Presentation: Delivering Results Across Businesses, Geography: DBS Group Holdings 1Q 2004 Financial
Delivering results across businesses, geography
April 30, 2004
DBS Group Holdings
1Q 2004 Financial Results
Presentation to Media and Analysts
This presentation is available at www.dbs.com/investor
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
2
Net profit expands 80.1%
(S$ million)
1Q 2004
1Q 2003
%
change
%
4Q 2003 change
Net interest income
634
599
5.8
628
1.0
Non-interest income
632
448
41.1
425
48.7
1,266
1,047
20.9
1,053
20.2
Staff costs
250
219
14.2
217
15.2
Other operating expenses
253
223
13.5
265
(4.5)
Operating expenses
503
442
13.8
482
4.4
Operating profit (a)
763
605
26.1
571
33.6
Goodwill amortization
110
107
2.8
110
nm
50
118
(57.6)
82
(39.0)
NPAM
488
271
80.1
292
67.1
Cash NPAM (b)
598
378
58.2
402
48.8
Operating income
Provisions
nm : not meaningful
(a) Operating profit before goodwill amortization and provisions
(b) NPAM before goodwill amortization
3
DBS achieves the highest ever quarterly net profit,
and stronger key operating ratios
(S$ million)
488
500
DBS Group Holdings Ltd
1Q
2004
1Q
2003
4Q
2003
Net interest margin
1.79%
1.87%
1.81%
Non-interest inc. / operating inc.
49.9%
42.8%
40.4%
Cost-to-income ratio (a)
39.7%
42.2%
45.8%
Cash ROA (b)
1.42%
0.99%
1.01%
Cash ROE (b)
15.80%
400
300
291
271
292
171
200
100
NPL ratio
0
1Q
2Q
3Q
4Q
1Q
2003 2003 2003 2003 2004
(a)
(b)
(c)
Cash EPS (S$) (c)
Excludes goodwill amortization
Excludes goodwill amortization, annualized
Earnings per share before goodwill amortization, annualized
10.52% 10.91%
4.6%
5.9%
5.2%
1.60
1.02
1.08
4
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
5
Net interest income, customer loans grow
QoQ Net interest income (S$ million)
Customer loans (a)
QoQ Net interest margin (%)
YoY growth rate
6.0%
65,344
1.87%
1.68%
599
560
588
628
62,714
634
1Q
2Q
3Q
4Q
1Q
2003 2003 2003 2003 2004
(a)
63,902
1.79%
1.72%
1.81%
64,335
61,640
Mar
2003
Jun
2003
Sep
2003
Dec
2003
Mar
2004
After deducting cumulative provisions
6
Fee income and other income rise
Other income (a)
Fee income
800
(S$ million)
700
632
600
525
500
400
300
448
350
157
381
168
358
157
316
126
425
424
355
266
174
288
210
214
259
251
277
200
100
193
213
201
190
160
1Q
2002
2Q
2002
3Q
2002
4Q
2002
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
33.0
42.8
43.1
47.2
40.4
49.9
0
Non-interest income contribution (%)
As a % of
total income 34.3
36.5
34.8
(a) Other income defined as non interest income less fee and commission income and excluded gains from sale of non-core assets.
Figures have been restated to reflect the changes in accounting policy
7
Fee income grows on sequential rebound in
market-related activities and wealth management
(S$ million)
1Q 2004
1Q 2003
%
change
4Q 2003
%
change
Stockbroking
69
18
283.3
60
15.0
Investment banking
26
7
271.4
24
8.3
Trade and remittances
30
27
11.1
29
3.4
Loan related
52
36
44.4
43
20.9
Deposit related
25
26
(3.8)
26
(3.8)
Credit card
22
20
10.0
24
(8.3)
Fund management
11
7
57.1
9
22.2
Wealth management (a)
34
13
161.5
23
47.8
8
6
33.3
13
(38.5)
Total
277
160
73.1
251
10.4
Fee-to-income (%) (b)
21.9
15.3
Others
(a) Unit trust distribution and bancassurance
(b) Fee and commission income as a % of total operating income
23.8
8
Retail wealth management sales rises every quarter
Sales Volume of Investment Products (a)
9000
8,806
(S$ million)
Hong Kong
8000
Singapore
7000
4,824
6000
5000
4,434
4000
1,396
3000
2,005
2000
453
1000
65
65
379
880
3,039
3,982
1998
1999
2000
2,481
1,004
1,370
1,403
1,518
775
1,061
1,068
1,078
1,224
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
1,822
1,047
1,552
0
2001
2002
2003
2,742
2,438
2,065
(a) Includes unit trusts (such as Horizon, Ei8ht, Up! and other DBSAM programmes) and treasury investment products (such
