In a statement, a UOB spokesperson says: “UOB has no exposure to Credit Suisse bonds. UOB bond holdings consist of high-quality liquid assets held primarily for regulatory requirements.” Meanwhile, a spokesperson for DBS says: “DBS’s exposure to Credit Suisse’s AT1 bonds is insignificant.” Similarly, an OCBC spokesperson says OCBC’s exposure is also insignificant.
As part of the rescue package for Credit Suisse as directed by Switzerland’s central bank, the Swiss National Bank (SNB), and the Swiss Financial Market Authority (Finma), all of Credit Suisse’s additional tier 1 (AT1) capital of CHF16 billion ($23 billion) will be written down completely.
The three local and Asia-Pacific banks generally hold minimal amounts of Credit Suisse’s AT1. This is because, based on Basel III rules, banks’ cross-holding of other banks’ capital instruments will lead to a direct deduction of the same type of holding of the capital instrument.
