Following the recent disruption of banking services, the Monetary Authority of Singapore has imposed additional capital requirements on DBS Bank, which is the banking division of Singapore's largest lender, DBS.
According to a statement from the Monetary Authority of Singapore (MAS), the additional capital requirement for DBS Bank is a response to the bank's digital banking services being widely unavailable on March 29, as well as a subsequent disruption to its ATM and digital banking services on May 5.
“Together with the additional capital requirement imposed on DBS in February 2022, this translates to approximately 1.6 billion Singaporean dollars ($1.21 billion) in total additional regulatory capital,” MAS added.
The MAS has announced that the additional capital requirement for DBS Bank is now 1.8 times its risk-weighing assets for operational risk. This represents an increase from the 1.5 times multiple applied by MAS in February 2022, which was in response to the November 2021 disruption.
The Monetary Authority of Singapore (MAS) has said that it might adjust the size of the multiplier based on the ongoing reviews outcome.
DBS stated that it will be affected by MAS' recent move, which will result in a decrease of DBS Group's common equity tier 1 capital ratio from 14.4% to 14.1% as of March 31, 2023, with a marginal impact of 0.3% points.
“Following the March 29 incident, the bank convened a special board Committee to oversee a full review of our technology resiliency with an independent external expert,” DBS Group CEO Piyush Gupta said in the response.
“We will complete the review as a matter of utmost priority and implement all recommendations expeditiously,” he added.
