Even then, the impact of the new rules will be “modest” for Singapore banks thanks to their diversified portfolios. The diverse portfolios mean that shortfalls for some risk-weighted assets (RWA) will be able to be offset by those above the output floor.
The capital impact of fully-loaded Basel IV rules looks to be “manageable” for all three Singapore banks, DBS, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB), says Bloomberg Intelligence credit analyst Rena Kwok.
Basel IV, which includes new standards for credit and operational risks, was implemented on Jan 1 and will be fully loaded in 2029.
