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Derivatives

Singapore Bank Plans Credit Debut

Singapore's OCBC Bank is planning to kick-start a credit derivatives operation by year-end.

Singapore's OCBC Bank is planning to kick-start a credit derivatives operation by year-end. "We're behind schedule, but this is in the works," said Yap Tsok Kee, v.p. in group treasury. OCBC has been eyeing credit derivatives over the last year or so but decided to first boost its presence in the interest rate derivatives market. Yap continued the bank plans to upgrade its trading systems in the coming months and then hire a credit trader and a structurer.

In addition to trading credit-default swaps, the bank will offer credit-linked notes and potentially more esoteric structures such as synthetic collateralized debt obligations.

A credit trader at a bulge bracket house said the move is a positive sign that more regional banks are getting involved, adding that rival Singapore bank DBS has built up a notable credit trading platform over the last few years.

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