financial performance 3Q08
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 2008.
For the third quarter of 2008, the Directors have declared an interim one-tier tax-exempt dividend of 20
cents (third quarter 2007: 20 cents less 18% tax) for each DBSH ordinary share.
The third quarter 2008 dividend will be payable on 4 December 2008. The DBSH shares will be quoted
ex-dividend on 19 November 2008. Notice is hereby given that the Share Transfer Books and Register
of Members of the Company will be closed on 24 November 2008. 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 21 November 2008 will be registered to determine
shareholders' entitlement to the third quarter 2008 dividend. In respect of ordinary shares in the
securities accounts with The Central Depository (Pte) Limited (“CDP”), the third quarter 2008 dividend
will be paid by DBSH to CDP, which will in turn distribute the dividend entitlements to shareholders.
By order of the Board
Linda Hoon
Group Secretary
6 November 2008
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 2008
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
Other Borrowings & Liabilities
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
Amendments to FRS 39 Financial Instruments: Recognition and Measurement and
FRS 107 Financial Instruments: Disclosures – Reclassification of Financial Assets
Disclosure on Certain Financial Instruments
Confirmation by the Board
Page
2
4
6
6
7
7
8
10
12
13
17
18
18
19
20
20
21
22
23
24
25
26
26
27
28
30
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 2007, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
On 1 January 2008, the Group adopted the new or revised INT FRS, which are issued by the Accounting Standard Council
(“ASC”), that are relevant for the Group.
• INT FRS 111: FRS 102 – Group and Treasury Share Transactions
• INT FRS 114: FRS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
Arising from the recent amendments by the International Accounting Standards Board (IASB) to FRS 39 Financial Instruments:
Recognition and Measurement and FRS 107 Financial Instruments: Disclosures – Reclassification of Financial Assets, the
Group has reclassified some financial assets from the “Held for Trading” (HFT) to the “Available for Sale” (AFS) category.
Additional disclosures on these financial assets are on page 27.
The Group has also initiated a review process which could result in the reclassification of certain financial assets from the AFS
to the “Loans & Receivables” category. The financial impact of this review, should it result in any reclassification, will be
reflected in the Fourth Quarter 2008 results announcement.
Selected income statement items
($m)
Net interest income
Net fee and commission income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and other
losses
Profit before tax
Net profit
2/
One-time items
Net profit including one-time items
Selected balance sheet items ($m)
Customer loans 3/
Interbank assets 4/
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
3rd Qtr
2008
3rd Qtr
2007 1/
% chg
2nd Qtr
2008
% chg
9 Mths
2008
9 Mths
2007 1/
% chg
1,071
316
11
1,398
578
820
1,048
403
86
1,537
652
885
2
(22)
(87)
(9)
(11)
(7)
1,058
342
199
1,599
687
912
1
(8)
(94)
(13)
(16)
(10)
3,186
1,011
363
4,560
1,921
2,639
3,049
1,083
498
4,630
1,970
2,660
4
(7)
(27)
(2)
(2)
(1)
319
80
>100
56
>100
515
249
>100
522
402
(23)
379
832
648
(38)
610
(37)
(38)
39
(38)
877
668
(16)
652
(40)
(40)
44
(42)
2,189
1,673
(39)
1,634
2,489
1,929
(142)
1,787
(12)
(13)
73
(9)
127,541
29,592
260,241
166,448
235,908
20,141
104,714
32,478
230,577
144,185
207,548
20,311
22
(9)
13
15
14
(1)
118,615
30,535
248,688
158,726
224,300
20,284
8
(3)
5
5
127,541
29,592
260,241
166,448
235,908
20,141
104,714
32,478
230,577
144,185
207,548
20,311
22
(9)
13
15
14
(1)
5
(1)
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Key financial ratios (%) (excluding
one-time items) 6/
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
7/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average
loans (bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
Per share data ($)
Per basic share
– earnings excluding one-time items
and goodwill charges
– earnings
7/
– net book value
Per diluted share
– earnings excluding one-time items
and goodwill charges
– earnings
– net book value 7/
3rd Qtr
2008
3rd Qtr
2007
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
1.99
23.4
41.3
0.63
7.93
76.6
1.3
2.14
31.8
42.4
1.14
12.96
72.6
1.2
2.04
33.8
43.0
1.07
13.00
74.7
1.4
2.04
30.1
42.1
0.90
10.91
76.6
1.3
2.19
34.1
42.5
1.20
13.21
72.6
1.2
34
11
18
22
10
9.7
13.4
9.2
14.0
10.0
13.8
9.7
13.4
9.2
14.0
1.05
1.70
1.76
1.46
1.69
1.03
12.95
1.68
13.10
1.74
13.05
1.44
12.95
1.60
13.10
1.01
1.63
1.69
1.41
1.62
1.00
12.69
1.61
12.82
1.68
12.78
1.38
12.69
1.53
12.82
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ One-time items include impairment charges for Thai investment, gains on sale of office buildings in Hong Kong and allowance write-back for a Singapore property
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 book value and return on equity
NM Not Meaningful
Third-quarter net profit amounted to $402 million, 40%
lower than the previous quarter and 38% below a year
ago. Revenues fell 13% from the previous quarter to
$1.40 billion as dislocations in financial markets
affected market-related income streams. General and
specific allowances were also higher. The results
included a $70 million charge set aside for
compensation to certain customers who bought
Lehman-exposed investments.
Net interest income rose 1% from the previous quarter
to $1.07 billion as loans rose 8%, more than offsetting
the impact of a five basis point decline in interest
margins to 1.99%. Fee income outside of capital market
activities was little changed from the previous quarter
and was higher than a year ago.
Total fee income, however, fell 8% from the previous
quarter and 22% from a year ago to $316 million due to
significant declines in market-related fee income
streams. A weaker trading performance reduced other
non-interest income to $11 million from $199 million in
the previous quarter.
Partially offsetting the lower revenues was a 16%
reduction in expenses to $578 million as wage bonus
accruals fell. The cost-income ratio of 41% improved
from the 43% in the previous quarter.
The amount of non-performing loans was little changed
from the previous quarter at $1.69 billion, with the NPL
rate also little changed at 1.3%. Specific allowances for
loans, however, rose to 34 basis points from 18 basis
points in the previous quarter, with the biggest increase
due to NPLs to individuals for equity market financing.
General allowances were also increased to further
strengthen the balance sheet against increased
macroeconomic uncertainties. These additional
allowances enabled the coverage for non-asset-backed
CDOs to be raised from 6% previously to 25%.
Total cumulative allowances amounted to 123% of nonperforming assets from 116% in the previous quarter.
Return on assets was 0.63% compared to 1.14% a year
ago and 1.07% in the previous quarter. Return on
equity fell to 7.9% from 13.0% a year ago as well as the
previous quarter.
There was a separate impairment charge of $23 million
for the group’s investment in TMB Bank which, if
included, would bring net earnings to $379 million.
For the nine months, net profit excluding one-time
items fell 13% from a year ago to $1.67 billion, with
return on equity declining from 13.2% to 10.9%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2008
Average
Average
rate
balance Interest
(%)
($m)
($m)
3rd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
2nd Qtr 2008
Average
Average
rate
balance Interest
(%)
($m)
($m)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
122,205
41,233
50,841
214,279
1,254
243
528
2,025
4.08
2.35
4.13
3.76
100,608
39,693
54,344
194,645
1,405
344
613
2,362
5.54
3.44
4.47
4.81
113,462
41,293
53,628
208,383
1,154
262
519
1,935
4.09
2.54
3.89
3.73
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
162,150
40,429
202,579
582
372
954
1.43
3.66
1.87
142,616
42,880
185,496
777
537
1,314
2.16
4.97
2.81
157,807
40,799
198,606
487
390
877
1.24
3.84
1.77
1,071
1.99
1,048
2.14
1,058
2.04
Net interest
1/
income/margin
9 Mths 2008
Average balance
sheet
Average
balance
($m)
9 Mths 2007
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
115,474
40,385
52,765
208,624
3,716
763
1,628
6,107
4.30
2.52
4.12
3.91
94,823
37,005
54,155
185,983
3,975
948
1,815
6,738
5.61
3.43
4.48
4.84
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
158,151
40,242
198,393
1,742
1,179
2,921
1.47
3.91
1.97
138,882
37,789
176,671
2,277
1,412
3,689
2.19
5.00
2.79
3,186
2.04
3,049
2.19
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest income rose 1% from the previous quarter
and 2% from a year ago to $1.07 billion due to higher
asset volumes, particularly customer loans. The benefit
was partially offset by lower interest margins as asset
yields rose less than liability costs.
