DBSH Share Plan and DBSH Employee Share Plan DBSH Share Ownership Scheme DBSH Share Option Plan

| 159 Financial statements 38 Share-based Compensation Plans As part of the Group’s remuneration policy, the Group provides various share-based compensation plans to foster a culture that aligns employees’ interests with shareholders, enable employees to share in the bank’s performance and enhance talent retention. Main SchemePlan Note DBSH Share Plan Share Plan • The Share Plan is granted to Group executives as determined by the Committee appointed to administer 38.1 the Share Plan from time to time. • Participants are awarded shares of the Company or, at the Committee’s discretion, their equivalent cash value or a combination. • Awards consist of main award and retention award 20 of main award. Dividends on unvested shares do not accrue to employees. • The vesting of main award is staggered between 2 to 4 years after grant i.e. 33 will vest 2 years after grant; another 33 will vest on the third year and the remaining 34 plus the retention award will vest 4 years after grant. • The market price of shares on the grant date is used to estimate the fair value of the shares awarded. • Vested and unvested shares are subject to clawbackmalus. Conditions that trigger such clawbackmalus are in the Corporate Governance section of the Annual Report. • Shares are awarded to non-executive directors as part of director’s remuneration. Details of these awards are disclosed in the Corporate Governance section of the Annual Report. DBSH Employee Share Plan ESP • The ESP caters to employees not eligible to participate in the above listed Share Plan. Eligible employees 38.1 are awarded ordinary shares of the Company, their equivalent cash value or a combination of both at the discretion of the Committee, when time-based conditions are met. • The awards structure and vesting conditions are similar to Share Plan. • There are no additional retention awards for shares granted to top performers and key employees. • However, in specific cases where the award forms part of an employee’s annual performance remuneration, the retention award which constitutes 20 of the shares given in the main award will be granted. The shares in the retention award will vest 4 years after the date of grant. For such cases, vested and unvested shares are subject to clawbackmalus. Conditions that trigger such clawbackmalus are in the Corporate Governance section of the Annual Report. DBSH Share Ownership Scheme • All Singapore-based employees with at least one year of service who hold the rank of Assistant Vice President 38.2 and below are eligible. • Participants contribute up to 10 of monthly salary and the Group will match up to 5 of monthly base salary to buy units of the DBSH’s ordinary shares. DBSH Share Option Plan Option Plan • The Option Plan expired on 19 June 2009. Any outstanding unexercised options as of 1 March 2015 had lapsed 38.3 following the expiry of all options granted under the plan.

38.1 DBSH Share Plan and DBSH Employee Share Plan

The following table sets out the movements of the awards during the year. The Group 2016 2015 Number of shares Share Plan ESP Share Plan ESP Balance at 1 January 17,368,488 1,998,781 17,216,431 1,777,193 Granted 8,251,608 1,067,078 5,718,522 889,166 Vested 5,507,188 551,646 5,154,074 471,393 Forfeited 449,630 226,799 412,391 196,185 Balance at 31 December 19,663,278 2,287,414 17,368,488 1,998,781 Weighted average fair value of the shares granted during the year 13.72 13.69 19.50 19.51 160 | DBS Annual Report 2016

38.2 DBSH Share Ownership Scheme

The outstanding shares held under DBSH Share Ownership Scheme are as follows: The Group Ordinary shares Market value Number in millions 2016 2015 2016 2015 Balance at 1 January 7,282,740 6,593,283 122 136 Balance at 31 December 8,388,820 7,282,740 145 122

38.3 DBSH Share Option Plan

The following table sets out movements of the unissued ordinary shares of DBSH under outstanding options. The Group Unissued number of ordinary shares under outstanding Weighted average options exercise price 2016 2015 2016 2015 Balance at 1 January – 354,877 – 12.81 Movements during the year: – Exercised – 350,623 – 12.81 – ForfeitedExpired – 4,254 – 12.81 Balance at 31 December – – – – In 2015, 350,623 options were exercised at their contractual exercise prices and the corresponding weighted average market price of the DBSH’s shares was 19.63. 39 Related Party Transactions 39.1 Transactions between the Company and its subsidiaries, including consolidated structured entities, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this Note. 39.2 During the financial year, the Group had banking transactions with related parties, consisting of associates and key management personnel of the Group. These included the taking of deposits and extension of credit card and other loan facilities. These transactions were made in the ordinary course of business and carried out at arms-length commercial terms, and were not material. In addition, key management personnel received remuneration for services rendered during the financial year. Non-cash benefits including performance shares were also granted. 39.3 Total compensation and fees to key management personnel a are as follows: The Group In millions 2016 2015 Short-term benefits b 40 46 Share-based payments c 30 26 Total 70 72 Of which: Company Directors’ remuneration and fees 14 15 a Includes Company Directors and members of the Management Committee who have authority and responsibility in planning the activities and direction of the Group. The composition and number of Directors and Management Committee members may differ from year to year b Includes cash bonus based on amount accrued during the year, to be paid in the following year c Share-based payments are expensed over the vesting period in accordance with FRS 102 | 161 Financial statements 40 Fair Value of Financial Instruments

40.1 Valuation Process