Credit Quality of Assets Changes in Stock of Defaulted Loans and Debt Securities

DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES 7 CREDIT RISK

7.1 Credit Quality of Assets

a b c d m Defaulted exposures Non-defaulted exposures 1 Loans 1 4,230 357,045 4,552 356,723 2 Debt Securities 94 63,719 93 63,720 3 Off-balance sheet exposures 156 62,250 177 62,229 4 Total 4,480 483,014 4,822 482,672 a Subjective default: Borrower is considered to be unlikely to pay its credit obligations in full, without the Group taking action such as realising security if held. b Technical default: Borrower is more than 90 days past due on any credit obligation to the Group.

7.2 Changes in Stock of Defaulted Loans and Debt Securities

30 Jun 2017 m a 1 Defaulted loans and debt securities at end of the previous semi-annual reporting period 4,597 2 Loans and debt securities that have defaulted since the previous semi-annual reporting period 845 3 Returned to non-defaulted status 5 4 Amounts written off 695 5 Other changes 418 6 Defaulted loans and debt securities at end of the semi-annual reporting period 1+2-3-4±5 4,324 1 Loans include loans and advances to customers and other assets which give rise to credit exposures. 2 Defaulted assets are a subset of non performing assets as disclosed in the financial statements. Unless otherwise required by MAS Notice 637 and stated as such in the relevant sections, the exposure amounts for defaulted assets in this document are measured in accordance with the requirements of MAS Notice 637 and may differ from the carrying amounts as disclosed in the financial statements which are measured in accordance with the Singapore Financial Reporting Standard as modified by the requirements of MAS Notice to Banks No. 612 Credit Files, Grading and Provisioning. A default 2 is considered to have occurred with regard to a particular borrower when either or both of the following events have taken place: The following table provides an overview of the credit quality of the Groups on- and off-balance sheet assets. Figures are based on carrying amounts as reported in the financial statements. The following table provides the changes in the Groups defaulted loans and debt securities excluding off-balance sheet exposures, including any i return to non-defaulted status, and ii reduction in defaulted exposures due to write-off. Figures are based on carrying amounts as reported in the financial statements. 30 Jun 2017 Gross carrying amount of Impairment allowances Net values a+b-c Defaulted loans and debt securities declined marginally in the first half of 2017 to 4.3 billion. Higher recoveries and write offs were partially offset by increase in defaulting corporate loans and debt securities. Other changes as shown above mainly include recoveries and foreign exchange translation differences. A-19 DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES

7.3 SACR and SAEQ – Credit Risk Exposure and CRM Effects