as Growth, Surf, medium-term equity linked notes and structured notes)
9
Revenue-related costs up, but cost to income down
(S$ million)
1Q 2004
1Q 2003
%
change
4Q 2003
%
change
Group operating expenses
Staff costs
250
219
14.2
217
15.2
Occupancy expenses
46
48
(4.2)
54
(14.8)
Technology-related
77
71
8.5
74
4.1
Revenue-related
54
33
63.6
53
1.9
Others
76
71
7.0
84
(9.5)
503
442
13.8
482
4.4
1,266
1,047
20.9
1,053
20.2
39.7
42.2
Total operating expenses
Operating income
Cost-to-income ratio (a) (%)
(a) Excludes goodwill amortization
45.8
10
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
11
DBS Hong Kong shows results again,
net profit up 52%
1Q 2004
1Q 2003
%
change
4Q 2003
Net interest income
213
190
12.1
208
2.4
Non-interest income
107
80
33.8
104
2.9
Operating income
320
270
18.5
312
2.6
Operating expenses
122
109
11.9
121
0.8
-
1
nm
-
-
198
160
23.8
191
3.7
24
41
(41.5)
25
(4.0)
149
98
52.0
144
3.5
(S$ million) (a)
Impairment of fixed assets
Operating profit (b)
Provisions
Net profit after tax
nm : not meaningful
(a) Assumes exchange rate of HK$1 to S$0.2154. Based on Hong Kong GAAP
(b) Operating profit before provisions
%
change
12
DBS Hong Kong key ratios continue to support
Group results
DBS Bank (Hong Kong) Limited
1Q 2004
1Q 2003
4Q 2003
Net interest margin
2.49%
2.35%
2.45%
Cost-to-income ratio (a)
38.1%
40.4%
38.8%
Non-interest inc. / operating inc.
33.4%
29.6%
33.3%
Loan-to-deposit ratio
77.1%
75.7%
76.0%
NPL ratio
2.2%
2.6%
2.4%
CAR ratio
18.7%
21.6%
19.0%
ROE
16.7%
10.1%
16.4%
ROA
1.65%
1.15%
1.59%
(a) Excludes impairment loss on properties
13
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
14
NPL rate trending down, the lowest since post
1997 Asian financial crisis
Substandard
Doubtful
Loss
NBk NPLs / NBk Loans (%)
(S$ million)
11.8%
13.0%
8,149
7500
7.6%
7,086
3,799
(54%)
5,121
4,411 4,512 4,224
951
(13%)
2,336
(33%)
452
3,607 3,411 3,114
(5%)
(82%)
(76%)
258
282
(74%)
3,780
5.7% 5.2%
4.6%
4,133 4,163 4,143
3,780
3,077
3,017 2,936 2,777
(74%)
(73%)
(71%)
(73%)
240
295
(6%)
204
(5%)
799
(7%)
316
(6%)
816
851
2,777
2,576
(6%)
(32%)
546
819
(12%)
(18%)
(20%)
(22%)
(20%)
(20%)
Dec
2000
Dec
2001
Dec
2002
Dec
2003
Mar
2003
Jun
2003
0
Dec
1998
5.9% 5.9%
(63%)
5000
2500
5.7% 6.1% 5.2%
Dec
1999
(6%)
252
858
(8%)
891
3,359
(73%) 2,523
(75%)
204
213
799
623
(5%)
(21%) (22%)
Sep
2003
37.2% are
restructured
loans
Dec
2003
(6%)
(19%)
Mar
2004
15
Provision coverage levels improve to 67.6%
5000
General Provisions (GP)
Specific Provisions (SP)
4,286
(S$ million)
4000
1,191
2,719
3000
2,286
1,061
2,500 2,387
2,477 2,496
2,605 2,387
2,271
1,064
1,003 1,017 1,061 1,064
1,323
1,474 1,479 1,544 1,323 1,199
Dec Dec Dec Dec Dec
1999 2000 2001 2002 2003
Mar Jun Sep Dec Mar
2003 2003 2003 2003 2004
2000
3,095
1,049
1000
1,237
989
1,658 1,511
1,072
0
Coverage ratios (%)
SP+GP / Unsec NPLs 118.4 129.9 142.5 120.7 124.0
SP+GP / NPLs
52.6
51.8
60.3
59.2
63.2
120.9 118.8 121.7 124.0 132.4
59.9
60.0 62.9 63.2 67.6
16
Specific provision charges significantly down
(S$ million)
1Q 2004
1Q 2003
%
Change
4Q 2003
%
Change
29
79
(63.3)
78
(62.8)
Singapore
17
18
(5.6)
53
(67.9)
Hong Kong
17
45
(62.2)
24
(29.2)
Others
(5)
16
nm
1
nm
1
24
(95.8)
(7)
nm
Specific provision
30
103
(70.9)
71
(57.7)
General provision
20
15
33.3
11
81.8
Total
50
118
(57.6)
82
(39.0)
SP + GP (loans) /
average loans (bps)
25
56
Loans
Securities, properties
and other assets
nm: not meaningful
52
17
Continued strong capital position
BIS capital adequacy ratio
24
20
16
Tier 2 capital ratio (%)
Tier 1 capital ratio (%)
17.4
15.5
5.2
5.2
12
8
15.1
12.2
14.5
15.2
15.1
15.2
4.7
4.6
4.5
14.2
4.6
4.7
4.5
10.3
10.5
9.8
9.7
10.5
10.5
10.7
Dec
2002
Dec
2003
Mar
2003
Jun
2003
Sep
2003
Dec
2003
Mar
2004
9,624
8,891
9,068
9,463
9,624 10,235
(a)
4
Dec
2001
Group Capital (in S$ million)
Tier-1 Capital 10,474
RWA
(a)
8,393
85,892 81,239 92,067
