financial performance 3Q07
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 report unaudited financial
results for the third quarter ended 30 September 2007.
For the third quarter of 2007, the Directors have declared an interim gross dividend of 20 cents (third
quarter 2006: 17 cents) for each DBSH ordinary share.
The third quarter 2007 dividends will be paid less 18% Singapore income tax.
The third quarter ended 30 September 2007 dividends will be payable on 26 November 2007. The
DBSH shares will be quoted ex-dividend on 7 November 2007. Notice is hereby given that the Share
Transfer Books and Register of Members of the Company will be closed on 13 November 2007. Duly
completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration Services
of 8 Cross Street #11-00 PWC Building, Singapore 048424 up to 5.00 p.m. on 12 November 2007 will
be registered to determine shareholders' entitlement to the third quarter 2007 dividends. In respect of
ordinary shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the third
quarter 2007 dividends will be paid by DBSH to CDP, which will in turn distribute the dividend
entitlements to shareholders.
By order of the Board
Heng Lee Cheng (Ms)
Group Secretary
25 October 2007
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Third Quarter ended
30 September 2007
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 Unit
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Funding Sources
Customer Deposits
Value at Risk and Trading Income
Capital Adequacy
Unrealised Valuation Surplus/(Losses)
Unaudited Consolidated Income Statement
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
Adoption of New or Revised FRS and INT FRS
Confirmation by the Board
Page
2
4
6
6
7
7
8
10
12
13
16
16
17
18
18
19
20
21
22
23
24
24
25
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its condensed consolidated DBSH Group (“Group”) interim financial statements in
accordance with Singapore Financial Reporting Standard (“FRS”) No. 34 Interim Financial Reporting, 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 2006, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
The Council on Corporate Disclosure and Governance (“CCDG”) issued several new or revised FRS and INT FRS, which are
effective 1 January 2007 for the Group.
•
•
•
•
•
•
•
Amendment to FRS 1: Presentation of Financial Statements – Capital Disclosures
FRS 32 (revised): Financial Instruments – Presentation
FRS 40 (new): Investment Property
FRS 107 (new): Financial Instruments – Disclosures
INT FRS 108: Scope of FRS 102 – Share-based Payment
INT FRS 109: Reassessment of Embedded Derivatives
INT FRS 110: Interim Financial Reporting and Impairment
Selected profit and loss items ($m)
Net interest income
Net fee and commission income
Net trading income
Net income from financial instruments
designated at fair value
Net income from financial investments
Other income
Total income
3rd Qtr
2007
3rd Qtr
1/
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
1/
2006
% chg
1,048
403
(63)
912
293
121
15
38
NM
1,027
371
97
3,049
1,083
205
2,659
851
457
15
27
(55)
5
(45)
NM
(49)
(90)
(156)
42
121
23
1,537
29
10
1,320
>100
>100
16
79
26
1,551
321
62
4,630
79
54
3,944
>100
15
17
Less: Expenses
652
584
12
660
1,970
1,742
13
Profit before allowances
885
736
20
891
2,660
2,202
21
Less: Allowances for credit and other losses
80
41
95
64
249
Share of profits of associates
27
18
50
25
78
134
50
86
56
Profit before tax
Net profit attributable to shareholders
(“Net profit”)
832
713
17
852
2,489
2,118
18
648
552
17
664
1,929
1,619
19
Add: One-time items 2/
Net profit including one-time items and
goodwill charges
(38)
-
NM
(104)
(142)
54
NM
610
552
11
560
1,787
1,673
7
104,714
32,478
230,577
144,185
207,548
20,311
85,254
30,712
197,086
127,541
176,601
18,096
23
6
17
13
18
12
98,957
30,858
222,891
141,272
200,602
19,641
104,714
32,478
230,577
144,185
207,548
20,311
85,254
30,712
197,086
127,541
176,601
18,096
23
6
17
13
18
12
2.14
31.8
42.4
1.14
12.96
72.6
1.2
11
9.2
14.0
2.17
30.9
44.2
1.14
12.34
66.8
1.8
12
10.1
14.6
2.21
33.8
42.6
1.23
13.60
70.0
1.4
19
9.4
14.7
2.19
34.1
42.5
1.20
13.21
72.6
1.2
10
9.2
14.0
2.20
32.6
44.2
1.14
12.42
66.8
1.8
16
10.1
14.6
Selected balance sheet items ($m)
3/
Customer loans
4/
Interbank assets
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios(%) (excluding one6/
time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
Return on equity 7/
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr
2007
3rd Qtr
1/
2006
1.70
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
– net book value 7/
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
7/
– net book value
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
1/
2006
1.46
1.76
1.69
1.43
1.68
13.10
1.46
11.73
1.69
12.66
1.60
13.10
1.47
11.73
1.63
1.40
1.69
1.62
1.38
1.61
12.82
1.40
11.51
1.63
12.45
1.53
12.82
1.41
11.51
% chg
Notes:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
2/ One-time items include gains from sale of buildings in Hong Kong, allowance write-back for a Singapore property, and impairment charges for Thai investment
3/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
4/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
5/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
6/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data for the quarters are computed on an annualised basis
7/ Minority interests are not included as equity in the computation of net asset value and return on equity
Third-quarter net profit rose 17% from a year ago to
$648 million before one-time items. Net interest and
fee income reached records as DBS captured the
benefits of the region’s continued growth in a wide
range of customer businesses. Income rose 16%,
outstripping a 12% increase in expenses.
Compared to the previous quarter, net profit was 2%
lower as improved contributions from customer
businesses were offset by mark-to-market losses of
$42 million and a charge of $43 million in specific and
general allowances for collateralised debt obligations
(CDOs). None of the $2.36 billion of CDOs held by
DBS is in default.
An impairment charge of $38 million was taken below
the line for DBS’ 16% stake in TMB Bank in Thailand to
reflect its market valuation as at 30 September.
Including this item, the third quarter’s net profit would
be $610 million.
Net interest income increased 15% from a year ago
and 2% from the previous quarter to $1.05 billion.
The increase was due to higher asset volumes as
loans expanded 23% from a year ago and 6% over
the quarter. Net fee income grew 38% from a year
ago and 9% from the previous quarter to $403 million
from increased volumes in a range of corporate and
capital market activities.
A net trading loss of $63 million was recorded
compared to a net trading income of $97 million in
the previous quarter. The $42 million mark-to-market
losses for CDOs were included in this line item.
Wider credit spreads during the quarter also reduced
mark-to-market values of trading securities and
credit-linked derivatives, more than offsetting gains in
other trading activities such as foreign exchange.
Expenses rose 12% from a year ago to $652 million
but were 1% below the previous quarter. Staff and
computerisation costs, two major expense items,
were actively managed to enable the cost-income
ratio to improve to 42% from 43% in the previous
quarter and 44% a year ago.
Against the backdrop of a benign environment, the
non-performing loan ratio fell to 1.2% from 1.4% in
the previous quarter. Specific allowances for loans of
$28 million corresponded to a charge of 11 basis
points, which was lower than most recent quarters.
Total provision charges, including those for CDOs,
amounted to $80 million.
Return on equity rose to 13.0% from 12.3% a year
ago while return on assets remained at 1.14%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
3rd Qtr 2006
Average
Average
rate
balance Interest
(%)
($m)
($m)
2nd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
100,608
39,693
54,344
194,645
1,405
344
613
2,362
5.54
3.44
4.47
4.81
84,118
30,512
51,958
166,588
1,176
251
638
2,065
5.54
3.26
4.87
4.92
94,742
36,341
55,368
186,451
1,322
303
627
2,252
5.60
3.35
4.54
4.85
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
142,616
42,880
185,496
777
537
1,314
2.16
4.97
2.81
126,797
33,133
159,930
757
396
1,153
2.37
4.75
2.86
139,705
36,900
176,605
754
471
1,225
2.17
5.12
2.78
1,048
2.14
912
2.17
1,027
2.21
Net interest
1/
income/margin
9 Mths 2007
Average balance
sheet
Average
balance
($m)
9 Mths 2006
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
94,823
37,005
54,155
185,983
3,975
948
1,815
6,738
5.61
3.43
4.48
4.84
81,359
29,947
50,087
161,393
3,347
695
1,689
5,731
5.50
3.10
4.51
4.75
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
138,882
37,789
176,671
2,277
1,412
3,689
2.19
5.00
2.79
122,101
32,034
154,135
1,990
1,082
3,072
2.18
4.52
2.67
3,049
2.19
2,659
2.20
Net interest
1/
income/margin
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
The increase in net interest income from both a year
ago and the previous quarter was due to higher asset
volumes. Customer loans increased at a faster rate than
other assets, resulting in a better asset mix.
Overall customer loan yields declined compared to the
previous quarter as corporate and SME loan yields in
Singapore and Hong Kong fell. Yields on securities
declined in line with a lower interest rate environment.
Interest margins fell seven basis points from the
previous quarter to 2.14%. Two basis points were due to
the full-period impact of the subordinated debt issue
completed in May. The remaining five basis points were
due to lower interest spreads in Hong Kong and
Singapore.
Overall customer deposit costs were stable as a higher
cost of funds in Hong Kong was offset by lower costs of
fixed deposits in Singapore.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2007 versus 3rd Qtr 2006
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2007 versus 2nd Qtr 2007
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
230
76
29
335
(1)
17
(54)
(38)
229
93
(25)
297
82
28
(12)
98
(14)
9
(9)
(14)
68
37
(21)
84
Interest expense
Customer deposits
Other borrowings
Total
95
119
214
(75)
22
(53)
20
141
161
15
78
93
(1)
(18)
(19)
14
60
74
Net impact on interest income
121
15
136
5
5
10
Interest income
Due to change in number of days
Net Interest Income
-
11
136
21
9 Mths 2007 versus 9 Mths 2006
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
554
163
137
854
74
90
(11)
153
628
253
126
1,007
Interest expense
Customer deposits
Other borrowings
Total
273
189
462
14
141
155
287
330
617
Net impact on interest income
392
(2)
390
Interest income
Due to change in number of days
Net Interest Income
390
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
72
57
52
66
9
20
36
10
64
17
403
28
40
48
41
8
21
29
12
53
13
293
>100
43
8
61
13
(5)
24
(17)
21
31
38
58
48
50
55
9
22
35
13
68
13
371
183
134
150
179
26
61
98
32
179
41
1,083
98
103
139
125
23
61
81
49
133
39
851
87
30
8
43
13
21
(35)
35
5
27
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
Compared to the previous quarter, net fee and commission
income was 9% higher, with the growth led by stockbroking,
investment banking and loan syndication.