While customer loan yields were stable and securities
yields were higher compared to the previous quarter,
interbank assets yields declined as tenors were
shortened as part of the group’s liquidity risk
management.
Customer deposit costs rose from the previous quarter
as the deposit mix shifted towards higher-yielding
foreign currencies during the quarter. Deposit costs in
Hong Kong also rose.
For the nine months, net interest income rose 4% to
$3.19 billion as the impact of higher asset volumes was
partially offset by lower interest margins.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2008 versus 3rd Qtr 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2008 versus 2nd Qtr 2008
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
301
13
(40)
(453)
(114)
(45)
(152)
(101)
(85)
89
(27)
(3)
(20)
30
86
(20)
3
Total
274
(612)
(338)
62
7
69
Interest expense
Customer deposits
Other borrowings
Total
106
(35)
71
(302)
(130)
(432)
(196)
(165)
(361)
13
(4)
9
76
(18)
58
89
(22)
67
Net impact on interest income
203
(180)
23
53
(51)
2
Interest income
Due to change in number of days
Net Interest Income
-
11
23
13
9 Mths 2008 versus 9 Mths 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
866
87
(46)
907
(1,139)
(276)
(146)
(1,561)
(273)
(189)
(192)
(654)
Interest expense
Customer deposits
Other borrowings
Total
316
106
422
(858)
(344)
(1,202)
(542)
(238)
(780)
Net impact on interest income
485
(359)
126
Interest income
Due to change in number of days
Net Interest Income
11
137
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
31
20
61
77
13
19
38
4
35
18
316
72
57
52
66
9
20
36
10
64
17
403
(57)
(65)
17
17
44
(5)
6
(60)
(45)
6
(22)
39
25
56
82
14
22
38
9
45
12
342
120
74
169
249
38
60
107
27
120
47
1,011
183
134
150
179
26
61
98
32
179
41
1,083
(34)
(45)
13
39
46
(2)
9
(16)
(33)
15
(7)
Revenues from other fee income segments was little
changed from the previous quarter and rose 10% from a
year ago.
Net fee and commission income fell 8% from the
previous quarter and 22% from a year ago to $316
million due to significantly lower contributions from
capital market activities. Stockbroking, investment
banking and wealth management revenues decreased
21% from the previous quarter and 55% from a year
ago.
For the nine months, net fee income declined 7% to
$1.01 billion as lower contributions from capital market
activities were partially offset by stronger revenues from
other areas such as loan syndication and trade and
remittances.
OTHER NON-INTEREST INCOME
($m)
3rd Qtr
2008
3rd Qtr
2007 1/
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007 1/
% chg
Net trading (loss)/income
(281)
(63)
(>100)
111
(331)
205
NM
From trading businesses
From other businesses
Net income/(loss) from financial instruments
designated at fair value
Net income on financial investments
Net gain on fixed assets 2/
(303)
22
(47)
(16)
(>100)
NM
88
23
(367)
36
222
(17)
NM
NM
268
5
>100
26
379
(90)
NM
3
2
128
2
(98)
-
49
-
263
5
346
6
(24)
(17)
Others (include rental income)
19
14
36
13
47
31
52
Total
11
86
(87)
199
363
498
(27)
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ Exclude one-time items
NM Not Meaningful
Trading activities (including financial instruments
designated at fair value) recorded a loss of $13 million
and included net losses related to the unwinding of
Lehman-exposed investment products. The trading
results included $74 million of gains from the
reclassification of certain trading assets as available-forsale investment securities in line with recent
amendments to accounting standards.
Net income from the sale of financial investments fell to
$3 million, significantly below both comparative periods
when conditions were conducive for profit taking on
equity investments.
For the nine months, trading activities recorded a gain of
$48 million compared to a gain of $115 million a year
ago. Net income from the sale of financial investments
was also lower, falling 24% to $263 million.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
188
66
115
38
171
578
15,591
347
53
106
38
108
652
13,842
(46)
25
8
58
(11)
13
370
61
109
40
107
687
15,219
910
185
326
112
388
1,921
15,591
1,061
157
329
98
325
1,970
13,842
(14)
18
(1)
14
19
(2)
13
42
1
32
#
31
NM
37
1
113
3
94
1
20
>100
1
2
(50)
2
5
5
-
Included in the above table were:
Depreciation of properties and other
fixed assets
Director’s fees
Audit fees payable
# Amount under $500,000
NM Not Meaningful
Expenses fell 16% from the previous quarter and 11%
from a year ago to $578 million through disciplined
management of controllable expenses.
Non-staff costs rose 23% from the previous quarter and
28% from a year ago due to a $70 million charge for
compensation to certain structured investment
customers.
Staff costs fell 49% from the previous quarter and 46%
from a year ago to $188 million as bonus accruals fell.
Headcount rose 2% from the previous quarter, with all of
the increase coming from outside Singapore and Hong
Kong.
For the nine months, expenses fell 2% to $1.92 billion
mainly due to lower wage costs. The decrease was in
line with revenues, leaving the cost-income ratio little
changed at 42%.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
General allowances (GP)
129
10
>100
(31)
188
136
38
Specific allowances (SP) for loans
Singapore
Hong Kong
Other countries
106
31
58
17
28
(8)
17
19
>100
NM
>100
(11)
52
9
37
6
195
63
110
22
76
(17)
54
39
>100
NM
>100
(44)
84
42
100
35
132
37
>100
319
80
>100
56
515
249
>100
Specific allowances (SP) for securities, properties
and other assets 1/
Total
Note:
1/ Exclude one-time items
NM Not Meaningful
Specific allowances for loans rose from $52 million in the
previous quarter to $106 million. Half of the increase was
due to charges for equity financing to individuals in
Singapore and Hong Kong. Charges for SMEs in Hong
Kong and corporates in other countries also rose.
General allowances of $129 million were taken to increase
the coverage of non-asset-backed CDO investments to
25%. General allowances for loans were not taken during
the quarter as existing allowances continued to be
adequate for total loan exposures net of collateral.
Specific allowances for other assets increased from $35
million in the previous quarter to $84 million and was for
investments in debt securities issued by certain US and
European financial institutions. The amounts represented
substantially all of the exposure to these institutions.
For the nine months, total allowances more than doubled
to $515 million, with specific allowances for loans and
securities accounting for most of the increase.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
Selected income items
1/
3rd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
269
152
353
14
54
190
99
101
60
128
231
133
102
106
156
262
(40)
132
26
66
177
(40)
12
201
(76)
(58)
23
(122)
(88)
194
1,071
327
578
319
522
2nd Qtr 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
292
174
276
11
179
189
102
96
31
164
219
162
103
(6)
284
294
60
154
1
197
164
(54)
8
5
97
(100)
97
50
14
(44)
1,058
541
687
56
877
3rd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
427
182
278
5
326
195
89
92
19
173
188
134
105
82
135
254
(66)
108
1
81
95
(6)
6
68
15
(111)
156
63
(95)
102
1,048
489
652
80
832
887
487
884
31
459
568
321
291
105
493
656
454
303
177
630
881
0
418
50
415
472
(54)
33
219
166
(278)
166
(8)
(67)
26
3,186
1,374
1,921
515
2,189
1,300
501
802
19
980
590
298
270
82
536
518
514
295
161
576
670
53
361
5
368
251
4
26
68
161
(280)
211
216
(86)
(132)
3,049
1,581
1,970
249
2,489
Selected balance sheet and other
items
30 Sept 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2008
Depreciation for 3rd Qtr 2008
35,575
90,899
9
10
29,281
25,898
2
-
67,948
34,090
6
2
88,389
56,088
11
3
28,336
1,890
-
4,865
27,043
39
27
254,394
235,908
67
42
30 Jun 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2008
Depreciation for 2nd Qtr 2008
34,214
88,978
21
8
26,424
22,842
1
64,263
31,795
1
1
85,560
52,895
3
3
27,980
1,582
-
4,409
26,208
139
24
242,850
224,300
164
37
9 Mths 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
9 Mths 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
Note:
1/ Allowances for credit and other losses and profits exclude one-time items
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
31 Dec 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 4th Qtr 2007
Depreciation for 4th Qtr 2007
32,148
83,171
27
6
22,738
21,311
1
1
56,569
30,733
3
2
84,444
47,667
4
3
27,930
1,458
-
3,920
26,093
42
20
227,749
210,433
77
32
30 Sept 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2007
Depreciation for 3rd Qtr 2007
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
Consumer Banking’s (CBG) net interest income fell
from both the previous quarter and a year ago due to
lower deposit and loan margins despite higher
deposit volumes. Non-interest income was also
lower than both comparative periods from lower
wealth management sales. The increase in
expenses from both comparative periods was due to
operating costs, including a $70 million charge for
compensation to certain structured investment
customers. Allowances were higher due to specific
allowances.