90,836 93,865 90,542 92,067 95,490
Compared to end December 2001, the reduction in the Tier 1 CAR ratio was primarily due to the reduction of
additional goodwill with DBS’ purchase of the DBS Diamond Holdings Limited minority interest
18
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
19
Delivering results across businesses, geography
Supplemental information
Page
Interest margins and Other income
21 - 22
Regional operations
23 - 24
Treasury & Markets
25 - 26
Asset quality and Capital
27 - 31
20
Continuing compression in the mortgage business,
favorable shift in the business mix affect 1Q 2004
margin
1Q 2004
(S$ million)
4Q 2003
Average
Bal.
Interest
Average
rate %
Average
Bal.
Interest
Average
rate %
Interest bearing assets
Customer loans and advances
Interbank items
Securities (a)
Total interest bearing assets
65,631
33,821
42,744
142,196
560
90
302
952
3.43
1.07
2.84
2.69
63,965
34,542
38,876
137,383
575
88
262
925
3.57
1.01
2.67
2.67
Total interest bearing
liabilities
134,388
318
0.95
129,029
297
0.91
634
1.79
628
1.81
Net interest income/margin
(a)
Refers to Singapore Government securities and treasury bills, trading and investment debt securities
21
Other income shows a robust growth, up 24.4%
(S$ million)
Net gain on treasury
activities (a)
1Q 2004 1Q 2003
%
%
4Q 2003
change
change
252
155
62.6
120
110.0
Net gain on investment
securities
86
119
(27.7)
28
207.1
Net gain on fixed assets
2
(1)
nm
3
(33.3)
Others
2
2
nm
2
nm
342
275
24.4
153
123.5
Total
nm : not meaningful
(a) Includes structured investment products
22
DBS Thai Danu’s net profit returned to a positive
territory, net profit up 271%
(S$ million) (a)
1Q 2004 1Q 2003
%
4Q 2003
change
%
change
Net interest income (b)
25
26
(1.0)
29
(10.9)
Non-interest income
12
12
(5.6)
14
(19.1)
Operating income
37
38
(2.5)
43
(13.7)
Operating expenses
22
25
(11.9)
24
(11.8)
Operating profit (c)
16
14
14.6
19
(16.2)
-
9
(100.0)
5
(100.0)
16
4
271.0
13
15.7
Provisions
Net profit / (loss)
after tax
(a)
(b)
(c)
Assumes exchange rate of THB1=S$0.0425
Includes dividend income
Operating profit before provisions
23
Group net profit balanced
1Q 2003 Net Profit
S$378 million (a)
(S$ million)
Singapore
253
(67%)
(S$ million)
Regional countries
15
(4%)
Hong Kong
100
(26%)
Rest of the world
10
(3%)
(a)
Excludes goodwill amortization
1Q 2004 Net Profit
S$598 million (a)
Singapore
407
(68%)
Regional countries
25
(4%)
Hong Kong
152
(26%)
Rest of the world
14
(2%)
24
DBS’ earnings diversified
1Q 2003 Revenues
S$1,047 million (a)
1Q 2004 Revenues
S$1,266 million (a)
(S$ million)
(S$ million)
Consumer
Banking
340
(32%)
Enterprise
Banking
149
(14%)
T&M
Funding Portfolio
102
(10%)
Consumer
Banking
384
(30%)
Treasury & Markets
203
(19%)
Investment
Banking
142
(14%)
(a)
Central Operations
111
(11%)
Totals may not sum exactly due to rounding
Enterprise
Banking
182
(14%)
T&M
Funding Portfolio
131
(10%)
Treasury & Markets
202
(16%)
Investment
Banking
176
(14%)
Central Operations
191
(15%)
25
Daily earnings at risk and trading income
DEaR for Trading Book
(April 1, 2003 to March 31, 2004)
At 31
(a)
(a)
Mar Average High Low
24.3
Interest rate
9.4
FX
4.1
Equity
Diversification (12.8)
effect
Total
25.0
24.5
6.9
3.8
(12.9)
33.7
18.2
7.3
-
19.6
2.3
1.3
-
70
60
50
No. of D ay s
(S$ million)
DBSH Group DEaR for Trading Book
40
30
20
10
0
DEaR ($ million)
22.3
32.0
16.5
DBSH Group Daily Distribution of Trading Income
60
50
No. of Days
40
30
20
10
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>10-12
>6-8
>8-10
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
0
Trading income ($ millions)
(a)
The high (and low) DEaR figures reported for each risk class did not necessarily occur on the same day as the high
(and low) reported for total. A corresponding diversification effect cannot be calculated and is therefore omitted from
the table.