Net fee and commission income grew 38% from a year
ago to $403 million, led by corporate and capital market
activities such as stockbroking, investment banking and
loan syndication. Stronger consumer confidence
boosted fees from credit card transactions and wealth
management product sales.
For the nine months, net fee and commission income rose
27% to $1.08 billion across all income sources with the
exception of fund management.
OTHER NON-INTEREST INCOME
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
(63)
(47)
(16)
121
116
5
NM
NM
NM
97
100
(3)
205
222
(17)
457
(55)
464
(7)
(52)
(>100)
5
(45)
NM
(49)
(90)
(156)
42
121
2
29
3
>100
(33)
79
2
321
6
79
>100
5
20
21
7
>100
24
56
49
14
86
115
(25)
153
498
434
15
Net trading income
From trading businesses
From other businesses
Net income from financial instruments
designated at fair value
Net income on financial investments
1/
Net gain on fixed assets
Others (include dividend and rental
income)
Total
Note:
1/ Excludes one-time items
The trading businesses recorded a net trading loss of
$47 million. Credit spreads on securities and creditlinked derivatives widened. The reduction in market
valuation of the credit trading portfolio more than offset
gains in other trading activities such as foreign
exchange.
A net trading loss from other businesses of $16 million
included mark-to-market losses of $42 million from
$1.12 billion of CDOs held by Red Orchid Secured
Assets (Rosa), a conduit managed by DBS. The losses
reflected the current valuation of these CDOs due to the
current conditions in the credit markets. None of the
CDOs whose value has been marked down is in default.
Net income on sales of investment securities amounted to
$121 million as capital gains were recorded for the sale of
debt and equity investments. Market conditions were
conducive to profit taking for some equity investments. The
gains were higher than both comparative periods.
Income from other sources, including dividend and rental
income, amounted to $21 million, above the $7 million a year
ago but slightly below the $24 million in the previous quarter.
For the nine months, trading income from trading businesses
fell to $222 million from $464 million a year ago, but was
more than offset by higher net income from the sale of
financial investments, which rose to $321 million from $79
million.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
347
53
106
38
108
652
13,842
317
47
94
26
100
584
12,670
9
354
51
111
35
109
660
13,364
1,061
157
329
98
325
1,970
13,842
938
138
283
75
308
1,742
12,670
13
14
16
31
6
13
9
Expenses increased 12% from a year ago to $652
million. Staff costs rose 9% from a higher headcount to
support business expansion. Computerisation expenses
were also higher.
13
13
46
8
12
9
Compared to the previous quarter, expenses fell 1% as
staff and computerisation costs declined slightly.
For the nine months, expenses rose 13% to $1.97 billion.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
General allowances (“GP”)
10
29
(66)
24
136
77
77
Specific allowances (“SP”) for loans
Singapore
Hong Kong
Other countries
28
(8)
17
19
27
8
20
(1)
4
NM
(15)
NM
47
9
18
20
76
(17)
54
39
100
44
57
(1)
(24)
NM
(5)
NM
Specific allowances (“SP”) for securities,
1/
properties and other assets
42
(15)
NM
(7)
37
(43)
NM
Total
80
41
95
64
249
134
86
($m)
Note:
1/ Excludes one-time items
Specific allowances for loans amounted to $28 million,
which, like the $27 million a year ago, was one of the
lowest in recent quarters. Charges in Hong Kong and the
region were partially offset by write-backs in Singapore
this quarter. By business unit, the charges were for
corporate and SME loans. There was a small net writeback in specific allowances for consumer loans.
Specific allowances for non-loan assets of $42 million
included a $33 million charge for CDOs held as financial
investments. These charges relate to the $275 million of
CDOs that have some degree of exposure to US subprime assets. An additional $10 million charge was taken
as general allowance for such CDOs. None of the $1.24
billion of CDOs held as financial investments is in default.
For the nine months, total allowances rose 86% to $249
million as general allowances and specific allowances for
non-loan assets increased. They were partially offset by
lower specific allowances for loans.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
Selected income items
3rd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
2nd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
3rd Qtr 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
427
182
278
195
89
92
188
134
105
254
(66)
108
95
(6)
6
(111)
156
63
1,048
489
652
5
326
19
173
82
135
1
81
68
15
(95)
102
80
832
423
175
258
201
91
87
172
188
102
236
51
125
94
(8)
9
(99)
27
79
1,027
524
660
5
335
45
160
36
222
3
163
77
(25)
(105)
64
852
446
135
251
189
83
88
158
137
95
144
79
107
66
(51)
6
(91)
25
37
912
408
584
16
314
25
159
25
175
(2)
119
(2)
11
(21)
(65)
41
713
1,300
501
802
590
298
270
518
514
295
670
53
361
251
4
26
(280)
211
216
3,049
1,581
1,970
19
980
82
536
161
576
5
368
68
161
(86)
(132)
249
2,489
1,302
387
727
537
242
255
432
411
277
441
241
314
216
(68)
24
(269)
72
145
2,659
1,285
1,742
34
928
66
458
57
509
(3)
375
(3)
125
(17)
(277)
134
2,118
32,116
80,457
11
6
22,599
20,122
1
1
52,061
24,809
1
2
86,083
53,119
2
3
28,007
1,791
-
3,868
27,250
38
20
224,734
207,548
53
32
31,871
81,168
11
7
22,028
19,898
1
-
47,354
22,305
4
1
85,218
49,193
2
2
27,228
1,404
-
3,349
26,634
18
20
217,048
200,602
36
30
1/
9 Mths 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
1/
9 Mths 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other
Losses
Profit before tax
Selected balance sheet and other
items
30 Sep 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2007
Depreciation for 3rd Qtr 2007
30 Jun 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2007
Depreciation for 2nd Qtr 2007
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
30,655
20,067
40,090
69,426
28,119
3,175
191,532
76,237
20
10
18,827
1
1
19,733
32
3
36,114
4
2
998
-
24,417
56
19
176,326
113
35
29,615
73,949
15
7
20,322
18,855
2
40,337
21,177
2
2
68,325
38,177
3
5
28,165
1,750
2
4,489
22,693
15
14
191,253
176,601
35
32
31 Dec 2006
Total assets before goodwill
Total liabilities
Capital expenditure for 4th Qtr 2006
Depreciation for 4th Qtr 2006
30 Sep 2006
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2006
Depreciation for 3rd Qtr 2006
Note:
1/ Income, allowances for credit and other losses and profits exclude one-time items
Consumer Banking’s (CBG) net interest income was
lower than a year ago as the benefit of higher loan
and deposit volumes in Singapore and Hong Kong
was more than offset by lower spreads in Hong
Kong. Compared to the previous quarter, net interest
income was little changed as the impact of higher
volumes in Singapore was offset by lower spreads in
Hong Kong. Non-interest income was higher than a
year ago due to higher sales of wealth management
products. The increase in expenses from both
comparative periods was due to higher wage and
support costs. Specific allowances were lower than a
year ago.
Enterprise Banking’s (EB) net interest income declined
from the previous quarter as higher loan and deposit
volumes were more than offset by lower spreads in
Hong Kong. Compared to a year ago, higher volumes
were partially offset by lower spreads in Hong Kong.
Expenses rose as a result of higher wage costs
compared to the previous quarter and higher support
costs compared to a year ago. Total allowances fell as
specific allowances were below both comparative
periods.
Corporate and Investment Banking’s (CIB) net interest
income was higher than both comparative periods as
loans and deposits increased. Compared to the
previous quarter, non-interest income fell as higher fee
income was more than offset by the mark-to-market
losses in Rosa’s CDOs and a decline in capital gains
from the sale of equity investments. Expenses were
higher than a year ago due to increased support costs.
Total allowances were higher than both comparative
periods due to increased general allowances.
Global Financial Markets’ (GFM) net interest income
rose from both comparative periods due to higher
contributions from money market activity, while noninterest losses were incurred as wider credit spreads
reduced the mark-to-market values of trading securities
and credit-linked derivatives.
Central Treasury Unit (CTU) manages the Group’s
asset and liability interest rate positions as well as
investments of the Group’s excess liquidity. Central
Operations encompasses a range of activities from
corporate decisions and income and expenses not
attributed to other business segments. Asset
management and private banking activities are
included in this segment.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
world
Total
3rd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
693
303
398
23
265
136
176
26
23
24
29
6
50
14
35
28
17
12
14
(3)
1,048
489
652
80
Profit before tax
581
199
18
16
18
832
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
672
317
414
(8)
591
277
127
163
21
220
25
28
29
21
3
35
34
38
21
27
18
18
16
9
11
1,027
524
660
64
852
3rd Qtr 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
574
254
353
9
291
95
171
27
15
19
23
(1)
21
27
23
5
11
13
14
1
912
408
584
41
Profit before tax
470
188
12
34
9
713
9 Mths 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
2,013
963
1,240
74
1,683
813
398
509
69
633
65
80
79
27
45
107
100
100
55
103
51
40
42
24
25
3,049
1,581
1,970
249
2,489
9 Mths 2006 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,662
842
1,082
54
1,374
855
272
497
71
559
35
69
58
2
44
67
67
65
(1)
114
40
35
40
8
27
2,659
1,285
1,742
134
2,118
146,606
143,238
126,499
123,895
49,937
46,819
44,868
45,630
10,045
9,137
7,792
7,606
7,631
7,265
5,131
5,427
10,515
10,589
7,242
8,695
224,734
217,048
191,532
191,253
Selected income items
1/
1/
1/
Total assets before goodwill
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
Note:
1/ Income, allowances for credit and other losses and profits exclude one-time gains/(charge)
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Singapore
Net interest income was higher than both comparative
periods as loans and deposits expanded. Fee income was
higher than both comparative periods while trading
income was lower.