Enterprise Banking’s (EB) net interest income was
stable from the previous quarter as loan growth was
offset by lower Hong Kong loan margins. Non-interest
income was little changed from the previous quarter
but rose from a year ago as fee-based activities
increased. Higher operating costs accounted for the
increase in expenses from the previous quarter and a
year ago. The increase in allowances from both
comparative periods was due to higher general
allowances and Hong Kong specific allowances.
due to higher loan volumes. Loan margins were higher
than a year ago but offset by lower deposit margins.
Non-interest income was lower than the previous
quarter due to a decline in capital market activities.
Expenses were stable compared to both earlier
periods. Higher general allowances accounted for most
of the increase in total allowances from the previous
quarter (when there had been a general allowance
write-back) while specific allowances were higher than
a year ago.
Global Financial Markets’ (GFM) non-interest income
recorded a loss from credit market activities. Expenses
fell from the previous quarter due to lower staff costs.
Central Treasury Unit (CTU) manages the Group’s
asset and liability interest rate positions as well as its
investments. Central Operations encompasses a range
of activities from corporate decisions and income and
expenses not attributed to other business segments.
Asset management and private banking activities are
included in this segment.
Corporate and Investment Banking’s (CIB) net interest
income rose from the previous quarter and a year ago
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
world
Total
696
188
286
214
394
213
109
170
62
90
86
7
65
18
13
41
21
42
17
11
35
2
15
8
14
1,071
327
578
319
522
709
275
412
11
563
214
138
175
40
137
66
17
39
2
51
38
75
44
(2)
81
31
36
17
5
45
1,058
541
687
56
877
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
Selected income items
1/
3rd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1/
2nd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1/
9 Mths 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
2,126
710
1,099
322
1,430
652
424
518
121
437
193
60
138
32
97
120
136
120
22
150
95
44
46
18
75
3,186
1,374
1,921
515
2,189
9 Mths 2007 1/
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
16,717
16,115
10,905
10,045
10,502
10,059
8,199
7,631
12,790
12,097
11,519
10,515
254,394
242,850
227,749
224,734
Total assets before goodwill
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
165,603
159,295
149,462
146,606
48,782
45,284
47,664
49,937
Note:
1/ Allowances for credit and other losses and profits exclude one-time items
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Singapore
Hong Kong
Net interest income was lower than the previous quarter
as the benefit of higher asset volumes was more than
offset by lower margins. Non-interest income was lower
than both comparative periods because of lower capital
market activities.
The third quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 7%
from a year ago and a depreciation of 3% from the
previous quarter.
Expenses declined as staff costs were lower than both
comparative periods.
Allowances rose due to an increase in general allowances
and specific allowances for both loans and investment
securities.
Net interest income was similar to the previous quarter as
the impact of higher asset volumes was offset by a
decline in margins. It was below a year ago due to lower
margins. Non-interest income was lower than both
comparative periods as a result of lower sales of wealth
management products and capital market activities.
Both staff and operating costs were lower than the
previous quarter. The increase in allowances from both
comparative periods was due to higher specific
allowances for Enterprise Banking and for margin lending
to individuals.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
Gross
Less:
Specific allowances
129,255
120,314
109,774
106,161
711
702
436
505
General allowances
Net total
1,003
127,541
997
118,615
905
108,433
942
104,714
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
34,111
27,995
60,105
7,044
129,255
33,166
25,167
54,986
6,995
120,314
31,213
22,334
48,940
7,287
109,774
31,367
22,531
45,675
6,588
106,161
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
72,622
33,405
10,123
5,915
7,190
129,255
68,056
30,679
9,542
5,062
6,975
120,314
62,019
29,141
6,371
4,737
7,506
109,774
57,996
31,254
5,473
4,425
7,013
106,161
17,108
17,445
28,843
12,588
12,878
14,695
10,685
15,417
15,906
28,039
12,303
11,854
12,499
10,697
14,469
13,004
26,306
10,042
11,169
13,919
9,758
13,948
12,225
26,494
9,865
10,075
13,781
9,770
15,013
129,255
13,599
120,314
11,107
109,774
10,003
106,161
51,387
14,958
36,429
29,900
694
29,206
29,428
2,054
27,374
18,540
3,247
15,293
129,255
46,778
13,802
32,976
27,340
644
26,696
27,871
1,475
26,396
18,325
3,109
15,216
120,314
42,675
10,597
32,078
26,012
614
25,398
25,595
1,595
24,000
15,492
2,858
12,634
109,774
41,974
9,735
32,239
28,317
783
27,534
20,461
559
19,902
15,409
1,452
13,957
106,161
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Others
Total (Gross)
By currency and fixed/variable pricing
Singapore dollar
Fixed rates
Floating or adjustable rates
Hong Kong dollar
Fixed rates
Floating or adjustable rates
US dollar
Fixed rates
Floating or adjustable rates
Others
Fixed rates
Floating or adjustable rates
Total (Gross)
Note:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
Gross customer loans rose 7% from the previous quarter,
with 2% points accounted for by the appreciation of the US
and Hong Kong currencies against the Singapore dollar
during the quarter. The growth was led by Singapore-dollar
loans to a wide range of sectors and by loans in Hong
Kong. For the nine months, gross loans rose 18%, led by
Singapore-dollar loans to corporates.
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
(%)
Consumer Banking
309
107
340
0.9
145
297
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
927
455
276
3.3
79
137
252
107
600
0.4
280
446
199
118
(160)
2.8
(21)
(38)
1,687
787
1,056
1.3
109
193
285
252
290
-
190
216
82
7
137
-
176
2,171
2,054
1,046
1,483
-
123
209
327
972
129
482
331
247
1.0
3.9
141
75
253
130
215
71
542
0.4
285
413
168
71
(64)
2.2
4
10
1,682
753
1,056
1.4
108
189
198
191
158
-
176
181
98
7
134
-
144
463
1,978
951
1,348
-
116
195
238
690
65
342
312
220
0.8
3.1
158
82
368
154
178
50
489
0.4
302
641
62
34
(41)
0.9
(10)
(13)
1,168
491
980
1.1
126
246
Debt securities
160
152
192
-
215
224
Contingent liabilities
Total non-performing
assets (NPA)
114
9
120
-
113
304
1,442
652
1,292
-
135
245
30 Sept 2008
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
30 Jun 2008
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
31 Dec 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
Note:
1/ Allowances for credit and other losses exclude one-time items
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
258
69
315
0.8
149
360
Enterprise Banking
726
350
235
3.2
81
153
Corporate and Investment
Banking
246
116
439
0.5
225
426
35
30
6
0.5
106
164
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
30 Sept 2007
Others
Total non-performing loans
(“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sept 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sept 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
531
467
437
235
223
226
338
330
124
0.8
1.4
3.8
108
119
80
213
212
139
110
56
145
1.1
182
194
142
47
119
1.2
117
242
1,687
787
1,056
1.3
109
193
285
82
252
7
290
137
-
190
176
216
2,171
2,054
1,046
1,483
-
123
209
558
437
483
219
200
273
398
301
119
0.9
1.5
4.4
110
115
81
221
217
124
90
42
131
1.0
193
221
114
19
107
1.1
111
229
1,682
753
1,056
1.4
108
189
198
98
191
7
158
134
-
176
144
181
463
1,978
951
1,348
-
116
195
533
418
80
237
174
28
414
284
87
1.0
1.5
1.0
122
109
144
244
190
463
71
41
116
0.9
221
281
66
11
79
0.5
137
849
1,168
491
980
1.1
126
246
160
114
152
9
192
120
-
215
113
224
304
1,442
652
1,292
-
135
245
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
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
485
92
190
246
28
46
453
105
202
216
41
61
336
69
152
160
19
35
361
81
168
212
25
37
General commerce
Transportation, storage &
communications
331
13
175
7
369
23
187
8
286
21
143
5
290
29
143
12
Financial institutions, investment
& holding companies
191
78
160
25
54
8
82
11
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
206
108
192
102
126
55
134
60
179
1,687
99
787
178
1,682
113
753
124
1,168
66
491
120
1,265
65
565
285
82
252
7
198
98
191
7
160
114
152
9
42
119
36
9
Total non-performing assets
2,054
1,046
1,978
951
1,442
652
1,426
610
By loan classification
($m)
30 Sept 2008
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Dec 2007
30 Sept 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,141
644
269
2,054
201
575
270
1,046
1,159
491
328
1,978
171
451
329
951
845
338
259
1,442
73
319
260
652
878
276
272
1,426
63
275
272
610
246
29
53
328
72
27
53
152
231
31
128
390
67
28
128
223
168
25
38
231
27
23
38
88
189
32
28
249
24
37
28
89
By collateral type
($m)
Unsecured non-performing assets
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
Total
30 Jun 2008
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
NPA
NPA
NPA
1,211
1,182
794
722
505
76
22
240
472
93
22
209
376
24
13
235
410
40
8
246
2,054
1,978
1,442
1,426
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Sept 2008
Not overdue
180 days overdue
Total
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
NPA
NPA
NPA
832
281
307
826
309
191
542
255
94
400
246
180
634
2,054
652
1,978
551
1,442
600
1,426
The amount of NPLs was stable from the previous
quarter at $1.69 billion, while the NPL rate declined
slightly from 1.4% to 1.3% on a larger loan base. New
NPLs due to individuals and SMEs in Hong Kong as well
as corporate loans in Rest of the World were offset by
recoveries in corporate loans in Singapore and write-offs
in SME loans in Taiwan arising from the acquisition of
Bowa.
