Title
DBS Group Holdings
Sound Strategy Backed by
Strong Capitalization
November 5, 2001
THESE PRESS MATERIALS ARE NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, SECURITIES MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF
SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE
ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL
STATEMENTS. "UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE
UNITED STATES, AND THE DISTRICT OF COLUMBIA.
Ensuring strong capitalization and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Improved efficiency in expense management

Non-interest income continues to shine
2
Operating profit up 49.9% QoQ
DBS
3Q00
DBS
3Q01
%
Change
Net interest income
Fees and commissions
Dividend & rental
Other income
Operating income
Staff costs
Operating expenses
Total expenses
Operating profit
Loan loss provisions
513
131
12
67
723
178
162
340
383
26
588
174
15
267
1,044
244
226
470
574
246
14.7
32.7
25.0
300.3
44.4
36.7
39.7
38.1
49.9
NM
472
133
28
87
720
177
189
366
354
8
24.6
30.8
-46.4
206.2
45.0
38.1
19.4
28.5
62.0
NM
Cash net profit
338
265
-21.6
308
-14.0
Goodwill
Net profit
0
338
64
201
NM
-40.5
0
308
NM
-34.8
Financial Indicators (%)
Net interest margin
Cost-to-income ratio
2.05
47.0
1.78
45.0
0
-4.3
1.71
50.8
4.1
11.4
(S$ million)
DBS
2Q01
%
Change
3
Dao Heng disproportionately contributed
to top line growth
(S$ million)
DBS
3Q01
DHB
3Q01
DBS excl
DHB
DBS
2Q01
%
Change
Net interest income
Fees and commissions
Dividend & rental
Other income
Operating income
Staff costs
Operating expenses
Total expenses
Operating profit
Loan loss provisions
588
174
15
267
1,044
244
226
470
574
246
150
51
1
22
224
56
50
106
118
24
438
123
14
245
820
188
176
364
456
222
472
133
28
87
720
177
189
366
354
8
-7.1
-7.6
-50.0
180.6
13.8
6.8
-7.4
57.4
28.8
NM
Cash profits
265
60
205
308
-33.4
Goodwill
Net profit
64
201
0
60
64
141
0
308
NM
-54.2
4
Dao Heng synergy targets raised 39%
Original Estimate:
HK$540 million
New:
HK$750 million
Revenue :
HK$275 million
Revenue :
HK$450 million
Cost:
HK$265 million
Cost:
HK$300 million
5
Ensuring strong capitalization and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Non-interest income continues to shine

Improved efficiency in expense management
6
Prudent provisioning
(S$ million)
9M00
9M01
%
Change
DBS Bank
- Loans
- Equities
- Others
25
20
4
-
263
132
123
8
947.9
554.7
2,653.1
NM
Dao Heng Bank
-
24
NM
DBS Kwong On Bank
-
13
NM
DBS Thai Danu Bank (DTDB)
19
12
(34.4)
DBS China Square
22
16
(26.7)
Others
16
21
27.0
Specific provisions
82
349
325.8
General provisions
(44)
(58)
28.3
38
292
678.5
Total DBSH Group provisions
7
A significant portion of 3Q provision is driven
by September 11 attacks
(S$ million)
Total 3Q provision exercise
246
- Loan related provision
146
- Mark-to-market provision for
marketable securities
100
Out of the S$100 million mark-to-market provision expense,
S$48 million was written-back after market recovery in
October
8
NPLs fell to 6.0%
Dao Heng Bank
DBS Thai Danu Bank
5 Regional Countries
Others
Singapore
NBk NPL/NBk
Loans (%)
(S$ million)
13.1% 13.0%
11.8%
12.7%
8,121 8,149
7,666
7,085
3,018
8.5%
3,207
3,000
2,874
1,408
3,907
1,365
1,144
1,143
871
267
2.7%
1,112
772
366
97
649
1,249
151
Dec 97
2,705
Dec 98
Jun 98
4,577
777
1,238
1,239
1,735
7.6%
4,834
4,411 815
6.2%
2,824
1152
2,425
1070
667
624
770
642
1,735
1,610
6.0%
1,101
606
607
2,452
Dec 99
Dec 00
Jun 99
Jun 00
Jun 01
1,486
Sep 01
9
71% of NPLs are graded “Substandard”
5
S'pore
5RC
1,207
275 1,486
81%
83
421
71%
Others
Substandard
85
Doubtful
Loss
589
10
273 58 340
103
DKOB
158
Dao Heng
7
268
290 221 266
777
7
DTDB
903
191
1,101
82% 1% 17%
Total
3,251
445
881
71%
10%
19%
Of which 9%
have never been
delinquent or
defaulted
4,577
10
Provision coverage improved from 55% to 59%
General Provisions (GP)
Specific Provisions (SP)
(S$ million)
SP+GP/Unsec NPLs (%)
SP+GP/NPLs (SEC) (%)
SP+GP/NPLS (%)
4,286
3,978
3,852
1,191
3,147
1,174
1,294
3,095
1,894
948
801
114.8%
110.6%
119.6%
980
1,155
1,049
2,032
946
1,180
2,286
2,558
88.1%
2,687
2,804
1,115
164.6%
2,643
118.4%
146.5%
129.9%
1,463
102.7%
1,237
55.3%
48.5% 44.4% 47.4%
143.8%
63.0% 60.8% 61.4% 59.9%
52.6% 51.9% 51.8%
54.7%
1,532
62.9%
58.7%
179
Dec 97
Dec 98
Jun 98
Dec 99
Dec 00
Jun 99
Jun 00
Jun 01
Sep 01
11
41% of NPLs restructured
Sep 00
Jun 01
Sep 01
16.9%
25.2%
32.5%
59.1%
67.3%
66.0%
22.1%
16.3%
18.2%
Restructured / non accrual
37.7%
38.5%
41.2%
NPLs under SEC reporting
6.3%
5.6%
5.5%
Non-restructured NPLs / total loans
5.4%
3.8%
3.4%
Singapore
Restructured / non-accrual
Regional countries
Restructured / non-accrual
Other countries
Restructured / non-accrual
Total
12
Ensuring strong capitalization and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Improved efficiency in expense management

