Chart of the Day: Singapore's big three banks' CET1 ratios hit 14% in 2018

DBS and OCBC’s CET1 ratios rose YoY, whilst UOB’s declined due to faster loan growth.

This chart from Moody’s Investor Service shows that Singapore’s three banks' CET1 ratios remained strong, at around 14% at the end of 2018.

CET1 ratios at DBS and OCBC rose at the end of 2018 from three months earlier (Exhibit 6), mainly as a result of growth in retained earnings, whilst UOB reported a decline due to faster loan growth.

Also read: Bad loans haunt Singapore banks as asset quality risks mount

According to Moody’s, CET1 ratios at DBS and UOB will decline by up to 50 basis points in 2019 due to dividend payouts but will remain within their target ranges of 13.0%-13.5%, giving the banks ample capital buffers against growing risks.

“The decline for OCBC will be much smaller because the bank maintains a scrip dividend scheme,” Moody’s said.