I Saw “Asia’s Safest Bank” at a Singapore Airport: A Banking Safety Lesson for a 10-Year-Old

At Singapore Changi Airport I saw an ad reading “Asia’s Safest Bank,” and my first question wasn’t how impressive it is, it was, who says so?

Author: Koutian Wu; GitHub: ktwu01

The bank in the ad is today called DBS Bank Limited, whose official Chinese name is 星展银行有限公司. “Limited” means “limited company,” commonly shortened to “Ltd” in company names. The three letters DBS come from its English name when founded in 1968, Development Bank of Singapore, naturally rendered in Chinese as “Singapore Development Bank.” The airport where I saw the ad, Singapore Changi Airport, has a three-letter booking and baggage code, SIN, taken from “Singapore.”

Now let’s look at the ad text again:

DBS — Asia’s Safest Bank

DBS, Asia’s safest bank

Upon seeing “No. 1 in Asia,” the most important move is neither to believe it immediately nor to call it boasting, but first to ask:

1. What’s this bank’s story?
2. Who says it’s No. 1?
3. Compared with whom?
4. What does “safe” actually mean?
5. If something goes wrong with the bank, what happens to my money?

This article explains everything from zero. The goal: a 10-year-old can read it, and know the numerator and denominator of every percentage.

Source: DBS official history: Development Bank of Singapore founded in 1968

Is “Asia’s Safest” true?

Within a ranking that clearly states the name, the year, and the methodology, yes.

In 2025, Global Finance ranked DBS No. 1 among “Asia’s Safest Banks.” This is the 17th consecutive year DBS has held the title. DBS also ranked No. 2 in the “World’s Safest Commercial Banks” list.

There are three terms here that must be explained.

1. Who is Global Finance?

It’s an American financial magazine, not the Singapore government and not an authority that manages banks.

So “Asia’s Safest Bank” is a media ranking, not a government-issued “certificate of never going bust.”

2. What is a commercial bank?

A commercial bank is the kind of bank we encounter when we deposit money, transfer money, get a credit card, or borrow. It serves individuals and businesses, and it also needs to make money.

“Second among the world’s safest commercial banks” is not “second among all financial institutions in the world.” Some policy banks, which are directly supported by governments and serve different functions, may appear on other lists.

3. How does it rank?

Global Finance first looks at 500 large banks worldwide, then consults the long-term foreign-currency ratings from three credit-rating agencies:

• Fitch Ratings;
• Moody’s Ratings;
• S&P Global Ratings, the Standard & Poor’s-based name.

You can think of rating agencies as teachers who assign scores to banks. Here the “score” corresponds to a credit rating, and the “subject tested” corresponds to a bank’s long-term ability to repay on time. But the teacher analogy stops there: rating agencies can’t see the future, and they don’t compensate depositors if a bank fails.

“Long-term foreign-currency rating” breaks into three parts:

• Long-term: not just looking at tomorrow, but at the next several years;
• Foreign currency: whether the bank can repay when it owes foreign currencies like the dollar;
• Rating: the rating agency’s judgment, not a guarantee.

Rating agencies can also judge wrong. So this ranking can serve as evidence, but it cannot by itself prove that a bank is absolutely safe.

Source: Global Finance 2025 ranking and methodology

How does a bank actually work?

Suppose Xiaoming, Xiaohong, and Xiaogang each deposit 100 yuan in the same bank. The bank now owes the three children a total of 300 yuan.

The bank won’t lock all 300 yuan in a drawer. It might:

• keep some cash;
• buy some easily-sellable government bonds, that is, “IOUs” the government writes by borrowing money, promising to repay principal and interest later;
• lend some money to home buyers or companies and collect interest.

So the money customers deposit is a liability to the bank, because the bank must repay it to customers later.

The loans the bank makes, and the cash and bonds it holds, are assets to the bank, because these can recover money or be sold for money.

A bank can be simplified as:

Here “shareholders’ capital” is the bank owners’ own money plus profits retained from earlier periods.

A bank failing can have two completely different causes

Type one: things are genuinely insufficient

Suppose the bank lends out 100 yuan, but the borrower goes bankrupt and can only repay 20. The bank loses 80.

If the bank’s owners have set aside enough capital, the shareholders absorb this 80 loss first, and customers’ money may still be safe.

If the loss is large enough to exceed all capital, the bank can have a solvency problem: everything it owns is no longer enough to repay what it owes.

Type two: the stuff is there, but it can’t be turned into cash today

Suppose the bank holds a 30-year mortgage. The borrower will repay gradually, but the bank can’t demand that they hand over all 30 years of money today.

If many customers all withdraw today at once, the bank may be temporarily short of cash. This is a liquidity problem.

In one sentence:

Capital answers “after losing stuff, is there still enough”; liquidity answers “can I produce cash today.”