Expenses fell from the previous quarter due to lower
wage and computerisation costs, but they were higher
than a year ago.
Allowances were higher due to higher charges for nonloan assets, partially offset by a net write-back in specific
allowances for loans.
Net interest income fell below comparative periods as
higher loan and deposit volumes were more than offset by
a decline in interest margins.
Non-interest income was higher than the previous quarter
due to higher stockbroking activity and demand from
corporate customers for foreign exchange hedging
products. Compared to a year ago, unit trust sales also
increased.
The increase in expenses was led by IT investment costs.
Allowances were higher than the previous quarter due to
an increase in general allowances.
Other regions
Hong Kong
The third quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 1%
from the previous quarter and 5% from a year ago.
Outside of Singapore and Hong Kong, the largest
contributions are from India, Indonesia and Greater
China.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
Gross
Less:
Specific allowances
106,161
100,475
88,080
86,673
505
544
564
546
General allowances
Net total
942
104,714
974
98,957
886
86,630
873
85,254
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
31,367
22,531
45,675
6,588
106,161
31,082
21,984
40,374
7,035
100,475
29,538
20,101
33,764
4,677
88,080
29,294
20,023
32,670
4,686
86,673
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
57,996
31,254
5,473
4,425
7,013
106,161
54,954
29,729
4,884
3,784
7,124
100,475
48,789
27,216
4,443
2,993
4,639
88,080
47,727
27,170
4,135
3,064
4,577
86,673
13,948
12,225
26,494
9,865
10,075
13,781
9,770
13,321
12,179
26,124
9,677
9,984
11,979
9,269
10,867
10,883
25,043
8,930
7,709
9,827
8,110
11,296
10,147
24,240
9,040
7,298
10,313
7,965
Others
Total (Gross)
10,003
106,161
7,942
100,475
6,711
88,080
6,374
86,673
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
41,974
28,317
20,461
15,409
106,161
39,328
27,536
19,763
13,848
100,475
35,708
24,942
15,895
11,535
88,080
35,629
25,194
15,041
10,809
86,673
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Note:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
Net customer loans expanded 23% from a year ago and
6% from the previous quarter to $104.7 billion. The growth
was broad-based across regions and was led by corporate
and SME loans.
Higher disbursements of Singapore housing loans
contributed to the increase in consumer loans.
Loans in Hong Kong rose 7% in local currency terms
during the quarter, with SME and corporate loans
leading the increase.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
1/
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
258
726
69
350
315
235
0.8
3.2
149
81
360
153
246
116
439
0.5
225
426
35
30
6
0.5
106
164
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
282
729
76
349
310
217
0.9
3.3
137
78
330
150
324
149
413
0.8
173
295
37
28
83
0.6
297
460
1,372
602
1,023
1.4
118
229
Debt securities
37
17
80
-
260
587
Contingent liabilities
Total non-performing
assets
85
5
129
-
158
2,137
1,494
624
1,232
-
124
254
307
691
95
324
294
198
1.0
3.4
127
76
356
150
396
183
336
1.2
131
224
66
23
100
1.4
185
499
1,460
625
928
1.7
106
217
36
37
15
9
66
114
-
223
327
531
1,173
1,533
649
1,108
-
115
237
30 Sep 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
30 Jun 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans
31 Dec 2006
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sep 2006
Consumer Banking
320
101
292
1.1
123
339
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (“NPL”)
732
289
198
3.7
67
147
426
186
325
1.3
120
227
98
30
95
2.1
128
396
1,576
606
910
1.8
96
216
38
32
15
9
68
126
-
218
422
541
995
1,646
630
1,104
-
105
237
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sep 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2006
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sep 2006
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
627
352
77
273
159
27
421
310
79
1.2
1.1
1.1
111
133
138
228
257
446
138
94
106
1.9
146
170
71
12
79
0.8
127
682
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
707
356
72
321
159
24
487
299
70
1.4
1.2
1.1
114
129
131
239
246
395
147
74
88
2.5
111
127
90
24
79
0.9
114
325
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
811
363
68
359
150
20
443
278
56
1.8
1.3
1.3
99
118
112
212
245
358
112
61
72
2.5
119
161
106
35
79
1.6
109
199
1,460
625
928
1.7
106
217
36
37
15
9
66
114
-
223
327
531
1,173
1,533
649
1,108
-
115
237
854
405
72
341
146
18
445
281
45
1.8
1.5
1.7
92
105
88
216
240
292
129
71
79
4.2
116
188
116
30
60
2.5
77
149
1,576
606
910
1.8
96
216
38
32
15
9
68
126
-
218
422
541
995
1,646
630
1,104
-
105
237
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
361
81
168
212
25
37
338
91
184
197
39
43
314
107
224
170
50
56
344
128
225
168
41
60
General commerce
Transportation, storage &
communications
290
29
143
12
339
34
150
11
336
25
146
12
345
26
131
12
82
11
101
19
173
47
179
48
134
60
142
61
142
65
184
75
120
1,265
65
565
143
1,372
82
602
139
1,460
79
625
145
1,576
71
606
42
119
36
9
37
85
17
5
36
37
15
9
38
32
15
9
Total non-performing assets
1,426
610
1,494
624
1,533
649
1,646
630
By loan classification
($m)
30 Sep 2007
Financial institutions, investment
& holding companies
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
SP
NPA
SP
NPA
SP
NPA
SP
878
276
272
1,426
63
275
272
610
904
273
317
1,494
73
232
319
624
939
243
351
1,533
82
216
351
649
1,081
225
340
1,646
88
202
340
630
189
32
28
249
24
37
28
89
200
47
55
302
28
45
55
128
218
66
42
326
29
48
42
119
295
57
38
390
43
36
38
117
By collateral type
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
NPA
NPA
NPA
Unsecured non-performing assets
722
731
740
732
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
410
40
8
246
454
47
41
221
556
46
38
153
657
45
41
171
1,426
1,494
1,533
1,646
Total
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
Not overdue
180 days overdue
Total
30 Sep 2007
30 June 2007
31 Dec 2006
30 Sep 2006
NPA
NPA
NPA
NPA
400
246
180
333
388
144
413
332
128
431
332
191
600
1,426
629
1,494
660
1,533
692
1,646
Including debt securities and contingent liabilities, the
amount of non-performing assets (NPAs) fell 13% from a
year ago and 5% from the previous quarter to $1.43 billion.
Non-performing loans (NPLs) fell 20% from a year ago
and 8% from the previous quarter to $1.27 billion. NPL
rates for all regions and businesses were better than the
previous quarter except for Rest of Greater China,
which was unchanged.
Cumulative allowances rose to 130% of non-performing
assets from 124% in the previous quarter and 105% a year
ago. Of the cumulative general allowances of $1.24 billion,
$37 million was set aside for CDOs with US sub-prime
exposures.
FUNDING SOURCES
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
144,185
15,360
50,721
141,272
11,898
50,080
131,373
8,537
38,787
127,541
12,389
39,060
20,311
230,577
19,641
222,891
18,675
197,372
18,096
197,086
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
78,493
28,073
24,274
13,345
144,185
79,798
25,556
23,583
12,335
141,272
71,242
24,758
23,059
12,314
131,373
68,820
22,828
23,121
12,772
127,541
52,335
15,923
71,084
4,843
52,607
15,540
69,071
4,054
47,491
14,109
66,718
3,055
44,679
13,855
66,353
2,654
144,185
141,272
131,373
127,541
1/
Customer deposits
Interbank liabilities 2/
2/
Other borrowings and liabilities
Shareholders’ funds
Total
Notes:
1/
Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
2/
Includes liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
CUSTOMER DEPOSITS
($m)
By currency
Singapore dollar
US dollar
Hong Kong dollar
Others
Total
1/
By product
Savings accounts
Current accounts
Fixed deposits
Others
Total
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 2% from the previous quarter and
13% from a year ago to $144.2 billion, with the growth led
by non-Singapore dollar fixed deposits.
Singapore-dollar deposits fell 2% during the quarter from a
decline in fixed deposits. Singapore-dollar savings
deposits were stable. Hong Kong-dollar deposits rose 5%
in local currency terms with fixed deposits accounting for
most of the increase.
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
VALUE AT RISK AND TRADING INCOME
The Group uses a Value at Risk (“VaR”) measure as one mechanism for monitoring and controlling trading risk. The VaR is
calculated using a one-day time horizon and a 99% confidence interval. The following table shows the period-end, average,
high and low VaR for the trading risk exposure of the DBSH Group for the period from 1 October 2006 to 30 September 2007.
DBS changed its trading book VaR methodology from Parametric VaR (PVaR) to Historical Simulation VaR (HSVaR) in
September 2006. The histogram below is based on HSVaR.
($m)
1 October 2006 to 30 September 2007
Average
High
Low
As at 30 Sep 2007
Total
20
13
28
6
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 October 2006 to 30 September 2007.
DBSH Group VaR for Trading Book
40
35
30
No. of Days
25
20
15
10
>29-30
>27-28
>25-26
>23-24
>21-22
>19-20
>17-18
>15-16
>13-14
>9-10
>7-8
>5-6
0
>11-12
5
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 October 2006 to 30 September 2007)
45
40
35
25
20
15
10
5
>34-36
>32-34
>30-32
>28-30
>26-28
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>8-10
>10-12
>6-8
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
>(20)-(18)
>(22)-(20)
>(24)-(22)
>(26)-(24)
>(28)-(26)
>(30)-(28)
>(32)-(30)
0
>(34)-(32)
No. of days
30
Trading income (S$ million)
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Goodwill
Total
Tier 2
Cumulative general allowances
Subordinated debts
Others
Total
Total capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier I ratio
Tier II ratio
Total (Tier I & II) ratio
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
4,138
17,879
(5,845)
16,172
4,127
17,479
(5,843)
15,763
4,042
16,556
(5,840)
14,758
8,242
11,795
(5,834)
14,203
1,170
7,254
138
8,562
1,157
7,612
119
8,888
1,033
5,038
103
6,174
1,031
5,208
54
6,293
24,734
176,533
24,651
167,830
20,932
144,086
20,496
140,250
9.2
4.8
14.0
9.4
5.3
14.7
10.2
4.3
14.5
10.1
4.5
14.6
Based on regulatory guidelines, the Group’s tier-1 fell to 9.2% from 9.4% in the previous quarter as the amount of riskweighted assets increased with a higher customer loan base.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
423
(73)
350
406
17
423
371
11
382
417
15
432
The amount of unrealised valuation surplus for properties increased to $423 million from $406 million in the previous
quarter as market valuations improved, while the valuation of the financial investments fell due to mark-to-market losses
in financial investments resulting from current conditions in credit markets.
