2Q14 performance summary
DBS Group Holdings Ltd
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The DBS Group Holdings Ltd (“DBSH” or “the Company”) Board of Directors reports unaudited financial
results for the first half of 2014, details of which are in the accompanying performance summary.
For the first half of 2014, the Directors have declared an interim one-tier tax-exempt dividend of 28
cents (first half 2013: 28 cents) for each DBSH non-voting redeemable convertible preference share
(“CPS”) and an interim one-tier tax-exempt dividend of 28 cents (first half 2013: 28 cents) for each
DBSH ordinary share. The DBSH Scrip Dividend Scheme will be applied to these dividends.
Details of these interim dividends are as follows:
In $ millions
2014
2013
8
8
689
684
697
692
DBSH Non-voting redeemable CPS
Interim one-tier tax exempt dividend of 28.0 cents (2013 : 28.0 cents )
DBSH ordinary shares
Interim one-tier tax exempt dividend of 28.0 cents (2013 : 28.0 cents )
The DBSH ordinary shares will be quoted ex-dividend on 13 August 2014. Notice is hereby given that
the Share Transfer Books and Register of Members of the Company will be closed on 18 August 2014.
Duly completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration
Services of 80 Robinson Road, #02-00, Singapore 068898 up to 5.00 p.m. on 15 August 2014 will be
registered to determine shareholders' entitlement to the first half 2014 one-tier tax-exempt dividends.
The issue price for new shares to be allotted to shareholders who have elected to receive the interim
dividends in scrip shall be the average of the last dealt prices of each DBSH ordinary share on the
SGX-ST for each of 13, 14 and 15 August 2014.
The first half 2014 one-tier tax-exempt dividends will be payable on or about 3 October 2014. In respect
of ordinary shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the first
half 2014 one-tier tax-exempt dividends will be paid by DBSH to CDP, which will in turn distribute the
dividend entitlements to shareholders.
A separate announcement which will outline further administrative details on the application of the
DBSH Scrip Dividend Scheme to the first half 2014 dividends will be made in due course.
By order of the Board
Goh Peng Fong
Group Secretary
31 July 2014
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the First Half / Second Quarter ended
30 June 2014
DBS Group Holdings Ltd
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Contents
Overview
Net Interest Income
Net Fee and Commission Income
Other Non-Interest Income
Expenses
Allowances for Credit and Other Losses
Performance by Business Segments
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Customer Deposits
Debts Issued
Value at Risk and Trading Income
Capital Adequacy
Additional Pillar 3 Disclosures
Unrealised Valuation Surplus
Unaudited Consolidated Income Statement
Unaudited Consolidated Statement of Comprehensive Income
Unaudited Balance Sheets
Unaudited Consolidated Statement of Changes in Equity
Unaudited Statement of Changes in Equity
Unaudited Consolidated Cash Flow Statement
Additional Information
Issuance of Ordinary Shares
Interested Person Transactions
Selected Notes to the Interim Financial Statements
Confirmation by the Board
Page
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6
7
7
8
11
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15
18
18
19
20
21
22
23
23
24
25
26
27
28
28
29
33
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its consolidated DBSH Group (“Group”) financial statements in accordance with
Singapore Financial Reporting Standard (“FRS”), as modified by the requirements of Notice to Banks No. 612 “Credit Files,
Grading and Provisioning” issued by the Monetary Authority of Singapore. The accounting policies and methods of
computation applied for the current financial periods are consistent with those applied for the financial year ended 31
December 2013, with the exception of the adoption of new or revised FRS.
On 1 January 2014, the Group adopted the following new or revised FRS that are issued by the Accounting Standards Council
and relevant for the Group:
FRS 110 Consolidated Financial Statements
FRS 111 Joint Arrangements
FRS 112 Disclosure of Interests in Other Entities
Amendments to FRS 32 Offsetting Financial Assets and Financial Liabilities
There is no significant impact on the Group’s financial statements from the adoption of the above FRS or revised FRS.
2nd Qtr
2014
2nd Qtr
2013
%
chg
1st Qtr
2014
%
chg
1st Half
2014
1st Half
2013
%
chg
Net interest income
Net fee and commission income
Other non-interest income
Total income
1,557
503
253
2,313
1,382
477
450
2,309
13
5
(44)
-
1,488
510
453
2,451
5
(1)
(44)
(6)
3,045
1,013
706
4,764
2,709
984
933
4,626
12
3
(24)
3
Expenses
1,054
987
7
1,041
1
2,095
1,939
8
Profit before allowances
1,259
1,322
(5)
1,410
(11)
2,669
2,687
(1)
128
245
(48)
151
(15)
279
468
(40)
1,182
1,099
8
1,272
(7)
2,454
2,268
8
969
887
9
1,033
(6)
2,002
1,837
9
One-time item (Gain from sale of BPI)
-
-
-
223
(100)
223
-
NM
One-time item (National Gallery
Singapore)
-
-
-
(25)
(100)
(25)
-
NM
969
887
9
1,231
(21)
2,200
1,837
20
Selected balance sheet items ($m)
Customer loans
Total assets
257,355
417,275
234,787
386,600
10
8
253,229
418,979
2
-
257,355
417,275
234,787
386,600
10
8
Customer deposits
Total liabilities
Shareholders’ funds
299,399
378,537
36,188
274,608
349,892
32,442
9
8
12
301,490
380,832
35,567
(1)
(1)
2
299,399
378,537
36,188
274,608
349,892
32,442
9
8
12
1.67
32.7
45.6
0.93
1.62
40.1
42.7
0.94
1.66
39.3
42.5
1.02
1.66
36.1
44.0
0.98
1.63
41.4
41.9
1.00
11.0
10.9
12.3
11.7
11.6
86.0
0.9
85.5
1.2
84.0
1.0
86.0
0.9
85.5
1.2
14
22
15
14
22
13.5
12.9
13.1
13.5
12.9
13.5
15.7
12.9
15.5
13.1
15.3
13.5
15.7
12.9
15.5
Selected income statement items ($m)
Allowances for credit and other losses
Profit before tax
Net profit
Net profit including one-time items
Key financial ratios (%) (excluding
1/
one-time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
2/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average
loans (bp)
Common Equity Tier 1 capital adequacy
ratio
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr
2014
2nd Qtr
2013
1st Qtr
2014
1st Half
2014
1st Half
2013
1.57
1.57
14.32
1.46
1.46
13.21
1.69
1.78
14.14
1.63
1.71
14.32
1.52
1.52
13.21
1.55
1.44
1.68
1.61
1.50
1.55
14.21
1.44
13.12
1.76
14.04
1.69
14.21
1.50
13.12
Per share data ($)
Per basic share
– earnings excluding one-time items
– earnings
3/
– net book value
Per diluted share
– earnings excluding one-time items
– earnings
3/
– net book value
Notes:
1/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data are computed on an annualised basis.
2/ Calculated based on net profit attributable to the shareholders net of dividends on preference shares and other equity instruments. Non-controlling interests, preference shares and
other equity instruments are not included as equity in the computation of return of equity.
3/ Non-controlling interests are not included as equity in the computation of net book value per share.
NM Not Meaningful
Second-quarter net profit rose 9% from a year ago to $969
million. Total income was stable at $2.31 billion as growth
in net interest income and fee income was offset by a
decline in other non-interest income. Allowance charges
were also lower. Compared to the previous quarter, net
profit fell 6%. Total income was 6% lower as an increase
in net interest income was more than offset by a decline in
other non-interest income.
Net interest income rose 13% from a year ago to $1.56
billion as loans rose 10% and net interest margin improved
five basis points to 1.67%. Compared to the previous
quarter, net interest income grew 5% from higher loan
volumes and stable net interest margin.
Non-interest income fell 18% from a year ago and 21%
from the previous quarter to $756 million. The decline
was due to weaker net trading income. There had also
been gains from fixed asset sales in both comparative
periods. Fee income of $503 million was 5% higher than
a year ago and little changed from the previous quarter.
Wealth management, investment banking and cards
fees were higher than both comparative periods.
Total allowances declined 48% from a year ago and
15% from the previous quarter to $128 million. The nonperforming loan rate improved to 0.9% from 1.2% a year
ago and 1.0% in the previous quarter. Allowance
coverage rose to 162% and to 321% if collateral was
considered.
A gain of $39 million was recorded in the share of profit
of associates during the second quarter from the
divestment of the operating entities of Hwang Capital
(Malaysia).
Capital adequacy ratios (CAR) were healthy, with
Common Equity Tier 1 at 13.5%, Tier 1 at 13.5% and
the total CAR at 15.7%.
For the first half, net profit rose 9% to a record $2.00
billion. Total income increased 3% to $4.76 billion as
higher net interest margin, loan volumes and annuity fee
income streams more than offset a decline in marketrelated income. Allowance charges declined 40% to
$279 million. Return on equity was 11.7%, similar to a
year ago. Including one-time items, first-half net profit
was $2.20 billion.
Expenses rose 7% from a year ago to $1.05 billion,
which was little changed from the previous quarter.
Profit before allowances declined 5% from a year ago
and 11% from the previous quarter to $1.26 billion.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2014
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2014
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer non-trade
loans
204,664
1,291
2.53
183,479
1,155
2.52
202,238
1,244
2.49
Trade assets
2/
Interbank assets
Securities
Total
63,497
40,312
65,668
374,141
406
145
376
2,218
2.56
1.44
2.30
2.38
58,672
33,385
66,183
341,719
354
111
355
1,975
2.42
1.33
2.15
2.32
62,669
36,358
63,451
364,716
404
144
337
2,129
2.61
1.61
2.15
2.37
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
296,929
52,638
349,567
525
136
661
0.71
1.04
0.76
267,889
49,387
317,276
470
123
593
0.70
1.00
0.75
291,197
48,666
339,863
517
124
641
0.72
1.03
0.76
1,557
1.67
1,382
1.62
1,488
1.66
1/
Net interest
3/
income/margin
Average balance
sheet
Interest-bearing
assets
Customer non-trade
loans
1/
Trade assets
2/
Interbank assets
Securities
Total
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
Net interest
3/
income/margin
1st Half 2014
1st Half 2013
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
203,451
2,535
2.51
180,582
2,284
2.55
63,083
38,335
64,560
369,429
810
289
713
4,347
2.59
1.52
2.23
2.37
56,201
32,995
65,399
335,177
692
221
698
3,895
2.48
1.35
2.15
2.34
294,063
50,652
344,715
1,042
260
1,302
0.71
1.04
0.76
265,194
45,760
310,954
936
250
1,186
0.71
1.10
0.77
3,045
1.66
2,709
1.63
Notes:
1/ Trade assets were subsumed under “Customer loans” and “Interbank assets” for previous presentation. Prior period comparatives have been aligned to the current
presentation.
