The Dubai Mercantile Exchange (DME) said the DBS Bank’s Singapore office has approved to issue letters of credit (LCs) for trading crude oil on the exchange.

DBS is the first Singapore bank to receive such approval and will be able to issue LCs directly from Singapore on behalf of its clients to guarantee deliveries of Oman crude oil through the DME, said a statement.

Owain Johnson, managing director, DME, said: “We are pleased to announce that DBS is the first Singapore bank with regional Asia presence to be awarded this status. As a major bank in Singapore with a strong credit rating, we believe DBS would play a significant role in contributing to higher trade volumes conducted by over 400 commodity players based on Singapore.

“DBS’ support is a significant step that will further enhance the trading environment offered by the Exchange and allow our customers to manage risks more effectively.”

John Laurens, managing director and head of Global Transaction Services, DBS, said: “Growing our Global Transaction Services franchise is one of the bank’s strategic priorities and we have made significant progress on this front over the past few years. 

“As a leading trade finance partner for corporates in Asia, receiving this endorsement from DME enables DBS to provide this valuable risk management tool, while leveraging Singapore’s position as Asia’s leading oil pricing and trading hub. We look forward to building the trade finance business actively with our clients and playing a more active role in facilitating trade between the Middle East and Asia.” - TradeArabia News Service