A notable difference between DBS and the other two local banks is that it has around $2.4 billion in management overlay, which it can choose to write back in the unlikely event of a surge in specific provisions, namely, expected credit loss (ECL) 3.
It was no surprise that analysts were focused on asset quality and credit costs, following DBS Group Holdings’ surprise specific provisions (SP) of $415 million in 4QFY2025 ended Dec 31, 2025, and new non-performing asset (NPA) formation of $751 million, the highest since the more than $1 billion of new NPA in 1QFY2020, at the start of the pandemic.
Unlike its peers, United Overseas Bank (UOB), which had a pre-emptive $615 million general allowance in 3QFY2025 ended Sept 30, 2025, and DBS Group Holdings, which reported an SP spike and new NPA formation in 4QFY2025, OCBC’s NPA formation of $399 million appeared moderate. It was up just 14% q-o-q, compared to a q-o-q surge of around five to six times for DBS. In 4QFY2025 ended Dec 31, 2025, UOB’s new NPA formation fell by 28.5% because of a spike in 3QFY2025.
