Singapore's DBS Takes a Hit from Money-Laundering Affair

Singapore's largest bank, DBS, is grappling with financial exposure of approximately S$100 million (US$73.8 million) in connection with a recent money-laundering scandal that has rocked the city-state, according to the bank's chief executive, Piyush Gupta. He made this revelation during a press briefing on Monday, shedding light on the bank's involvement in the ongoing investigation.

Gupta disclosed that DBS had provided financing for property purchases involving individuals or companies currently under investigation by Singaporean authorities. In August, the local police made headlines when they arrested 10 foreign nationals on charges that include fraud and money laundering, sending shockwaves throughout the financial sector in Singapore.

DBS is not the only bank with ties to the suspects in this high-profile case, as several domestic and international financial institutions find themselves connected to the ongoing investigation. Since the mid-August raids, Singapore's law enforcement agencies have taken decisive action, seizing or freezing assets valued at more than US$2 billion. These assets include a wide range of properties, gold bars, and valuable jewelry.

Piyush Gupta emphasized during the press briefing that DBS had proactively identified and reported suspicious transactions related to the money-laundering case to the relevant authorities. "We have almost S$100 million in exposures, and basically we have provided for most of it," he stated.

As a consequence of its involvement in the money-laundering probe, the bank recorded allowances for expected credit losses amounting to the equivalent of US$145 million in the third quarter, which concluded in September. These allowances accounted for the loans that DBS had extended to parties linked to the ongoing investigation.

DBS has found itself under increasing scrutiny from Singaporean authorities in recent months, with the Monetary Authority of Singapore (MAS) taking action to address the bank's operational issues. In a move aimed at rectifying a string of digital-banking service outages earlier in the year, MAS imposed a six-month hiatus on DBS for acquisitions and nonessential technology changes.

Despite the challenges and delays resulting from the freeze, Gupta expressed optimism about the future, emphasizing that it presents an opportunity for the bank to make necessary improvements. He likened the situation to putting on the brakes, stating, "It's like putting brakes on. When you put brakes, you can run faster later."DBS remains committed to addressing the issues at hand and working closely with the authorities to ensure compliance with the highest standards of financial integrity and transparency.

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