Non-interest income continues to shine
13
Margins stabilized at 1.78% in 3Q01
(S$ million)
Net interest income
Net interest margin (gross basis)
1,176*
1,046
1,046
993
989
2.00%
1H99
2.04%
962
2.07%
1.97%
2H99
1H00
2H00
1.78%
1.78%
1H01
3Q01
* Semi-annualised earnings derived from quarterly performance.
14
Ensuring strong capitalization and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Improved efficiency in expense management

Non-interest income continues to shine
15
On track with target growth rate of YoY
17% expense growth
9M00
9M01
%
Change
Staff costs
460
567
23.2
Occupancy expenses
110
120
9.2
Technology-related expenses
99
121
21.9
Professional and consultancy fees
54
44
(18.6)
211
250
18.5
934
1,102
17.9
-
11
NM
934
1,113
19.1
-
106
NM
Total
934
1,219
30.5
Cost-to-income ratio (%)
42.2
47.4
(S$ million)
DBSH Group (excluding DHG)
Others
Non Dao Heng restructuring costs
Total (excluding Dao Heng)
Dao Heng
16
Set to achieve 17% expense growth target
by end-2001
(S$ million)
500
400
382
470
366
(%)
30
26
106
19
20
300
200
364*
17
10
100
0
0
1Q2001
2Q2001
3Q2001
* Includes S$11mn restructuring charge
Cost containment program is
producing results - Operating
expenses (excluding Dao Heng)
have been declining steadily
quarter-on-quarter
1H2001
3Q2001
FY2001
Target
Year-on-year expense growth
expected to meet
management target
17
STP rates leap from 14% to 89%
100
% of txns processed ‘Straight Through
75
% Transactions processed
Straight Through
Increasing straight-through levels improve
productivity
100
Remittance Operations
75
50
40.0 Benchmark: Operations Council
25.3
25
16.1
5.5
0
Bench Mark Dec 00
86.5
86.0
85.5
87.4
87.6
88.3
89.6
25
14.4
17.1
0
Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep01
01
01
01
01
01
01
01
01
% Calls handled by IVR
50
100
75
Mar 01
Sep 01
Contact Centre
75.0
Benchmark: Operations Council
Assumes full service IVR capability
50
23.2
25
8.8
0
Bench Mark Dec 00
Mar 01
Sep 01

Implementation of CRM & Interactive Voice
Recognition will bring Contact Centre STP rates close
to Global bench marks

IDEAL & BBS-2000 Enhancements, will drive the
Remittance Operations STP rates up to
approximately 45-50%

