Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of DBS Group Holdings Ltd (DBSH) and DBS Bank Ltd (DBS) at 'AA-'.

The Outlooks are Stable. Fitch has also affirmed DBSH's and DBS's Viability Ratings (VR) at 'aa-'.

A full list of rating actions can be found at the end of this commentary.

Key Rating Drivers

VR Underpins IDR: DBS's Long-Term IDR is driven by its standalone credit profile, as denoted by its VR, which is aligned with the implied VR. The VR reflects its strong domestic franchise, well-diversified business model, and sound execution throughout economic cycles.

Stable Operating Environment: We expect the operating environment to remain stable, with faster GDP growth in 2024 across many markets in which DBS operates. We expect DBS's home market, Singapore, to experience GDP growth of 2.5% in 2024 and 3% in 2025, after a 1.1% expansion in 2023. Its key overseas markets of Hong Kong and China are likely to see slower growth in 2024, but its other key Asian markets are likely to experience an improvement in growth.

Stable Business Profile: DBS maintained its dominant loan and deposit market shares in Singapore at around 29% and 24%, respectively, highlighting its strong domestic franchise. DBS also shows highly resilient earnings due to its well-diversified business operations across segments and geographies. This led us to score its business profile at 'aa-', above the implied 'a' category score.

Overseas Expansion Risk Factored In: The risk profile score of 'a+' is a notch lower than DBS's business profile score of 'aa-', as we take into account the bank's appetite in expanding overseas, including in emerging markets. DBS targets low single-digit loan growth in 2024 following two years of limited loan growth, supported by the economic recovery in its key markets.

Asset Quality Remains Benign: The non-performing loan (NPL) ratio remains below pre-pandemic levels, at 1.1% in 1Q24 against 1.5% in 2019. However, we expect some modest weakening this year as the high interest rates erode certain borrowers' repayment capabilities. The bank built up sizeable general allowances that we expect it will maintain in the near term, in light of the current global uncertainties. The 'a+' asset quality score is on a stable outlook.

Structural Improvement in Profitability: DBS's profitability reached a record high in 2023 with the operating profit/risk-weighted asset (RWA) ratio of 3.1% above pre-pandemic levels (2019: 2.5%), supported by higher margins and low credit costs. We expect profitability to plateau in 2024 as the benefit from previous rises in interest rates ebbs. DBS's profitability score takes into account its high earnings stability throughout economic cycles and the potential for sustained improvement in core profitability over the medium to long term.

Capital Supported by Earnings: We expect DBS to maintain its common equity Tier 1 (CET1) ratio at above 14%, supported by continued strength in earnings and muted loan growth. Capital accretion from earnings in the next few quarters should support the CET1 ratio and the capitalisation score at 'aa-'.

Steady Funding and Liquidity: The bank's loan/deposit ratio (LDR) of 79% at end-1Q24 remained lower than the pre-pandemic level (2019: 90%), and its low-cost deposit ratio moderated to 51% from a peak of 76% as depositors moved funds to higher-yielding assets as rates rose. We expect the LDR and low-cost deposit ratio to remain stable in the near term. The funding and liquidity score has been affirmed at 'aa-'/stable.

Strong State Support: DBS's Government Support Rating (GSR) of 'a' reflects an extremely high probability of extraordinary support from the government, if needed, in light of the bank's high systemic importance as well as the sovereign's strong fiscal flexibility. The Monetary Authority of Singapore (MAS) regulates DBS and DBSH as an integral unit, and this drives the equalisation of DBSH's GSR with that of DBS.

Holdco Ratings Equalised: The ratings of DBSH are equalised with those of DBS, which is its sole operating entity. The entities are closely integrated, with shared branding, common board and management, and have the same operating markets and regulator. They also reflect DBSH's simple balance-sheet structure and our expectation of low double leverage to be maintained in the medium term. We use the consolidated statements of DBSH in our financial analysis of DBS.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The VRs and Long-Term IDRs of DBS and DBSH could come under pressure should financial metrics deteriorate significantly, for example, if:

The CET1 ratio declines and remains significantly below 14% without a credible plan to restore it to around this level, along with a weakening in the Basel leverage ratio to meaningfully below 7% for a sustained period;

The four-year average impaired loan ratio worsens and is sustained above 2.0%;

The four-year average operating profit/RWA ratio falls below 2.0% for a sustained period.

A lowering of the operating environment score to 'a+', due to a major economic slowdown in DBS's key markets or much larger exposure to higher-risk markets, may also lead to a downgrade.

Any downgrade to the Long-Term IDR would be limited to two notches, unless the Government Support Rating (GSR) is also downgraded.

We do not expect a downgrade of the Short-Term IDR or short-term senior debt rating, as this would require the Long-Term IDR to be downgraded by at least two notches to 'A' and the funding and liquidity score to simultaneously be lowered by at least one notch to 'a+'.

A weakening in the propensity of authorities to provide support may result in Fitch downgrading the GSRs. This could arise from a very material reduction in DBS's and DBSH's systemic significance, or the introduction of senior debt bail-in requirements in Singapore. However, we do not foresee such changes in the near term. Any change in the GSRs would not directly affect the IDRs, which are driven by the VRs.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An upgrade of the VRs and Long-Term IDRs appears unlikely, as the ratings are already near the top of Fitch's universe of rated banks globally. Long-term upward rating momentum would involve material strengthening of the bank's capital position, franchise outside of Singapore and a reduced risk profile, including by way of lower exposure to emerging markets, as well as a considerable improvement in asset quality, profitability and funding.

The Short-Term IDR is already at the highest level on the scale and cannot be upgraded.

The GSRs may be revised upwards if Singapore's authorities make explicit statements of support towards DBS, giving greater certainty that support would be provided if needed, or if DBS becomes majority-owned by the government or a relevant government-related entity.


DBS's and DBSH's senior debt represent the entities' unsecured and unsubordinated obligations, and the ratings on the debt are equalised with the Long- and Short-Term IDRs.

DBSH's Basel III Tier 2 subordinated notes are rated two notches below the VR to account for loss severity risk. This reflects the notes' subordinated status, the absence of going-concern loss-absorption features, and the partial or full write-down feature at the point of non-viability, as determined by the MAS.

DBSH's Basel III Additional Tier 1 securities are rated four notches below its VR, comprising two notches for non-performance risk and two notches for loss severity risk. This reflects the securities' deep subordination status and fully discretionary distributions.


The senior debt ratings would be downgraded if the IDRs are downgraded. DBSH's Tier 2 and Additional Tier 1 debt ratings would be downgraded if its VR is downgraded.

The senior debt ratings would be upgraded if the IDRs are upgraded. DBSH's Tier 2 and Additional Tier 1 debt ratings would be upgraded if its VR is upgraded.


The business profile score of 'aa-' has been assigned above the 'a' category implied score for the following adjustment reason: business model (positive).

The capitalisation and leverage score of 'aa-' has been assigned above the implied category of 'a' for the following adjustment: leverage and risk-weight calculation (positive).

The funding and liquidity score of 'aa-' has been assigned above the implied category of 'a' for the following adjustment: deposit structure (positive).


The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

DBS's GSR is linked to Singapore's sovereign rating (AAA/Stable).

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit

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