnerable and should exercise vigilance,” he said.

He highlighted smaller firms in externally oriented sectors that could face risks to revenue and liquidity, and households with less stable incomes. 

The latter group should plan their finances prudently and avoid taking on large new loan commitments during this period of uncertainty, he said.

GROWTH IN FINANCIAL SERVICES

Singapore’s financial services sector grew 6.8 per cent in 2024, compared with 3.1 per cent in the previous year.

The average growth rate for 2021 to 2024 is 4.7 per cent, on track to meet the target of the Industry Transformation Map. The sector is also on track to meet the target of 3,000 to 4,000 net jobs created per year.

In 2024, growth in the banking sector was resilient, while the insurance industry expanded, with total assets increasing by 3.6 per cent to S$456.4 billion.

MAS added that Singapore continues to grow as a leading foreign exchange hub in Asia and that the corporate debt market posted strong growth.

Assets under management grew 12.2 per cent and exceeded S$6 trillion for the first time, driven by both traditional and alternative sectors.

Wealth management experienced strong growth, and Singapore will be tough on suspicious and illegitimate monies, but welcoming and efficient to legitimate wealth, said Mr Chia.

He added that MAS does not expect the financial sector to continue growing at the pace of the last few years.

“With the global uncertainty, we do expect globally economic activity to come down, and financing activity will also come down,” he said.

There are a range of possible outcomes, but the pace has also been “unusually strong”, so that cannot be expected to continue, he said.

QUANTUM TECH AND AI

Mr Chia also announced that the MAS’s Quantum Key Distribution sandbox, conducted together with some banks and technology partners, has been successfully completed.

The regulator had conducted trials to study the viability of quantum-safe solutions in anticipation of the future threat posed by quantum-powered decryption.

Last year, MAS committed an additional S$100 million to support financial institutions in building capabilities in quantum and artificial intelligence technologies.

“While quantum computing is currently not at a mature stage, the technology is developing rapidly and could eventually render current encryption techniques obsolete, putting at risk sensitive customer data and financial transactions,” said Mr Chia.

MAS also announced that it has established PathFin.ai, a programme where financial institutions can share their knowledge and experience in implementing artificial intelligence solutions.

“By curating a library of use-cases, industry-validated solutions and best practices among these FIs, the programme seeks to reduce the time and effort to search, select and effectively implement AI solutions.

A total of 20 financial institutions covering banking, insurance, capital markets and payments have been onboarded to the Pathfinder programme so far.