2/ Includes non-restricted balances with central banks.
3/ Net interest margin is net interest income expressed as a percentage of average interest-bearing assets.
Net interest income rose 13% from a year ago to $1.56
billion. Net interest margin improved five basis points to
1.67%. Asset volumes were also higher. Funding costs
were stable.
For the first half, net interest income rose 12% to $3.05
billion as a result of higher asset volumes and improved net
interest margin.
Compared to the previous quarter, net interest income was
5% higher from higher asset volumes.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2014 versus 2nd Qtr 2013
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Interest income
Customer non-trade
loans
Trade assets
Interbank assets
Securities
Total
Interest expense
Customer deposits
Other borrowings
Total
Net impact on interest income
2nd Qtr 2014 versus 1st Qtr 2014
Volume
Rate
Net
change
133
3
136
15
19
34
29
23
(2)
23
11
23
52
34
21
5
16
12
(8)
(17)
23
(3)
(1)
35
183
60
243
48
17
65
51
8
59
5
4
9
56
12
68
10
10
20
(7)
(7)
3
10
13
124
51
175
28
24
52
Due to change in number of days
Net Interest Income
Volume
Rate
Net
change
-
17
175
69
1st Half 2014 versus 1st Half 2013
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
289
(39)
250
85
36
(9)
401
33
33
24
51
118
69
15
452
Interest expense
Customer deposits
Other borrowings
Total
102
26
128
5
(17)
(12)
107
9
116
Net impact on interest income
273
63
336
Interest income
Customer non-trade
loans
Trade assets
Interbank assets
Securities
Total
Due to change in number of days
Net Interest Income
336
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Brokerage
Investment banking
Trade and transaction services
Loan-related
1/
2/
Cards
Wealth management
Others
Fee and commission income
Less: Fee and commission
expense
Total
2nd Qtr
2014
2nd Qtr
2013
% chg
1st Qtr
2014
% chg
1st Half
2014
1st Half
2013
% chg
42
57
(26)
43
(2)
85
119
(29)
21
(6)
(21)
6
18
(26)
(1)
95
271
211
171
255
40
1,128
111
271
197
160
214
31
1,103
(14)
7
7
19
29
2
52
131
93
88
138
17
561
47
137
94
82
101
17
535
11
(4)
(1)
7
37
5
43
140
118
83
117
23
567
58
58
-
57
2
115
119
(3)
503
477
5
510
(1)
1,013
984
3
Notes:
1/ Includes trade & remittances, guarantees and deposit-related fees
2/ Net of interchange fees paid
Net fee and commission income rose 5% from a year ago
to $503 million as contributions from wealth management,
cards and investment banking improved.
Compared to the previous quarter, net fee and commission
income decreased 1% as higher contributions from wealth
management, investment banking and cards were more
than offset by a decline in fees from loan-related activities
and trade and transaction services.
Net fee and commission income for the first half was 3%
higher at $1.01 billion. Higher contributions from annuity
businesses was partially offset by lower brokerage
commissions and investment banking fees.
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2014
2nd Qtr
2013
% chg
1st Qtr
2014
% chg
1st Half
2014
1st Half
2013
% chg
Net trading income
Net income from investment
securities
Net gain on fixed assets
1/
Others (includes rental income)
176
336
(48)
362
(51)
538
744
(28)
62
45
38
38
63
100
111
(10)
15
44
25
(100)
(40)
43
10
(100)
50
43
25
44
34
(2)
(26)
Total
253
450
(44)
453
(44)
706
933
(24)
Note:
1/ Excludes one-time items.
Other non-interest income fell 44% from both the
previous quarter and a year ago to $253 million. Net
trading income fell to $176 million from $362 million in
the previous quarter and $336 million a year ago. The
previous quarter and the year-ago period also had net
gains from the disposal of properties. These factors
were partially offset by an increase in net income from
investment securities.
For the first half, other non-interest income fell 24% to
$706 million as a result of declines in net trading income
and net income from investment securities.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
2nd Qtr
2014
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
Included in the above table were:
Depreciation of properties and other
fixed assets
Directors’ fees
Audit fees payable
2nd Qtr % chg
2013
1st Qtr
2014
% chg
1st Half 1st Half % chg
2014
2013
554
90
200
62
148
1,054
20,015
521
95
167
58
146
987
18,631
6
(5)
20
7
1
7
7
557
98
187
59
140
1,041
19,623
(1)
(8)
7
5
6
1
2
1,111
188
387
121
288
2,095
20,015
1,027
183
334
108
287
1,939
18,631
8
3
16
12
8
7
54
2
53
1
2
100
53
1
2
100
107
3
108
2
(1)
50
2
1
100
2
-
4
3
33
For the first half, costs rose 8% to $2.10 billion, bringing
the cost-income ratio to 44%.
Expenses rose 7% from a year ago to $1.05 billion as staff
and other operating costs rose. Expenses were 1% higher
than the previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr
2014
General allowances (GP)
2nd Qtr % chg
2013
1st Qtr
2014
% chg
1st Half 1st Half
2014
2013
% chg
28
113
(75)
56
(50)
84
223
(62)
1/
88
23
12
7
74
(28)
128
41
12
9
35
31
(31)
(44)
(22)
>100
NM
93
15
10
3
97
(32)
(5)
53
20
>100
(24)
13
181
38
22
10
171
(60)
242
48
20
11
68
95
(25)
(21)
10
(9)
>100
NM
Specific allowances (SP) for securities,
properties and other assets
12
4
>100
2
>100
14
3
>100
128
245
(48)
151
(15)
279
468
(40)
Specific allowances (SP) for loans
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total
Notes:
1/
Specific allowances for loans are classified according to where the borrower is incorporated
NM Not Meaningful
Specific allowances for loans amounted to $88 million,
lower than both a year ago and the previous quarter.
General allowances of $28 million were taken in line with
loan growth.
For the first half, total allowances fell 40% to $279 million
as specific allowances and general allowances both
declined.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS
($m)
Consumer
Banking/
Wealth
Management
Selected income items
2nd Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Institutional
Banking
Treasury
Others
Total
401
308
709
472
22
814
392
1,206
373
67
250
(13)
237
115
2
92
69
161
94
37
1,557
756
2,313
1,054
128
1
216
766
120
50
80
51
1,182
384
282
666
437
29
766
520
1,286
357
129
218
61
279
122
-
120
100
220
125
(7)
1,488
963
2,451
1,041
151
2
202
800
157
11
113
13
1,272
364
259
623
427
20
742
440
1,182
346
193
180
106
286
119
(1)
96
122
218
95
33
1,382
927
2,309
987
245
176
643
168
22
112
22
1,099
785
590
1,375
909
51
1,580
912
2,492
730
196
468
48
516
237
2
212
169
381
219
30
3,045
1,719
4,764
2,095
279
3
418
1,566
277
61
193
64
2,454
1/
1st Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
1/
1st Half 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer
Banking/
Wealth
Management
1st Half 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Institutional
Banking
Treasury
Others
Total
723
522
1,245
827
38
1,460
924
2,384
665
366
343
266
609
229
(1)
183
205
388
218
65
2,709
1,917
4,626
1,939
468
380
1,353
381
49
154
49
2,268
78,829
210,418
86,635
36,558
412,440
Selected balance sheet and other
2/
items
30 Jun 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2014
Depreciation for 2nd Qtr 2014
31 Mar 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 1st Qtr 2014
Depreciation for 1st Qtr 2014
30 Jun 2013
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2013
Depreciation for 2nd Qtr 2013
146,108
20
8
154,347
5
3
59,053
1
2
19,029
39
41
4,835
417,275
378,537
65
54
76,332
208,713
92,285
36,847
414,177
144,721
15
8
159,323
5
3
58,510
3
2
18,278
20
40
4,802
418,979
380,832
43
53
68,186
198,432
78,313
36,867
381,798
12,123
29
41
4,802
386,600
349,892
55
53
139,914
11
8
133,440
9
2
64,415
6
2
Notes:
1/ Non-interest income and profit before tax exclude one-time items.
2/ Refer to sections on Customer Loans and Non-Performing Assets and Loss Allowance Coverage for more information on business segments.
The business segment results are prepared based on
the Group’s internal management reporting which
reflects the organisation management structure. As the
activities of the Group are highly integrated, internal
allocation has been made in preparing the segment
information. Amounts for each business segment are
shown after the allocation of certain centralised costs,
funding income and the application of transfer pricing,
where appropriate. Transactions between segments are
recorded within the segment as if they are third party
transactions and are eliminated on consolidation.
The various business segments are described below:
Consumer Banking/ Wealth Management
Consumer Banking/ Wealth Management provides individual
customers with a diverse range of banking and related
financial services. The products and services available to
customers include current and savings accounts, fixed
deposits, loans and home finance, cards, payments,
investment and insurance products.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Compared to the previous quarter, total income
increased by 6% to $709 million. Net-interest income
increased from improved deposit margin as well as
higher deposit and loan volumes. Non-interest income
was higher from strong momentum in investment and
insurance product sales. Expenses increased 8% to
$472 million as investments were made to enhance
customer service, while allowances were $7 million
lower at $22 million. Profit before tax was 7% higher at
$216 million.
Compared to a year ago, profit before tax increased
23%. Total income increased 14% as net interest
income rose, and non-interest income was higher from
continued customer acquisition, better cross-selling and
higher cards fees. Expenses rose 11% from increased
investments and seasonal marketing campaigns. Total
allowances were $2 million higher in line with loan
growth.