The amount of non-performing assets rose 4% to
$2.05 billion due to an increase in non-performing
debt securities. Allowance coverage for nonperforming assets increased to 123% from 116% in
the previous quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
2/
Interbank liabilities
Other borrowings and liabilities 2/
Shareholders’ funds
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
166,448
19,616
54,036
158,726
19,921
49,757
153,572
16,481
43,057
144,185
15,360
50,721
20,141
260,241
20,284
248,688
20,481
233,591
20,311
230,577
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
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
1/
($m)
By currency and product
Singapore dollar
Fixed deposits
Savings accounts
Current accounts
Others
Hong Kong dollar
Fixed deposits
Savings accounts
Current accounts
Others
US dollar
Fixed deposits
Savings accounts
Current accounts
Others
Others
Fixed deposits
Savings accounts
Current accounts
Others
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
89,666
21,821
57,256
9,775
814
23,503
16,917
3,970
1,856
760
29,018
19,536
1,851
4,833
2,798
24,261
20,163
1,233
1,771
1,094
166,448
78,437
64,310
18,235
5,466
88,973
24,149
53,496
10,712
616
21,032
14,137
4,410
1,831
654
26,717
17,891
1,657
4,248
2,921
22,004
17,708
1,294
1,858
1,144
158,726
73,885
60,857
18,649
5,335
84,099
27,708
46,622
9,258
511
24,775
17,302
4,556
1,935
982
28,507
20,375
1,849
3,976
2,307
16,191
13,152
778
1,477
784
153,572
78,537
53,805
16,646
4,584
78,493
23,082
45,733
9,029
649
24,274
17,448
3,967
1,777
1,082
28,073
19,798
2,143
3,628
2,504
13,345
10,756
492
1,489
608
144,185
71,084
52,335
15,923
4,843
Total
Fixed deposits
Savings accounts
Current accounts
Others
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
For the nine months, customer deposits rose 8%, led by
Singapore-dollar savings accounts.
Customer deposits rose 5% from the previous quarter to
$166.4 billion. The increase was in foreign currency fixed
deposits and Singapore-dollar savings deposits. The mix
of Singapore dollar deposits shifted towards savings
accounts as fixed deposits fell.
OTHER BORROWINGS & LIABILITIES
($m)
Subordinated term debts1/
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
2/
Secured
Unsecured
Others
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
8,882
8,470
8,954
9,171
830
1,094
1,458
831
960
239
4,705
403
269
1,655
43,230
54,036
473
1,816
38,998
49,757
369
830
32,904
43,057
1,106
4,002
36,442
50,721
Notes:
1/ All subordinated term debts issued are unsecured and due after 1 year
2/ These are mainly secured by properties and securities
18
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 Group for the period from 1 October 2007 to 30 September 2008. The
Group’s trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 September 2008
Total
1 October 2007 to 30 September 2008
Average
High
Low
51
27
53
17
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 October 2007 to 30 September 2008.
DBSH Group VaR for Trading Book
25
No. of Days
20
15
10
5
>15-16
>16-17
>17-18
>18-19
>19-20
>20-21
>21-22
>22-23
>23-24
>24-25
>25-26
>26-27
>27-28
>28-29
>29-30
>30-31
>31-32
>32-33
>33-34
>34-35
>35-36
>36-37
>37-38
>38-39
>39-40
>40-41
>41-42
>42-43
>43-44
>44-45
>45-46
>46-47
>47-48
>48-49
>49-50
>50-51
>51-52
>52-53
>53-54
0
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 Oct 2007 to 30 Sep2008)
30
25
15
10
5
0
>(82)-(80)
>(80)-(78)
>(78)-(76)
>(76)-(74)
>(74)-(72)
>(72)-(70)
>(70)-(68)
>(68)-(66)
>(66)-(64)
>(64)-(62)
>(62)-(60)
>(60)-(58)
>(58)-(56)
>(56)-(54)
>(54)-(52)
>(52)-(50)
>(50)-(48)
>(48)-(46)
>(46)-(44)
>(44)-(42)
>(42)-(40)
>(40)-(38)
>(38)-(36)
>(36)-(34)
>(34)-(32)
>(32)-(30)
>(30)-(28)
>(28)-(26)
>(26)-(24)
>(24)-(22)
>(22)-(20)
>(20)-(18)
>(18)-(16)
>(16)-(14)
>(14)-(12)
>(12)-(10)
>(10)-(8)
>(8)-(6)
>(6)-(4)
>(4)-(2)
>(2)-0
>0-2
>2-4
>4-6
>6-8
>8-10
>10-12
>12-14
>14-16
>16-18
>18-20
>20-22
>22-24
>24-26
>26-28
>28-30
>30-32
>32-34
>34-36
>36-38
>38-40
>40-42
No. of days
20
Trading income (S$ million)
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Tier 1 Deductions
Eligible Tier 1
Tier 2
Loan allowances admitted as Tier 2
Subordinated debts
Revaluation surplus from equity securities
Less: Tier 2 Deductions
Total eligible capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier 1 ratio
Tier 2 ratio
Total (Tier 1 & 2) ratio
31 Dec 2007
1/
30 Sept 2007
1/
30 Sept 2008
30 Jun 2008
4,214
20,268
(6,011)
18,471
4,206
20,080
(5,987)
18,299
4,164
18,092
(5,897)
16,359
4,138
17,922
(5,888)
16,172
680
6,413
27
(117)
25,474
190,188
564
6,323
84
(102)
25,168
182,254
1,210
7,087
177
(102)
24,731
184,601
1,170
7,254
239
(101)
24,734
176,533
9.7
3.7
13.4
10.0
3.8
13.8
8.9
4.5
13.4
9.2
4.8
14.0
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
The Group’s total capital adequacy ratio decreased from 13.8% in June 2008 to 13.4% in September 2008 due mainly to an
increase in credit risk weighted assets.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
687
62
749
704
(11)
693
650
43
693
423
(73)
350
The amount of unrealised valuation surplus increased from $693 million in the previous quarter to $749 million as the
valuation surplus for financial investments rose due to an increase in general allowances.
