DBS Group has completed a US$1.3 billion significant risk transfer (SRT) transaction, marking the first time a Singapore-based bank has executed a deal of this magnitude.
The move allows the lender to offload a portion of the credit risk associated with a pool of corporate loans to external investors, while retaining ownership of the underlying assets.
This structure enables DBS to optimize its capital position without disrupting client relationships or removing loans from its balance sheet entirely.
The transaction is designed to free up regulatory capital that can be redeployed toward new lending and growth opportunities.
By transferring risk rather than selling loans, DBS maintains its role as the primary lender while mitigating potential losses from credit events.
This approach is increasingly relevant as banks seek to enhance return on equity and manage capital buffers more efficiently in a volatile economic environment.