DBS completes $1 billion synthetic securitisation in first for a Singapore bank

DBS Group, Singapore’s largest bank by assets, said on Tuesday it has completed a synthetic securitization transaction tied to its $1 billion corporate loan portfolio, the first such deal by a Singapore bank.

The agreement, also known as a significant risk transfer transaction, allows investors to assume some of the credit risk of the loan portfolio. DBS stores and services loans while reducing the legal capital it must hold against loans.

DBS said the transaction would help it manage capital more efficiently and support more customer financing as it expands across the region.

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It was stated that the agreement also provides a basis for the bank to selectively conduct such transactions in the future.

DBS group chief financial officer Philip Fernandez said the deal would help the bank maintain strong balance sheet discipline while pursuing growth opportunities.
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DBS said capital ratios were well above regulatory requirements.