DBS Group, Singapore’s biggest bank by assets, said on Tuesday it has completed a synthetic securitisation transaction tied to a $1 billion portfolio of corporate loans, the first such deal by a Singapore bank.
The deal, also known as a significant risk transfer transaction, allows investors to take on part of the credit risk of the loan portfolio. DBS keeps and services the loans, while reducing the regulatory capital it must hold against them.
DBS said the transaction would help it manage capital more efficiently and support more client financing as it expands across the region.
It said the deal also lays a foundation for the bank to selectively execute more such transactions in future.
Philip Fernandez, DBS’ group corporate treasurer, said the deal would help the bank keep strong balance sheet discipline while pursuing growth opportunities.
DBS said its capital ratios were well above regulatory requirements.
Reuters
