Here’s where the majority of DBS’ bad loans are coming from

The bank’s NPLs increased by 5.7% this quarter.

Despite keeping its non-performing loans (NPLs) in tact, banking giant DBS’ bad loans are notably arising from two places.

According to analysts from UOB Kay Hian, DBS’ new NPLs are mainly from Hong Kong and China, leading the jump of NPLs by $141m or 5.7% up from the previous quarter.

“DBS recognised two NPLs in 4Q15, one from a fishery company in Hong Kong and the other from an Offshore & Marine company in Singapore,” UOB Kay Hian said.

Meanwhile, DBS is also cushioning from surplus general provisions, as loan loss coverage of 137.1%.

“DBS has surplus general provisions of S$600m, which could be utilised to absorb additional specific provisions without affecting its CET-1 CAR,” UOB Kay Hian said.