DBS expects to recover half of its $700 million exposure to Swiber
DBS Group Holdings, Singapore's biggest lender, said it expects to recover about half of its total exposure of S$700 million ($517.4 million) to Swiber Holdings Ltd, the oilfield services provider that filed to wind up operations.
DBS said on Thursday that it would tap into its reserves to provide fully for the anticipated shortfall and that it expects the net allowance charge to be lower, at about S$150 million.
Swiber filed for liquidation on Wednesday, buckling under millions of dollars of debt to become the latest victim of the slump in oil prices.
DBS's exposure to Swiber was through loans, bonds and off-balance sheet items and that it expected a minimal impact on its capital adequacy ratio due to the exposure, the company said in a statement.
United Overseas Bank said it had some exposure to Swiber, but added that it was "something manageable".
Singapore lenders' profits are under pressure due to slowing Asian economies, and weak commodity prices that have forced them to set aside more money to cover loans to the energy sector.
DBS is scheduled to report second-quarter results on Aug. 8.