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
3rd Qtr
2008
3rd Qtr
1/
2007
9 Mths
2008
9 Mths
1/
2007
+/(-)
%
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
2,025
954
1,071
316
(281)
268
3
21
2,362
1,314
1,048
403
(63)
5
128
16
(14)
(27)
2
(22)
(>100)
>100
(98)
31
1,935
877
1,058
342
111
26
49
31
6,107
2,921
3,186
1,011
(331)
379
263
70
6,738
3,689
3,049
1,083
205
(90)
346
37
(9)
(21)
4
(7)
NM
NM
(24)
89
Total income
1,398
1,537
(9)
1,617
4,578
4,630
(1)
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
188
42
348
342
347
32
273
118
(46)
31
27
>100
370
37
280
90
910
113
898
572
1,061
94
815
368
(14)
20
10
55
Total expenses
920
770
19
777
2,493
2,338
7
Profit
Share of profits of associates
Profit before tax
478
21
499
767
27
794
(38)
(22)
(37)
840
21
861
2,085
65
2,150
2,292
78
2,370
(9)
(17)
(9)
Income tax expense
Net profit
59
440
146
648
(60)
(32)
159
702
369
1,781
449
1,921
(18)
(7)
379
61
440
610
38
648
(38)
61
(32)
652
50
702
1,634
147
1,781
1,787
134
1,921
(9)
10
(7)
In $ millions
Attributable to:
Shareholders
Minority interests
+/(-) 2nd Qtr
%
2008
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets
In $ millions
30 Sept
2008
GROUP
30 Jun
31 Dec
2008
2007 1/
30 Sept
2007
30 Sept
2008
COMPANY
30 Jun
31 Dec
2008
2007 1/
30 Sept
2007
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 2/
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
15,044
15,000
27,331
11,575
23,007
126,893
23,996
3,218
620
5,847
1,632
41
6,037
13,593
16,001
28,164
17,278
19,313
117,844
20,779
2,129
608
5,838
1,585
26
5,530
18,564
15,433
23,304
19,543
13,119
106,344
19,182
4,115
715
5,842
1,534
25
5,871
8,450
16,646
30,465
20,748
10,925
103,405
21,855
2,706
666
5,843
1,511
17
7,340
TOTAL ASSETS
260,241
248,688
233,591
230,577
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 3/
Negative replacement values
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue
Subordinated term debts
19,200
158,340
15,161
23,535
762
885
11
7,208
1,924
8,882
19,331
150,390
15,967
18,354
1,262
938
41
7,258
2,289
8,470
15,464
145,368
18,242
12,554
380
882
172
7,218
1,199
8,954
13,678
133,941
23,271
10,863
590
943
191
9,792
5,108
9,171
TOTAL LIABILITIES
235,908
224,300
210,433
24,333
24,388
4,213
(137)
6,605
9,460
6,767
6,779
6,748
6,736
74
-
-
-
6,841
6,779
6,748
6,736
18
4
7
7
207,548
18
4
7
7
23,158
23,029
6,823
6,775
6,741
6,729
4,206
(106)
6,798
9,386
4,164
(102)
7,680
8,739
4,138
(74)
7,751
8,496
4,213
(62)
82
2,590
4,206
(31)
32
2,568
4,164
(27)
37
2,567
4,138
53
2,538
6,823
6,775
6,741
6,729
6,823
6,775
6,741
6,729
4.43
4.40
4.39
4.39
4.30
4.27
4.25
4.25
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,141
20,284
20,481
20,311
Minority interests
4,192
4,104
2,677
2,718
TOTAL EQUITY
24,333
24,388
23,158
23,029
17,063
93,129
2,005,986
16,799
89,095
1,918,487
14,656
92,305
1,816,007
13,808
90,334
1,887,740
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
Notes:
1/
Audited
2/ Includes customer loans, interbank assets, other government securities and treasury bills, corporate debt securities and equity securities
3/ Includes customer deposits, interbank liabilities, other debt securities in issue and other financial liabilities
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Statement of Changes in Equity
GROUP
In $ millions
Balance at 1 January 2008
Exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
Treasury
shares
Other
reserves
Revenue
reserve
Minority
interests
Total equity
66
(102)
7,680
8,739
2,677
23,158
(17)
(11)
43
43
Net exchange translation adjustments
6
Share of associates’ reserves
(24)
Cost of share-based payments
22
Share buyback during the period
Reclassification of reserves upon exercise of share options
(24)
22
(35)
6
(35)
(6)
-
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
(992)
(992)
- Transferred to income statement on sale
(238)
(238)
- Tax on items taken directly to or transferred from equity
173
Transfer from / (to) revenue reserve
(16)
173
16
Net profit for the period
1,634
Final dividends paid for previous year
(302)
Interim dividends paid for current year
(627)
147
1,781
(302)
(627)
Dividends paid to minority interests
(116)
(116)
Change in minority interests
1,501
1,501
Balance at 30 September 2008
4,147
66
(137)
6,605
9,460
4,192
24,333
Balance at 1 January 2007
3,976
66
(111)
7,182
7,562
2,371
21,046
(41)
(66)
Exercise of share options
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
798
798
(177)
(177)
(64)
- Tax on items taken directly to or transferred from equity
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
Balance at 30 September 2007
4,072
66
(74)
7,751
8,496
(513)
(116)
(116)
370
370
2,718
23,029
Note:
1/ Includes appropriation from prior year’s net profit
23
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Statement of Changes in Equity
COMPANY
In $ millions
Balance at 1 January 2008
Exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
66
Other
reserves
Treasury
shares
(27)
Total equity
2,567
6,741
43
43
51
Cost of share-based payments
Reclassification of reserves upon exercise of share options
37
Revenue
reserve
51
(6)
6
Net profit for the period
954
954
(304)
(304)
(35)
Share buyback during the period
(35)
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 September 2008
4,147
66
(62)
82
(627)
2,590
(627)
6,823
Balance at 1 January
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 2008.
For the third quarter of 2008, the Directors have declared an interim one-tier tax-exempt dividend of 20
cents (third quarter 2007: 20 cents less 18% tax) for each DBSH ordinary share.
The third quarter 2008 dividend will be payable on 4 December 2008. The DBSH shares will be quoted
ex-dividend on 19 November 2008. Notice is hereby given that the Share Transfer Books and Register
of Members of the Company will be closed on 24 November 2008. 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 21 November 2008 will be registered to determine
shareholders' entitlement to the third quarter 2008 dividend. In respect of ordinary shares in the
securities accounts with The Central Depository (Pte) Limited (“CDP”), the third quarter 2008 dividend
will be paid by DBSH to CDP, which will in turn distribute the dividend entitlements to shareholders.
By order of the Board
Linda Hoon
Group Secretary
6 November 2008
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 2008
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
Other Borrowings & Liabilities
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
Amendments to FRS 39 Financial Instruments: Recognition and Measurement and
FRS 107 Financial Instruments: Disclosures – Reclassification of Financial Assets
Disclosure on Certain Financial Instruments
Confirmation by the Board
Page
2
4
6
6
7
7
8
10
12
13
17
18
18
19
20
20
21
22
23
24
25
26
26
27
28
30
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 2007, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
On 1 January 2008, the Group adopted the new or revised INT FRS, which are issued by the Accounting Standard Council
(“ASC”), that are relevant for the Group.
• INT FRS 111: FRS 102 – Group and Treasury Share Transactions
• INT FRS 114: FRS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
Arising from the recent amendments by the International Accounting Standards Board (IASB) to FRS 39 Financial Instruments:
Recognition and Measurement and FRS 107 Financial Instruments: Disclosures – Reclassification of Financial Assets, the
Group has reclassified some financial assets from the “Held for Trading” (HFT) to the “Available for Sale” (AFS) category.
Additional disclosures on these financial assets are on page 27.
The Group has also initiated a review process which could result in the reclassification of certain financial assets from the AFS
to the “Loans & Receivables” category. The financial impact of this review, should it result in any reclassification, will be
reflected in the Fourth Quarter 2008 results announcement.
