S'pore banks 'can absorb increasing risks'

Singapore

THE strong capital positions of the three Singapore banks will be a buffer against the higher number of soured loans expected when interest rates rise from their current low levels, a Standard & Poor's (S&P) analyst has said.

"Their capitalisation is quite high," said Mr Ivan Tan said on Tuesday; he added that their Tier 1 capital ratios averaged 12 to 13 per cent - well above the regulatory 8 per cent minimum.

The three local banks - DBS Group Holdings, OCBC Bank and United Overseas Bank - are rated AA- by S&P, a rating higher than that of other banks in the region.

Mr Tan was elaborating on a new S&P report, which predicted that Asean banks' asset quality could weaken in the …