26
DBS Hong Kong Consumer Banking asset quality
Credit card delinquency rates
Credit card charge-off rates
15.00%
12.9%
12.4%
12.00%
12.0% 11.8% 11.8%
90 days
past due
11.0%
10.8%
1Q03
2Q03 3Q03
4Q03
1.5%
1.5%
1Q04
10.0%
DBS (HK) (a) 1.1%
9.00%
0.6% Industry (c) 1.3%1.3%
3.00%
1.2%
0.9%
n.a.
6.0%
6.00%
1.8%
?
0.00%
3M
2003
6M
2003
DBS HK (b)
9M
2003
12M
2003
3M
2004
Industry (c)
n.a : not available
(a)
(b)
(c)
Delinquency rates as at period end
YTD, annualized Credit card charge off rates using HKMA basis
Source: Hong Kong Monetary Authority
27
DBS Singapore Consumer Banking asset quality
Credit Card Delinquency Rates (a)
Credit card charge-off rates
3.00%
6.00%
4.5%
4.6%
4.5%
2.2%
4.1%
4.0%
2.2%
2.0%
2.00%
1.8%
1.8%
3.00%
1.00%
0.00%
0.00%
3M
2003
(a)
6M
2003
9M
2003
12M
2003
3M
2004
90 days past due delinquency rates as at period end
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
28
Residential mortgage delinquency rates (a)
DBS Bank (Hong Kong) Ltd.
DBS Singapore Consumer Banking
2.00%
2.00%
1.50%
1.30%
1.27%
1.04%
1.00%
1.00%
0.82%
0.63%
0.70%
0.69%
Mar
2003
Jun
2003
0.81%
0.69%
0.62%
0.50%
0.00%
0.00%
Mar
2003
(a)
Jun
2003
Sep
2003
Dec
2003
Mar
2004
Sep
2003
Dec
2003
Mar
2004
Residential mortgage 90 days past due delinquency rates
29
Total capital versus RWA
(S$ billion)
Risk Weighted Assets
Total Capital
+1.8 -0.4 -0.2 +0.2 14.5
15
+6.3 +0.6 -2.0 -0.2 95.5
13.1
10
Others (b)
Capital (a)
Instruments
90.8
Others (c)
Financial
Derivatives
Dividend
Cash
Earnings
75
Inter-Bank
Placements
& Bank Bonds
5
50
Loans &
Bonds
25
0
0
Mar
2003
(a)
(b)
(c)
100
Mar
2004
Mar
2003
USD-denominated capital instruments decreased as USD weakened against SGD
Includes asset revaluation reserves for equities and general provisions
Decrease mainly due to drop in financial guarantees, offset by increase in accounts receivables and trade receivables
from DBSV
Mar
2004
30
Total capital versus RWA
(S$ billion)
15
Risk Weighted Assets
Total Capital
13.9
+0.6
14.5
92.1
+3.3
+0.3
95.5
100
Others (a)
Cash
Earnings
10
-0.2
Financial
Derivatives
75
Loans &
Bonds
50
5
25
0
0
Dec
2003
(a)
Includes accounts receivables and other assets
Mar
2004
Dec
2003
Mar
2004
31
Delivering results across businesses, geography
April 30, 2004
DBS Group Holdings
1Q 2004 Financial Results
Presentation to Media and Analysts
This presentation is available at www.dbs.com/investor
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
April 30, 2004
DBS Group Holdings
1Q 2004 Financial Results
Presentation to Media and Analysts
This presentation is available at www.dbs.com/investor
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
2
Net profit expands 80.1%
(S$ million)
1Q 2004
1Q 2003
%
change
%
4Q 2003 change
Net interest income
634
599
5.8
628
1.0
Non-interest income
632
448
41.1
425
48.7
1,266
1,047
20.9
1,053
20.2
Staff costs
250
219
14.2
217
15.2
Other operating expenses
253
223
13.5
265
(4.5)
Operating expenses
503
442
13.8
482
4.4
Operating profit (a)
763
605
26.1
571
33.6
Goodwill amortization
110
107
2.8
110
nm
50
118
(57.6)
82
(39.0)
NPAM
488
271
80.1
292
67.1
Cash NPAM (b)
598
378
58.2
402
48.8
Operating income
Provisions
nm : not meaningful
(a) Operating profit before goodwill amortization and provisions
(b) NPAM before goodwill amortization
3
DBS achieves the highest ever quarterly net profit,
and stronger key operating ratios
(S$ million)
488
500
DBS Group Holdings Ltd
1Q
2004
1Q
2003
4Q
2003
Net interest margin
1.79%
1.87%
1.81%
Non-interest inc. / operating inc.
