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

Written by Sun Weilun

DBS, Singapore’s largest bank, is at about S$100 million (US$73.8 million) in financial jeopardy due to recent money laundering scandals in the city-state, its chief executive said on Monday. It was announced on .
Piyush Gupta told a news conference that the bank had financed property purchases by individuals and companies being investigated by Singaporean authorities. In August, police arrested 10 foreigners on charges including fraud and money laundering.

DBS is one of several domestic and international banks connected to the suspects in this case.  Since the raid in mid-August, Singapore police have seized or frozen assets worth more than US$2 billion, including real estate, gold bars and jewellery.
Mr. Gupta said on Monday that DBS had reported suspicious transactions related to the incident to authorities.
“We have an exposure of about S$100 million and we have basically covered most of that,” he told a news conference.
The bank has recorded a provision worth US$145 million for expected credit losses in the third quarter ended September. This total included provisions required for loans to parties involved in money laundering investigations.
DBS has come under increased scrutiny from Singaporean authorities in recent months. The bank was forced by the Monetary Authority of Singapore last week to suspend acquisitions and non-essential technology changes for six months after a series of digital banking service outages this year.
Mr. Gupta said on Monday that while the freeze would delay the introduction of some bank products and services to the market, the setback was an opportunity to put things right.
“It’s like putting on the brakes. When you put on the brakes, you can go faster later,” he said.
Email Weilun Soon at weilun.soon@wsj.com.