Derivatives Contingent liabilities and commitments

| 173 Financial statements

42.2 Derivatives

The table below shows the contractual undiscounted cash flows for derivatives settled on net and gross settlement basis: The Group Less than 1 week to 1 to 3 3 to 12 More than In millions a 7 days 1 month months months 1 year Total 2016 Derivatives settled on a net basis 461 3 140 265 1,403 1,350 Derivatives settled on a gross basis – inflow 59,091 104,497 171,874 232,808 184,251 752,521 – outflow 58,909 104,280 171,858 232,889 184,409 752,345 2015 Derivatives settled on a net basis 398 3 41 153 457 256 Derivatives settled on a gross basis – inflow 48,301 93,374 141,698 263,871 136,811 684,055 – outflow 48,045 93,041 141,707 263,906 136,252 682,951 a Positive indicates inflow and negative indicates outflow of funds

42.3 Contingent liabilities and commitments

The table below shows the Group’s contingent liabilities and commitments based on the remaining period as at the balance sheet date to contractual expiry date: The Group Less than 1 to 3 3 to 5 Over In millions 1 year years years 5 years Total 2016 Guarantees, endorsements and other contingent liabilities 22,714 – – – 22,714 Undrawn credit commitments a and other facilities 206,183 11,970 13,028 4,152 235,333 Operating lease commitments 234 267 42 6 549 Capital commitments 54 12 3 – 69 Total 229,185 12,249 13,073 4,158 258,665 2015 Guarantees, endorsements and other contingent liabilities 19,901 – – – 19,901 Undrawn credit commitments a and other facilities 197,676 8,985 10,389 2,732 219,782 Operating lease commitments 226 342 84 9 661 Capital commitments 33 8 7 – 48 Total 217,836 9,335 10,480 2,741 240,392 a Includes commitments that are unconditionally cancellable at any time by the Group The Group expects that not all of the contingent liabilities and undrawn credit commitments will be drawn before expiry. 174 | DBS Annual Report 2016 43 Capital Management The Board is responsible for setting the Group’s capital management objective, which is to maintain a strong capital position consistent with regulatory requirements under MAS Notice 637 and the expectations of various stakeholders, e.g. customers, investors and rating agencies. The Board articulates this objective in the form of capital targets. This objective is pursued while delivering returns to shareholders and ensuring that adequate capital resources are available for business growth and investment opportunities as well as adverse situations, taking into consideration our strategic plans and risk appetite. The Group’s capital management objective is implemented via a capital management and planning process that is overseen by the Capital Committee. The Chief Financial Officer chairs the Capital Committee. The Capital Committee receives regular updates on the Group’s current and projected capital position. A key tool for capital planning is the annual Internal Capital Adequacy Assessment Process ICAAP through which the Group assesses its forecast capital supply and demand relative to regulatory requirements and internal capital targets. The ICAAP has a three-year horizon and covers various scenarios, including stress scenarios of differing scope and severity. The Group is subject to and has compiled with the capital adequacy requirements set out in the MAS Notice 637, which effects the Basel Committee on Banking Supervision’s capital adequacy framework in Singapore throughout the year. The Group’s capital adequacy ratios as at 31 December 2016 have been subject to an external limited assurance review, pursuant to the MAS Notice 609 “Auditor’s Report and Additional Information to be submitted with Annual Accounts”. 44 Segment Reporting

44.1 Business segment reporting