49.9%
42.8%
40.4%
Cost-to-income ratio (a)
39.7%
42.2%
45.8%
Cash ROA (b)
1.42%
0.99%
1.01%
Cash ROE (b)
15.80%
400
300
291
271
292
171
200
100
NPL ratio
0
1Q
2Q
3Q
4Q
1Q
2003 2003 2003 2003 2004
(a)
(b)
(c)
Cash EPS (S$) (c)
Excludes goodwill amortization
Excludes goodwill amortization, annualized
Earnings per share before goodwill amortization, annualized
10.52% 10.91%
4.6%
5.9%
5.2%
1.60
1.02
1.08
4
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
5
Net interest income, customer loans grow
QoQ Net interest income (S$ million)
Customer loans (a)
QoQ Net interest margin (%)
YoY growth rate
6.0%
65,344
1.87%
1.68%
599
560
588
628
62,714
634
1Q
2Q
3Q
4Q
1Q
2003 2003 2003 2003 2004
(a)
63,902
1.79%
1.72%
1.81%
64,335
61,640
Mar
2003
Jun
2003
Sep
2003
Dec
2003
Mar
2004
After deducting cumulative provisions
6
Fee income and other income rise
Other income (a)
Fee income
800
(S$ million)
700
632
600
525
500
400
300
448
350
157
381
168
358
157
316
126
425
424
355
266
174
288
210
214
259
251
277
200
100
193
213
201
190
160
1Q
2002
2Q
2002
3Q
2002
4Q
2002
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
33.0
42.8
43.1
47.2
40.4
49.9
0
Non-interest income contribution (%)
As a % of
total income 34.3
36.5
34.8
(a) Other income defined as non interest income less fee and commission income and excluded gains from sale of non-core assets.
Figures have been restated to reflect the changes in accounting policy
7
Fee income grows on sequential rebound in
market-related activities and wealth management
(S$ million)
1Q 2004
1Q 2003
%
change
4Q 2003
%
change
Stockbroking
69
18
283.3
60
15.0
Investment banking
26
7
271.4
24
8.3
Trade and remittances
30
27
11.1
29
3.4
Loan related
52
36
44.4
43
20.9
Deposit related
25
26
(3.8)
26
(3.8)
Credit card
22
20
10.0
24
(8.3)
Fund management
11
7
57.1
9
22.2
Wealth management (a)
34
13
161.5
23
47.8
8
6
33.3
13
(38.5)
Total
277
160
73.1
251
10.4
Fee-to-income (%) (b)
21.9
15.3
Others
(a) Unit trust distribution and bancassurance
(b) Fee and commission income as a % of total operating income
23.8
8
Retail wealth management sales rises every quarter
Sales Volume of Investment Products (a)
9000
8,806
(S$ million)
Hong Kong
8000
Singapore
7000
4,824
6000
5000
4,434
4000
1,396
3000
2,005
2000
453
1000
65
65
379
880
3,039
3,982
1998
1999
2000
2,481
1,004
1,370
1,403
1,518
775
1,061
1,068
1,078
1,224
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
1,822
1,047
1,552
0
2001
2002
2003
2,742
2,438
2,065
(a) Includes unit trusts (such as Horizon, Ei8ht, Up! and other DBSAM programmes) and treasury investment products (such
as Growth, Surf, medium-term equity linked notes and structured notes)
9
Revenue-related costs up, but cost to income down
(S$ million)
1Q 2004
1Q 2003
%
change
4Q 2003
%
change
Group operating expenses
Staff costs
250
219
14.2
217
15.2
Occupancy expenses
46
48
(4.2)
54
(14.8)
Technology-related
77
71
8.5
74
4.1
Revenue-related
54
33
63.6
53
1.9
Others
76
71
7.0
84
(9.5)
503
442
13.8
482
4.4
1,266
1,047
20.9
1,053
20.2
39.7
42.2
Total operating expenses
Operating income
Cost-to-income ratio (a) (%)
(a) Excludes goodwill amortization
45.8
10
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
11
DBS Hong Kong shows results again,
net profit up 52%
1Q 2004
1Q 2003
%
change
4Q 2003
Net interest income
213
190
12.1
208
2.4
Non-interest income
107
80
33.8
104
2.9
Operating income
320
270
18.5
312
2.6
Operating expenses
122
109
11.9
121
0.8
-
1
nm
-
-
198
160
23.8
191
3.7
24
41
(41.5)
25
(4.0)
