1Q08 presentation slides
Earnings resilience despite
market volatility
DBS Group Holdings
1Q 2008 financial results
May 7, 2008
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.
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
2
Net profit up 8% on quarter, down 2% on year
(S$m)
1Q
2008
YoY
%
QoQ
%
Net interest income
1,057
9
(0)
353
14
(7)
(161)
nm
nm
Other income
314
>100
>100
Non-interest income
506
(11)
7
1,563
1
2
Staff expenses
352
(2)
9
Other expenses
304
2
(6)
Expenses
656
(0)
1
Profit before allowances
907
3
2
Allowances for credit & other losses
140
33
(23)
Net profit
603
(2)
8
Fee income
Trading income
Income
Excluding one-time gains and impairment charges
3
Key ratios stable on quarter
(%)
1Q
2008
4Q
2007
1Q
2007
Net interest margin
2.09
2.11
2.21
Fee income/total income
23
25
20
Non-interest income/total income
32
31
37
Cost/income
42
42
43
11.6
10.9
13.0
Loans/deposits
73
71
69
NPL ratio
1.0
1.1
1.5
ROE
Excluding one-time gains and impairment charges
4
Net interest income maintained at previous
quarter’s level despite stronger headwinds
(S$m)
Net interest margin (%)
4,108
3,591
2,943
2.20
2.17
2.21
2.21
2.14
2.11
2.09
1,057
1.91
2005
2006
2007
974
1,027
1,048
1,059
1Q
2Q
3Q
4Q
2007
1Q
2008
5
Loans up 5% on quarter, 21% on year
(S$m)
114,227
5%
94,294
79,462
Dec
2005
71,055
(1%)
Mar
98,957
5%
104,714
6%
108,433
4%
9%
86,630
85,254
83,410
2%
2%
6%
Jun
Sep
2006
Dec
Mar
Jun
Sep
2007
Dec
Mar
2008
6
Fee income down 7% on quarter as capital market
revenues fall
(S$m)
Fee income
Other income
Non-interest income /
total income (%)
2,055
1,753
37
34
1,395
32
32
33
33
1,155
1,462
986
409
2005
598
2006
32
568
524
489
474
506
309
371
403
379
353
259
153
86
95
153
1Q
2Q
3Q
4Q
1Q
2008
593
2007
31
2007
Excluding one-time gains
7
Wealth management fees decline on lower unit
trust sales
(S$m)
Structured deposits
7,428
6,912
4,334
Bancassurance
7,768
2,492
Unit trusts
1,889
144
612
247
2,847
5,735
1,962
690
28
3,808
1,244
2005
2006
2007
1Q
2,125
248
61
1,816
2Q
1,829
1,852
472
28
1,329
479
27
1,346
1,237
3Q
4Q
1Q
2008
2007
Sales (all products)
S’pore
3,560
3,477
3,924
HK
3,868
3,435
3,844
Fees (unit trusts and bancassurance only)
S’pore + HK
129
170
249
560
27
650
993
969
1,116
1,009
958
871
857
995
662
575
47
68
64
70
40
8
Cost-income ratio maintained at 42%
(S$m)
Cost/Income (%)
2,618
2,369
2,026
47
2005
44
2006
42
2007
43
43
42
42
42
658
660
652
648
656
1Q
2Q
3Q
4Q
1Q
2008
2007
12,728
12,907
14,523
13,177
13,364
13,842
14,523
14,551
Staff costs (S$m) 1,052
1,244
1,384
360
354
347
323
352
Headcount
Cost-income ratio excluding one-time gains
9
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
10
Hong Kong’s net profit up 13% on quarter and
1% on year in Singapore-dollar terms
(S$m)
1Q
2008
YoY
%
QoQ
%
Net interest income
225
(17)
(10)
Non-interest income
177
31
13
Income
402
(1)
(1)
Expenses
173
2
(8)
Profit before allowances
229
(3)
5
Allowances for credit & other losses
19
(14)
(30)
Net profit
180
1
13
Figures for Hong Kong geographical basis and converted to S$ using monthly closing rates.