For the first half, profit before tax was $418 million, 10%
higher from a year ago. Total income grew 10% to $1.38
billion. Net interest income increased 9% to $785 million
as loan and deposit volumes increased, while noninterest income rose 13% to $590 million from higher
wealth management and cards fees. Expenses rose
10% to $909 million as investments, marketing and
advertising activities continued. Total allowances
increased 34% to $51 million in line with loan growth.
lower treasury customer flows. Expenses were 8% higher.
For the first half of the year, profit before tax increased
16% from a year ago to $1.57 billion as total income rose
while allowances halved from lower specific and general
allowances. Total income grew 5% to $2.49 billion as net
interest income rose 8% to $1.58 billion from loan growth
and better margin, and treasury customer flows and loanrelated fees were higher. Expenses rose 10% to $730
million from headcount growth.
Treasury
Treasury provides treasury services to corporations,
institutional and private investors, financial institutions and
other market participants. It is primary involved in sales,
structuring, market marking and trading across a broad
range of financial products including foreign exchange,
interest rate, debt, credit, equity and other structured
derivatives. Income from these financial products and
services offered to the customer of other business
segments, such as Consumer Banking/Wealth
Management and Institutional Banking, is reflected in the
respective segments. Treasury is also responsible for
managing surplus funds.
Compared to the previous quarter, profit before tax was
24% lower at $120 million. Total income declined 15% to
$237 million as trading gains from foreign exchange and
interest rate activities were lower. Expenses declined 6%
to $115 million mainly due to lower staff expenses.
Institutional Banking
Institutional Banking provides financial services and
products to institutional clients including bank and
non-bank financial institutions, government- linked
companies, large corporates and small and mediumsized businesses. The business focuses on
broadening and deepening customer
relationships. Products and services comprise the full
range of credit facilities from short term working
capital financing to specialized lending. It also
provides global transactional services such as cash
management, trade finance and securities and
fiduciary services; treasury and markets products;
corporate finance and advisory banking as well as
capital markets solutions.
Compared to the previous quarter, profit before tax
was 4% lower at $766 million. Net interest income
rose 6% to $814 million from loan growth and better
net interest margin. Non-interest income fell 25% to
$392 million as treasury customer flows and loanrelated fee declined. Total income fell 6% to $1.21
billion. Expense growth was contained at 4% and
reached $373 million as headcount increased to
support business growth. Allowances declined 48% to
$67 million as both specific and general allowances
were lower.
Compared to a year ago, profit before tax rose 19% as
allowances declined 65% from lower specific and
general allowances. Total income rose 2% as growth
in global transactional services income was offset by
Compared to a year ago, profit before tax fell 29%. Total
income declined 17% as trading gains in foreign exchange
dropped, while expenses were 3% lower mainly due to
lower staff expenses.
For the first half of the year, profit before tax fell 27% from
a year ago to $277 million. Total income declined 15% to
$516 million due to lower income from foreign exchange
and interest rate trading activities. Expenses rose 3% to
$237 million as business related expenses were higher,
but partially offset by lower staff expenses.
Income from treasury customer flows is reflected in the
Institutional Banking and Consumer Banking/Wealth
Management customer segments and not in Treasury.
Income from treasury customer flows declined 23% from
the previous quarter to $272 million as customer related
transactions decreased in Hong Kong, China, Taiwan and
Korea. Compared to a year ago, treasury customer flows
was 3% lower due to slower treasury customer activities in
Hong Kong, Taiwan and Korea, but mitigated by an
increase in Singapore. For the first half of the year, income
from treasury customer flows was 8% higher at $627
million.
Others
Others encompasses a range of activities from corporate
decisions and includes income and expenses not attributed
to other business segments, including capital and balance
sheet management, funding and liquidity. DBS Vickers
Securities and Islamic Bank of Asia are also included in this
segment.
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
1/
($m)
S’pore
Selected income items
2nd Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
1,003
458
1,461
624
62
253
173
426
186
1
146
80
226
151
8
100
35
135
73
48
55
10
65
20
9
1,557
756
2,313
1,054
128
6
1
2
42
-
51
781
117
631
240
40
200
69
6
63
56
11
45
36
6
30
1,182
180
969
931
540
1,471
629
69
260
246
506
178
4
154
123
277
140
11
96
41
137
73
62
47
13
60
21
5
1,488
963
2,451
1,041
151
5
778
117
621
2
326
54
272
1
127
30
97
5
7
(5)
12
34
3
31
13
1,272
199
1,033
864
505
1,369
575
143
250
274
524
186
41
104
80
184
133
19
111
37
148
71
31
53
31
84
22
11
1,382
927
2,309
987
245
3
-
3
16
-
22
654
94
510
297
43
254
35
14
21
62
9
53
51
2
49
1,099
162
887
1st Half 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
1,934
998
2,932
1,253
131
11
513
419
932
364
5
3
300
203
503
291
19
3
196
76
272
146
110
47
102
23
125
41
14
-
3,045
1,719
4,764
2,095
279
64
Profit before tax
Income tax expense
Net profit
1,559
234
1,252
566
94
472
196
36
160
63
6
57
70
9
61
2,454
379
2,002
2/
1st Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
2/
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
1st Half 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
1,699
1,119
2,818
1,154
241
7
481
517
998
354
82
-
205
149
354
251
25
4
220
81
301
140
42
38
104
51
155
40
78
-
2,709
1,917
4,626
1,939
468
49
Profit before tax
Income tax expense
Net profit
1,430
177
1,151
562
86
476
82
24
58
157
35
122
37
7
30
2,268
329
1,837
274,009
63,292
42,322
17,951
14,866
412,440
4,802
278,811
1,939
172,919
33
63,325
354
49,434
42,322
98
20,247
17,951
32
10,205
14,866
2
7,953
4,835
417,275
2,425
260,758
274,075
66,531
42,006
18,436
13,129
414,177
4,802
278,877
1,976
168,817
66,531
411
50,595
42,006
99
20,188
18,436
35
9,761
13,129
2
7,383
4,802
418,979
2,523
256,744
246,092
63,587
41,490
17,579
13,050
381,798
4,802
250,894
2,223
153,224
63,587
351
48,283
41,490
106
19,949
17,579
19
9,408
13,050
2
7,529
4,802
386,600
2,701
238,393
Selected balance sheet items
30 Jun 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
31 Mar 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
30 Jun 2013
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked.
2/ Non-interest income and profit exclude one-time items.
3/ Includes interests in associates and joint venture, properties and other fixed assets.
The performance by geography is classified based on the
location in which income and assets are recorded.
in the previous quarter from fixed asset sales. Fee
income was stable.
Singapore
Expenses fell marginally to $624 million and profit before
allowances was 1% lower at $837 million. Allowances
fell 10% to $62 million as general allowances were lower.
Net profit rose 2% from the previous quarter to $631
million. Total income fell 1% to $1.46 billion. Net interest
income rose 8% to $1.00 billion from higher loan
volumes. Non-interest income was 15% lower at $458
million due to lower net trading income as well as a gain
Compared to a year ago, net profit rose 24% as income
growth was partially offset by an increase in expenses.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Allowances fell 57% as both specific allowances and
general allowances were lower.
For the first half, net profit rose 9% to $1.25 billion. Total
income increased 4% to $2.93 billion from higher loan
volumes partially offset by lower trading income.
Expenses were 9% higher at $1.25 billion. Allowances
fell 46% from lower specific and general allowances.
Hong Kong
Currency effects were minimal compared to the previous
quarter and a year ago.
Net profit declined 26% from the previous quarter to
$200 million as total income fell 16% to $426 million. Net
interest income fell 3% to $253 million from lower
average loan volume and higher fixed deposit costs.
Both loan and deposit balances were little changed from
the previous quarter. Net interest margin declined nine
basis points to 1.48%.
Non-interest income decreased 30% to $173 million as
treasury customer flows fell. Fee income was higher
from increased contributions from loan-related activities,
trade and transaction services, cards and wealth
management, partially offset by lower brokerage income.
Expenses rose 4% to $186 million from higher general
costs. Allowances of $1 million were little changed from
$4 million in the previous quarter.
Compared to a year ago, net profit was 21% lower as
total income declined 19%. Net interest income
increased 1% from higher loan volumes partially offset
by the impact of a ten basis points decline in net interest
margin. Non-interest income was 37% lower from slower
treasury customer flows as well as a gain a year ago
from fixed asset sales. These factors were partially offset
by higher fee income in trade and transaction services
and loan-related activities. Expenses were flat, while
allowances declined to $1 million from $41 million a year
ago from a net write-back of general allowances.
For the first half, net profit was little changed at $472
million. Total income declined 7% to $932 million. Net
interest income rose 7% to $513 million from higher
average loan volume while net interest margin declined
slightly. Non-interest income fell mainly from by lower
trading income, and there had also been a gain of $43
million a year ago from the sale of fixed assets. Expenses
were 3% higher at $364 million while allowances declined
to $5 million from a net write-back of general allowances.
Other countries
Net profit for Rest of Greater China fell 35% from the
previous quarter to $63 million. Net interest income
declined 5% to $146 million from lower net interest
margin. Non-interest income fell 35% to $80 million as
trading income declined with slower treasury customer
flows. Trade and transaction services and loan-related
fees also declined. Expenses increased 8% to $151
million while total allowances declined to $8 million from
$11 million due to lower general allowances.
Compared to a year ago, net profit was two times higher.
Net interest income rose 40% due mainly to higher net
interest margin, while non-interest income was
unchanged. Expenses were higher while allowances
halved.
For the first half, net profit rose to $160 million from $58
million a year ago. Total income was 42% higher at $503
million as both net interest and non-interest income rose.
Expenses were 16% higher at $291 million. Allowances
declined to $19 million from $25 million due to lower
general allowances.
Net profit for South and South-east Asia rose to $45
million from $12 million in the previous quarter. Total
income was little changed as net interest income rose 4%
to $100 million from higher loan volume, while noninterest income fell 15% to $35 million as lower trading
income more than offset higher fee income. Expenses
was flat at $73 million. Total allowances fell 23% to $48
million as specific allowances were lower, partially offset
by higher general allowances.
Compared to a year ago, net profit was 15% lower as
both net interest and non-interest income declined, and
allowances rose 55% while expenses were marginally
higher.