149
98
52.0
144
3.5
(S$ million) (a)
Impairment of fixed assets
Operating profit (b)
Provisions
Net profit after tax
nm : not meaningful
(a) Assumes exchange rate of HK$1 to S$0.2154. Based on Hong Kong GAAP
(b) Operating profit before provisions
%
change
12
DBS Hong Kong key ratios continue to support
Group results
DBS Bank (Hong Kong) Limited
1Q 2004
1Q 2003
4Q 2003
Net interest margin
2.49%
2.35%
2.45%
Cost-to-income ratio (a)
38.1%
40.4%
38.8%
Non-interest inc. / operating inc.
33.4%
29.6%
33.3%
Loan-to-deposit ratio
77.1%
75.7%
76.0%
NPL ratio
2.2%
2.6%
2.4%
CAR ratio
18.7%
21.6%
19.0%
ROE
16.7%
10.1%
16.4%
ROA
1.65%
1.15%
1.59%
(a) Excludes impairment loss on properties
13
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
14
NPL rate trending down, the lowest since post
1997 Asian financial crisis
Substandard
Doubtful
Loss
NBk NPLs / NBk Loans (%)
(S$ million)
11.8%
13.0%
8,149
7500
7.6%
7,086
3,799
(54%)
5,121
4,411 4,512 4,224
951
(13%)
2,336
(33%)
452
3,607 3,411 3,114
(5%)
(82%)
(76%)
258
282
(74%)
3,780
5.7% 5.2%
4.6%
4,133 4,163 4,143
3,780
3,077
3,017 2,936 2,777
(74%)
(73%)
(71%)
(73%)
240
295
(6%)
204
(5%)
799
(7%)
316
(6%)
816
851
2,777
2,576
(6%)
(32%)
546
819
(12%)
(18%)
(20%)
(22%)
(20%)
(20%)
Dec
2000
Dec
2001
Dec
2002
Dec
2003
Mar
2003
Jun
2003
0
Dec
1998
5.9% 5.9%
(63%)
5000
2500
5.7% 6.1% 5.2%
Dec
1999
(6%)
252
858
(8%)
891
3,359
(73%) 2,523
(75%)
204
213
799
623
(5%)
(21%) (22%)
Sep
2003
37.2% are
restructured
loans
Dec
2003
(6%)
(19%)
Mar
2004
15
Provision coverage levels improve to 67.6%
5000
General Provisions (GP)
Specific Provisions (SP)
4,286
(S$ million)
4000
1,191
2,719
3000
2,286
1,061
2,500 2,387
2,477 2,496
2,605 2,387
2,271
1,064
1,003 1,017 1,061 1,064
1,323
1,474 1,479 1,544 1,323 1,199
Dec Dec Dec Dec Dec
1999 2000 2001 2002 2003
Mar Jun Sep Dec Mar
2003 2003 2003 2003 2004
2000
3,095
1,049
1000
1,237
989
1,658 1,511
1,072
0
Coverage ratios (%)
SP+GP / Unsec NPLs 118.4 129.9 142.5 120.7 124.0
SP+GP / NPLs
52.6
51.8
60.3
59.2
63.2
120.9 118.8 121.7 124.0 132.4
59.9
60.0 62.9 63.2 67.6
16
Specific provision charges significantly down
(S$ million)
1Q 2004
1Q 2003
%
Change
4Q 2003
%
Change
29
79
(63.3)
78
(62.8)
Singapore
17
18
(5.6)
53
(67.9)
Hong Kong
17
45
(62.2)
24
(29.2)
Others
(5)
16
nm
1
nm
1
24
(95.8)
(7)
nm
Specific provision
30
103
(70.9)
71
(57.7)
General provision
20
15
33.3
11
81.8
Total
50
118
(57.6)
82
(39.0)
SP + GP (loans) /
average loans (bps)
25
56
Loans
Securities, properties
and other assets
nm: not meaningful
52
17
Continued strong capital position
BIS capital adequacy ratio
24
20
16
Tier 2 capital ratio (%)
Tier 1 capital ratio (%)
17.4
15.5
5.2
5.2
12
8
15.1
12.2
14.5
15.2
15.1
15.2
4.7
4.6
4.5
14.2
4.6
4.7
4.5
10.3
10.5
9.8
9.7
10.5
10.5
10.7
Dec
2002
Dec
2003
Mar
2003
Jun
2003
Sep
2003
Dec
2003
Mar
2004
9,624
8,891
9,068
9,463
9,624 10,235
(a)
4
Dec
2001
Group Capital (in S$ million)
Tier-1 Capital 10,474
RWA
(a)
8,393
85,892 81,239 92,067
90,836 93,865 90,542 92,067 95,490
Compared to end December 2001, the reduction in the Tier 1 CAR ratio was primarily due to the reduction of
additional goodwill with DBS’ purchase of the DBS Diamond Holdings Limited minority interest
18
Delivering results across businesses, geography
Achieving top line growth, highest ever quarterly net
profit
Stronger operating profit on better non interest income
Regional investment producing results
Better asset quality, stronger capital adequacy
19
Delivering results across businesses, geography
