The Singaporean banking sector is not the safe-haven it used to be. Material exposure to rising defaults from the Singaporean energy sector will lead to higher provisions. Aggressive expansion into China and India has yielded sub-par returns and is now beginning to manifest itself in rising NPLs. Meanwhile, the banks have far greater exposure to off-balance sheet liabilities and market risk than most regional peers. Despite all of this, provisions are below long-term historic averages. Instead of being conservative, the banks look to have been reckless. Significant earnings and capital risk exist. Underweight the sector and Sell DBS with 35% downside to S$9.9/share.