Selected income statement items
($m)
Net interest income
Net fee and commission income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and other
losses
Profit before tax
Net profit
2/
One-time items
Net profit including one-time items
Selected balance sheet items ($m)
Customer loans 3/
Interbank assets 4/
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
3rd Qtr
2008
3rd Qtr
2007 1/
% chg
2nd Qtr
2008
% chg
9 Mths
2008
9 Mths
2007 1/
% chg
1,071
316
11
1,398
578
820
1,048
403
86
1,537
652
885
2
(22)
(87)
(9)
(11)
(7)
1,058
342
199
1,599
687
912
1
(8)
(94)
(13)
(16)
(10)
3,186
1,011
363
4,560
1,921
2,639
3,049
1,083
498
4,630
1,970
2,660
4
(7)
(27)
(2)
(2)
(1)
319
80
>100
56
>100
515
249
>100
522
402
(23)
379
832
648
(38)
610
(37)
(38)
39
(38)
877
668
(16)
652
(40)
(40)
44
(42)
2,189
1,673
(39)
1,634
2,489
1,929
(142)
1,787
(12)
(13)
73
(9)
127,541
29,592
260,241
166,448
235,908
20,141
104,714
32,478
230,577
144,185
207,548
20,311
22
(9)
13
15
14
(1)
118,615
30,535
248,688
158,726
224,300
20,284
8
(3)
5
5
127,541
29,592
260,241
166,448
235,908
20,141
104,714
32,478
230,577
144,185
207,548
20,311
22
(9)
13
15
14
(1)
5
(1)
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Key financial ratios (%) (excluding
one-time items) 6/
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
7/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average
loans (bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
Per share data ($)
Per basic share
– earnings excluding one-time items
and goodwill charges
– earnings
7/
– net book value
Per diluted share
– earnings excluding one-time items
and goodwill charges
– earnings
– net book value 7/
3rd Qtr
2008
3rd Qtr
2007
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
1.99
23.4
41.3
0.63
7.93
76.6
1.3
2.14
31.8
42.4
1.14
12.96
72.6
1.2
2.04
33.8
43.0
1.07
13.00
74.7
1.4
2.04
30.1
42.1
0.90
10.91
76.6
1.3
2.19
34.1
42.5
1.20
13.21
72.6
1.2
34
11
18
22
10
9.7
13.4
9.2
14.0
10.0
13.8
9.7
13.4
9.2
14.0
1.05
1.70
1.76
1.46
1.69
1.03
12.95
1.68
13.10
1.74
13.05
1.44
12.95
1.60
13.10
1.01
1.63
1.69
1.41
1.62
1.00
12.69
1.61
12.82
1.68
12.78
1.38
12.69
1.53
12.82
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ One-time items include impairment charges for Thai investment, gains on sale of office buildings in Hong Kong and allowance write-back for a Singapore property
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 book value and return on equity
NM Not Meaningful
Third-quarter net profit amounted to $402 million, 40%
lower than the previous quarter and 38% below a year
ago. Revenues fell 13% from the previous quarter to
$1.40 billion as dislocations in financial markets
affected market-related income streams. General and
specific allowances were also higher. The results
included a $70 million charge set aside for
compensation to certain customers who bought
Lehman-exposed investments.
Net interest income rose 1% from the previous quarter
to $1.07 billion as loans rose 8%, more than offsetting
the impact of a five basis point decline in interest
margins to 1.99%. Fee income outside of capital market
activities was little changed from the previous quarter
and was higher than a year ago.
Total fee income, however, fell 8% from the previous
quarter and 22% from a year ago to $316 million due to
significant declines in market-related fee income
streams. A weaker trading performance reduced other
non-interest income to $11 million from $199 million in
the previous quarter.
Partially offsetting the lower revenues was a 16%
reduction in expenses to $578 million as wage bonus
accruals fell. The cost-income ratio of 41% improved
from the 43% in the previous quarter.
The amount of non-performing loans was little changed
from the previous quarter at $1.69 billion, with the NPL
rate also little changed at 1.3%. Specific allowances for
loans, however, rose to 34 basis points from 18 basis
points in the previous quarter, with the biggest increase
due to NPLs to individuals for equity market financing.
General allowances were also increased to further
strengthen the balance sheet against increased
macroeconomic uncertainties. These additional
allowances enabled the coverage for non-asset-backed
CDOs to be raised from 6% previously to 25%.
Total cumulative allowances amounted to 123% of nonperforming assets from 116% in the previous quarter.
Return on assets was 0.63% compared to 1.14% a year
ago and 1.07% in the previous quarter. Return on
equity fell to 7.9% from 13.0% a year ago as well as the
previous quarter.
There was a separate impairment charge of $23 million
for the group’s investment in TMB Bank which, if
included, would bring net earnings to $379 million.
For the nine months, net profit excluding one-time
items fell 13% from a year ago to $1.67 billion, with
return on equity declining from 13.2% to 10.9%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2008
Average
Average
rate
balance Interest
(%)
($m)
($m)
3rd Qtr 2007
Average
Average
rate
balance Interest
(%)
($m)
($m)
2nd Qtr 2008
Average
Average
rate
balance Interest
(%)
($m)
($m)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
122,205
41,233
50,841
214,279
1,254
243
528
2,025
4.08
2.35
4.13
3.76
100,608
39,693
54,344
194,645
1,405
344
613
2,362
5.54
3.44
4.47
4.81
113,462
41,293
53,628
208,383
1,154
262
519
1,935
4.09
2.54
3.89
3.73
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
162,150
40,429
202,579
582
372
954
1.43
3.66
1.87
142,616
42,880
185,496
777
537
1,314
2.16
4.97
2.81
157,807
40,799
198,606
487
390
877
1.24
3.84
1.77
1,071
1.99
1,048
2.14
1,058
2.04
Net interest
1/
income/margin
9 Mths 2008
Average balance
sheet
Average
balance
($m)
9 Mths 2007
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
115,474
40,385
52,765
208,624
3,716
763
1,628
6,107
4.30
2.52
4.12
3.91
94,823
37,005
54,155
185,983
3,975
948
1,815
6,738
5.61
3.43
4.48
4.84
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
158,151
40,242
198,393
1,742
1,179
2,921
1.47
3.91
1.97
138,882
37,789
176,671
2,277
1,412
3,689
2.19
5.00
2.79
3,186
2.04
3,049
2.19
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest income rose 1% from the previous quarter
and 2% from a year ago to $1.07 billion due to higher
asset volumes, particularly customer loans. The benefit
was partially offset by lower interest margins as asset
yields rose less than liability costs.
While customer loan yields were stable and securities
yields were higher compared to the previous quarter,
interbank assets yields declined as tenors were
shortened as part of the group’s liquidity risk
management.
Customer deposit costs rose from the previous quarter
as the deposit mix shifted towards higher-yielding
foreign currencies during the quarter. Deposit costs in
Hong Kong also rose.
For the nine months, net interest income rose 4% to
$3.19 billion as the impact of higher asset volumes was
partially offset by lower interest margins.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2008 versus 3rd Qtr 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2008 versus 2nd Qtr 2008
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
301
13
(40)
(453)
(114)
(45)
(152)
(101)
(85)
89
(27)
(3)
(20)
30
86
(20)
3
Total
274
(612)
(338)
62
7
69
Interest expense
Customer deposits
Other borrowings
Total
106
(35)
71
(302)
(130)
(432)
(196)
(165)
(361)
13
(4)
9
76
(18)
58
89
(22)
67
Net impact on interest income
203
(180)
23
53
(51)
2
Interest income
Due to change in number of days
Net Interest Income
-
11
23
13
9 Mths 2008 versus 9 Mths 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
866
87
(46)
907
(1,139)
(276)
(146)
(1,561)
(273)
(189)
(192)
(654)
Interest expense
Customer deposits
Other borrowings
Total
316
106
422
(858)
(344)
(1,202)
(542)
(238)
(780)
Net impact on interest income
485
(359)
126
Interest income
Due to change in number of days
Net Interest Income
11
137
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
31
20
61
77
13
19
38
4
35
18
316
72
57
52
66
9
20
36
10
64
17
403
(57)
(65)
17
17
44
(5)
6
(60)
(45)
6
(22)
39
25
56
82
14
22
38
9
45
12
342
120
74
169
249
38
60
107
27
120
47
1,011
183
134
150
179
26
61
98
32
179
41
1,083
(34)
(45)
13
39
46
(2)
9
(16)
(33)
15
(7)
Revenues from other fee income segments was little
changed from the previous quarter and rose 10% from a
year ago.
Net fee and commission income fell 8% from the
previous quarter and 22% from a year ago to $316
million due to significantly lower contributions from
capital market activities. Stockbroking, investment
banking and wealth management revenues decreased
21% from the previous quarter and 55% from a year
ago.
For the nine months, net fee income declined 7% to
$1.01 billion as lower contributions from capital market
activities were partially offset by stronger revenues from
other areas such as loan syndication and trade and
remittances.
OTHER NON-INTEREST INCOME
($m)
3rd Qtr
2008
3rd Qtr
2007 1/
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007 1/
% chg
Net trading (loss)/income
(281)
(63)
(>100)
111
(331)
205
NM
From trading businesses
From other businesses
Net income/(loss) from financial instruments
designated at fair value
Net income on financial investments
Net gain on fixed assets 2/
(303)
22
(47)
(16)
(>100)
NM
88
23
(367)
36
222
(17)
NM
NM
268
5
>100
26
379
(90)
NM
3
2
128
2
(98)
-
49
-
263
5
346
6
(24)
(17)
Others (include rental income)
19
14
36
13
47
31
52
Total
11
86
(87)
199
363
498
(27)
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ Exclude one-time items
NM Not Meaningful
Trading activities (including financial instruments
designated at fair value) recorded a loss of $13 million
and included net losses related to the unwinding of
Lehman-exposed investment products. The trading
results included $74 million of gains from the
reclassification of certain trading assets as available-forsale investment securities in line with recent
amendments to accounting standards.