Supplemental information
Page
Interest margins and Other income
21 - 22
Regional operations
23 - 24
Treasury & Markets
25 - 26
Asset quality and Capital
27 - 31
20
Continuing compression in the mortgage business,
favorable shift in the business mix affect 1Q 2004
margin
1Q 2004
(S$ million)
4Q 2003
Average
Bal.
Interest
Average
rate %
Average
Bal.
Interest
Average
rate %
Interest bearing assets
Customer loans and advances
Interbank items
Securities (a)
Total interest bearing assets
65,631
33,821
42,744
142,196
560
90
302
952
3.43
1.07
2.84
2.69
63,965
34,542
38,876
137,383
575
88
262
925
3.57
1.01
2.67
2.67
Total interest bearing
liabilities
134,388
318
0.95
129,029
297
0.91
634
1.79
628
1.81
Net interest income/margin
(a)
Refers to Singapore Government securities and treasury bills, trading and investment debt securities
21
Other income shows a robust growth, up 24.4%
(S$ million)
Net gain on treasury
activities (a)
1Q 2004 1Q 2003
%
%
4Q 2003
change
change
252
155
62.6
120
110.0
Net gain on investment
securities
86
119
(27.7)
28
207.1
Net gain on fixed assets
2
(1)
nm
3
(33.3)
Others
2
2
nm
2
nm
342
275
24.4
153
123.5
Total
nm : not meaningful
(a) Includes structured investment products
22
DBS Thai Danu’s net profit returned to a positive
territory, net profit up 271%
(S$ million) (a)
1Q 2004 1Q 2003
%
4Q 2003
change
%
change
Net interest income (b)
25
26
(1.0)
29
(10.9)
Non-interest income
12
12
(5.6)
14
(19.1)
Operating income
37
38
(2.5)
43
(13.7)
Operating expenses
22
25
(11.9)
24
(11.8)
Operating profit (c)
16
14
14.6
19
(16.2)
-
9
(100.0)
5
(100.0)
16
4
271.0
13
15.7
Provisions
Net profit / (loss)
after tax
(a)
(b)
(c)
Assumes exchange rate of THB1=S$0.0425
Includes dividend income
Operating profit before provisions
23
Group net profit balanced
1Q 2003 Net Profit
S$378 million (a)
(S$ million)
Singapore
253
(67%)
(S$ million)
Regional countries
15
(4%)
Hong Kong
100
(26%)
Rest of the world
10
(3%)
(a)
Excludes goodwill amortization
1Q 2004 Net Profit
S$598 million (a)
Singapore
407
(68%)
Regional countries
25
(4%)
Hong Kong
152
(26%)
Rest of the world
14
(2%)
24
DBS’ earnings diversified
1Q 2003 Revenues
S$1,047 million (a)
1Q 2004 Revenues
S$1,266 million (a)
(S$ million)
(S$ million)
Consumer
Banking
340
(32%)
Enterprise
Banking
149
(14%)
T&M
Funding Portfolio
102
(10%)
Consumer
Banking
384
(30%)
Treasury & Markets
203
(19%)
Investment
Banking
142
(14%)
(a)
Central Operations
111
(11%)
Totals may not sum exactly due to rounding
Enterprise
Banking
182
(14%)
T&M
Funding Portfolio
131
(10%)
Treasury & Markets
202
(16%)
Investment
Banking
176
(14%)
Central Operations
191
(15%)
25
Daily earnings at risk and trading income
DEaR for Trading Book
(April 1, 2003 to March 31, 2004)
At 31
(a)
(a)
Mar Average High Low
24.3
Interest rate
9.4
FX
4.1
Equity
Diversification (12.8)
effect
Total
25.0
24.5
6.9
3.8
(12.9)
33.7
18.2
7.3
-
19.6
2.3
1.3
-
70
60
50
No. of D ay s
(S$ million)
DBSH Group DEaR for Trading Book
40
30
20
10
0
DEaR ($ million)
22.3
32.0
16.5
DBSH Group Daily Distribution of Trading Income
60
50
No. of Days
40
30
20
10
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>10-12
>6-8
>8-10
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
0
Trading income ($ millions)
(a)
The high (and low) DEaR figures reported for each risk class did not necessarily occur on the same day as the high
(and low) reported for total. A corresponding diversification effect cannot be calculated and is therefore omitted from
the table.