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
+/(-) 2nd Qtr
%
2007
9 Mths
2007
9 Mths
20061/
+/(-)
%
2,252
1,225
1,027
371
97
(49)
79
26
6,738
3,689
3,049
1,083
205
(90)
321
62
5,731
3,072
2,659
851
457
(156)
79
108
18
20
15
27
(55)
42
>100
(43)
16
1,551
4,630
3,998
16
317
32
235
41
9
16
>100
354
30
276
145
1,061
94
815
368
938
95
709
134
13
(1)
15
>100
770
625
23
805
2,338
1,876
25
Profit
Share of profits of associates
Profit before tax
767
27
794
695
18
713
10
50
11
746
25
771
2,292
78
2,370
2,122
50
2,172
8
56
9
Income tax expense
Net profit
146
648
127
586
15
11
151
620
449
1,921
391
1,781
15
8
610
38
648
552
34
586
11
12
11
560
60
620
1,787
134
1,921
1,673
108
1,781
7
24
8
3rd Qtr
2007
3rd Qtr
20061/
Income
Interest income
Interest expense
Net interest income
Net fee and commission income
Net trading income
Net income from financial instruments designated at fair value
Net income from financial investments
Other income
2,362
1,314
1,048
403
(63)
5
121
23
2,065
1,153
912
293
121
(45)
29
10
14
14
15
38
NM
NM
>100
>100
Total income
1,537
1,320
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
347
32
273
118
Total expenses
In $ millions
Attributable to:
Shareholders
Minority interests
Note:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets as at
In $ millions
30 Sep
2007
GROUP
30 Jun
31 Dec
2007
2006 2/
30 Sep
2006 1/
30 Sep
2007
COMPANY
30 Jun
31 Dec
2007
2006 2/
30 Sep
2006 1/
ASSETS
Cash and balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value though profit or loss 3/
Positive replacement values
Loans and advances to customers
Financial investments
Securities pledged
Subsidiaries
Investments in associates
Goodwill on consolidation
Properties and other fixed assets
Deferred tax assets
Other assets
8,450
16,646
30,465
20,748
10,925
103,405
21,855
2,706
666
5,843
1,511
17
7,340
11,848
14,909
28,161
21,103
9,627
96,909
23,026
2,517
643
5,843
1,524
20
6,761
11,846
12,843
25,273
16,496
8,215
85,149
22,261
2,866
603
5,840
1,481
20
4,479
5,948
13,921
28,338
16,953
7,924
84,495
23,229
3,239
575
5,833
1,549
29
5,053
TOTAL ASSETS
230,577
222,891
197,372
197,086
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 4/
Negative replacement values
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue 5/
- due within one year
- due after one year
Subordinated term debts
13,678
133,941
23,271
10,863
590
943
191
9,792
5,108
4,705
403
9,171
9,956
132,294
22,903
9,766
539
874
140
8,873
5,933
5,755
178
9,324
7,863
122,092
19,708
7,873
511
766
137
6,677
3,950
3,682
268
6,749
11,619
117,125
21,717
8,093
426
735
54
7,117
2,728
1,364
1,364
6,987
TOTAL LIABILITIES
207,548
200,602
176,326
23,029
22,289
4,138
(74)
7,751
8,496
6,736
6,744
6,927
6,854
6,736
6,744
6,927
6,854
7
6
8
8
176,601
7
6
8
8
21,046
20,485
6,729
6,738
6,919
6,846
4,127
(74)
7,449
8,139
4,042
(111)
7,182
7,562
3,971
(111)
7,024
7,212
4,138
53
2,538
4,127
53
2,558
4,042
53
2,824
3,971
52
2,823
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,311
19,641
18,675
18,096
6,729
6,738
6,919
6,846
Minority interests
2,718
2,648
2,371
2,389
-
-
-
-
TOTAL EQUITY
23,029
22,289
21,046
20,485
6,729
6,738
6,919
6,846
4.39
4.39
4.54
4.49
4.25
4.27
4.39
4.34
SHAREHOLDERS’ FUNDS
OFF BALANCE SHEET ITEMS
Contingent liabilities
Commitments
Financial derivatives
OTHER INFORMATION
Net asset value per ordinary share ($)
(i) Based on existing ordinary share capital
(ii) Assuming conversion of outstanding preference
shares to ordinary shares
13,808
13,790
12,187
11,373
90,334
93,567
86,065
80,022
1,887,740 1,818,734 1,378,916 1,407,293
Notes:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
2/ Audited
3/ Includes customer loans, interbank assets, other government securities and treasury bills, corporate debt securities and equity securities
4/ Includes customer deposits, interbank liabilities, other debt securities in issue and other financial liabilities
5/ Includes secured amount of $2,551 million as at 30 September 2007 ( 30 June 2007 : $3,953 million; 31 December 2006: $2,743 million; 30 September 2006: $2,635 million). These are mainly secured by properties
and securities
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Statement of Changes in Equity
GROUP
In $ millions
Balance at 1 January 2007
Exercise of share options
Ordinary
shares
3,976
Convertible
preference
shares
66
Share
premium
Treasury
shares
Other
reserves
Revenue
reserve
Minority
interests
Total
equity
-
(111)
7,182
7,562
2,371
21,046
(41)
(66)
96
96
Net exchange translation adjustments
(25)
Share of associates’ reserves
18
18
Cost of share-based payments
26
26
(37)
-
Draw-down of reserves upon vesting of performance
shares
37
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
- Transferred to income statement on sale
- Tax on items taken directly to or transferred from
equity
798
798
(177)
(177)
(64)
Net profit for the period
(64)
1,787
Appropriation from income statement 1/
30
134
1,921
(30)
-
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(513)
Dividends paid to minority interests
Change in minority interests
(513)
(116)
(116)
370
370
Balance at 30 September 2007
4,072
66
-
(74)
7,751
8,496
2,718
23,029
Balance at 1 January 2006
1,498
66
2,269
(117)
6,841
6,167
2,466
19,190
Exercise of share options
Effects of Companies (Amendment) Act 2005
103
7
2,304
(2,276)
110
(28)
Net exchange translation adjustments
-
(1)
(60)
(61)
Share of associates’ reserves
1
1
Cost of share-based payments
20
20
(6)
-
Draw-down of reserves upon vesting of performance
shares
6
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
269
269
- Transferred to income statement on sale
(43)
(43)
- Tax on items taken directly to or transferred from
equity
(29)
(29)
Net profit for the period
1,673
Final dividends paid for previous year
(203)
Interim dividends paid for current year
(425)
Dividends paid to minority interests
Change in minority interests
Balance at 30 September 2006
3,905
66
-
(111)
7,024
7,212
108
1,781
(203)
(425)
(120)
(120)
(5)
(5)
2,389
20,485
Note:
1/ Includes appropriation from prior year’s net profit
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Statement of Changes in Equity
COMPANY
Convertible
preference
shares
Revenue
reserve
Total equity
2,824
6,919
537
537
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(513)
(513)
In $ millions
Balance at 1 January 2007
Exercise of share options
Ordinary
shares
3,976
66
Other
reserves
Share
premium
-
53
96
96
Net profit for the period
Balance at 30 September 2007
4,072
66
-
53
2,538
6,729
Balance at 1 January 2006
1,498
66
2,269
77
2,874
6,784
Exercise of share options
Effects of Companies (Amendment) Act 2005
103
7
2,304
(2,276)
Cost of share-based payments
Net profit for the period
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 September 2006
3,905
66
-
110
(28)
-
3
577
(203)
(425)
3
577
(203)
(425)
2,823
6,846
52
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Cash Flow Statement
In $ millions
9 Mths
2007
9 Mths
20061/
Cash flows from operating activities
Profit before tax
2,370
2,172
Adjustments for non-cash items:
Allowances for credit and other losses
Depreciation of properties and other fixed assets
Share of profits of associates
Net gain on disposal of properties and other fixed assets
Net gain on disposal of financial investments
Profit before changes in operating assets & liabilities
368
94
(78)
(6)
(321)
2,427
134
95
(50)
(5)
(79)
2,267
Increase/(Decrease) in:
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss
Other liabilities including bills payable
Debt securities and borrowings
5,815
11,849
3,563
5,134
1,612
2,669
10,694
(1,106)
1,464
284
Decrease/(Increase) in:
Change in restricted balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value through profit or loss
Loans and advances to customers
Financial investments
Other assets
362
(3,640)
(5,202)
(4,012)
(18,418)
1,090
(5,105)
440
(4,460)
(6,217)
3,739
(6,991)
255
(522)
(279)
(111)
Tax paid
Net cash (used in) / generated from operating activities (1)
Cash flows from investing activities
Dividends from associates
Purchase of properties and other fixed assets
Proceeds from disposal of properties and other fixed assets
Acquisition of interest in associates
Net cash (used in) / generated from investing activities (2)
(4,804)
2,405
51
(119)
69
(4)
36
(126)
106
(5)
(3)
11
Cash flows from financing activities
Increase in share capital and share premium
Proceeds from issuance of subordinated term debts
Dividends paid to shareholders of the Company
Dividends paid to minority interests
96
3,044
(823)
(116)
110
1,428
(628)
(120)
Net cash generated from financing activities (3)
Exchange translation adjustments (4)
2,201
(25)
790
1
(2,631)
15,118
12,487
3,207
9,408
12,615
Net change in cash and cash equivalents (1)+(2)+(3)+(4)
Cash and cash equivalents at 1 January
Cash and cash equivalents at 30 Se
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The DBS Group Holdings Ltd (“DBSH” or “the Company”) Board of Directors report unaudited financial
results for the third quarter ended 30 September 2007.