Net income from the sale of financial investments fell to
$3 million, significantly below both comparative periods
when conditions were conducive for profit taking on
equity investments.
For the nine months, trading activities recorded a gain of
$48 million compared to a gain of $115 million a year
ago. Net income from the sale of financial investments
was also lower, falling 24% to $263 million.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
188
66
115
38
171
578
15,591
347
53
106
38
108
652
13,842
(46)
25
8
58
(11)
13
370
61
109
40
107
687
15,219
910
185
326
112
388
1,921
15,591
1,061
157
329
98
325
1,970
13,842
(14)
18
(1)
14
19
(2)
13
42
1
32
#
31
NM
37
1
113
3
94
1
20
>100
1
2
(50)
2
5
5
-
Included in the above table were:
Depreciation of properties and other
fixed assets
Director’s fees
Audit fees payable
# Amount under $500,000
NM Not Meaningful
Expenses fell 16% from the previous quarter and 11%
from a year ago to $578 million through disciplined
management of controllable expenses.
Non-staff costs rose 23% from the previous quarter and
28% from a year ago due to a $70 million charge for
compensation to certain structured investment
customers.
Staff costs fell 49% from the previous quarter and 46%
from a year ago to $188 million as bonus accruals fell.
Headcount rose 2% from the previous quarter, with all of
the increase coming from outside Singapore and Hong
Kong.
For the nine months, expenses fell 2% to $1.92 billion
mainly due to lower wage costs. The decrease was in
line with revenues, leaving the cost-income ratio little
changed at 42%.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
3rd Qtr
2008
3rd Qtr
2007
% chg
2nd Qtr
2008
9 Mths
2008
9 Mths
2007
% chg
General allowances (GP)
129
10
>100
(31)
188
136
38
Specific allowances (SP) for loans
Singapore
Hong Kong
Other countries
106
31
58
17
28
(8)
17
19
>100
NM
>100
(11)
52
9
37
6
195
63
110
22
76
(17)
54
39
>100
NM
>100
(44)
84
42
100
35
132
37
>100
319
80
>100
56
515
249
>100
Specific allowances (SP) for securities, properties
and other assets 1/
Total
Note:
1/ Exclude one-time items
NM Not Meaningful
Specific allowances for loans rose from $52 million in the
previous quarter to $106 million. Half of the increase was
due to charges for equity financing to individuals in
Singapore and Hong Kong. Charges for SMEs in Hong
Kong and corporates in other countries also rose.
General allowances of $129 million were taken to increase
the coverage of non-asset-backed CDO investments to
25%. General allowances for loans were not taken during
the quarter as existing allowances continued to be
adequate for total loan exposures net of collateral.
Specific allowances for other assets increased from $35
million in the previous quarter to $84 million and was for
investments in debt securities issued by certain US and
European financial institutions. The amounts represented
substantially all of the exposure to these institutions.
For the nine months, total allowances more than doubled
to $515 million, with specific allowances for loans and
securities accounting for most of the increase.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
Selected income items
1/
3rd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
269
152
353
14
54
190
99
101
60
128
231
133
102
106
156
262
(40)
132
26
66
177
(40)
12
201
(76)
(58)
23
(122)
(88)
194
1,071
327
578
319
522
2nd Qtr 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
292
174
276
11
179
189
102
96
31
164
219
162
103
(6)
284
294
60
154
1
197
164
(54)
8
5
97
(100)
97
50
14
(44)
1,058
541
687
56
877
3rd Qtr 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
427
182
278
5
326
195
89
92
19
173
188
134
105
82
135
254
(66)
108
1
81
95
(6)
6
68
15
(111)
156
63
(95)
102
1,048
489
652
80
832
887
487
884
31
459
568
321
291
105
493
656
454
303
177
630
881
0
418
50
415
472
(54)
33
219
166
(278)
166
(8)
(67)
26
3,186
1,374
1,921
515
2,189
1,300
501
802
19
980
590
298
270
82
536
518
514
295
161
576
670
53
361
5
368
251
4
26
68
161
(280)
211
216
(86)
(132)
3,049
1,581
1,970
249
2,489
Selected balance sheet and other
items
30 Sept 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2008
Depreciation for 3rd Qtr 2008
35,575
90,899
9
10
29,281
25,898
2
-
67,948
34,090
6
2
88,389
56,088
11
3
28,336
1,890
-
4,865
27,043
39
27
254,394
235,908
67
42
30 Jun 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2008
Depreciation for 2nd Qtr 2008
34,214
88,978
21
8
26,424
22,842
1
64,263
31,795
1
1
85,560
52,895
3
3
27,980
1,582
-
4,409
26,208
139
24
242,850
224,300
164
37
9 Mths 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
9 Mths 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
Note:
1/ Allowances for credit and other losses and profits exclude one-time items
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
31 Dec 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 4th Qtr 2007
Depreciation for 4th Qtr 2007
32,148
83,171
27
6
22,738
21,311
1
1
56,569
30,733
3
2
84,444
47,667
4
3
27,930
1,458
-
3,920
26,093
42
20
227,749
210,433
77
32
30 Sept 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 3rd Qtr 2007
Depreciation for 3rd Qtr 2007
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
Consumer Banking’s (CBG) net interest income fell
from both the previous quarter and a year ago due to
lower deposit and loan margins despite higher
deposit volumes. Non-interest income was also
lower than both comparative periods from lower
wealth management sales. The increase in
expenses from both comparative periods was due to
operating costs, including a $70 million charge for
compensation to certain structured investment
customers. Allowances were higher due to specific
allowances.
Enterprise Banking’s (EB) net interest income was
stable from the previous quarter as loan growth was
offset by lower Hong Kong loan margins. Non-interest
income was little changed from the previous quarter
but rose from a year ago as fee-based activities
increased. Higher operating costs accounted for the
increase in expenses from the previous quarter and a
year ago. The increase in allowances from both
comparative periods was due to higher general
allowances and Hong Kong specific allowances.
due to higher loan volumes. Loan margins were higher
than a year ago but offset by lower deposit margins.
Non-interest income was lower than the previous
quarter due to a decline in capital market activities.
Expenses were stable compared to both earlier
periods. Higher general allowances accounted for most
of the increase in total allowances from the previous
quarter (when there had been a general allowance
write-back) while specific allowances were higher than
a year ago.
Global Financial Markets’ (GFM) non-interest income
recorded a loss from credit market activities. Expenses
fell from the previous quarter due to lower staff costs.
Central Treasury Unit (CTU) manages the Group’s
asset and liability interest rate positions as well as its
investments. Central Operations encompasses a range
of activities from corporate decisions and income and
expenses not attributed to other business segments.
Asset management and private banking activities are
included in this segment.
Corporate and Investment Banking’s (CIB) net interest
income rose from the previous quarter and a year ago
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
world
Total
696
188
286
214
394
213
109
170
62
90
86
7
65
18
13
41
21
42
17
11
35
2
15
8
14
1,071
327
578
319
522
709
275
412
11
563
214
138
175
40
137
66
17
39
2
51
38
75
44
(2)
81
31
36
17
5
45
1,058
541
687
56
877
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
Selected income items
1/
3rd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1/
2nd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1/
9 Mths 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
2,126
710
1,099
322
1,430
652
424
518
121
437
193
60
138
32
97
120
136
120
22
150
95
44
46
18
75
3,186
1,374
1,921
515
2,189
9 Mths 2007 1/
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
16,717
16,115
10,905
10,045
10,502
10,059
8,199
7,631
12,790
12,097
11,519
10,515
254,394
242,850
227,749
224,734
Total assets before goodwill
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
165,603
159,295
149,462
146,606
48,782
45,284
47,664
49,937
Note:
1/ Allowances for credit and other losses and profits exclude one-time items
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Singapore
Hong Kong
Net interest income was lower than the previous quarter
as the benefit of higher asset volumes was more than
offset by lower margins. Non-interest income was lower
than both comparative periods because of lower capital
market activities.
The third quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 7%
from a year ago and a depreciation of 3% from the
previous quarter.
Expenses declined as staff costs were lower than both
comparative periods.
