SINGAPORE, Jan 10, 2026, 14:49 (SGT) — Market closed
Shares of DBS Group Holdings nudged up on Friday following a report by The Business Times that the bank is considering significant risk transfers (SRTs), a strategy to hedge loan defaults. DBS closed up S$0.26, or 0.45%, at S$57.60, after swinging between S$57.30 and S$57.77 during the session. The stock’s 12-month range stretches from S$36.30 to S$58.80, with a trailing dividend yield sitting at 4.17%.
DBS hit S$58.80 earlier this week, buoyed by a surge in Singapore bank stocks driven by dividend demand. According to The Straits Times, the shares have climbed over 30% in the past year. Morningstar’s Asia equity research director Lorraine Tan noted that “dividend yields, which are around 5 per cent, are attractive presently,” even though DBS and OCBC appear pricey on intrinsic value. Meanwhile, UOB Kay Hian’s research head Jonathan Koh described the banks as “attractive yield plays” amid Singapore’s low-rate backdrop, setting a S$68.95 price target on DBS. (The Straits Times)
Given this environment, anything affecting capital flexibility sparks sharp moves in the stock. Investors see DBS as a dividend play riding momentum, so the price moves quickly when that narrative faces pressure.
The Straits Times reported that DBS has begun early talks with funds that invest in SRTs, though the preparations are still in their infancy and no deals have been discussed. A bank spokesperson declined to comment. SRTs, often structured as credit-linked notes—bond-like instruments that transfer some loan-default risk to investors—can boost a bank’s capital buffer, or solvency ratio. The report referenced a Standard Chartered trade-finance deal planned for 2025 and cited Man Group’s estimates that the SRT market could double within five years. (The Straits Times)
But SRTs occupy a segment of the securitisation market that’s come under increased regulatory scrutiny as volumes climb. The European Central Bank has cautioned euro zone banks against overusing these deals to lower capital requirements. (Financial Times)
Investors will be watching U.S. inflation data for December, set for release on Jan. 13, before trading picks up again Monday. That report could sway expectations around rate cuts ahead of the Federal Reserve’s policy meeting scheduled for Jan. 27-28. (Bureau of Labor Statistics)
DBS’ next key event is its Q4 2025 earnings release on Feb. 9. Investors will watch closely for any remarks on dividends, capital returns, and updates—or silence—on the risk-transfer discussions. (Dbs)
