Fitch says DBS and OCBC are stable

Fitch's affirmation of DBS and OCBC's stability status reflects the banks' strong credit profiles.

Fitch ratings on Wednesday agreed on the 'AA-' Long-term foreign-currency Issuer Default Rating (IDR) of DBS Bank Ltd (DBS) and Oversea-Chinese Banking Corp (OCBC) with Stable Outlooks.

The affirmation of DBS' and OCBC's ratings reflects the banks' strong credit profiles, which remained resilient despite the difficult operating environment in 2008 and 2009. In contrast to many Western financial institutions, both banks remained profitable in 2009, with asset quality having held up much better than expected and capital not only staying intact but strong.

The weaknesses of many major developed countries could have a knock-on impact on fairly open economies which DBS and OCBC operate in, namely Singapore, Hong Kong and/or Malaysia. Notwithstanding these risks, Fitch believes that the two banks may have better earnings prospects in 2010.