DBS Bank in Taiwan needs capital injection

DBS is the only bank that has yet to meet the $6.6mln capital requirement for foreign lenders.

The Financial Supervisory Commission (FSC) said Tuesday DBS Bank would need a capital injection from its Singaporean parent both to meet tightened capital requirements and to qualify for its plan to upgrade a local branch to a subsidiary in the third quarter next year.

Foreign banks must maintain at least NT$200 million (US$6.6 million) in working capital — up from NT$100 million before the commission changed the requirements in December last year to enhance risk control — for each individual branch in Taiwan, with the threshold rising to NT$250 million if the branches take deposits from individuals.

All 28 foreign banks operating in the country were given one year to make the adjustment and DBS is the only foreign lender that has yet to meet the requirement, the commission said.

Chang Kuo-ming, deputy director-general at the commission’s banking bureau, said DBS has applied to increase capital by NT$5.95 billion before Dec. 1 and the fund may help meet the upgrade requirement later.

A banking subsidiary must maintain NT$10 billion in working capital, as required of all domestic lenders, and is subject to the commission’s regular stress tests, Chang said.

DBS, the largest lender in Southeast Asia by assets, is scheduled to celebrate relocations of three branches acquired from Bowa Banknext week in a continued bid to strengthen its presence in Taiwan, the Singapore-based lender said in a statement Tuesday.

View the full story in Taipei Times.