Write-off of CS AT1 securities no risk to SG banks: analyst

The strong corporate governance and risk management add bank confidence.

Investors are swarmed with questions following the takeover of Credit Suisse (CS) by UBS and are wondering if this development has any effect on Singapore banks.

For CGS-CIMB, the write-off or conversion of CS’ AT1 bonds are “idiosyncratic and will not represent similar risks to Singapore banks.”

The analyst underscored that strong corporate governance and risk management will help improve SG banks’ confidence.

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Investor queries

When asked if Singapore banks have CS AT1 holdings, CGS-CIMB said UOB doesn’t but DBS and OCBC said that their exposures are insignificant.

CGS-CIMB also addressed the query on investment in other AT1 bonds. Singapore banks do invest in other bonds but only affects a small part of total investments, the analyst said.

For banks in ASEAN, they are less affected in the event due to their smaller exposure to US and EU banks and corporations.