For the first half, net profit fell 53% to $57 million. Total
income was 10% lower at $272 million, while expenses
were 4% higher at $146 million. Allowances more than
doubled to $110 million from $42 million due to higher
specific allowances.
Net profit for Rest of the World was little changed from
the previous quarter at $30 million. Total income rose
8% to $65 million as net interest income increased 17%
to $55 million mainly from higher loan volumes, while
non-interest income declined 23% to $10 million.
Expenses were little changed. Allowances rose to $9
million from $5 million due to higher general allowances.
Compared to a year ago, net profit fell 39% as total
income declined 23%. Expenses and total allowances
were little changed.
For the first half, net profit doubled to $61 million. Total
income fell 19% to $125 million as non-interest income
declined from lower trading income, while expenses
were little changed. Allowances fell 82% to $14 million
due mainly to lower specific allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
260,758
256,744
252,181
238,393
General allowances
Net total
937
2,466
257,355
1,073
2,442
253,229
1,129
2,398
248,654
1,286
2,320
234,787
By business unit
Consumer Banking/ Wealth Management
Institutional Banking
Others
Total (Gross)
76,373
181,991
2,394
260,758
74,120
179,748
2,876
256,744
70,995
178,609
2,577
252,181
66,195
169,293
2,905
238,393
123,410
44,919
48,656
23,303
20,470
260,758
119,264
43,951
48,744
23,911
20,874
256,744
119,463
41,418
47,910
23,004
20,386
252,181
114,626
37,760
41,641
23,161
21,205
238,393
31,487
44,790
50,816
54,826
21,475
14,475
30,533
44,210
49,846
53,753
21,210
14,339
30,034
43,016
49,147
51,803
21,265
11,013
32,556
40,177
47,202
48,230
19,816
9,976
21,727
20,555
19,180
16,989
21,162
260,758
22,298
256,744
26,723
252,181
23,447
238,393
104,169
29,968
90,045
36,576
260,758
101,651
29,714
90,201
35,178
256,744
101,456
29,463
84,998
36,264
252,181
97,779
28,811
80,146
31,657
238,393
Gross
Less:
Specific allowances
1/
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total (Gross)
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals
(excluding housing loans)
Others
Total (Gross)
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
Note:
1/ Loans by geography are classified according to where the borrower is incorporated.
Gross customer loans rose 2% from the previous
quarter to $261 billion, with Singapore-dollar consumer
and corporate loans accounting for the increase.
Gross loans were 9% higher than a year ago, with the
expansion led by Singapore-dollar and US-dollar loans
in Singapore, Hong Kong and Rest of Greater China.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
30 Jun 2014
NPA
($m)
NPL
(% of
loans)
31 Mar 2014
SP
($m)
NPA
($m)
NPL
(% of
loans)
30 Jun 2013
31 Dec 2013
SP
($m)
NPA
($m)
NPL
(% of
loans)
SP
($m)
NPA
($m)
NPL
(% of
loans)
SP
($m)
By business unit
Consumer Banking/
Wealth Management
296
0.4
75
297
0.4
72
293
0.4
73
297
0.4
71
Institutional Banking
2,021
1.1
862
2,325
1.3
1,001
2,589
1.4
1,056
2,578
1.5
1,306
Total non-performing
loans (NPL)
2,317
0.9
937
2,622
1.0
1,073
2,882
1.1
1,129
2,875
1.2
1,377
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
9
-
3
9
-
3
9
-
3
9
-
3
104
-
47
99
-
49
105
-
50
82
-
48
2,430
-
987
2,730
-
1,125
2,996
-
1,182
2,966
-
1,428
By geography
Singapore
422
0.3
129
423
0.4
113
435
0.4
109
468
0.4
165
Hong Kong
223
0.5
103
229
0.5
115
233
0.6
117
262
0.7
126
Rest of Greater China
289
0.6
147
281
0.6
143
282
0.6
146
266
0.6
133
South and South-east
Asia
819
3.5
326
800
3.3
257
587
2.6
195
374
Rest of the World
564
2.8
232
889
4.3
445
1,345
6.6
562
1,505
7.1
760
2,317
0.9
937
2,622
1.0
1,073
2,882
1.1
1,129
2,875
1.2
1,377
Total non-performing
loans
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
1.6
193
9
-
3
9
-
3
9
-
3
9
-
3
104
-
47
99
-
49
105
-
50
82
-
48
2,430
-
987
2,730
-
1,125
2,996
-
1,182
2,966
-
1,428
Loss Allowance
Coverage
Specific allowances
987
1,125
1,182
1,428
General allowances
2,942
2,915
2,865
2,750
Total Allowances
3,929
4,040
4,047
4,178
Total Allowances/ NPA
162%
148%
135%
141%
Total Allowances/
unsecured NPA
321%
271%
204%
191%
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
SP
NPA
SP
NPA
SP
NPA
SP
544
382
110
387
256
135
9
135
579
384
111
328
250
103
8
123
488
226
112
397
240
42
9
142
481
114
118
406
289
50
12
229
331
131
633
332
1,145
465
1,231
545
Financial institutions, investment &
holding companies
251
160
266
159
265
146
297
172
Professionals & private individuals
(excluding housing loans)
157
50
158
47
155
48
158
46
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
155
61
163
51
94
37
70
34
2,317
9
937
3
2,622
9
1,073
3
2,882
9
1,129
3
2,875
9
1,377
3
104
47
99
49
105
50
82
48
Total non-performing assets
2,430
987
2,730
1,125
2,996
1,182
2,966
1,428
By loan classification
($m)
30 Jun 2014
Total non-performing loans
Debt securities
Contingent liabilities & others
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,515
686
229
2,430
217
541
229
987
1,693
810
227
2,730
228
670
227
1,125
1,981
753
262
2,996
306
614
262
1,182
1,620
983
363
2,966
260
805
363
1,428
319
122
50
491
35
113
50
198
429
338
57
824
41
322
57
420
878
343
56
1,277
168
326
56
550
942
363
72
1,377
182
338
72
592
By collateral type
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
NPA
NPA
NPA
1,224
1,491
1,986
2,190
Secured non-performing assets by collateral type
Properties
375
394
351
343
Shares and debentures
Fixed deposits
398
13
482
30
323
33
145
27
Others
420
333
303
261
2,430
2,730
2,996
2,966
Unsecured non-performing assets
Total
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
517
246
254
1,413
831
333
340
1,226
1,281
275
272
1,168
1,244
249
319
1,154
Total
2,430
2,730
2,996
2,966
Non-performing assets declined 11% from the
previous quarter to $2.43 billion as a result of a loan
resolution in Rest of the World.
Allowance coverage was at 162% of non-performing
assets and 321% if collateral was considered.
The non-performing loans ratio improved to 0.9%
from 1.0%.
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
($m)
By currency and product
Singapore dollar
Fixed deposits
Savings accounts
Current accounts
Others
Hong Kong dollar
Fixed deposits
Savings accounts
Current accounts
Others
US dollar
Fixed deposits
Savings accounts
Current accounts
Others
Others
Fixed deposits
Savings accounts
Current accounts
Others
Total
Fixed deposits
Savings accounts
Current accounts
Others
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
135,961
15,294
100,011
20,634
22
27,964
16,593
6,816
4,135
420
85,417
52,551
5,058
21,665
6,143
50,057
40,634
2,981
5,555
887
299,399
125,072
114,866
51,989
7,472
139,560
19,052
98,784
21,666
58
27,609
17,371
5,944
3,940
354
83,376
47,461
4,915
25,674
5,326
50,945
41,925
3,107
5,416
497
301,490
125,809
112,750
56,696
6,235
134,758
17,079
97,022
20,616
41
29,840
18,964
6,437
3,993
446
75,023
43,172
5,858
18,616
7,377
52,744
43,285
3,112
5,584
763
292,365
122,500
112,429
48,809
8,627
138,947
21,190
94,347
22,227
1,183
27,579
17,892
5,902
3,692
93
59,118
33,114
4,666
16,319
5,019
48,964
39,372
2,900
5,330
1,362
274,608
111,568
107,815
47,568
7,657
Customer deposits declined 1% from the previous quarter
to $299 billion. Adjusting for the placement of a short-term
deposit at end-March 2014 that subsequently flowed out,
deposits rose 3% during the quarter.
Compared to a year ago, customer deposits were 9%
higher, in line with loan growth. The deposit growth was
led by Singapore dollar savings deposits, which rose 6%
to $100 billion, and US dollar deposits, which rose 44%
to $85 billion.
DEBTS ISSUED
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
Subordinated term debts
Senior medium term notes
Commercial papers
Negotiable certificates of deposit
Other debt securities
Total
5,506
7,480
13,596
1,465
4,822
32,869
5,523
6,411
12,121
1,432
4,534
30,021
5,544
5,635
12,142
1,235
4,103
28,659
5,532
4,511
14,186
967
4,370
29,566
Due within 1 year
Due after 1 year
Total
20,524
12,345
32,869
18,300
11,721
30,021
17,108
11,551
28,659
16,458
13,108
29,566
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
VALUE AT RISK AND TRADING INCOME
The Group’s market risk appetite framework leverages on the Tail Value-at-Risk (TVaR) metric to monitor and limit market
risk exposures. TVaR, or more commonly referenced as Expected Shortfall, is calculated using the historical simulation
value-at-risk (VaR) approach and averaging the losses beyond the 95% confidence interval, over a one-day holding period.
The following table shows for Treasury’s trading portfolios at period-end, average, high and low diversified TVaR.
($m)
As at 30 Jun 2014
Total
Average
13
1 Jul 2013 to 30 Jun 2014
High
11
19
Low
7
Treasury’s trading portfolio experienced three back-testing exceptions from 1 July 2013 to 30 June 2014 compared with
one in the corresponding prior period. The exceptions occurred in July and February.
The chart below shows the histogram of VaR for the Group’s trading book for the period from 1 July 2013 to 30 June 2014.
DBSH Group TVaR for Treasury Trading Book
90
80
70
No. of Days
60
50
40
30
20
>17
>15-17
>13-15
>11-13
>9-11
0
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The DBS Group Holdings Ltd (“DBSH” or “the Company”) Board of Directors reports unaudited financial
results for the first half of 2014, details of which are in the accompanying performance summary.