For the third quarter of 2007, the Directors have declared an interim gross dividend of 20 cents (third
quarter 2006: 17 cents) for each DBSH ordinary share.
The third quarter 2007 dividends will be paid less 18% Singapore income tax.
The third quarter ended 30 September 2007 dividends will be payable on 26 November 2007. The
DBSH shares will be quoted ex-dividend on 7 November 2007. Notice is hereby given that the Share
Transfer Books and Register of Members of the Company will be closed on 13 November 2007. Duly
completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration Services
of 8 Cross Street #11-00 PWC Building, Singapore 048424 up to 5.00 p.m. on 12 November 2007 will
be registered to determine shareholders' entitlement to the third quarter 2007 dividends. In respect of
ordinary shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the third
quarter 2007 dividends will be paid by DBSH to CDP, which will in turn distribute the dividend
entitlements to shareholders.
By order of the Board
Heng Lee Cheng (Ms)
Group Secretary
25 October 2007
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Third Quarter ended
30 September 2007
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 Unit
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Funding Sources
Customer Deposits
Value at Risk and Trading Income
Capital Adequacy
Unrealised Valuation Surplus/(Losses)
Unaudited Consolidated Income Statement
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
Adoption of New or Revised FRS and INT FRS
Confirmation by the Board
Page
2
4
6
6
7
7
8
10
12
13
16
16
17
18
18
19
20
21
22
23
24
24
25
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its condensed consolidated DBSH Group (“Group”) interim financial statements in
accordance with Singapore Financial Reporting Standard (“FRS”) No. 34 Interim Financial Reporting, 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 2006, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
The Council on Corporate Disclosure and Governance (“CCDG”) issued several new or revised FRS and INT FRS, which are
effective 1 January 2007 for the Group.
•
•
•
•
•
•
•
Amendment to FRS 1: Presentation of Financial Statements – Capital Disclosures
FRS 32 (revised): Financial Instruments – Presentation
FRS 40 (new): Investment Property
FRS 107 (new): Financial Instruments – Disclosures
INT FRS 108: Scope of FRS 102 – Share-based Payment
INT FRS 109: Reassessment of Embedded Derivatives
INT FRS 110: Interim Financial Reporting and Impairment
Selected profit and loss items ($m)
Net interest income
Net fee and commission income
Net trading income
Net income from financial instruments
designated at fair value
Net income from financial investments
Other income
Total income
3rd Qtr
2007
3rd Qtr
1/
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
1/
2006
% chg
1,048
403
(63)
912
293
121
15
38
NM
1,027
371
97
3,049
1,083
205
2,659
851
457
15
27
(55)
5
(45)
NM
(49)
(90)
(156)
42
121
23
1,537
29
10
1,320
>100
>100
16
79
26
1,551
321
62
4,630
79
54
3,944
>100
15
17
Less: Expenses
652
584
12
660
1,970
1,742
13
Profit before allowances
885
736
20
891
2,660
2,202
21
Less: Allowances for credit and other losses
80
41
95
64
249
Share of profits of associates
27
18
50
25
78
134
50
86
56
Profit before tax
Net profit attributable to shareholders
(“Net profit”)
832
713
17
852
2,489
2,118
18
648
552
17
664
1,929
1,619
19
Add: One-time items 2/
Net profit including one-time items and
goodwill charges
(38)
-
NM
(104)
(142)
54
NM
610
552
11
560
1,787
1,673
7
104,714
32,478
230,577
144,185
207,548
20,311
85,254
30,712
197,086
127,541
176,601
18,096
23
6
17
13
18
12
98,957
30,858
222,891
141,272
200,602
19,641
104,714
32,478
230,577
144,185
207,548
20,311
85,254
30,712
197,086
127,541
176,601
18,096
23
6
17
13
18
12
2.14
31.8
42.4
1.14
12.96
72.6
1.2
11
9.2
14.0
2.17
30.9
44.2
1.14
12.34
66.8
1.8
12
10.1
14.6
2.21
33.8
42.6
1.23
13.60
70.0
1.4
19
9.4
14.7
2.19
34.1
42.5
1.20
13.21
72.6
1.2
10
9.2
14.0
2.20
32.6
44.2
1.14
12.42
66.8
1.8
16
10.1
14.6
Selected balance sheet items ($m)
3/
Customer loans
4/
Interbank assets
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios(%) (excluding one6/
time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
Return on equity 7/
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr
2007
3rd Qtr
1/
2006
1.70
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
– net book value 7/
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
7/
– net book value
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
1/
2006
1.46
1.76
1.69
1.43
1.68
13.10
1.46
11.73
1.69
12.66
1.60
13.10
1.47
11.73
1.63
1.40
1.69
1.62
1.38
1.61
12.82
1.40
11.51
1.63
12.45
1.53
12.82
1.41
11.51
% chg
Notes:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
2/ One-time items include gains from sale of buildings in Hong Kong, allowance write-back for a Singapore property, and impairment charges for Thai investment
3/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
4/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
5/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
6/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data for the quarters are computed on an annualised basis
7/ Minority interests are not included as equity in the computation of net asset value and return on equity
Third-quarter net profit rose 17% from a year ago to
$648 million before one-time items. Net interest and
fee income reached records as DBS captured the
benefits of the region’s continued growth in a wide
range of customer businesses. Income rose 16%,
outstripping a 12% increase in expenses.
Compared to the previous quarter, net profit was 2%
lower as improved contributions from customer
businesses were offset by mark-to-market losses of
$42 million and a charge of $43 million in specific and
general allowances for collateralised debt obligations
(CDOs). None of the $2.36 billion of CDOs held by
DBS is in default.
An impairment charge of $38 million was taken below
the line for DBS’ 16% stake in TMB Bank in Thailand to
reflect its market valuation as at 30 September.
Including this item, the third quarter’s net profit would
be $610 million.
Net interest income increased 15% from a year ago
and 2% from the previous quarter to $1.05 billion.
The increase was due to higher asset volumes as
loans expanded 23% from a year ago and 6% over
the quarter. Net fee income grew 38% from a year
ago and 9% from the previous quarter to $403 million
from increased volumes in a range of corporate and
capital market activities.
A net trading loss of $63 million was recorded
compared to a net trading income of $97 million in
the previous quarter. The $42 million mark-to-market
losses for CDOs were included in this line item.
Wider credit spreads during the quarter also reduced
mark-to-market values of trading securities and
credit-linked derivatives, more than offsetting gains in
other trading activities such as foreign exchange.
Expenses rose 12% from a year ago to $652 million
but were 1% below the previous quarter. Staff and
computerisation costs, two major expense items,
were actively managed to enable the cost-income
ratio to improve to 42% from 43% in the previous
quarter and 44% a year ago.
Against the backdrop of a benign environment, the
non-performing loan ratio fell to 1.2% from 1.4% in
the previous quarter. Specific allowances for loans of
$28 million corresponded to a charge of 11 basis
points, which was lower than most recent quarters.
Total provision charges, including those for CDOs,
amounted to $80 million.
Return on equity rose to 13.0% from 12.3% a year
ago while return on assets remained at 1.14%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
3rd Qtr 2006
Average
Average
rate
balance Interest
(%)
($m)
($m)
2nd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
100,608
39,693
54,344
194,645
1,405
344
613
2,362
5.54
3.44
4.47
4.81
84,118
30,512
51,958
166,588
1,176
251
638
2,065
5.54
3.26
4.87
4.92
94,742
36,341
55,368
186,451
1,322
303
627
2,252
5.60
3.35
4.54
4.85
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
142,616
42,880
185,496
777
537
1,314
2.16
4.97
2.81
126,797
33,133
159,930
757
396
1,153
2.37
4.75
2.86
139,705
36,900
176,605
754
471
1,225
2.17
5.12
2.78
1,048
2.14
912
2.17
1,027
2.21
Net interest
1/
income/margin
9 Mths 2007
Average balance
sheet
Average
balance
($m)
9 Mths 2006
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
94,823
37,005
54,155
185,983
3,975
948
1,815
6,738
5.61
3.43
4.48
4.84
81,359
29,947
50,087
161,393
3,347
695
1,689
5,731
5.50
3.10
4.51
4.75
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
138,882
37,789
176,671
2,277
1,412
3,689
2.19
5.00
2.79
122,101
32,034
154,135
1,990
1,082
3,072
2.18
4.52
2.67
3,049
2.19
2,659
2.20
Net interest
1/
income/margin
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
The increase in net interest income from both a year
ago and the previous quarter was due to higher asset
volumes. Customer loans increased at a faster rate than
other assets, resulting in a better asset mix.
Overall customer loan yields declined compared to the
previous quarter as corporate and SME loan yields in
Singapore and Hong Kong fell. Yields on securities
declined in line with a lower interest rate environment.
Interest margins fell seven basis points from the
previous quarter to 2.14%. Two basis points were due to
the full-period impact of the subordinated debt issue
completed in May. The remaining five basis points were
due to lower interest spreads in Hong Kong and
Singapore.
Overall customer deposit costs were stable as a higher
cost of funds in Hong Kong was offset by lower costs of
fixed deposits in Singapore.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2007 versus 3rd Qtr 2006
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2007 versus 2nd Qtr 2007
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
230
76
29
335
(1)
17
(54)
(38)
229
93
(25)
297
82
28
(12)
98
(14)
9
(9)
(14)
68
37
(21)
84
Interest expense
Customer deposits
Other borrowings
Total
95
119
214
(75)
22
(53)
20
141
161
15
78
93
(1)
(18)
(19)
14
60
74
Net impact on interest income
121
15
136
5
5
10
Interest income
Due to change in number of days
Net Interest Income
-
11
136
21
9 Mths 2007 versus 9 Mths 2006
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
554
163
137
854
74
90
(11)
153
628
253
126
1,007
Interest expense
Customer deposits
Other borrowings
Total
273
189
462
14
141
155
287
330
617
Net impact on interest income
392
(2)
390
Interest income
Due to change in number of days
Net Interest Income
390
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
72
57
52
66
9
20
36
10
64
17
403
28
40
48
41
8
21
29
12
53
13
293
>100
43
8
61
13
(5)
24
(17)
21
31
38
58
48
50
55
9
22
35
13
68
13
371
183
134
150
179
26
61
98
32
179
41
1,083
98
103
139
125
23
61
81
49
133
39
851
87
30
8
43
13
21
(35)
35
5
27
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
Compared to the previous quarter, net fee and commission
income was 9% higher, with the growth led by stockbroking,
investment banking and loan syndication.
