DBS rating unaffected by Dubai exposure

Standard & Poor's counterparty credit ratings on DBS Bank Ltd were not affected by the bank's credit exposure to Dubai.

The ratings service group expects DBS' credit profile to remain well supported by its solid franchise in Singapore, outstanding liquidity profile, sound capitalisation, and strong financial flexibility. It has also been enhanced by its parent's rights issue of US$2.89 billion earlier this year.

S&P expects any loss in the bank's partially collateralised exposure to Dubai of US$1.3 billion, including a US$404 million loan affected by last week's standstill notice, is unlikely to significantly dent the bank's capitalisation. The exposure represents less than 10 percent of DBS' adjusted total equity as at the end of 2008. However, the bank's short-term profitability could be pressured by higher credit costs.