5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARY COMPANIES
Exhibit 1 Group Net Interest Income and Net Interest Margin
2 ,0 3 5 2 ,0 3 9
2 ,2 5 7 2 ,6 4 5
6 7 0 6 4 2
5 9 9 1 ,4 3 0
2 .0 2 2 .0 2
1 .8 7 1 .9 9
2 .0 2 1 .9 7
1 .8 7 1 .7 7
5 0 0 1 ,0 0 0
1 ,5 0 0 2 ,0 0 0
2 ,5 0 0 3 ,0 0 0
1 9 9 8 1 9 9 9
2 0 0 0 2 0 0 1
2 0 0 2 1 s t Q tr
2 0 0 2 4 th Q tr
2 0 0 2 1 s t Q tr
2 0 0 3
S m
1 2
3
N e t In t e re s t In c o m e N e t In t e re s t M a rg in
Table 1 Group Net Interest Income and Net Interest Margin
S’m 1st Qtr
2003 4th Qtr
2002 1st Qtr
2002
Net interest income 599
642 670
Average interest bearing assets 129,694
128,506 134,296
Gross interest yield 2.86
3.18 3.52
Net interest spread
1
1.80 1.89
1.94 Net interest margin
2
1.87 1.97
2.02
Notes: 1 Net interest spread is the difference between the average interest
rate earned on average interest-earning assets and the average interest rate paid on average interest-bearing funds.
2 Net interest margin is net interest income expressed as a percentage of average interest-earning assets and is annualised.
Net Interest Income and Net Interest Margin
Net interest income decreased by 10.6 to S599 million over the same period in 2002.
The decrease was due to decline in average interest bearing assets, narrower spread on
loans and reduced benefits from deployment of net free funds in a low interest rate
environment.
Compared to 4th Qtr 2002, the decrease in net interest income was 6.7, due mainly to
continuing interest margin compression in the mortgage business and a lower contribution
from net free funds.
Net interest margin was 1.87 for 1st Qtr 2003, a decrease of 15 basis points from
2.02 in 1st Qtr 2002 and 10 basis points, from 1.97 in 4th Qtr 2002.
Table 2 Group Non-Interest Income
Sm 1st Qtr
2003 4th Qtr
2002 1st Qtr
2002
Fee and commission income 160
191 193
Stockbroking 18
23 47
Investment banking 7
22 13
Trade and remittances 27
27 29
Loan related 36
40 26
Deposit related
26
27 27
Credit card 20
22 21
Fund management 7
9 12
Wealth management 14
14 13
Others 5
7 5
Dividend and rental income 13
12 9
Other income 283
203 152
Net gain on treasury products including structured
investment products
153 77
94 Net gain on Singapore
government securities 102
17 26
Net gainloss on equities 1
98 15
Net gainloss on investment securities
27 1
7 Net gainloss on fixed assets
1 5
Others 3
7 10
Total 456
406 354
Non-interest income as a percentage of Operating
income
43.2 38.7
34.6
Note: 1 Insignificant
Non-interest Income
Fee and commission income decreased by 16.7 over the same period in 2002. The
decrease was mainly due to lower stockbroking fees resulting from the less
favourable conditions in the equity market. Investment banking and fund management
income were also lower.
Compared to 4th Qtr 2002, fee and commission income was 15.9 lower in the
first quarter 2003. All categories of fee and commission income showed marginal decline
reflecting the weak business and consumer sentiment prevailing in the market.
Other income for 1st Qtr 2003 increased significantly by 86.3 as compared to 1st Qtr
2002. Income from sale of structured products and gains on Singapore Government
Securities and other securities were higher in 1st Qtr 2003 compared to 1st Qtr 2002 and
4th Qtr 2002.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARY COMPANIES
Table 3 Group Operating Expenses
Sm 1st Qtr
2003 4th Qtr
2002 1st Qtr
2002
Staff costs 219
226 237
Occupancy expenses 48
58 54
Technology-related expenses 71
66 51
Others 104
121 117
Total 442
471 459
Cost-to-income ratio excluding goodwill
amortisation
41.9 45.0
