Troubles come in troops for DBS Group Holdings share price (SGX: D05). The recent online service outage caused an uproar in Singapore, with the Monetary Authority of Singapore (MAS) saying that the disruption was “unacceptable”. The MAS will also be taking actions against DBS after investigation is completed. In light of this mess, what will the implication be for DBS Group Holdings share price (SGX: D05) in the coming months?
For DBS Group Holdings, it is a case of lightning strikes thrice as the 29 March 2023 service outage was actually the third time for DBS. The previous incidents took place in November 2021 and July 2010. For the 2021 incident, the MAS has imposed an extra capital requirement of $930 million on DBS. This was four times higher than the amount imposed on the bank for the 2010 incident. Evidently, the extra capital requirements had not been effective as the latest outage took place just 16 months from the 2021 incident.
Will the MAS impose a significant civil penalty on DBS? It remains to be seen as analysts had claimed that the MAS is likely to impose another round of extra capital requirement on DBS, albeit at a much higher amount than the 2021 version.Read more