“We believe NIMs for the sector will move quite a bit in the coming quarters… 3-month SIBOR… has shot up and there is no reason to believe it will slow,” JPMorgan wrote in a March 16 sector report.

The increase in SIBOR may be a double-edged sword as rising rates could impact debt servicing ability and asset quality, leading to higher NPLs. Some banks may also face higher cost of funds, so those with larger current and savings account (CASA) deposits, amassed during the years of low interest rates, could have an advantage.

NPLs will show up, “but with a lag”, which can be from “a couple of quarters to a couple of years,” and “will be bank-specific in the beginning,” said JPMorgan in its report.

DBS’s NPLs eased to 0.9% in 4Q from 1.1% a year ago and was steady from the previous quarter, while those for OCBC slipped to 0.6% from 0.7% in both the year-ago quarter and 3Q 2014. UOB’s NPLs edged higher to 1.2% in 4Q versus 1.1% a year ago and were unchanged quarter-on-quarter.