Confident DBS brushes off oil and gas debt threat

It will survive even if oil falls to US$20 per barrel.

Singapore’s largest lender reiterated that its asset quality will remain sound even if the number of non-performing oil and gas loans tick up.

In its full-year earnings statement, DBS said that although the commodity downturn have createsd “stresses”, these are not enough to significantly dent is loan book.

DBS said that it had stress-tested its O&G portfolio to reflect a worst-case scenario of oil prices hitting US$20 per barrel.

In the fourth quarter, DBS reported a non-performing loan rate of 0.9%,unchanged from a year ago and the previous quarter. The allowance coverage of nonperforming assets remained healthy at 148% and at 303% if collateral was considered, DBS said.

DBS has $22 billion worth of loans to O&G players. The bank said that loans to producers, traders and processors are not under stress, while minimal special provisions are expected from its support services portfolio.