For the first half of 2014, the Directors have declared an interim one-tier tax-exempt dividend of 28
cents (first half 2013: 28 cents) for each DBSH non-voting redeemable convertible preference share
(“CPS”) and an interim one-tier tax-exempt dividend of 28 cents (first half 2013: 28 cents) for each
DBSH ordinary share. The DBSH Scrip Dividend Scheme will be applied to these dividends.
Details of these interim dividends are as follows:
In $ millions
2014
2013
8
8
689
684
697
692
DBSH Non-voting redeemable CPS
Interim one-tier tax exempt dividend of 28.0 cents (2013 : 28.0 cents )
DBSH ordinary shares
Interim one-tier tax exempt dividend of 28.0 cents (2013 : 28.0 cents )
The DBSH ordinary shares will be quoted ex-dividend on 13 August 2014. Notice is hereby given that
the Share Transfer Books and Register of Members of the Company will be closed on 18 August 2014.
Duly completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration
Services of 80 Robinson Road, #02-00, Singapore 068898 up to 5.00 p.m. on 15 August 2014 will be
registered to determine shareholders' entitlement to the first half 2014 one-tier tax-exempt dividends.
The issue price for new shares to be allotted to shareholders who have elected to receive the interim
dividends in scrip shall be the average of the last dealt prices of each DBSH ordinary share on the
SGX-ST for each of 13, 14 and 15 August 2014.
The first half 2014 one-tier tax-exempt dividends will be payable on or about 3 October 2014. In respect
of ordinary shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the first
half 2014 one-tier tax-exempt dividends will be paid by DBSH to CDP, which will in turn distribute the
dividend entitlements to shareholders.
A separate announcement which will outline further administrative details on the application of the
DBSH Scrip Dividend Scheme to the first half 2014 dividends will be made in due course.
By order of the Board
Goh Peng Fong
Group Secretary
31 July 2014
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the First Half / Second Quarter ended
30 June 2014
DBS Group Holdings Ltd
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Contents
Overview
Net Interest Income
Net Fee and Commission Income
Other Non-Interest Income
Expenses
Allowances for Credit and Other Losses
Performance by Business Segments
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Customer Deposits
Debts Issued
Value at Risk and Trading Income
Capital Adequacy
Additional Pillar 3 Disclosures
Unrealised Valuation Surplus
Unaudited Consolidated Income Statement
Unaudited Consolidated Statement of Comprehensive Income
Unaudited Balance Sheets
Unaudited Consolidated Statement of Changes in Equity
Unaudited Statement of Changes in Equity
Unaudited Consolidated Cash Flow Statement
Additional Information
Issuance of Ordinary Shares
Interested Person Transactions
Selected Notes to the Interim Financial Statements
Confirmation by the Board
Page
2
4
6
6
7
7
8
11
14
15
18
18
19
20
21
22
23
23
24
25
26
27
28
28
29
33
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its consolidated DBSH Group (“Group”) financial statements in accordance with
Singapore Financial Reporting Standard (“FRS”), as modified by the requirements of Notice to Banks No. 612 “Credit Files,
Grading and Provisioning” issued by the Monetary Authority of Singapore. The accounting policies and methods of
computation applied for the current financial periods are consistent with those applied for the financial year ended 31
December 2013, with the exception of the adoption of new or revised FRS.
On 1 January 2014, the Group adopted the following new or revised FRS that are issued by the Accounting Standards Council
and relevant for the Group:
FRS 110 Consolidated Financial Statements
FRS 111 Joint Arrangements
FRS 112 Disclosure of Interests in Other Entities
Amendments to FRS 32 Offsetting Financial Assets and Financial Liabilities
There is no significant impact on the Group’s financial statements from the adoption of the above FRS or revised FRS.
2nd Qtr
2014
2nd Qtr
2013
%
chg
1st Qtr
2014
%
chg
1st Half
2014
1st Half
2013
%
chg
Net interest income
Net fee and commission income
Other non-interest income
Total income
1,557
503
253
2,313
1,382
477
450
2,309
13
5
(44)
-
1,488
510
453
2,451
5
(1)
(44)
(6)
3,045
1,013
706
4,764
2,709
984
933
4,626
12
3
(24)
3
Expenses
1,054
987
7
1,041
1
2,095
1,939
8
Profit before allowances
1,259
1,322
(5)
1,410
(11)
2,669
2,687
(1)
128
245
(48)
151
(15)
279
468
(40)
1,182
1,099
8
1,272
(7)
2,454
2,268
8
969
887
9
1,033
(6)
2,002
1,837
9
One-time item (Gain from sale of BPI)
-
-
-
223
(100)
223
-
NM
One-time item (National Gallery
Singapore)
-
-
-
(25)
(100)
(25)
-
NM
969
887
9
1,231
(21)
2,200
1,837
20
Selected balance sheet items ($m)
Customer loans
Total assets
257,355
417,275
234,787
386,600
10
8
253,229
418,979
2
-
257,355
417,275
234,787
386,600
10
8
Customer deposits
Total liabilities
Shareholders’ funds
299,399
378,537
36,188
274,608
349,892
32,442
9
8
12
301,490
380,832
35,567
(1)
(1)
2
299,399
378,537
36,188
274,608
349,892
32,442
9
8
12
1.67
32.7
45.6
0.93
1.62
40.1
42.7
0.94
1.66
39.3
42.5
1.02
1.66
36.1
44.0
0.98
1.63
41.4
41.9
1.00
11.0
10.9
12.3
11.7
11.6
86.0
0.9
85.5
1.2
84.0
1.0
86.0
0.9
85.5
1.2
14
22
15
14
22
13.5
12.9
13.1
13.5
12.9
13.5
15.7
12.9
15.5
13.1
15.3
13.5
15.7
12.9
15.5
Selected income statement items ($m)
Allowances for credit and other losses
Profit before tax
Net profit
Net profit including one-time items
Key financial ratios (%) (excluding
1/
one-time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
2/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average
loans (bp)
Common Equity Tier 1 capital adequacy
ratio
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr
2014
2nd Qtr
2013
1st Qtr
2014
1st Half
2014
1st Half
2013
1.57
1.57
14.32
1.46
1.46
13.21
1.69
1.78
14.14
1.63
1.71
14.32
1.52
1.52
13.21
1.55
1.44
1.68
1.61
1.50
1.55
14.21
1.44
13.12
1.76
14.04
1.69
14.21
1.50
13.12
Per share data ($)
Per basic share
– earnings excluding one-time items
– earnings
3/
– net book value
Per diluted share
– earnings excluding one-time items
– earnings
3/
– net book value
Notes:
1/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data are computed on an annualised basis.
2/ Calculated based on net profit attributable to the shareholders net of dividends on preference shares and other equity instruments. Non-controlling interests, preference shares and
other equity instruments are not included as equity in the computation of return of equity.
3/ Non-controlling interests are not included as equity in the computation of net book value per share.
NM Not Meaningful
Second-quarter net profit rose 9% from a year ago to $969
million. Total income was stable at $2.31 billion as growth
in net interest income and fee income was offset by a
decline in other non-interest income. Allowance charges
were also lower. Compared to the previous quarter, net
profit fell 6%. Total income was 6% lower as an increase
in net interest income was more than offset by a decline in
other non-interest income.
Net interest income rose 13% from a year ago to $1.56
billion as loans rose 10% and net interest margin improved
five basis points to 1.67%. Compared to the previous
quarter, net interest income grew 5% from higher loan
volumes and stable net interest margin.
Non-interest income fell 18% from a year ago and 21%
from the previous quarter to $756 million. The decline
was due to weaker net trading income. There had also
been gains from fixed asset sales in both comparative
periods. Fee income of $503 million was 5% higher than
a year ago and little changed from the previous quarter.
Wealth management, investment banking and cards
fees were higher than both comparative periods.
Total allowances declined 48% from a year ago and
15% from the previous quarter to $128 million. The nonperforming loan rate improved to 0.9% from 1.2% a year
ago and 1.0% in the previous quarter. Allowance
coverage rose to 162% and to 321% if collateral was
considered.
A gain of $39 million was recorded in the share of profit
of associates during the second quarter from the
divestment of the operating entities of Hwang Capital
(Malaysia).
Capital adequacy ratios (CAR) were healthy, with
Common Equity Tier 1 at 13.5%, Tier 1 at 13.5% and
the total CAR at 15.7%.
For the first half, net profit rose 9% to a record $2.00
billion. Total income increased 3% to $4.76 billion as
higher net interest margin, loan volumes and annuity fee
income streams more than offset a decline in marketrelated income. Allowance charges declined 40% to
$279 million. Return on equity was 11.7%, similar to a
year ago. Including one-time items, first-half net profit
was $2.20 billion.
Expenses rose 7% from a year ago to $1.05 billion,
which was little changed from the previous quarter.
Profit before allowances declined 5% from a year ago
and 11% from the previous quarter to $1.26 billion.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2014
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2014
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer non-trade
loans
204,664
1,291
2.53
183,479
1,155
2.52
202,238
1,244
2.49
Trade assets
2/
Interbank assets
Securities
Total
63,497
40,312
65,668
374,141
406
145
376
2,218
2.56
1.44
2.30
2.38
58,672
33,385
66,183
341,719
354
111
355
1,975
2.42
1.33
2.15
2.32
62,669
36,358
63,451
364,716
404
144
337
2,129
2.61
1.61
2.15
2.37
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
296,929
52,638
349,567
525
136
661
0.71
1.04
0.76
267,889
49,387
317,276
470
123
593
0.70
1.00
0.75
291,197
48,666
339,863
517
124
641
0.72
1.03
0.76
1,557
1.67
1,382
1.62
1,488
1.66
1/
Net interest
3/
income/margin
Average balance
sheet
Interest-bearing
assets
Customer non-trade
loans
1/
Trade assets
2/
Interbank assets
Securities
Total
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
Net interest
3/
income/margin
1st Half 2014
1st Half 2013
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
203,451
2,535
2.51
180,582
2,284
2.55
63,083
38,335
64,560
369,429
810
289
713
4,347
2.59
1.52
2.23
2.37
56,201
32,995
65,399
335,177
692
221
698
3,895
2.48
1.35
2.15
2.34
294,063
50,652
344,715
1,042
260
1,302
0.71
1.04
0.76
265,194
45,760
310,954
936
250
1,186
0.71
1.10
0.77
3,045
1.66
2,709
1.63
Notes:
1/ Trade assets were subsumed under “Customer loans” and “Interbank assets” for previous presentation. Prior period comparatives have been aligned to the current
presentation.