All the indicators below answer these two questions.

CET1: how thick is the “crash cushion” the bank’s shareholders prepared?

CET1 stands for Common Equity Tier 1, that is, “ordinary equity tier-1 capital,” often just called “core tier-1 capital.”

This name is long, but it mainly includes:

• money put in by common shareholders;
• profits the bank earned but didn’t pay out, remaining within the business.

If loans suffer losses, this layer of money is reduced first. So you can think of CET1 as the crash cushion shareholders place at the front. The cushion corresponds to shareholder capital, the crash corresponds to losses on assets like loans, and the cushion thinning corresponds to capital being consumed by losses. However, capital isn’t a pile of cash locked alone in a warehouse; this analogy only explains who bears the loss first.

What are “risk-weighted assets”?

Regulators don’t treat every 100 yuan of assets as equally risky:

• cash is easy to use and lower risk;
• high-rated government bonds are usually lower risk;
• a corporate loan that might not be repaid is higher risk.

So regulators multiply different assets by different risk weights and add them up to get “risk-weighted assets.”

The CET1 ratio’s simple formula is:

DBS reported a CET1 ratio of 17.0% at the end of 2025. Plain-language translation:

Behind every 100 “risk units” of assets, about 17 Singapore dollars of the highest-quality shareholder capital absorb the first round of losses.

This does not mean there are 17 Singapore dollars of cash sitting beside every 100 dollars of deposits. Capital and cash aren’t the same thing.

At the time, DBS held about 62.2 billion Singapore dollars of CET1 capital. Under the rules being phased in during 2025, the ratio is 17.0%; if the not-yet-fully-effective new rules were assumed fully effective, DBS estimates about 15.0%, still above its own target and regulatory requirements.

Basel III (巴塞尔协议III in Chinese) is a set of international banking safety rules formed after the 2008 financial crisis. Each country’s regulator then writes them into local rules.

Source: DBS 2025 annual report

Leverage ratio: why measure with another ruler?

Risk weights require human design, and they can underestimate the danger of a given asset. So regulators also check the leverage ratio.

The leverage ratio depends less on risk weights; it’s closer to:

Here the numerator “Tier 1 capital” includes the core tier-1 capital explained above, plus possibly a small amount of other capital that can also absorb losses. The denominator “total risk exposure” looks not only at loans already made, but also at other assets the bank holds, and money it has promised to perhaps provide in the future.

It’s like a second ruler, used to stop a bank from describing all its assets as “low risk” so it can pretend to have lots of capital.

DBS’s leverage ratio at the end of 2025 was 6.2%, above the 3.0% minimum set by the Monetary Authority of Singapore. Plain-language translation: behind every 100 Singapore dollars of total risk exposure, there is about 6.2 Singapore dollars of Tier 1 capital. It doesn’t mean the bank keeps 6.2% of deposits as cash, and it doesn’t mean the bank expects to lose 6.2%.

Non-performing loan ratio: how much of the money lent out has already gone seriously wrong?

NPL stands for Non-Performing Loan, “bad loan” in Chinese.

It doesn’t mean a payment one day late; it means a loan that is seriously overdue, or that the bank judges the borrower is likely unable to repay in full.

The non-performing loan ratio has as its numerator the loans already classified as non-performing, and as its denominator the bank’s total loans. DBS’s non-performing loan ratio at the end of 2025 was 1.0%. Plain-language translation:

Of every 100 Singapore dollars lent out, about 1 Singapore dollar is classified as a loan already seriously in trouble.

But this doesn’t mean the bank necessarily loses that full 1 dollar. The bank may:

• recover part of it from the borrower;
• sell collateral;
• use expected loan losses already provisioned on the books earlier.

Conversely, a loan that is normal today can still go wrong later. So the NPL ratio is a current snapshot, not a promise about the future.

What exactly is the “30-day stress scenario”?

This is the vaguest part of the ad text. It does not say:

“We predict that next month happens to bring a crisis lasting exactly 30 days.”

What it genuinely means is:

Regulators design a uniform bank fire-drill, assume a very bad month arrives, and then calculate whether the bank can survive 30 days on its own.

This drill comes from international bank regulation rules, which the Monetary Authority of Singapore then writes into local requirements. Banks fill in their own real deposit, borrowing, and asset data; they can’t invent the least stressful story for themselves. The scenario puts together two types of stress, “this bank gets into trouble by itself” and “the whole financial market is strained together,” and then assumes several bad things happen at once, for example:

1. some ordinary customers withdraw due to fear;
2. corporate customers withdraw a larger share of deposits;
3. people who usually lend to the bank don’t want to renew when their money comes due;
4. customers draw on credit lines the bank has already committed, that is, actually borrowing money that was available but not yet taken;
5. the bank will still receive some repayments, but regulators won’t assume that all due money arrives smoothly.

