DBS Bank has joined SwapClear, part of LCH, the clearing business for London Stock Exchange Group (LSEG) business. The bank has become the first direct member in Singapore. SwapClear
The move to central clearing continues to be a focus for banks in the region as they try to seek efficiency and regulatory capital relief. SwapClear reports a continued increase in the use of its services in the Asia Pacific (APAC) region, recording a 15% increase year-on-year in volumes from APAC-domiciled clients and APAC currencies.
DBS, a major regional market participants in APAC, saw its Treasury and Markets (T&M) business recording income growth from SGD2.2 billion in 2019 to SGD3.2 billion in 2021, an increase of more than 46%. DBS’ T&M business’ five-year revenue compound annual growth rate (CAGR) between 2017 and 2021 was 13%.
By joining LCH SwapClear as a direct member, DBS will be able to post Singapore Government Bonds as collateral, marking the first time a global offshore clearing house has accepted this asset class as eligible collateral.
Isabelle Girolami, CEO of LCH Ltd, said, “We are proud to welcome DBS as our first member in Singapore and look forward to helping them achieve their optimization goals as they continue their impressive growth. Singapore is a strategic focus for us as we look to expand our services throughout APAC. Through our continued investments in regional products, services, and people we hope DBS and other APAC firms continue to derive incremental value.”
Andrew Ng, group head of treasury and markets at DBS Bank, said, “We are delighted to be LCH SwapClear’s first direct member in Singapore, unlocking even greater liquidity in the OTC interest rate swap and IRS markets for our global client base. This partnership will also provide us with the highest standard of risk mitigation and unparalleled capital and margin efficiencies to further fortify our treasury markets business amid an increasingly competitive landscape. In particular, LCH’s expansion of collateral services to include Singapore Government Bonds was a particularly important step to meet our local market needs.”
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