DBS Bank Ltd.

Market leader in Singapore. Strong funding profile. Management team's proven record. Exposure to increasing economic and credit risk because of expansion in emerging Asian markets. Operations in a saturated domestic market with competitive pricing. The stable outlook reflects our view that DBS Bank Ltd. will maintain its high systemic importance in Singapore and its 'a' stand-alone credit profile over the next two years. The outlook also reflects the outlook on the sovereign credit rating on Singapore (AAA/Stable/A-1+; axAAA/axA-1+). We expect DBS to maintain its leadership position in the key markets of Singapore and Hong Kong, while growing in a measured manner overseas with an emphasis on risk control, which has enabled the bank to remain resilient under tough external conditions.

...Operations in a saturated domestic market with competitive pricing. Outlook: Stable The stable outlook reflects our view that DBS Bank Ltd. will maintain its high systemic importance in Singapore and its 'a' stand-alone credit profile over the next two years. The outlook also reflects the outlook on the sovereign credit rating on Singapore (###/Stable/A-1+; axAAA/axA-1+). We expect DBS to maintain its leadership position in the key markets of Singapore and Hong Kong, while growing in a measured manner overseas with an emphasis on risk control, which has enabled the bank to remain resilient under tough external conditions. We see the possibility of an upgrade or a downgrade as remote over the next 18-24 months. DBS' SACP needs to move by at least two notches before the rating is affected. We might revise the SACP downward if DBS' risk-adjusted capital (RAC) ratio falls below 7%. This could happen if the bank grows aggressively especially in higher risk emerging countries. However, we view...

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