Andy Mukherjee, Columnist

For DBS, It's 2009 Once More

Contingent liabilities may be the banana peel to watch.

August 8, 2016 at 5:27 AM UTC

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

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In fretting over DBS Group's nonperforming loans, investors may be ignoring a slipperier banana peel: contingent liabilities.

When Gadfly flagged the risk in May, the difference between "nonperforming assets" and "nonperforming loans" for Singapore's largest bank had more than quadrupled to S$355 million ($257 million) in one year. That was worrying enough. But with Monday's earnings report showing a further 67 percent jump in the NPA-NPL gap between March and June, the situation is now worse than it was during the 2009 crisis: