DBS shares get second day of beating from $700m Swiber exposure

The logo of DBS is pictured outside an office in Singapore on Jan 5.
The logo of DBS is pictured outside an office in Singapore on Jan 5. PHOTO: REUTERS

SINGAPORE - Shares of DBS Group Holdings fell for a second day when trading opened on Friday (July 29) after it said it has total exposure of about S$700 million to Swiber Holdings, only about half of which the bank said it expects to recover.

Oilfield services provider Swiber shocked investors on Thursday by announcing it had filed to wind up the company, becoming the first major Singapore casualty of a prolonged oil slump.

DBS shares were trading 2.2 per cent lower at S$15.53 as of 9:24 am, with 2.8 million shares traded. The Straits Times Index was 0.9 per cent lower. On Thursday, DBS shares fell 2.3 per cent.

DBS, Swiber's main banker, said on Thursday said it would tap into its reserves to fully provide for the anticipated shortfall and that it expected the net allowance charge to be about S$150 million.

Shares of Singapore's other lenders also fell on opening. UOB shares were trading 0.9 per cent lower at S$18.53 while OCBC Bank was down 1.5 per cent at S$8.67.

On Thursday, OCBC noted that it was not listed as a principal banker to Swiber in the firm's annual report while United Overseas Bank said its exposure was "manageable".