DBS

DBS has been ordered by MAS to apply a 1.2x multiplier to its risk-weighted assets in the wake of the July 5 systems outage, which translates to an additional $230m in regulatory capital for operational risk. Impact will be marginal with Tier 1 capital dropping 20bps from 13.1% to 12.9%, while CAR drop from 16.5% to 16.3%, still well above minimum requirements. The extra capital buffer is unlikely to affect its dividend payout or have any material impact on DBS earnings.

we do not rule out MAS coming up with a new regulation requiring all banks to set aside capital reserves for operational risks in the near future.