Fitch upgrades DBS Bank

Fitch Ratings said it upgraded the long-term foreign currency debt rating of Hong Kong's DBS Bank Ltd. to AA- from A+ to reflect its wholly owned status and core role within the operations of parent DBS Bank in Singapore (AA-).

Fitch also upgraded DBS' short-term rating to F1+ from F1, its $300 million 7¾% fixed-rated subordinated notes due 2007 to A+ from A and affirmed the bank's B individual and 1 support ratings.

The outlook is stable.

The ratings reflect DBS' sound financials and good management, the agency said. Its profitability has been good throughout the economic cycle, thanks to its above-average net interest margins, higher non-interest income and low credit charges.

Looking ahead, DBS' margins should improve as the bank further raised its prime rate in the second half of 2005, although challenges remain in regards to limited loan growth, keen competition and higher operating costs.

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