26
DBS Hong Kong Consumer Banking asset quality
Credit card delinquency rates
Credit card charge-off rates
15.00%
12.9%
12.4%
12.00%
12.0% 11.8% 11.8%
90 days
past due
11.0%
10.8%
1Q03
2Q03 3Q03
4Q03
1.5%
1.5%
1Q04
10.0%
DBS (HK) (a) 1.1%
9.00%
0.6% Industry (c) 1.3%1.3%
3.00%
1.2%
0.9%
n.a.
6.0%
6.00%
1.8%
?
0.00%
3M
2003
6M
2003
DBS HK (b)
9M
2003
12M
2003
3M
2004
Industry (c)
n.a : not available
(a)
(b)
(c)
Delinquency rates as at period end
YTD, annualized Credit card charge off rates using HKMA basis
Source: Hong Kong Monetary Authority
27
DBS Singapore Consumer Banking asset quality
Credit Card Delinquency Rates (a)
Credit card charge-off rates
3.00%
6.00%
4.5%
4.6%
4.5%
2.2%
4.1%
4.0%
2.2%
2.0%
2.00%
1.8%
1.8%
3.00%
1.00%
0.00%
0.00%
3M
2003
(a)
6M
2003
9M
2003
12M
2003
3M
2004
90 days past due delinquency rates as at period end
1Q
2003
2Q
2003
3Q
2003
4Q
2003
1Q
2004
28
Residential mortgage delinquency rates (a)
DBS Bank (Hong Kong) Ltd.
DBS Singapore Consumer Banking
2.00%
2.00%
1.50%
1.30%
1.27%
1.04%
1.00%
1.00%
0.82%
0.63%
0.70%
0.69%
Mar
2003
Jun
2003
0.81%
0.69%
0.62%
0.50%
0.00%
0.00%
Mar
2003
(a)
Jun
2003
Sep
2003
Dec
2003
Mar
2004
Sep
2003
Dec
2003
Mar
2004
Residential mortgage 90 days past due delinquency rates
29
Total capital versus RWA
(S$ billion)
Risk Weighted Assets
Total Capital
+1.8 -0.4 -0.2 +0.2 14.5
15
+6.3 +0.6 -2.0 -0.2 95.5
13.1
10
Others (b)
Capital (a)
Instruments
90.8
Others (c)
Financial
Derivatives
Dividend
Cash
Earnings
75
Inter-Bank
Placements
& Bank Bonds
5
50
Loans &
Bonds
25
0
0
Mar
2003
(a)
(b)
(c)
100
Mar
2004
Mar
2003
USD-denominated capital instruments decreased as USD weakened against SGD
Includes asset revaluation reserves for equities and general provisions
Decrease mainly due to drop in financial guarantees, offset by increase in accounts receivables and trade receivables
from DBSV
Mar
2004
30
Total capital versus RWA
(S$ billion)
15
Risk Weighted Assets
Total Capital
13.9
+0.6
14.5
92.1
+3.3
+0.3
95.5
100
Others (a)
Cash
Earnings
10
-0.2
Financial
Derivatives
75
Loans &
Bonds
50
5
25
0
0
Dec
2003
(a)
Includes accounts receivables and other assets
Mar
2004
Dec
2003
Mar
2004
31
Delivering results across businesses, geography
April 30, 2004
DBS Group Holdings
1Q 2004 Financial Results
Presentation to Media and Analysts
This presentation is available at www.dbs.com/investor
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.