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.