Regulators set a withdrawal or outflow rate for each category of funding. The bank can’t just pick the easiest story.

How is LCR calculated?

LCR stands for Liquidity Coverage Ratio, “liquidity coverage ratio” in Chinese.

The formula is:

“Net outflow” is:

Here’s an example purely to understand the formula:

• the regulatory rules calculate: after the bad situation, net outflow of 100 dollars over the next 30 days;
• the bank holds 155 dollars of eligible high-quality liquid assets;
• then LCR is \(155\div100=155\%\).

DBS reported a group LCR of 155% at the end of 2025. This means that, in the 30-day bad scenario prescribed by regulators, DBS’s eligible liquid assets were about 1.55 times its projected net cash outflow.

What are “high-quality liquid assets”?

HQLA stands for High-Quality Liquid Assets, “high-quality liquid assets” in Chinese. They serve as the bank’s emergency cash box and need to be able to turn quickly into cash with little price discount, and they must not already be pledged to someone else.

DBS says these assets mainly include:

• cash;
• funds at the central bank, the public institution responsible for issuing currency and overseeing the banking system;
• high-rated government bonds;
• some high-rated bonds issued by supranational institutions.

“Supranational institutions” means institutions jointly established by multiple countries, such as certain international development banks. You don’t need to memorize the names here; just know that some of their bonds are highly creditworthy and easy to sell.

Why 30 days?

International rules consider that 30 days at least gives bank management and regulators some time:

• to sell liquid assets;
• to find new longer-term funding;
• to reduce risk;
• to arrange a rescue, restructuring, or the orderly resolution of a bank that can no longer continue.

What doesn’t 155% mean?

It does not mean:

• DBS set aside 155 dollars of cash for every 100 dollars of total deposits;
• if all customers withdrew all their deposits at once, DBS would still definitely survive;
• any crisis only lasts 30 days;
• real withdrawal speeds will match the model’s assumptions;
• DBS will never have a liquidity crisis.

So LCR is a stress test using uniform rules, not a prophecy and not an insurance contract.

Source: Bank for International Settlements’ explanation of LCR and the 30-day scenario

NSFR: don’t fund a loan repaid 30 years from now with money due tomorrow

NSFR stands for Net Stable Funding Ratio, “net stable funding ratio” in Chinese. It checks whether, over the next year, assets that the bank finds hard to recover or sell quickly are supported by reasonably stable funding.

The liquidity coverage ratio mainly looks at the next 30 days; the net stable funding ratio mainly looks at the next year.

For example, the bank issues a mortgage fully repaid only 30 years later, yet funds it entirely with borrowing due tomorrow. If tomorrow others refuse to keep lending, the bank will be in trouble.

This ratio simplifies to:

The “available stable funding” in the numerator includes shareholder capital, the more stable customer deposits, and long-term borrowing, but regulators discount it by stability. The denominator captures how much stable funding assets like loans and bonds require; the harder they are to recover or sell quickly, the more stable funding they usually need.

The net stable funding ratio therefore checks:

Are assets the bank must hold long-term supported by sufficiently stable funding?

100% is the minimum regulatory line. Using teaching numbers: if the bank has 105 dollars of available stable funding and the business needs 100, the ratio is 105%. DBS only states that its NSFR has stayed above 100% and gives no precise figure here, so don’t assume it’s 105% or 130%. Being above 100% also doesn’t mean the bank kept 100 dollars of cash for every 100 dollars of deposits, and it certainly doesn’t guarantee it can survive any crisis of one year’s length.

Where’s the gold? “Reserves” actually has three different meanings

Seeing “safest bank,” some people think of gold bars in a vault. But modern commercial banks don’t operate that way.

The word “reserve” can refer to at least three different things:

1. a country’s or central bank’s gold and foreign-exchange reserves: assets at the sovereign level;
2. commercial bank reserves: usually the cash a bank holds and money at the central bank, not necessarily gold;
3. loan-loss provisions: an accounting buffer recorded in advance for loans that may not be recovered.

A DBS customer depositing 1 Singapore dollar doesn’t mean DBS adds a matching amount of gold to its vault. Customer deposits are supported by the bank’s entire assets and capital together, including loans, bonds, cash, and central-bank deposits.

DBS may hold or trade gold on customers’ behalf, or may temporarily hold gold or other precious metals because of its trading business; but this is entirely different from “every deposit is supported one-to-one by gold.” DBS’s 2025 annual report also doesn’t list gold as a special reserve backing deposits; the assets used to cope with withdrawal pressure are mainly cash, central-bank funds, and high-rated bonds.

So:

DBS is called safe not because it claims to hold the most gold bars, but because its ratings, capital, loan quality, and liquidity indicators are stronger.

Who is MAS? Will the government definitely rescue DBS?