Based on Singapore GAAP. Excluding one-time gains
11
Lower Hong Kong margins offset by higher noninterest income contributions
(%)
1Q
2008
4Q
2007
1Q
2007
Net interest margin
1.90
2.03
2.34
Non-interest / total income
44
38
33
Cost/income ratio
43
47
42
1.32
1.15
1.40
78
72
73
ROA
Loans/deposit
Excluding one-time gains
12
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
13
NPL rate improves to 1.0%, allowance coverage
rises to 138%
Substandard
(S$m)
Doubtful
Loss
2.1
NPL ratio (%)
1.7
1.5
1.4
1.1
1.2
1.1
1.0
1,865
1,533
1,442
1,460
1,494
1,426
1,442
1,464
65%
61%
59%
61%
61%
62%
59%
58%
15%
16%
23%
23%
18%
15%
24%
18%
21%
19%
19%
23%
18%
25%
17%
2006
2007
Mar
Jun
Sep
Dec
Mar
2008
20%
2005
2007
Cumulative general and specific allowances as % of:
NPAs
97
115
135
125
124
130
135
138
Unsecured NPAs
198
237
245
254
254
256
245
241
14
Non-performing assets up slightly
(S$m)
1Q
2008
4Q
2007
1Q
2007
NPAs at start of period
1,442
1,426
1,533
195
270
90
Net recoveries of existing NPAs
(146)
(162)
(125)
Write-offs
(27)
(92)
(38)
1,464
1,442
1,460
New NPAs
NPAs at end of period
15
Specific allowances for loans remain low
(S$m)
1Q
2008
4Q
2007
1Q
2007
New NPLs
26
42
32
Existing NPLs
51
38
21
77
80
53
Upgrading
1
1
1
Settlements
33
55
44
Recoveries
6
8
7
40
63
52
37
16
1
Add charges for
Subtract charges for
Total SP charges
16
CDO exposure reduced due to repayments and
exchange rate movements
31 Mar
31 Jan
1Q
allowance
charges
259
267
(8)
232
90
1,178
1,232
20
50
--
Investment portfolio
875
907
20
50
6
Trading portfolio
303
325
--
--
--
1,437
1,499
12
282
--
(S$m)
ABS CDOs
Amount as at:
Cumulative
allowances
%
coverage
(with US sub-prime)
Non-ABS CDOs
of which in:
Total
17
CAR maintained, RWA decreases under Basel II
Tier 2 (Basel I)
Tier 1 (Basel I)
Tier 2 (Basel II)
Tier 1 (Basel II)
(%)
14.8
4.2
14.5
4.3
13.4
13.4
4.5
4.2
8.9
9.2
10.6
10.2
Dec
Dec
Dec
Mar
2005
2006
2007
2008
Tier-1 capital
13.1
14.8
16.4
16.5
RWA
123.8
144.1
184.6
178.7
(S$bn)
18
1Q one-tier dividends of 20 cents
Special (gross)
(S¢)
Ordinary (gross)
Ordinary (one-tier)
5
20
20
20
17
17
15
17
20
15
11
17
20
20
2005
2006
2007
2008
19
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
20
Earnings resilience despite
market volatility
DBS Group Holdings
1Q 2008 financial results
May 7, 2008
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
market volatility
DBS Group Holdings
1Q 2008 financial results
May 7, 2008
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or
distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
2
Net profit up 8% on quarter, down 2% on year
(S$m)
1Q
2008
YoY
%
QoQ
%
Net interest income
1,057
9
(0)
353
14
(7)
(161)
nm
nm
Other income
314
>100
>100
Non-interest income
506
(11)
7
1,563
1
2
Staff expenses
352
(2)
9
Other expenses
304
2
(6)
Expenses
656
(0)
1
Profit before allowances
907
3
2
Allowances for credit & other losses
140
33
(23)
Net profit
603
(2)
8
Fee income
Trading income
Income
Excluding one-time gains and impairment charges
3
Key ratios stable on quarter
(%)
1Q
2008
4Q
2007
1Q
2007
Net interest margin
2.09
2.11
2.21
Fee income/total income
23
25
20
Non-interest income/total income
32
31
37
Cost/income
42
42
43
11.6
10.9
13.0
Loans/deposits
73
71
69
NPL ratio
1.0
1.1
1.5
ROE
Excluding one-time gains and impairment charges
4
Net interest income maintained at previous
quarter’s level despite stronger headwinds
(S$m)
Net interest margin (%)
4,108
3,591
2,943
2.20
2.17
2.21
2.21
2.14
2.11
2.09
1,057
1.91
2005
2006
2007
974
1,027
1,048
1,059
1Q
2Q
3Q
4Q
2007
1Q
2008
5
Loans up 5% on quarter, 21% on year
(S$m)
114,227
5%
94,294
79,462
Dec
2005
71,055
(1%)
Mar
98,957
5%
104,714
6%
108,433
4%
9%
86,630
85,254
83,410
2%
2%
6%
Jun
Sep
2006
Dec
Mar
Jun
Sep
2007
Dec
Mar
2008
6
Fee income down 7% on quarter as capital market
revenues fall
(S$m)
Fee income
Other income
Non-interest income /
total income (%)
2,055
1,753
37
34
1,395
32
32
33
33
