DBS weathers oil & gas storm to maintain stable asset quality

It stands virtually alone against its struggling peers.

Exposure to the troubled oil & gas sector has always spelled doom for Singapore’s banks, and it reflects in their deteriorating asset quality. However, this time, DBS emerged as the exception.

According to analysts from KGI Fraser, DBS did not see any meaningful erosion in asset quality within the sector, with overall NPL ratio unchanged at 0.9% for six consecutive quarters.

What’s more impressive is that DBS’s total exposure to the commodities sector, including oil & gas, was around $34b, according to KGI Fraser.

“Loan loss coverage was also maintained around historical levels (161% in 3QFY15), though CET1 (Basel 3) ratio saw a decline from 12.3% in 2QFY15 to 11.9% in 3QFY15 as the bank’s RWA were affected by FX translation in the recent quarter,” KGI Fraser said.