2/ Includes non-restricted balances with central banks.
3/ Net interest margin is net interest income expressed as a percentage of average interest-bearing assets.
Net interest income rose 13% from a year ago to $1.56
billion. Net interest margin improved five basis points to
1.67%. Asset volumes were also higher. Funding costs
were stable.
For the first half, net interest income rose 12% to $3.05
billion as a result of higher asset volumes and improved net
interest margin.
Compared to the previous quarter, net interest income was
5% higher from higher asset volumes.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2014 versus 2nd Qtr 2013
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Interest income
Customer non-trade
loans
Trade assets
Interbank assets
Securities
Total
Interest expense
Customer deposits
Other borrowings
Total
Net impact on interest income
2nd Qtr 2014 versus 1st Qtr 2014
Volume
Rate
Net
change
133
3
136
15
19
34
29
23
(2)
23
11
23
52
34
21
5
16
12
(8)
(17)
23
(3)
(1)
35
183
60
243
48
17
65
51
8
59
5
4
9
56
12
68
10
10
20
(7)
(7)
3
10
13
124
51
175
28
24
52
Due to change in number of days
Net Interest Income
Volume
Rate
Net
change
-
17
175
69
1st Half 2014 versus 1st Half 2013
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
289
(39)
250
85
36
(9)
401
33
33
24
51
118
69
15
452
Interest expense
Customer deposits
Other borrowings
Total
102
26
128
5
(17)
(12)
107
9
116
Net impact on interest income
273
63
336
Interest income
Customer non-trade
loans
Trade assets
Interbank assets
Securities
Total
Due to change in number of days
Net Interest Income
336
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Brokerage
Investment banking
Trade and transaction services
Loan-related
1/
2/
Cards
Wealth management
Others
Fee and commission income
Less: Fee and commission
expense
Total
2nd Qtr
2014
2nd Qtr
2013
% chg
1st Qtr
2014
% chg
1st Half
2014
1st Half
2013
% chg
42
57
(26)
43
(2)
85
119
(29)
21
(6)
(21)
6
18
(26)
(1)
95
271
211
171
255
40
1,128
111
271
197
160
214
31
1,103
(14)
7
7
19
29
2
52
131
93
88
138
17
561
47
137
94
82
101
17
535
11
(4)
(1)
7
37
5
43
140
118
83
117
23
567
58
58
-
57
2
115
119
(3)
503
477
5
510
(1)
1,013
984
3
Notes:
1/ Includes trade & remittances, guarantees and deposit-related fees
2/ Net of interchange fees paid
Net fee and commission income rose 5% from a year ago
to $503 million as contributions from wealth management,
cards and investment banking improved.
Compared to the previous quarter, net fee and commission
income decreased 1% as higher contributions from wealth
management, investment banking and cards were more
than offset by a decline in fees from loan-related activities
and trade and transaction services.
Net fee and commission income for the first half was 3%
higher at $1.01 billion. Higher contributions from annuity
businesses was partially offset by lower brokerage
commissions and investment banking fees.
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2014
2nd Qtr
2013
% chg
1st Qtr
2014
% chg
1st Half
2014
1st Half
2013
% chg
Net trading income
Net income from investment
securities
Net gain on fixed assets
1/
Others (includes rental income)
176
336
(48)
362
(51)
538
744
(28)
62
45
38
38
63
100
111
(10)
15
44
25
(100)
(40)
43
10
(100)
50
43
25
44
34
(2)
(26)
Total
253
450
(44)
453
(44)
706
933
(24)
Note:
1/ Excludes one-time items.
Other non-interest income fell 44% from both the
previous quarter and a year ago to $253 million. Net
trading income fell to $176 million from $362 million in
the previous quarter and $336 million a year ago. The
previous quarter and the year-ago period also had net
gains from the disposal of properties. These factors
were partially offset by an increase in net income from
investment securities.
For the first half, other non-interest income fell 24% to
$706 million as a result of declines in net trading income
and net income from investment securities.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
2nd Qtr
2014
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
Included in the above table were:
Depreciation of properties and other
fixed assets
Directors’ fees
Audit fees payable
2nd Qtr % chg
2013
1st Qtr
2014
% chg
1st Half 1st Half % chg
2014
2013
554
90
200
62
148
1,054
20,015
521
95
167
58
146
987
18,631
6
(5)
20
7
1
7
7
557
98
187
59
140
1,041
19,623
(1)
(8)
7
5
6
1
2
1,111
188
387
121
288
2,095
20,015
1,027
183
334
108
287
1,939
18,631
8
3
16
12
8
7
54
2
53
1
2
100
53
1
2
100
107
3
108
2
(1)
50
2
1
100
2
-
4
3
33
For the first half, costs rose 8% to $2.10 billion, bringing
the cost-income ratio to 44%.
Expenses rose 7% from a year ago to $1.05 billion as staff
and other operating costs rose. Expenses were 1% higher
than the previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr
2014
General allowances (GP)
2nd Qtr % chg
2013
1st Qtr
2014
% chg
1st Half 1st Half
2014
2013
% chg
28
113
(75)
56
(50)
84
223
(62)
1/
88
23
12
7
74
(28)
128
41
12
9
35
31
(31)
(44)
(22)
>100
NM
93
15
10
3
97
(32)
(5)
53
20
>100
(24)
13
181
38
22
10
171
(60)
242
48
20
11
68
95
(25)
(21)
10
(9)
>100
NM
Specific allowances (SP) for securities,
properties and other assets
12
4
>100
2
>100
14
3
>100
128
245
(48)
151
(15)
279
468
(40)
Specific allowances (SP) for loans
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total
Notes:
1/
Specific allowances for loans are classified according to where the borrower is incorporated
NM Not Meaningful
Specific allowances for loans amounted to $88 million,
lower than both a year ago and the previous quarter.
General allowances of $28 million were taken in line with
loan growth.
For the first half, total allowances fell 40% to $279 million
as specific allowances and general allowances both
declined.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS
($m)
Consumer
Banking/
Wealth
Management
Selected income items
2nd Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Institutional
Banking
Treasury
Others
Total
401
308
709
472
22
814
392
1,206
373
67
250
(13)
237
115
2
92
69
161
94
37
1,557
756
2,313
1,054
128
1
216
766
120
50
80
51
1,182
384
282
666
437
29
766
520
1,286
357
129
218
61
279
122
-
120
100
220
125
(7)
1,488
963
2,451
1,041
151
2
202
800
157
11
113
13
1,272
364
259
623
427
20
742
440
1,182
346
193
180
106
286
119
(1)
96
122
218
95
33
1,382
927
2,309
987
245
176
643
168
22
112
22
1,099
785
590
1,375
909
51
1,580
912
2,492
730
196
468
48
516
237
2
212
169
381
219
30
3,045
1,719
4,764
2,095
279
3
418
1,566
277
61
193
64
2,454
1/
1st Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
1/
1st Half 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer
Banking/
Wealth
Management
1st Half 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Institutional
Banking
Treasury
Others
Total
723
522
1,245
827
38
1,460
924
2,384
665
366
343
266
609
229
(1)
183
205
388
218
65
2,709
1,917
4,626
1,939
468
380
1,353
381
49
154
49
2,268
78,829
210,418
86,635
36,558
412,440
Selected balance sheet and other
2/
items
30 Jun 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2014
Depreciation for 2nd Qtr 2014
31 Mar 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 1st Qtr 2014
Depreciation for 1st Qtr 2014
30 Jun 2013
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2013
Depreciation for 2nd Qtr 2013
146,108
20
8
154,347
5
3
59,053
1
2
19,029
39
41
4,835
417,275
378,537
65
54
76,332
208,713
92,285
36,847
414,177
144,721
15
8
159,323
5
3
58,510
3
2
18,278
20
40
4,802
418,979
380,832
43
53
68,186
198,432
78,313
36,867
381,798
12,123
29
41
4,802
386,600
349,892
55
53
139,914
11
8
133,440
9
2
64,415
6
2
Notes:
1/ Non-interest income and profit before tax exclude one-time items.
2/ Refer to sections on Customer Loans and Non-Performing Assets and Loss Allowance Coverage for more information on business segments.
The business segment results are prepared based on
the Group’s internal management reporting which
reflects the organisation management structure. As the
activities of the Group are highly integrated, internal
allocation has been made in preparing the segment
information. Amounts for each business segment are
shown after the allocation of certain centralised costs,
funding income and the application of transfer pricing,
where appropriate. Transactions between segments are
recorded within the segment as if they are third party
transactions and are eliminated on consolidation.
The various business segments are described below:
Consumer Banking/ Wealth Management
Consumer Banking/ Wealth Management provides individual
customers with a diverse range of banking and related
financial services. The products and services available to
customers include current and savings accounts, fixed
deposits, loans and home finance, cards, payments,
investment and insurance products.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Compared to the previous quarter, total income
increased by 6% to $709 million. Net-interest income
increased from improved deposit margin as well as
higher deposit and loan volumes. Non-interest income
was higher from strong momentum in investment and
insurance product sales. Expenses increased 8% to
$472 million as investments were made to enhance
customer service, while allowances were $7 million
lower at $22 million. Profit before tax was 7% higher at
$216 million.
Compared to a year ago, profit before tax increased
23%. Total income increased 14% as net interest
income rose, and non-interest income was higher from
continued customer acquisition, better cross-selling and
higher cards fees. Expenses rose 11% from increased
investments and seasonal marketing campaigns. Total
allowances were $2 million higher in line with loan
growth.
For the first half, profit before tax was $418 million, 10%
higher from a year ago. Total income grew 10% to $1.38
billion. Net interest income increased 9% to $785 million
as loan and deposit volumes increased, while noninterest income rose 13% to $590 million from higher
wealth management and cards fees. Expenses rose
10% to $909 million as investments, marketing and
advertising activities continued. Total allowances
increased 34% to $51 million in line with loan growth.
lower treasury customer flows. Expenses were 8% higher.