MAS stands for Monetary Authority of Singapore, “Singapore Monetary Authority” in Chinese.

It performs many of the duties of both Singapore’s central bank and its financial regulator. You can think of it as “the referee responsible for setting banks’ safety rules and examining banks.”

DBS is also Singapore’s systemically important bank. This term means: if it stopped operating, the payment system, businesses, and many residents would be significantly affected, so regulators impose stricter requirements on it.

But “systemically important” doesn’t equal “legally guaranteed never to fail.”

DBS’s government ties come from two layers:

• it was originally established by Singapore to help the country industrialize;
• as of February 2026, Temasek (淡马锡 in Chinese), wholly owned by the Singapore government, held about 28.3% of DBS Group directly and indirectly. That is, of every 100 shares, about 28.3 are held directly or indirectly by Temasek; this is an ownership proportion, not a government payout proportion for deposits.

This strengthens market confidence that DBS may get support. But:

The government holding shares through Temasek does not mean the government has signed a contract guaranteeing unlimited payout of every DBS deposit and debt.

Deposit insurance: if the bank really fails, which money is protected?

SDIC stands for Singapore Deposit Insurance Corporation, “Singapore Deposit Insurance Corporation” in Chinese.

If a member bank of this insurance scheme fails, SDIC provides, in aggregate for the eligible deposits of the same depositor at that member institution, protection up to a maximum of S$100,000.

“In aggregate” matters. Suppose one person has, at the same member bank:

• a savings account of S$60,000;
• a fixed deposit of S$50,000.

Together that’s S$110,000, not S$100,000 of protection for each account. The general coverage cap is still calculated as the aggregate S$100,000 per depositor per member institution.

What’s mainly protected is eligible Singapore-dollar deposits held at a Singapore branch, such as savings, current, and fixed deposits.

The following products are NOT covered by this deposit insurance:

• foreign-currency deposits;
• structured deposits, that is, products whose returns are linked to market prices such as stocks or exchange rates and may carry investment risk;
• investment products such as funds and stocks.

So you can’t just ask “am I a DBS customer”; you also have to ask:

Is my product an eligible Singapore-dollar deposit? What’s my aggregate amount at the same member institution?

Source: SDIC: scope of coverage and products not covered

“Financial safety” doesn’t equal the mobile app never going down

DBS’s capital and liquidity can be strong, but its mobile application, the app people call it, can still malfunction.

In 2023, DBS suffered multiple disruptions to its digital-banking services. The Monetary Authority of Singapore therefore raised its operational-risk capital requirement and suspended certain non-essential information-technology changes for six months. Information Technology, often abbreviated IT, here refers to the bank’s software, computers, and network systems.

This shows bank safety has at least four layers:

1. solvency safety: whether assets are ultimately enough to repay debts;
2. liquidity safety: whether cash can be produced today;
3. operational safety: whether the mobile app, transfers, and internal systems work properly;
4. individual account safety: whether customers suffer scams, account takeover, or mistaken transfers.

Global Finance’s “Asia’s Safest Bank” mainly touches the first layer and indirectly considers overall credit standing. It doesn’t mean the other three layers never go wrong.

Source: MAS regulatory measures over DBS service disruptions

Translating DBS’s numbers into plain English

These numbers support the judgment that DBS’s financial position is strong, but no single one can by itself prove “absolute safety.”

When you see “No. 1,” “best,” or “safest,” how should you ask?

Even a 10-year-old can ask, in order:

1. Who says so? Government, regulator, media, or the company itself?
2. Which year? Last year’s No. 1 isn’t necessarily this year’s No. 1.
3. Compared with whom? All banks, commercial banks, or banks in one region?
4. By what rules? Credit ratings, capital, profits, mobile-app experience, or customer votes?
5. What are the numerator and denominator of the percentage? Who is divided by whom to get 155%?
6. What is it not measuring? Financial safety doesn’t equal system, scam, and individual-account safety.
7. Who pays when things really go wrong? What products and how much does deposit insurance cover?

Final summary

Translating the airport ad into words without marketing flavor:

In a Global Finance 2025 ranking based on large banks’ long-term foreign-currency credit ratings, DBS ranks No. 1 in Asia. DBS’s capital, non-performing-loan, and liquidity data also show a strong financial buffer.

But it does not mean:

• every DBS deposit is backed one-to-one by gold;
• an LCR of 155% equals keeping 155% cash against all deposits;
• the government guarantees unlimited payout of all deposits;
• mobile banking never goes down;
• customers can never be scammed;
• the bank can’t fail in any extreme event.

What’s really worth learning from this ad isn’t the single sentence “DBS is amazing,” but a method for examining concepts:

First ask who rated it, then ask how it was rated; when you see a percentage, ask who’s divided by whom; when you see “safe,” ask which kind of safety it measured.