Net fee and commission income grew 38% from a year
ago to $403 million, led by corporate and capital market
activities such as stockbroking, investment banking and
loan syndication. Stronger consumer confidence
boosted fees from credit card transactions and wealth
management product sales.
For the nine months, net fee and commission income rose
27% to $1.08 billion across all income sources with the
exception of fund management.
OTHER NON-INTEREST INCOME
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
(63)
(47)
(16)
121
116
5
NM
NM
NM
97
100
(3)
205
222
(17)
457
(55)
464
(7)
(52)
(>100)
5
(45)
NM
(49)
(90)
(156)
42
121
2
29
3
>100
(33)
79
2
321
6
79
>100
5
20
21
7
>100
24
56
49
14
86
115
(25)
153
498
434
15
Net trading income
From trading businesses
From other businesses
Net income from financial instruments
designated at fair value
Net income on financial investments
1/
Net gain on fixed assets
Others (include dividend and rental
income)
Total
Note:
1/ Excludes one-time items
The trading businesses recorded a net trading loss of
$47 million. Credit spreads on securities and creditlinked derivatives widened. The reduction in market
valuation of the credit trading portfolio more than offset
gains in other trading activities such as foreign
exchange.
A net trading loss from other businesses of $16 million
included mark-to-market losses of $42 million from
$1.12 billion of CDOs held by Red Orchid Secured
Assets (Rosa), a conduit managed by DBS. The losses
reflected the current valuation of these CDOs due to the
current conditions in the credit markets. None of the
CDOs whose value has been marked down is in default.
Net income on sales of investment securities amounted to
$121 million as capital gains were recorded for the sale of
debt and equity investments. Market conditions were
conducive to profit taking for some equity investments. The
gains were higher than both comparative periods.
Income from other sources, including dividend and rental
income, amounted to $21 million, above the $7 million a year
ago but slightly below the $24 million in the previous quarter.
For the nine months, trading income from trading businesses
fell to $222 million from $464 million a year ago, but was
more than offset by higher net income from the sale of
financial investments, which rose to $321 million from $79
million.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
347
53
106
38
108
652
13,842
317
47
94
26
100
584
12,670
9
354
51
111
35
109
660
13,364
1,061
157
329
98
325
1,970
13,842
938
138
283
75
308
1,742
12,670
13
14
16
31
6
13
9
Expenses increased 12% from a year ago to $652
million. Staff costs rose 9% from a higher headcount to
support business expansion. Computerisation expenses
were also higher.
13
13
46
8
12
9
Compared to the previous quarter, expenses fell 1% as
staff and computerisation costs declined slightly.
For the nine months, expenses rose 13% to $1.97 billion.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
3rd Qtr
2007
3rd Qtr
2006
% chg
2nd Qtr
2007
9 Mths
2007
9 Mths
2006
% chg
General allowances (“GP”)
10
29
(66)
24
136
77
77
Specific allowances (“SP”) for loans
Singapore
Hong Kong
Other countries
28
(8)
17
19
27
8
20
(1)
4
NM
(15)
NM
47
9
18
20
76
(17)
54
39
100
44
57
(1)
(24)
NM
(5)
NM
Specific allowances (“SP”) for securities,
1/
properties and other assets
42
(15)
NM
(7)
37
(43)
NM
Total
80
41
95
64
249
134
86
($m)
Note:
1/ Excludes one-time items
Specific allowances for loans amounted to $28 million,
which, like the $27 million a year ago, was one of the
lowest in recent quarters. Charges in Hong Kong and the
region were partially offset by write-backs in Singapore
this quarter. By business unit, the charges were for
corporate and SME loans. There was a small net writeback in specific allowances for consumer loans.
Specific allowances for non-loan assets of $42 million
included a $33 million charge for CDOs held as financial
investments. These charges relate to the $275 million of
CDOs that have some degree of exposure to US subprime assets. An additional $10 million charge was taken
as general allowance for such CDOs. None of the $1.24
billion of CDOs held as financial investments is in default.
For the nine months, total allowances rose 86% to $249
million as general allowances and specific allowances for
non-loan assets increased. They were partially offset by
lower specific allowances for loans.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
Selected income items
3rd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
2nd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
3rd Qtr 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
427
182
278
195
89
92
188
134
105
254
(66)
108
95
(6)
6
(111)
156
63
1,048
489
652
5
326
19
173
82
135
1
81
68
15
(95)
102
80
832
423
175
258
201
91
87
172
188
102
236
51
125
94
(8)
9
(99)
27
79
1,027
524
660
5
335
45
160
36
222
3
163
77
(25)
(105)
64
852
446
135
251
189
83
88
158
137
95
144
79
107
66
(51)
6
(91)
25
37
912
408
584
16
314
25
159
25
175
(2)
119
(2)
11
(21)
(65)
41
713
1,300
501
802
590
298
270
518
514
295
670
53
361
251
4
26
(280)
211
216
3,049
1,581
1,970
19
980
82
536
161
576
5
368
68
161
(86)
(132)
249
2,489
1,302
387
727
537
242
255
432
411
277
441
241
314
216
(68)
24
(269)
72
145
2,659
1,285
1,742
34
928
66
458
57
509
(3)
375
(3)
125
(17)
(277)
134
2,118
32,116
80,457
11
6
22,599
20,122
1
1
52,061
24,809
1
2
86,083
53,119
2
3
28,007
1,791
-
3,868
27,250
38
20
224,734
207,548
53
32
31,871
81,168
11
7
22,028
19,898
1
-
47,354
22,305
4
1
85,218
49,193
2
2
27,228
1,404
-
3,349
26,634
18
20
217,048
200,602
36
30
1/
9 Mths 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other
losses
Profit before tax
1/
9 Mths 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other
Losses
Profit before tax
Selected balance sheet and other
items
30 Sep 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2007
Depreciation for 3rd Qtr 2007
30 Jun 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2007
Depreciation for 2nd Qtr 2007
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
30,655
20,067
40,090
69,426
28,119
3,175
191,532
76,237
20
10
18,827
1
1
19,733
32
3
36,114
4
2
998
-
24,417
56
19
176,326
113
35
29,615
73,949
15
7
20,322
18,855
2
40,337
21,177
2
2
68,325
38,177
3
5
28,165
1,750
2
4,489
22,693
15
14
191,253
176,601
35
32
31 Dec 2006
Total assets before goodwill
Total liabilities
Capital expenditure for 4th Qtr 2006
Depreciation for 4th Qtr 2006
30 Sep 2006
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2006
Depreciation for 3rd Qtr 2006
Note:
1/ Income, allowances for credit and other losses and profits exclude one-time items
Consumer Banking’s (CBG) net interest income was
lower than a year ago as the benefit of higher loan
and deposit volumes in Singapore and Hong Kong
was more than offset by lower spreads in Hong
Kong. Compared to the previous quarter, net interest
income was little changed as the impact of higher
volumes in Singapore was offset by lower spreads in
Hong Kong. Non-interest income was higher than a
year ago due to higher sales of wealth management
products. The increase in expenses from both
comparative periods was due to higher wage and
support costs. Specific allowances were lower than a
year ago.
Enterprise Banking’s (EB) net interest income declined
from the previous quarter as higher loan and deposit
volumes were more than offset by lower spreads in
Hong Kong. Compared to a year ago, higher volumes
were partially offset by lower spreads in Hong Kong.
Expenses rose as a result of higher wage costs
compared to the previous quarter and higher support
costs compared to a year ago. Total allowances fell as
specific allowances were below both comparative
periods.
Corporate and Investment Banking’s (CIB) net interest
income was higher than both comparative periods as
loans and deposits increased. Compared to the
previous quarter, non-interest income fell as higher fee
income was more than offset by the mark-to-market
losses in Rosa’s CDOs and a decline in capital gains
from the sale of equity investments. Expenses were
higher than a year ago due to increased support costs.
Total allowances were higher than both comparative
periods due to increased general allowances.
Global Financial Markets’ (GFM) net interest income
rose from both comparative periods due to higher
contributions from money market activity, while noninterest losses were incurred as wider credit spreads
reduced the mark-to-market values of trading securities
and credit-linked derivatives.
Central Treasury Unit (CTU) manages the Group’s
asset and liability interest rate positions as well as
investments of the Group’s excess liquidity. Central
Operations encompasses a range of activities from
corporate decisions and income and expenses not
attributed to other business segments. Asset
management and private banking activities are
included in this segment.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
world
Total
3rd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
693
303
398
23
265
136
176
26
23
24
29
6
50
14
35
28
17
12
14
(3)
1,048
489
652
80
Profit before tax
581
199
18
16
18
832
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
672
317
414
(8)
591
277
127
163
21
220
25
28
29
21
3
35
34
38
21
27
18
18
16
9
11
1,027
524
660
64
852
3rd Qtr 2006
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
574
254
353
9
291
95
171
27
15
19
23
(1)
21
27
23
5
11
13
14
1
912
408
584
41
Profit before tax
470
188
12
34
9
713
9 Mths 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
2,013
963
1,240
74
1,683
813
398
509
69
633
65
80
79
27
45
107
100
100
55
103
51
40
42
24
25
3,049
1,581
1,970
249
2,489
9 Mths 2006 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,662
842
1,082
54
1,374
855
272
497
71
559
35
69
58
2
44
67
67
65
(1)
114
40
35
40
8
27
2,659
1,285
1,742
134
2,118
146,606
143,238
126,499
123,895
49,937
46,819
44,868
45,630
10,045
9,137
7,792
7,606
7,631
7,265
5,131
5,427
10,515
10,589
7,242
8,695
224,734
217,048
191,532
191,253
Selected income items
1/
1/
1/
Total assets before goodwill
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
Note:
1/ Income, allowances for credit and other losses and profits exclude one-time gains/(charge)
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Singapore
Net interest income was higher than both comparative
periods as loans and deposits expanded. Fee income was
higher than both comparative periods while trading
income was lower.
