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DBS exposure to Swiber at S$700m, expects to recover only half of amount
SOUTH-EAST Asia's largest bank DBS says that it expects to only recover half of the S$700 million it has exposed to the Swiber group of companies.
In a filing to the Singapore Exchange on Thursday night, DBS said that the exposure to Swiber is at about S$700 million, and comprises loans, bonds and off-balance sheet items.
This makes it the first Singaporean bank to disclose its total exposure to the offshore services firm. Swiber announced earlier on Thursday that it has filed an application to place the company under provisional liquidation.
Said DBS: "As the exposure is partially secured, DBS expects to recover half of it and will provide fully for the anticipated shortfall."
"DBS will tap on its surplus general allowances and the net allowance charge will be lower, at about S$150 million," it added.
Swiber's announcement sent shock waves in the oil and gas industry hit by a protracted price slump due to oversupply. The winding-up application will be heard in court on Aug 19.
DBS stated that its balance sheet remains strong, and there is minimal impact on its capital adequacy ratio.
The bank will announce its second quarter results on Aug 8 as scheduled.
DBS's statement on Thursday night follows comments made by UOB and OCBC.
UOB said that it has "some exposure" to the oil and gas contractor which is seeking to wind up its operations.
OCBC alluded that it has no exposure to Swiber.
"We have no borrower who has abandoned operations. This is a good sign. We do not foresee any customers who will abandon ship," said OCBC's group chief executive officer Samuel Tsien.
Before the statement, DBS shares closed S$0.38 lower on Thursday at S$15.88. UOB shares fell S$0.24 to S$18.70, while OCBC closed S$0.05 lower at S$8.80.