Singapore's covered bond market reaches S$29.8 billion
The Monetary Authority of Singapore reported that new issuance reached a record S$11 billion in 2025, with the market growing 15% annually since 2021.
Singapore's Covered Bond Market Expansion
Singapore's covered bond market reached S$29.8 billion in outstanding value last year, according to data released by the Monetary Authority of Singapore (MAS) on Monday. This represents a significant increase from S$17.3 billion four years earlier. The market has shown consistent expansion, recording a compound annual growth rate of 15 per cent since 2021. This growth reflects increasing utilisation of this funding instrument within the city-state's financial sector.
Record Issuance in 2025
The MAS's latest annual update on the corporate debt market also revealed a record S$11 billion in new covered bond issuance during 2025. This substantial inflow of new bonds contributed significantly to the overall market expansion. Covered bonds, backed by specific assets like mortgage loans, offer banks a secure funding avenue, typically at lower costs than unsecured debt.
DBS Drives Market Growth
A closer examination of the market's trajectory indicates that DBS Group Holdings has been a primary driver of this expansion. While all three major local banks – DBS, Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB) – utilise covered bonds, their approaches to this funding tool vary considerably. This suggests differing strategic priorities or asset portfolios among Singapore's leading lenders.
The strong growth in Singapore's covered bond market provides local banks with a diversified and cost-effective funding source. For investors, the expanding market offers opportunities in high-quality, asset-backed debt instruments.
However, the observed disparity in usage among major banks suggests that future market evolution may depend on individual institutional strategies and their specific funding requirements. Investors should monitor how these different approaches affect bond availability and pricing.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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