Expenses fell from the previous quarter due to lower
wage and computerisation costs, but they were higher
than a year ago.
Allowances were higher due to higher charges for nonloan assets, partially offset by a net write-back in specific
allowances for loans.
Net interest income fell below comparative periods as
higher loan and deposit volumes were more than offset by
a decline in interest margins.
Non-interest income was higher than the previous quarter
due to higher stockbroking activity and demand from
corporate customers for foreign exchange hedging
products. Compared to a year ago, unit trust sales also
increased.
The increase in expenses was led by IT investment costs.
Allowances were higher than the previous quarter due to
an increase in general allowances.
Other regions
Hong Kong
The third quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 1%
from the previous quarter and 5% from a year ago.
Outside of Singapore and Hong Kong, the largest
contributions are from India, Indonesia and Greater
China.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
Gross
Less:
Specific allowances
106,161
100,475
88,080
86,673
505
544
564
546
General allowances
Net total
942
104,714
974
98,957
886
86,630
873
85,254
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
31,367
22,531
45,675
6,588
106,161
31,082
21,984
40,374
7,035
100,475
29,538
20,101
33,764
4,677
88,080
29,294
20,023
32,670
4,686
86,673
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
57,996
31,254
5,473
4,425
7,013
106,161
54,954
29,729
4,884
3,784
7,124
100,475
48,789
27,216
4,443
2,993
4,639
88,080
47,727
27,170
4,135
3,064
4,577
86,673
13,948
12,225
26,494
9,865
10,075
13,781
9,770
13,321
12,179
26,124
9,677
9,984
11,979
9,269
10,867
10,883
25,043
8,930
7,709
9,827
8,110
11,296
10,147
24,240
9,040
7,298
10,313
7,965
Others
Total (Gross)
10,003
106,161
7,942
100,475
6,711
88,080
6,374
86,673
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
41,974
28,317
20,461
15,409
106,161
39,328
27,536
19,763
13,848
100,475
35,708
24,942
15,895
11,535
88,080
35,629
25,194
15,041
10,809
86,673
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Note:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
Net customer loans expanded 23% from a year ago and
6% from the previous quarter to $104.7 billion. The growth
was broad-based across regions and was led by corporate
and SME loans.
Higher disbursements of Singapore housing loans
contributed to the increase in consumer loans.
Loans in Hong Kong rose 7% in local currency terms
during the quarter, with SME and corporate loans
leading the increase.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
1/
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
258
726
69
350
315
235
0.8
3.2
149
81
360
153
246
116
439
0.5
225
426
35
30
6
0.5
106
164
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
282
729
76
349
310
217
0.9
3.3
137
78
330
150
324
149
413
0.8
173
295
37
28
83
0.6
297
460
1,372
602
1,023
1.4
118
229
Debt securities
37
17
80
-
260
587
Contingent liabilities
Total non-performing
assets
85
5
129
-
158
2,137
1,494
624
1,232
-
124
254
307
691
95
324
294
198
1.0
3.4
127
76
356
150
396
183
336
1.2
131
224
66
23
100
1.4
185
499
1,460
625
928
1.7
106
217
36
37
15
9
66
114
-
223
327
531
1,173
1,533
649
1,108
-
115
237
30 Sep 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
30 Jun 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans
31 Dec 2006
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sep 2006
Consumer Banking
320
101
292
1.1
123
339
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (“NPL”)
732
289
198
3.7
67
147
426
186
325
1.3
120
227
98
30
95
2.1
128
396
1,576
606
910
1.8
96
216
38
32
15
9
68
126
-
218
422
541
995
1,646
630
1,104
-
105
237
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sep 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2006
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sep 2006
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
627
352
77
273
159
27
421
310
79
1.2
1.1
1.1
111
133
138
228
257
446
138
94
106
1.9
146
170
71
12
79
0.8
127
682
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
707
356
72
321
159
24
487
299
70
1.4
1.2
1.1
114
129
131
239
246
395
147
74
88
2.5
111
127
90
24
79
0.9
114
325
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
811
363
68
359
150
20
443
278
56
1.8
1.3
1.3
99
118
112
212
245
358
112
61
72
2.5
119
161
106
35
79
1.6
109
199
1,460
625
928
1.7
106
217
36
37
15
9
66
114
-
223
327
531
1,173
1,533
649
1,108
-
115
237
854
405
72
341
146
18
445
281
45
1.8
1.5
1.7
92
105
88
216
240
292
129
71
79
4.2
116
188
116
30
60
2.5
77
149
1,576
606
910
1.8
96
216
38
32
15
9
68
126
-
218
422
541
995
1,646
630
1,104
-
105
237
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
361
81
168
212
25
37
338
91
184
197
39
43
314
107
224
170
50
56
344
128
225
168
41
60
General commerce
Transportation, storage &
communications
290
29
143
12
339
34
150
11
336
25
146
12
345
26
131
12
82
11
101
19
173
47
179
48
134
60
142
61
142
65
184
75
120
1,265
65
565
143
1,372
82
602
139
1,460
79
625
145
1,576
71
606
42
119
36
9
37
85
17
5
36
37
15
9
38
32
15
9
Total non-performing assets
1,426
610
1,494
624
1,533
649
1,646
630
By loan classification
($m)
30 Sep 2007
Financial institutions, investment
& holding companies
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
SP
NPA
SP
NPA
SP
NPA
SP
878
276
272
1,426
63
275
272
610
904
273
317
1,494
73
232
319
624
939
243
351
1,533
82
216
351
649
1,081
225
340
1,646
88
202
340
630
189
32
28
249
24
37
28
89
200
47
55
302
28
45
55
128
218
66
42
326
29
48
42
119
295
57
38
390
43
36
38
117
By collateral type
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
NPA
NPA
NPA
NPA
Unsecured non-performing assets
722
731
740
732
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
410
40
8
246
454
47
41
221
556
46
38
153
657
45
41
171
1,426
1,494
1,533
1,646
Total
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
Not overdue
180 days overdue
Total
30 Sep 2007
30 June 2007
31 Dec 2006
30 Sep 2006
NPA
NPA
NPA
NPA
400
246
180
333
388
144
413
332
128
431
332
191
600
1,426
629
1,494
660
1,533
692
1,646
Including debt securities and contingent liabilities, the
amount of non-performing assets (NPAs) fell 13% from a
year ago and 5% from the previous quarter to $1.43 billion.
Non-performing loans (NPLs) fell 20% from a year ago
and 8% from the previous quarter to $1.27 billion. NPL
rates for all regions and businesses were better than the
previous quarter except for Rest of Greater China,
which was unchanged.
Cumulative allowances rose to 130% of non-performing
assets from 124% in the previous quarter and 105% a year
ago. Of the cumulative general allowances of $1.24 billion,
$37 million was set aside for CDOs with US sub-prime
exposures.
FUNDING SOURCES
($m)
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
144,185
15,360
50,721
141,272
11,898
50,080
131,373
8,537
38,787
127,541
12,389
39,060
20,311
230,577
19,641
222,891
18,675
197,372
18,096
197,086
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
78,493
28,073
24,274
13,345
144,185
79,798
25,556
23,583
12,335
141,272
71,242
24,758
23,059
12,314
131,373
68,820
22,828
23,121
12,772
127,541
52,335
15,923
71,084
4,843
52,607
15,540
69,071
4,054
47,491
14,109
66,718
3,055
44,679
13,855
66,353
2,654
144,185
141,272
131,373
127,541
1/
Customer deposits
Interbank liabilities 2/
2/
Other borrowings and liabilities
Shareholders’ funds
Total
Notes:
1/
Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
2/
Includes liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
CUSTOMER DEPOSITS
($m)
By currency
Singapore dollar
US dollar
Hong Kong dollar
Others
Total
1/
By product
Savings accounts
Current accounts
Fixed deposits
Others
Total
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 2% from the previous quarter and
13% from a year ago to $144.2 billion, with the growth led
by non-Singapore dollar fixed deposits.
Singapore-dollar deposits fell 2% during the quarter from a
decline in fixed deposits. Singapore-dollar savings
deposits were stable. Hong Kong-dollar deposits rose 5%
in local currency terms with fixed deposits accounting for
most of the increase.
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
VALUE AT RISK AND TRADING INCOME
The Group uses a Value at Risk (“VaR”) measure as one mechanism for monitoring and controlling trading risk. The VaR is
calculated using a one-day time horizon and a 99% confidence interval. The following table shows the period-end, average,
high and low VaR for the trading risk exposure of the DBSH Group for the period from 1 October 2006 to 30 September 2007.
DBS changed its trading book VaR methodology from Parametric VaR (PVaR) to Historical Simulation VaR (HSVaR) in
September 2006. The histogram below is based on HSVaR.
($m)
1 October 2006 to 30 September 2007
Average
High
Low
As at 30 Sep 2007
Total
20
13
28
6
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 October 2006 to 30 September 2007.
DBSH Group VaR for Trading Book
40
35
30
No. of Days
25
20
15
10
>29-30
>27-28
>25-26
>23-24
>21-22
>19-20
>17-18
>15-16
>13-14
>9-10
>7-8
>5-6
0
>11-12
5
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 October 2006 to 30 September 2007)
45
40
35
25
20
15
10
5
>34-36
>32-34
>30-32
>28-30
>26-28
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>8-10
>10-12
>6-8
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
>(20)-(18)
>(22)-(20)
>(24)-(22)
>(26)-(24)
>(28)-(26)
>(30)-(28)
>(32)-(30)
0
>(34)-(32)
No. of days
30
Trading income (S$ million)
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Goodwill
Total
Tier 2
Cumulative general allowances
Subordinated debts
Others
Total
Total capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier I ratio
Tier II ratio
Total (Tier I & II) ratio
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
4,138
17,879
(5,845)
16,172
4,127
17,479
(5,843)
15,763
4,042
16,556
(5,840)
14,758
8,242
11,795
(5,834)
14,203
1,170
7,254
138
8,562
1,157
7,612
119
8,888
1,033
5,038
103
6,174
1,031
5,208
54
6,293
24,734
176,533
24,651
167,830
20,932
144,086
20,496
140,250
9.2
4.8
14.0
9.4
5.3
14.7
10.2
4.3
14.5
10.1
4.5
14.6
Based on regulatory guidelines, the Group’s tier-1 fell to 9.2% from 9.4% in the previous quarter as the amount of riskweighted assets increased with a higher customer loan base.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Sep 2007
30 Jun 2007
31 Dec 2006
30 Sep 2006
423
(73)
350
406
17
423
371
11
382
417
15
432
The amount of unrealised valuation surplus for properties increased to $423 million from $406 million in the previous
quarter as market valuations improved, while the valuation of the financial investments fell due to mark-to-market losses
in financial investments resulting from current conditions in credit markets.
