Singapore-listed DBS Group has raised S$800 million ($638.8 million) towards meeting Basel III international capital standards.

Singapore-listed DBS Group has raised S$800 million ($638.8 million) towards meeting Basel III international capital standards, as banks continue to adjust towards more stringent rules.

Banks facing mounting regulatory and capital standards are raising money to bolster their capital buffers in the wake of the 2008 financial crisis, an event that continues to force large institutions to take action. While it may have been neglected in the past, banks today, including wealth management specialists, are increasingly keen to stress their capital adequacy prowess as they realise this is a big plus in the eyes of clients.

DBS sold what is called a “non-cumulative non-convertible perpetual capital securities callable in 2019”. It was priced at a distribution rate of 4.7 per cent, DBS said in a statement.

This tender offer was designed to help the DBS Group transition to the new Basel III regulatory capital rules, under which the existing preference shares - which had formed part of the bank's capital structure - no longer fully qualify as Tier 1 capital of DBS Bank, it said.

On 1 November, DBS Group announced its third-quarter results, including the fact that its Core Equity Tier 1 ratio was 13.3 per cent and total capital adequacy ratio of 15.9 per cent - both 0.4 percentage points higher than the previous quarter’s levels. The increase was due to updates to internal credit ratings and a reduction in market risk positions.