SINGAPORE — DBS Group, Singapore’s biggest bank by assets, said on Tuesday it has completed a synthetic securitization transaction tied to a $1-billion portfolio of corporate loans, the first such deal by a Singapore bank.
The deal, also known as a significant risk transfer transaction, allows investors to take on part of the credit risk of the loan portfolio. Development Bank of Singapore (DBS) keeps and services the loans while reducing the regulatory capital it must hold against them.
Synthetic securitizations are widely used by global banks to manage capital and risk, and DBS is the first lender in Singapore to carry it out.
DBS said the transaction would help it manage capital more efficiently and support more client financing as it expands across the region.