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
+/(-) 2nd Qtr
%
2007
9 Mths
2007
9 Mths
20061/
+/(-)
%
2,252
1,225
1,027
371
97
(49)
79
26
6,738
3,689
3,049
1,083
205
(90)
321
62
5,731
3,072
2,659
851
457
(156)
79
108
18
20
15
27
(55)
42
>100
(43)
16
1,551
4,630
3,998
16
317
32
235
41
9
16
>100
354
30
276
145
1,061
94
815
368
938
95
709
134
13
(1)
15
>100
770
625
23
805
2,338
1,876
25
Profit
Share of profits of associates
Profit before tax
767
27
794
695
18
713
10
50
11
746
25
771
2,292
78
2,370
2,122
50
2,172
8
56
9
Income tax expense
Net profit
146
648
127
586
15
11
151
620
449
1,921
391
1,781
15
8
610
38
648
552
34
586
11
12
11
560
60
620
1,787
134
1,921
1,673
108
1,781
7
24
8
3rd Qtr
2007
3rd Qtr
20061/
Income
Interest income
Interest expense
Net interest income
Net fee and commission income
Net trading income
Net income from financial instruments designated at fair value
Net income from financial investments
Other income
2,362
1,314
1,048
403
(63)
5
121
23
2,065
1,153
912
293
121
(45)
29
10
14
14
15
38
NM
NM
>100
>100
Total income
1,537
1,320
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
347
32
273
118
Total expenses
In $ millions
Attributable to:
Shareholders
Minority interests
Note:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets as at
In $ millions
30 Sep
2007
GROUP
30 Jun
31 Dec
2007
2006 2/
30 Sep
2006 1/
30 Sep
2007
COMPANY
30 Jun
31 Dec
2007
2006 2/
30 Sep
2006 1/
ASSETS
Cash and balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value though profit or loss 3/
Positive replacement values
Loans and advances to customers
Financial investments
Securities pledged
Subsidiaries
Investments in associates
Goodwill on consolidation
Properties and other fixed assets
Deferred tax assets
Other assets
8,450
16,646
30,465
20,748
10,925
103,405
21,855
2,706
666
5,843
1,511
17
7,340
11,848
14,909
28,161
21,103
9,627
96,909
23,026
2,517
643
5,843
1,524
20
6,761
11,846
12,843
25,273
16,496
8,215
85,149
22,261
2,866
603
5,840
1,481
20
4,479
5,948
13,921
28,338
16,953
7,924
84,495
23,229
3,239
575
5,833
1,549
29
5,053
TOTAL ASSETS
230,577
222,891
197,372
197,086
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 4/
Negative replacement values
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue 5/
- due within one year
- due after one year
Subordinated term debts
13,678
133,941
23,271
10,863
590
943
191
9,792
5,108
4,705
403
9,171
9,956
132,294
22,903
9,766
539
874
140
8,873
5,933
5,755
178
9,324
7,863
122,092
19,708
7,873
511
766
137
6,677
3,950
3,682
268
6,749
11,619
117,125
21,717
8,093
426
735
54
7,117
2,728
1,364
1,364
6,987
TOTAL LIABILITIES
207,548
200,602
176,326
23,029
22,289
4,138
(74)
7,751
8,496
6,736
6,744
6,927
6,854
6,736
6,744
6,927
6,854
7
6
8
8
176,601
7
6
8
8
21,046
20,485
6,729
6,738
6,919
6,846
4,127
(74)
7,449
8,139
4,042
(111)
7,182
7,562
3,971
(111)
7,024
7,212
4,138
53
2,538
4,127
53
2,558
4,042
53
2,824
3,971
52
2,823
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,311
19,641
18,675
18,096
6,729
6,738
6,919
6,846
Minority interests
2,718
2,648
2,371
2,389
-
-
-
-
TOTAL EQUITY
23,029
22,289
21,046
20,485
6,729
6,738
6,919
6,846
4.39
4.39
4.54
4.49
4.25
4.27
4.39
4.34
SHAREHOLDERS’ FUNDS
OFF BALANCE SHEET ITEMS
Contingent liabilities
Commitments
Financial derivatives
OTHER INFORMATION
Net asset value per ordinary share ($)
(i) Based on existing ordinary share capital
(ii) Assuming conversion of outstanding preference
shares to ordinary shares
13,808
13,790
12,187
11,373
90,334
93,567
86,065
80,022
1,887,740 1,818,734 1,378,916 1,407,293
Notes:
1/ Figures for 2006 have been reclassified to make them consistent with the current year’s presentation
2/ Audited
3/ Includes customer loans, interbank assets, other government securities and treasury bills, corporate debt securities and equity securities
4/ Includes customer deposits, interbank liabilities, other debt securities in issue and other financial liabilities
5/ Includes secured amount of $2,551 million as at 30 September 2007 ( 30 June 2007 : $3,953 million; 31 December 2006: $2,743 million; 30 September 2006: $2,635 million). These are mainly secured by properties
and securities
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Statement of Changes in Equity
GROUP
In $ millions
Balance at 1 January 2007
Exercise of share options
Ordinary
shares
3,976
Convertible
preference
shares
66
Share
premium
Treasury
shares
Other
reserves
Revenue
reserve
Minority
interests
Total
equity
-
(111)
7,182
7,562
2,371
21,046
(41)
(66)
96
96
Net exchange translation adjustments
(25)
Share of associates’ reserves
18
18
Cost of share-based payments
26
26
(37)
-
Draw-down of reserves upon vesting of performance
shares
37
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
- Transferred to income statement on sale
- Tax on items taken directly to or transferred from
equity
798
798
(177)
(177)
(64)
Net profit for the period
(64)
1,787
Appropriation from income statement 1/
30
134
1,921
(30)
-
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(513)
Dividends paid to minority interests
Change in minority interests
(513)
(116)
(116)
370
370
Balance at 30 September 2007
4,072
66
-
(74)
7,751
8,496
2,718
23,029
Balance at 1 January 2006
1,498
66
2,269
(117)
6,841
6,167
2,466
19,190
Exercise of share options
Effects of Companies (Amendment) Act 2005
103
7
2,304
(2,276)
110
(28)
Net exchange translation adjustments
-
(1)
(60)
(61)
Share of associates’ reserves
1
1
Cost of share-based payments
20
20
(6)
-
Draw-down of reserves upon vesting of performance
shares
6
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
269
269
- Transferred to income statement on sale
(43)
(43)
- Tax on items taken directly to or transferred from
equity
(29)
(29)
Net profit for the period
1,673
Final dividends paid for previous year
(203)
Interim dividends paid for current year
(425)
Dividends paid to minority interests
Change in minority interests
Balance at 30 September 2006
3,905
66
-
(111)
7,024
7,212
108
1,781
(203)
(425)
(120)
(120)
(5)
(5)
2,389
20,485
Note:
1/ Includes appropriation from prior year’s net profit
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Statement of Changes in Equity
COMPANY
Convertible
preference
shares
Revenue
reserve
Total equity
2,824
6,919
537
537
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(513)
(513)
In $ millions
Balance at 1 January 2007
Exercise of share options
Ordinary
shares
3,976
66
Other
reserves
Share
premium
-
53
96
96
Net profit for the period
Balance at 30 September 2007
4,072
66
-
53
2,538
6,729
Balance at 1 January 2006
1,498
66
2,269
77
2,874
6,784
Exercise of share options
Effects of Companies (Amendment) Act 2005
103
7
2,304
(2,276)
Cost of share-based payments
Net profit for the period
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 September 2006
3,905
66
-
110
(28)
-
3
577
(203)
(425)
3
577
(203)
(425)
2,823
6,846
52
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Cash Flow Statement
In $ millions
9 Mths
2007
9 Mths
20061/
Cash flows from operating activities
Profit before tax
2,370
2,172
Adjustments for non-cash items:
Allowances for credit and other losses
Depreciation of properties and other fixed assets
Share of profits of associates
Net gain on disposal of properties and other fixed assets
Net gain on disposal of financial investments
Profit before changes in operating assets & liabilities
368
94
(78)
(6)
(321)
2,427
134
95
(50)
(5)
(79)
2,267
Increase/(Decrease) in:
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss
Other liabilities including bills payable
Debt securities and borrowings
5,815
11,849
3,563
5,134
1,612
2,669
10,694
(1,106)
1,464
284
Decrease/(Increase) in:
Change in restricted balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value through profit or loss
Loans and advances to customers
Financial investments
Other assets
362
(3,640)
(5,202)
(4,012)
(18,418)
1,090
(5,105)
440
(4,460)
(6,217)
3,739
(6,991)
255
(522)
(279)
(111)
Tax paid
Net cash (used in) / generated from operating activities (1)
Cash flows from investing activities
Dividends from associates
Purchase of properties and other fixed assets
Proceeds from disposal of properties and other fixed assets
Acquisition of interest in associates
Net cash (used in) / generated from investing activities (2)
(4,804)
2,405
51
(119)
69
(4)
36
(126)
106
(5)
(3)
11
Cash flows from financing activities
Increase in share capital and share premium
Proceeds from issuance of subordinated term debts
Dividends paid to shareholders of the Company
Dividends paid to minority interests
96
3,044
(823)
(116)
110
1,428
(628)
(120)
Net cash generated from financing activities (3)
Exchange translation adjustments (4)
2,201
(25)
790
1
(2,631)
15,118
12,487
3,207
9,408
12,615
Net change in cash and cash equivalents (1)+(2)+(3)+(4)
Cash and cash equivalents at 1 January
Cash and cash equivalents at 30 Se