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Photo via DBS' website

DBS to maintain strong solvency, robust funding: Moody’s

It is anticipated to sustain high profitability with return on assets of around 1.3%.

The DBS Bank Ltd. (DBS) will maintain strong solvency and robust funding and liquidity over the next 12 to 18 months, according to Moody’s.

DBS is projected to uphold its high credit quality with a problem loans ratio expected to stay below 2% of gross loans.

The bank's core capital, as measured by tangible common equity to adjusted risk weighted assets, is expected to experience a modest decrease to around 14%, down from 15.2% at the end of 2023.

Still, the DBS' return on assets is expected to stay strong at about 1.3% in 2024-2025, slightly down from 1.4% in 2023, due to net interest margin compression driven by monetary policy easing.

“Funding and liquidity will remain very strong. DBS has a modest reliance on market borrowings, and its funding benefits from a very strong transaction banking franchise and sticky domestic deposit base,” Moody’s said.
 

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