For the first half of the year, profit before tax increased
16% from a year ago to $1.57 billion as total income rose
while allowances halved from lower specific and general
allowances. Total income grew 5% to $2.49 billion as net
interest income rose 8% to $1.58 billion from loan growth
and better margin, and treasury customer flows and loanrelated fees were higher. Expenses rose 10% to $730
million from headcount growth.
Treasury
Treasury provides treasury services to corporations,
institutional and private investors, financial institutions and
other market participants. It is primary involved in sales,
structuring, market marking and trading across a broad
range of financial products including foreign exchange,
interest rate, debt, credit, equity and other structured
derivatives. Income from these financial products and
services offered to the customer of other business
segments, such as Consumer Banking/Wealth
Management and Institutional Banking, is reflected in the
respective segments. Treasury is also responsible for
managing surplus funds.
Compared to the previous quarter, profit before tax was
24% lower at $120 million. Total income declined 15% to
$237 million as trading gains from foreign exchange and
interest rate activities were lower. Expenses declined 6%
to $115 million mainly due to lower staff expenses.
Institutional Banking
Institutional Banking provides financial services and
products to institutional clients including bank and
non-bank financial institutions, government- linked
companies, large corporates and small and mediumsized businesses. The business focuses on
broadening and deepening customer
relationships. Products and services comprise the full
range of credit facilities from short term working
capital financing to specialized lending. It also
provides global transactional services such as cash
management, trade finance and securities and
fiduciary services; treasury and markets products;
corporate finance and advisory banking as well as
capital markets solutions.
Compared to the previous quarter, profit before tax
was 4% lower at $766 million. Net interest income
rose 6% to $814 million from loan growth and better
net interest margin. Non-interest income fell 25% to
$392 million as treasury customer flows and loanrelated fee declined. Total income fell 6% to $1.21
billion. Expense growth was contained at 4% and
reached $373 million as headcount increased to
support business growth. Allowances declined 48% to
$67 million as both specific and general allowances
were lower.
Compared to a year ago, profit before tax rose 19% as
allowances declined 65% from lower specific and
general allowances. Total income rose 2% as growth
in global transactional services income was offset by
Compared to a year ago, profit before tax fell 29%. Total
income declined 17% as trading gains in foreign exchange
dropped, while expenses were 3% lower mainly due to
lower staff expenses.
For the first half of the year, profit before tax fell 27% from
a year ago to $277 million. Total income declined 15% to
$516 million due to lower income from foreign exchange
and interest rate trading activities. Expenses rose 3% to
$237 million as business related expenses were higher,
but partially offset by lower staff expenses.
Income from treasury customer flows is reflected in the
Institutional Banking and Consumer Banking/Wealth
Management customer segments and not in Treasury.
Income from treasury customer flows declined 23% from
the previous quarter to $272 million as customer related
transactions decreased in Hong Kong, China, Taiwan and
Korea. Compared to a year ago, treasury customer flows
was 3% lower due to slower treasury customer activities in
Hong Kong, Taiwan and Korea, but mitigated by an
increase in Singapore. For the first half of the year, income
from treasury customer flows was 8% higher at $627
million.
Others
Others encompasses a range of activities from corporate
decisions and includes income and expenses not attributed
to other business segments, including capital and balance
sheet management, funding and liquidity. DBS Vickers
Securities and Islamic Bank of Asia are also included in this
segment.
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
1/
($m)
S’pore
Selected income items
2nd Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
1,003
458
1,461
624
62
253
173
426
186
1
146
80
226
151
8
100
35
135
73
48
55
10
65
20
9
1,557
756
2,313
1,054
128
6
1
2
42
-
51
781
117
631
240
40
200
69
6
63
56
11
45
36
6
30
1,182
180
969
931
540
1,471
629
69
260
246
506
178
4
154
123
277
140
11
96
41
137
73
62
47
13
60
21
5
1,488
963
2,451
1,041
151
5
778
117
621
2
326
54
272
1
127
30
97
5
7
(5)
12
34
3
31
13
1,272
199
1,033
864
505
1,369
575
143
250
274
524
186
41
104
80
184
133
19
111
37
148
71
31
53
31
84
22
11
1,382
927
2,309
987
245
3
-
3
16
-
22
654
94
510
297
43
254
35
14
21
62
9
53
51
2
49
1,099
162
887
1st Half 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
1,934
998
2,932
1,253
131
11
513
419
932
364
5
3
300
203
503
291
19
3
196
76
272
146
110
47
102
23
125
41
14
-
3,045
1,719
4,764
2,095
279
64
Profit before tax
Income tax expense
Net profit
1,559
234
1,252
566
94
472
196
36
160
63
6
57
70
9
61
2,454
379
2,002
2/
1st Qtr 2014
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
Profit before tax
Income tax expense
Net profit
2/
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
1st Half 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
and joint venture
1,699
1,119
2,818
1,154
241
7
481
517
998
354
82
-
205
149
354
251
25
4
220
81
301
140
42
38
104
51
155
40
78
-
2,709
1,917
4,626
1,939
468
49
Profit before tax
Income tax expense
Net profit
1,430
177
1,151
562
86
476
82
24
58
157
35
122
37
7
30
2,268
329
1,837
274,009
63,292
42,322
17,951
14,866
412,440
4,802
278,811
1,939
172,919
33
63,325
354
49,434
42,322
98
20,247
17,951
32
10,205
14,866
2
7,953
4,835
417,275
2,425
260,758
274,075
66,531
42,006
18,436
13,129
414,177
4,802
278,877
1,976
168,817
66,531
411
50,595
42,006
99
20,188
18,436
35
9,761
13,129
2
7,383
4,802
418,979
2,523
256,744
246,092
63,587
41,490
17,579
13,050
381,798
4,802
250,894
2,223
153,224
63,587
351
48,283
41,490
106
19,949
17,579
19
9,408
13,050
2
7,529
4,802
386,600
2,701
238,393
Selected balance sheet items
30 Jun 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
31 Mar 2014
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
30 Jun 2013
Total assets before goodwill and
intangibles
Goodwill and intangibles
Total assets
3/
Non-current assets
Gross customer loans
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked.
2/ Non-interest income and profit exclude one-time items.
3/ Includes interests in associates and joint venture, properties and other fixed assets.
The performance by geography is classified based on the
location in which income and assets are recorded.
in the previous quarter from fixed asset sales. Fee
income was stable.
Singapore
Expenses fell marginally to $624 million and profit before
allowances was 1% lower at $837 million. Allowances
fell 10% to $62 million as general allowances were lower.
Net profit rose 2% from the previous quarter to $631
million. Total income fell 1% to $1.46 billion. Net interest
income rose 8% to $1.00 billion from higher loan
volumes. Non-interest income was 15% lower at $458
million due to lower net trading income as well as a gain
Compared to a year ago, net profit rose 24% as income
growth was partially offset by an increase in expenses.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Allowances fell 57% as both specific allowances and
general allowances were lower.
For the first half, net profit rose 9% to $1.25 billion. Total
income increased 4% to $2.93 billion from higher loan
volumes partially offset by lower trading income.
Expenses were 9% higher at $1.25 billion. Allowances
fell 46% from lower specific and general allowances.
Hong Kong
Currency effects were minimal compared to the previous
quarter and a year ago.
Net profit declined 26% from the previous quarter to
$200 million as total income fell 16% to $426 million. Net
interest income fell 3% to $253 million from lower
average loan volume and higher fixed deposit costs.
Both loan and deposit balances were little changed from
the previous quarter. Net interest margin declined nine
basis points to 1.48%.
Non-interest income decreased 30% to $173 million as
treasury customer flows fell. Fee income was higher
from increased contributions from loan-related activities,
trade and transaction services, cards and wealth
management, partially offset by lower brokerage income.
Expenses rose 4% to $186 million from higher general
costs. Allowances of $1 million were little changed from
$4 million in the previous quarter.
Compared to a year ago, net profit was 21% lower as
total income declined 19%. Net interest income
increased 1% from higher loan volumes partially offset
by the impact of a ten basis points decline in net interest
margin. Non-interest income was 37% lower from slower
treasury customer flows as well as a gain a year ago
from fixed asset sales. These factors were partially offset
by higher fee income in trade and transaction services
and loan-related activities. Expenses were flat, while
allowances declined to $1 million from $41 million a year
ago from a net write-back of general allowances.
For the first half, net profit was little changed at $472
million. Total income declined 7% to $932 million. Net
interest income rose 7% to $513 million from higher
average loan volume while net interest margin declined
slightly. Non-interest income fell mainly from by lower
trading income, and there had also been a gain of $43
million a year ago from the sale of fixed assets. Expenses
were 3% higher at $364 million while allowances declined
to $5 million from a net write-back of general allowances.
Other countries
Net profit for Rest of Greater China fell 35% from the
previous quarter to $63 million. Net interest income
declined 5% to $146 million from lower net interest
margin. Non-interest income fell 35% to $80 million as
trading income declined with slower treasury customer
flows. Trade and transaction services and loan-related
fees also declined. Expenses increased 8% to $151
million while total allowances declined to $8 million from
$11 million due to lower general allowances.
Compared to a year ago, net profit was two times higher.
Net interest income rose 40% due mainly to higher net
interest margin, while non-interest income was
unchanged. Expenses were higher while allowances
halved.
For the first half, net profit rose to $160 million from $58
million a year ago. Total income was 42% higher at $503
million as both net interest and non-interest income rose.
Expenses were 16% higher at $291 million. Allowances
declined to $19 million from $25 million due to lower
general allowances.
Net profit for South and South-east Asia rose to $45
million from $12 million in the previous quarter. Total
income was little changed as net interest income rose 4%
to $100 million from higher loan volume, while noninterest income fell 15% to $35 million as lower trading
income more than offset higher fee income. Expenses
was flat at $73 million. Total allowances fell 23% to $48
million as specific allowances were lower, partially offset
by higher general allowances.
Compared to a year ago, net profit was 15% lower as
both net interest and non-interest income declined, and
allowances rose 55% while expenses were marginally
higher.