1,155
1,462
986
409
2005
598
2006
32
568
524
489
474
506
309
371
403
379
353
259
153
86
95
153
1Q
2Q
3Q
4Q
1Q
2008
593
2007
31
2007
Excluding one-time gains
7
Wealth management fees decline on lower unit
trust sales
(S$m)
Structured deposits
7,428
6,912
4,334
Bancassurance
7,768
2,492
Unit trusts
1,889
144
612
247
2,847
5,735
1,962
690
28
3,808
1,244
2005
2006
2007
1Q
2,125
248
61
1,816
2Q
1,829
1,852
472
28
1,329
479
27
1,346
1,237
3Q
4Q
1Q
2008
2007
Sales (all products)
S’pore
3,560
3,477
3,924
HK
3,868
3,435
3,844
Fees (unit trusts and bancassurance only)
S’pore + HK
129
170
249
560
27
650
993
969
1,116
1,009
958
871
857
995
662
575
47
68
64
70
40
8
Cost-income ratio maintained at 42%
(S$m)
Cost/Income (%)
2,618
2,369
2,026
47
2005
44
2006
42
2007
43
43
42
42
42
658
660
652
648
656
1Q
2Q
3Q
4Q
1Q
2008
2007
12,728
12,907
14,523
13,177
13,364
13,842
14,523
14,551
Staff costs (S$m) 1,052
1,244
1,384
360
354
347
323
352
Headcount
Cost-income ratio excluding one-time gains
9
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
10
Hong Kong’s net profit up 13% on quarter and
1% on year in Singapore-dollar terms
(S$m)
1Q
2008
YoY
%
QoQ
%
Net interest income
225
(17)
(10)
Non-interest income
177
31
13
Income
402
(1)
(1)
Expenses
173
2
(8)
Profit before allowances
229
(3)
5
Allowances for credit & other losses
19
(14)
(30)
Net profit
180
1
13
Figures for Hong Kong geographical basis and converted to S$ using monthly closing rates.
Based on Singapore GAAP. Excluding one-time gains
11
Lower Hong Kong margins offset by higher noninterest income contributions
(%)
1Q
2008
4Q
2007
1Q
2007
Net interest margin
1.90
2.03
2.34
Non-interest / total income
44
38
33
Cost/income ratio
43
47
42
1.32
1.15
1.40
78
72
73
ROA
Loans/deposit
Excluding one-time gains
12
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
13
NPL rate improves to 1.0%, allowance coverage
rises to 138%
Substandard
(S$m)
Doubtful
Loss
2.1
NPL ratio (%)
1.7
1.5
1.4
1.1
1.2
1.1
1.0
1,865
1,533
1,442
1,460
1,494
1,426
1,442
1,464
65%
61%
59%
61%
61%
62%
59%
58%
15%
16%
23%
23%
18%
15%
24%
18%
21%
19%
19%
23%
18%
25%
17%
2006
2007
Mar
Jun
Sep
Dec
Mar
2008
20%
2005
2007
Cumulative general and specific allowances as % of:
NPAs
97
115
135
125
124
130
135
138
Unsecured NPAs
198
237
245
254
254
256
245
241
14
Non-performing assets up slightly
(S$m)
1Q
2008
4Q
2007
1Q
2007
NPAs at start of period
1,442
1,426
1,533
195
270
90
Net recoveries of existing NPAs
(146)
(162)
(125)
Write-offs
(27)
(92)
(38)
1,464
1,442
1,460
New NPAs
NPAs at end of period
15
Specific allowances for loans remain low
(S$m)
1Q
2008
4Q
2007
1Q
2007
New NPLs
26
42
32
Existing NPLs
51
38
21
77
80
53
Upgrading
1
1
1
Settlements
33
55
44
Recoveries
6
8
7
40
63
52
37
16
1
Add charges for
Subtract charges for
Total SP charges
16
CDO exposure reduced due to repayments and
exchange rate movements
31 Mar
31 Jan
1Q
allowance
charges
259
267
(8)
232
90
1,178
1,232
20
50
--
Investment portfolio
875
907
20
50
6
Trading portfolio
303
325
--
--
--
1,437
1,499
12
282
--
(S$m)
ABS CDOs
Amount as at:
Cumulative
allowances
%
coverage
(with US sub-prime)
Non-ABS CDOs
of which in:
Total
17
CAR maintained, RWA decreases under Basel II
Tier 2 (Basel I)
Tier 1 (Basel I)
Tier 2 (Basel II)
Tier 1 (Basel II)
(%)
14.8
4.2
14.5
4.3
13.4
13.4
4.5
4.2
8.9
9.2
10.6
10.2
Dec
Dec
Dec
Mar
2005
2006
2007
2008
Tier-1 capital
13.1
14.8
16.4
16.5
RWA
123.8
144.1
184.6
178.7
(S$bn)
18
1Q one-tier dividends of 20 cents
Special (gross)
(S¢)
Ordinary (gross)
Ordinary (one-tier)
5
20
20
20
17
17
15
17
20
15
11
17
20
20
2005
2006
2007
2008
19
Earnings resilience despite market volatility
Key operating trends intact
Lower Hong Kong margins offset by stronger non-interest income
Balance sheet remains strong
20
Earnings resilience despite
market volatility
DBS Group Holdings
1Q 2008 financial results
May 7, 2008
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.