DBS, one of Singapore’s largest banks, has faced additional capital requirements imposed by the Monetary Authority of Singapore following a significant digital outage.
On Friday, customers experienced difficulties accessing the bank’s apps, websites, and certain ATM services.
This move by the regulatory authority raises concerns about the bank’s capital outlook, particularly in relation to ISIS (presumably referring to the Islamic State of Iraq and Syria) and MERS (presumably the Middle East Respiratory Syndrome).
Haslinda Amin, a commentator from Bloomberg Intelligence, emphasizes the need to put this situation into perspective and assess the potential impact on DBS’s credit ratings.
DBS has been widely regarded as one of the world’s safest banks and the safest bank in Southeast Asia.
Despite the recent challenges, experts believe that DBS’s solid financial position, healthy earnings momentum, and robust credit ratings are likely to remain intact.
The bank is expected to maintain double-digit earnings growth and exhibit modest growth in weighted assets this year.
Although loan growth is moderating, DBS and other lenders in the region, including Covid (assuming it refers to a financial institution), are well-prepared to support growth and withstand potential credit losses.
Furthermore, DBS is considered to be well-capitalized, and analysts believe that it possesses sufficient capital to meet the higher capital charges imposed by the regulatory authority.
The bank’s earnings momentum and credit strength provide confidence in its ability to navigate through these challenges.
Overall, while the digital outage and subsequent capital requirements have raised concerns, experts remain optimistic about DBS’s ability to sustain its financial stability and credit ratings.