For the first half, net profit fell 53% to $57 million. Total
income was 10% lower at $272 million, while expenses
were 4% higher at $146 million. Allowances more than
doubled to $110 million from $42 million due to higher
specific allowances.
Net profit for Rest of the World was little changed from
the previous quarter at $30 million. Total income rose
8% to $65 million as net interest income increased 17%
to $55 million mainly from higher loan volumes, while
non-interest income declined 23% to $10 million.
Expenses were little changed. Allowances rose to $9
million from $5 million due to higher general allowances.
Compared to a year ago, net profit fell 39% as total
income declined 23%. Expenses and total allowances
were little changed.
For the first half, net profit doubled to $61 million. Total
income fell 19% to $125 million as non-interest income
declined from lower trading income, while expenses
were little changed. Allowances fell 82% to $14 million
due mainly to lower specific allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
260,758
256,744
252,181
238,393
General allowances
Net total
937
2,466
257,355
1,073
2,442
253,229
1,129
2,398
248,654
1,286
2,320
234,787
By business unit
Consumer Banking/ Wealth Management
Institutional Banking
Others
Total (Gross)
76,373
181,991
2,394
260,758
74,120
179,748
2,876
256,744
70,995
178,609
2,577
252,181
66,195
169,293
2,905
238,393
123,410
44,919
48,656
23,303
20,470
260,758
119,264
43,951
48,744
23,911
20,874
256,744
119,463
41,418
47,910
23,004
20,386
252,181
114,626
37,760
41,641
23,161
21,205
238,393
31,487
44,790
50,816
54,826
21,475
14,475
30,533
44,210
49,846
53,753
21,210
14,339
30,034
43,016
49,147
51,803
21,265
11,013
32,556
40,177
47,202
48,230
19,816
9,976
21,727
20,555
19,180
16,989
21,162
260,758
22,298
256,744
26,723
252,181
23,447
238,393
104,169
29,968
90,045
36,576
260,758
101,651
29,714
90,201
35,178
256,744
101,456
29,463
84,998
36,264
252,181
97,779
28,811
80,146
31,657
238,393
Gross
Less:
Specific allowances
1/
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total (Gross)
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals
(excluding housing loans)
Others
Total (Gross)
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
Note:
1/ Loans by geography are classified according to where the borrower is incorporated.
Gross customer loans rose 2% from the previous
quarter to $261 billion, with Singapore-dollar consumer
and corporate loans accounting for the increase.
Gross loans were 9% higher than a year ago, with the
expansion led by Singapore-dollar and US-dollar loans
in Singapore, Hong Kong and Rest of Greater China.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
30 Jun 2014
NPA
($m)
NPL
(% of
loans)
31 Mar 2014
SP
($m)
NPA
($m)
NPL
(% of
loans)
30 Jun 2013
31 Dec 2013
SP
($m)
NPA
($m)
NPL
(% of
loans)
SP
($m)
NPA
($m)
NPL
(% of
loans)
SP
($m)
By business unit
Consumer Banking/
Wealth Management
296
0.4
75
297
0.4
72
293
0.4
73
297
0.4
71
Institutional Banking
2,021
1.1
862
2,325
1.3
1,001
2,589
1.4
1,056
2,578
1.5
1,306
Total non-performing
loans (NPL)
2,317
0.9
937
2,622
1.0
1,073
2,882
1.1
1,129
2,875
1.2
1,377
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
9
-
3
9
-
3
9
-
3
9
-
3
104
-
47
99
-
49
105
-
50
82
-
48
2,430
-
987
2,730
-
1,125
2,996
-
1,182
2,966
-
1,428
By geography
Singapore
422
0.3
129
423
0.4
113
435
0.4
109
468
0.4
165
Hong Kong
223
0.5
103
229
0.5
115
233
0.6
117
262
0.7
126
Rest of Greater China
289
0.6
147
281
0.6
143
282
0.6
146
266
0.6
133
South and South-east
Asia
819
3.5
326
800
3.3
257
587
2.6
195
374
Rest of the World
564
2.8
232
889
4.3
445
1,345
6.6
562
1,505
7.1
760
2,317
0.9
937
2,622
1.0
1,073
2,882
1.1
1,129
2,875
1.2
1,377
Total non-performing
loans
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
1.6
193
9
-
3
9
-
3
9
-
3
9
-
3
104
-
47
99
-
49
105
-
50
82
-
48
2,430
-
987
2,730
-
1,125
2,996
-
1,182
2,966
-
1,428
Loss Allowance
Coverage
Specific allowances
987
1,125
1,182
1,428
General allowances
2,942
2,915
2,865
2,750
Total Allowances
3,929
4,040
4,047
4,178
Total Allowances/ NPA
162%
148%
135%
141%
Total Allowances/
unsecured NPA
321%
271%
204%
191%
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
SP
NPA
SP
NPA
SP
NPA
SP
544
382
110
387
256
135
9
135
579
384
111
328
250
103
8
123
488
226
112
397
240
42
9
142
481
114
118
406
289
50
12
229
331
131
633
332
1,145
465
1,231
545
Financial institutions, investment &
holding companies
251
160
266
159
265
146
297
172
Professionals & private individuals
(excluding housing loans)
157
50
158
47
155
48
158
46
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
155
61
163
51
94
37
70
34
2,317
9
937
3
2,622
9
1,073
3
2,882
9
1,129
3
2,875
9
1,377
3
104
47
99
49
105
50
82
48
Total non-performing assets
2,430
987
2,730
1,125
2,996
1,182
2,966
1,428
By loan classification
($m)
30 Jun 2014
Total non-performing loans
Debt securities
Contingent liabilities & others
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,515
686
229
2,430
217
541
229
987
1,693
810
227
2,730
228
670
227
1,125
1,981
753
262
2,996
306
614
262
1,182
1,620
983
363
2,966
260
805
363
1,428
319
122
50
491
35
113
50
198
429
338
57
824
41
322
57
420
878
343
56
1,277
168
326
56
550
942
363
72
1,377
182
338
72
592
By collateral type
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
NPA
NPA
NPA
1,224
1,491
1,986
2,190
Secured non-performing assets by collateral type
Properties
375
394
351
343
Shares and debentures
Fixed deposits
398
13
482
30
323
33
145
27
Others
420
333
303
261
2,430
2,730
2,996
2,966
Unsecured non-performing assets
Total
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
517
246
254
1,413
831
333
340
1,226
1,281
275
272
1,168
1,244
249
319
1,154
Total
2,430
2,730
2,996
2,966
Non-performing assets declined 11% from the
previous quarter to $2.43 billion as a result of a loan
resolution in Rest of the World.
Allowance coverage was at 162% of non-performing
assets and 321% if collateral was considered.
The non-performing loans ratio improved to 0.9%
from 1.0%.
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
($m)
By currency and product
Singapore dollar
Fixed deposits
Savings accounts
Current accounts
Others
Hong Kong dollar
Fixed deposits
Savings accounts
Current accounts
Others
US dollar
Fixed deposits
Savings accounts
Current accounts
Others
Others
Fixed deposits
Savings accounts
Current accounts
Others
Total
Fixed deposits
Savings accounts
Current accounts
Others
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
135,961
15,294
100,011
20,634
22
27,964
16,593
6,816
4,135
420
85,417
52,551
5,058
21,665
6,143
50,057
40,634
2,981
5,555
887
299,399
125,072
114,866
51,989
7,472
139,560
19,052
98,784
21,666
58
27,609
17,371
5,944
3,940
354
83,376
47,461
4,915
25,674
5,326
50,945
41,925
3,107
5,416
497
301,490
125,809
112,750
56,696
6,235
134,758
17,079
97,022
20,616
41
29,840
18,964
6,437
3,993
446
75,023
43,172
5,858
18,616
7,377
52,744
43,285
3,112
5,584
763
292,365
122,500
112,429
48,809
8,627
138,947
21,190
94,347
22,227
1,183
27,579
17,892
5,902
3,692
93
59,118
33,114
4,666
16,319
5,019
48,964
39,372
2,900
5,330
1,362
274,608
111,568
107,815
47,568
7,657
Customer deposits declined 1% from the previous quarter
to $299 billion. Adjusting for the placement of a short-term
deposit at end-March 2014 that subsequently flowed out,
deposits rose 3% during the quarter.
Compared to a year ago, customer deposits were 9%
higher, in line with loan growth. The deposit growth was
led by Singapore dollar savings deposits, which rose 6%
to $100 billion, and US dollar deposits, which rose 44%
to $85 billion.
DEBTS ISSUED
($m)
30 Jun 2014
31 Mar 2014
31 Dec 2013
30 Jun 2013
Subordinated term debts
Senior medium term notes
Commercial papers
Negotiable certificates of deposit
Other debt securities
Total
5,506
7,480
13,596
1,465
4,822
32,869
5,523
6,411
12,121
1,432
4,534
30,021
5,544
5,635
12,142
1,235
4,103
28,659
5,532
4,511
14,186
967
4,370
29,566
Due within 1 year
Due after 1 year
Total
20,524
12,345
32,869
18,300
11,721
30,021
17,108
11,551
28,659
16,458
13,108
29,566
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
VALUE AT RISK AND TRADING INCOME
The Group’s market risk appetite framework leverages on the Tail Value-at-Risk (TVaR) metric to monitor and limit market
risk exposures. TVaR, or more commonly referenced as Expected Shortfall, is calculated using the historical simulation
value-at-risk (VaR) approach and averaging the losses beyond the 95% confidence interval, over a one-day holding period.
The following table shows for Treasury’s trading portfolios at period-end, average, high and low diversified TVaR.
($m)
As at 30 Jun 2014
Total
Average
13
1 Jul 2013 to 30 Jun 2014
High
11
19
Low
7
Treasury’s trading portfolio experienced three back-testing exceptions from 1 July 2013 to 30 June 2014 compared with
one in the corresponding prior period. The exceptions occurred in July and February.
The chart below shows the histogram of VaR for the Group’s trading book for the period from 1 July 2013 to 30 June 2014.
DBSH Group TVaR for Treasury Trading Book
90
80
70
No. of Days
60
50
40
30
20
>17
>15-17
>13-15
>11-13
>9-11
0