Cheque Truncation Scheme implementation in 2Q-02
along with other initiatives will move the Clearing
Operations STP rates closer to the 100% Mark
% Transactions processed
Straight Through
Clearing Operations
100
98.0
91.4
93.5
96.0
Bench
mark: Int.
research
75
50
25
0
Bench Mark Dec 00
Mar 01
Sep 01
18
Unit costs are low
Remittance Operations-Outward TTs
Clearing Operations - Inward Cheques
(Index)
1.20
(Index)
1.20
1.00
0.97
0.80
0.80
0.40
0.40
0.00
Budget
YTD (Avg)
Trade Operations - Collections
(Index)
1.20
0.00
1.00
1.02
Budget
(Avg)
YTD (Avg)
Remittance Operations - Cashiers Orders
(Index)
1.20
1.00
1.00
0.88
0.80
0.80
0.40
0.40
0.78
0.00
0.00
Budget
(Avg)
YTD (Avg)
Budget
(Avg)
YTD (Avg)
19
Processing & Servicing rolled-up
199
181
140
100
70
0
2000
Mar 01
Sep 01
240
240
Remittance Operations
163
180
133
120
100
60
0
Dec 00
Clearing operations
:
5.25 Sigma

Account services
:
5.00 Sigma

Remittance operations :

Clearing & Remittance Operations ISO9000 Certified
4.25 Sigma
Sep 01
180
131
100
120
96
60
0
Process Quality

Mar 01
Contact Centre
Dec 00
Transactions / FTE (Index)
Transaction / FTE (Index)
210
Transactions / FTE (Index)
Large Productivity Gains from
Centralisation & Re-engineering
Transactions / FTE (Index)
Processing productivity is improving
240
Mar 01
Sep 01
Clearing Operations
163
180
127
120
100
60
0
Dec 00
Mar 01
Sep 01
20
Ensuring strong capitalisation and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Improved efficiency in expense management

Non-interest income continues to shine
21
Strong fee income despite stockbroking
liberalization and weak markets
(S$ million)
9M00
9M01
%
Change
Loan-related
37
56
52.5
Deposit-related
42
72
70.6
Trade-related
55
71
30.3
Investment Banking
77
54
(29.7)
Credit Card
25
51
102.8
Fund Management
52
50
(3.9)
Stockbroking
65
31
(52.3)
Others
39
40
1.3
Total
392
425
8.5
Fee-to-income ratio (%)
17.7
16.5
22
Other income: FX & securities trading
doubled
9M00
9M01
%
Change
86
39
141
158
64.1
306.1
Net gains on sale of government
securities and equities
25
58
130.5
Net gains on disposal of investment
securities
27
135
401.3
Net gains on disposal of fixed assets
4
24
533.5
25
26
4.4
Total
206
542
163.3
Non-interest income to operating
income ratio (%)
29.5
39.7
(S$ million)
Net gains on treasury activities
- foreign exchange
- trading securities and derivatives
Others
23
Significant growth in Treasury & Markets
business with consistent risk profile
-10
24/Sep/01
28/Aug/01
27/Jul/01
27/Jun/01
1/Jun/01
6/Apr/01
4/May/01
-1
16/Feb/01
24/Jan/01
2/Jan/01
0
21/Sep/01
22/Aug/01
27/Jul/01
3/Jul/01
11/Jun/01
9/May/01
13/Apr/01
16/Mar/01
20/Feb/01
25/Jan/01
-5
2/Jan/01
0
14/Mar/01
Hong Kong DEaR
Singapore T&M DEaR
S$M
S$m
-2
-15
-3
-20
-4
-25
-5

Singapore Treasury and Markets
have expanded earnings while
maintaining DEaR levels

Hong Kong has benefited from a
significant decline in DEaR
24
Ensuring strong capitalization and asset
quality coverage

Top-line growth offset by conservative
provisioning

Strong asset quality and provision coverage

Stabilized interest margin and interest income

Improved efficiency in expense management

Non-interest income continues to shine
25
Title
DBS Group Holdings
Sound Strategy Backed by
Strong Capitalization
Presentation to Media and Analysts
November 5, 2001
THESE MATERIALS ARE NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, SECURITIES MAY NOT BE OFFERED OR SOLD
IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES
TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND
THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS.
"UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES,
AND THE DISTRICT OF COLUMBIA.