Moody’s Ratings has affirmed the long-term bank deposits and senior unsecured debt ratings of DBS Bank Ltd at Aa1 and the issuer ratings of DBS Group Holdings Ltd at Aa2, maintaining stable outlooks for both. The decision reflects expectations of DBS’s continued strong solvency and liquidity through 2025–2026, supported by a high probability of government backing from Singapore.
DBS’s robust financial health is attributed to its superior funding franchise, diversified income streams, and substantial credit reserves. The bank’s problem loans ratio was reported at a low 1.1% as of 31 March 2025, with only a mild increase anticipated due to exposure in Hong Kong’s building and construction sector and personal unsecured loans. Despite potential challenges from higher US tariffs, DBS’s credit reserves are deemed sufficient to cover these risks.
Profitability is expected to dip slightly due to easing monetary policies but will remain buoyed by DBS’s wealth management business. The bank’s net interest income is less sensitive to rate cuts compared to its peers. The Common Equity Tier 1 ratio is projected to decrease moderately to around 14% over the next two years, influenced by higher capital distributions.
DBS’s funding and liquidity strengths are underscored by limited market borrowings and a high ratio of current account savings deposits. The bank’s liquid assets remain substantial, ensuring a strong buffer against market fluctuations. Moody’s highlights DBS’s conservative risk management culture as a key factor in its low credit losses across cycles.
Whilst an upgrade in ratings is unlikely, significant improvements in macroeconomic conditions and DBS’s financial metrics could positively impact its baseline credit assessment. Conversely, a rise in problem loans or a decrease in capital ratios could lead to a downgrade. The ratings of DBS Group Holdings would similarly be affected by any changes to DBS’s ratings.
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