Allowances rose due to an increase in general allowances
and specific allowances for both loans and investment
securities.
Net interest income was similar to the previous quarter as
the impact of higher asset volumes was offset by a
decline in margins. It was below a year ago due to lower
margins. Non-interest income was lower than both
comparative periods as a result of lower sales of wealth
management products and capital market activities.
Both staff and operating costs were lower than the
previous quarter. The increase in allowances from both
comparative periods was due to higher specific
allowances for Enterprise Banking and for margin lending
to individuals.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
Gross
Less:
Specific allowances
129,255
120,314
109,774
106,161
711
702
436
505
General allowances
Net total
1,003
127,541
997
118,615
905
108,433
942
104,714
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
34,111
27,995
60,105
7,044
129,255
33,166
25,167
54,986
6,995
120,314
31,213
22,334
48,940
7,287
109,774
31,367
22,531
45,675
6,588
106,161
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
72,622
33,405
10,123
5,915
7,190
129,255
68,056
30,679
9,542
5,062
6,975
120,314
62,019
29,141
6,371
4,737
7,506
109,774
57,996
31,254
5,473
4,425
7,013
106,161
17,108
17,445
28,843
12,588
12,878
14,695
10,685
15,417
15,906
28,039
12,303
11,854
12,499
10,697
14,469
13,004
26,306
10,042
11,169
13,919
9,758
13,948
12,225
26,494
9,865
10,075
13,781
9,770
15,013
129,255
13,599
120,314
11,107
109,774
10,003
106,161
51,387
14,958
36,429
29,900
694
29,206
29,428
2,054
27,374
18,540
3,247
15,293
129,255
46,778
13,802
32,976
27,340
644
26,696
27,871
1,475
26,396
18,325
3,109
15,216
120,314
42,675
10,597
32,078
26,012
614
25,398
25,595
1,595
24,000
15,492
2,858
12,634
109,774
41,974
9,735
32,239
28,317
783
27,534
20,461
559
19,902
15,409
1,452
13,957
106,161
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Others
Total (Gross)
By currency and fixed/variable pricing
Singapore dollar
Fixed rates
Floating or adjustable rates
Hong Kong dollar
Fixed rates
Floating or adjustable rates
US dollar
Fixed rates
Floating or adjustable rates
Others
Fixed rates
Floating or adjustable rates
Total (Gross)
Note:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
Gross customer loans rose 7% from the previous quarter,
with 2% points accounted for by the appreciation of the US
and Hong Kong currencies against the Singapore dollar
during the quarter. The growth was led by Singapore-dollar
loans to a wide range of sectors and by loans in Hong
Kong. For the nine months, gross loans rose 18%, led by
Singapore-dollar loans to corporates.
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
(%)
Consumer Banking
309
107
340
0.9
145
297
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
927
455
276
3.3
79
137
252
107
600
0.4
280
446
199
118
(160)
2.8
(21)
(38)
1,687
787
1,056
1.3
109
193
285
252
290
-
190
216
82
7
137
-
176
2,171
2,054
1,046
1,483
-
123
209
327
972
129
482
331
247
1.0
3.9
141
75
253
130
215
71
542
0.4
285
413
168
71
(64)
2.2
4
10
1,682
753
1,056
1.4
108
189
198
191
158
-
176
181
98
7
134
-
144
463
1,978
951
1,348
-
116
195
238
690
65
342
312
220
0.8
3.1
158
82
368
154
178
50
489
0.4
302
641
62
34
(41)
0.9
(10)
(13)
1,168
491
980
1.1
126
246
Debt securities
160
152
192
-
215
224
Contingent liabilities
Total non-performing
assets (NPA)
114
9
120
-
113
304
1,442
652
1,292
-
135
245
30 Sept 2008
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
30 Jun 2008
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
31 Dec 2007
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
Note:
1/ Allowances for credit and other losses exclude one-time items
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
258
69
315
0.8
149
360
Enterprise Banking
726
350
235
3.2
81
153
Corporate and Investment
Banking
246
116
439
0.5
225
426
35
30
6
0.5
106
164
1,265
565
995
1.2
123
243
42
119
36
9
114
130
-
357
117
416
318
1,426
610
1,239
-
130
256
30 Sept 2007
Others
Total non-performing loans
(“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sept 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Sept 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
531
467
437
235
223
226
338
330
124
0.8
1.4
3.8
108
119
80
213
212
139
110
56
145
1.1
182
194
142
47
119
1.2
117
242
1,687
787
1,056
1.3
109
193
285
82
252
7
290
137
-
190
176
216
2,171
2,054
1,046
1,483
-
123
209
558
437
483
219
200
273
398
301
119
0.9
1.5
4.4
110
115
81
221
217
124
90
42
131
1.0
193
221
114
19
107
1.1
111
229
1,682
753
1,056
1.4
108
189
198
98
191
7
158
134
-
176
144
181
463
1,978
951
1,348
-
116
195
533
418
80
237
174
28
414
284
87
1.0
1.5
1.0
122
109
144
244
190
463
71
41
116
0.9
221
281
66
11
79
0.5
137
849
1,168
491
980
1.1
126
246
160
114
152
9
192
120
-
215
113
224
304
1,442
652
1,292
-
135
245
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
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
485
92
190
246
28
46
453
105
202
216
41
61
336
69
152
160
19
35
361
81
168
212
25
37
General commerce
Transportation, storage &
communications
331
13
175
7
369
23
187
8
286
21
143
5
290
29
143
12
Financial institutions, investment
& holding companies
191
78
160
25
54
8
82
11
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
206
108
192
102
126
55
134
60
179
1,687
99
787
178
1,682
113
753
124
1,168
66
491
120
1,265
65
565
285
82
252
7
198
98
191
7
160
114
152
9
42
119
36
9
Total non-performing assets
2,054
1,046
1,978
951
1,442
652
1,426
610
By loan classification
($m)
30 Sept 2008
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Dec 2007
30 Sept 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,141
644
269
2,054
201
575
270
1,046
1,159
491
328
1,978
171
451
329
951
845
338
259
1,442
73
319
260
652
878
276
272
1,426
63
275
272
610
246
29
53
328
72
27
53
152
231
31
128
390
67
28
128
223
168
25
38
231
27
23
38
88
189
32
28
249
24
37
28
89
By collateral type
($m)
Unsecured non-performing assets
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
Total
30 Jun 2008
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
NPA
NPA
NPA
1,211
1,182
794
722
505
76
22
240
472
93
22
209
376
24
13
235
410
40
8
246
2,054
1,978
1,442
1,426
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Sept 2008
Not overdue
180 days overdue
Total
30 Jun 2008
31 Dec 2007
30 Sept 2007
NPA
NPA
NPA
NPA
832
281
307
826
309
191
542
255
94
400
246
180
634
2,054
652
1,978
551
1,442
600
1,426
The amount of NPLs was stable from the previous
quarter at $1.69 billion, while the NPL rate declined
slightly from 1.4% to 1.3% on a larger loan base. New
NPLs due to individuals and SMEs in Hong Kong as well
as corporate loans in Rest of the World were offset by
recoveries in corporate loans in Singapore and write-offs
in SME loans in Taiwan arising from the acquisition of
Bowa.
The amount of non-performing assets rose 4% to
$2.05 billion due to an increase in non-performing
debt securities. Allowance coverage for nonperforming assets increased to 123% from 116% in
the previous quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
2/
Interbank liabilities
Other borrowings and liabilities 2/
Shareholders’ funds
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
166,448
19,616
54,036
158,726
19,921
49,757
153,572
16,481
43,057
144,185
15,360
50,721
20,141
260,241
20,284
248,688
20,481
233,591
20,311
230,577
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
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
1/
($m)
By currency and product
Singapore dollar
Fixed deposits
Savings accounts
Current accounts
Others
Hong Kong dollar
Fixed deposits
Savings accounts
Current accounts
Others
US dollar
Fixed deposits
Savings accounts
Current accounts
Others
Others
Fixed deposits
Savings accounts
Current accounts
Others
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
89,666
21,821
57,256
9,775
814
23,503
16,917
3,970
1,856
760
29,018
19,536
1,851
4,833
2,798
24,261
20,163
1,233
1,771
1,094
166,448
78,437
64,310
18,235
5,466
88,973
24,149
53,496
10,712
616
21,032
14,137
4,410
1,831
654
26,717
17,891
1,657
4,248
2,921
22,004
17,708
1,294
1,858
1,144
158,726
73,885
60,857
18,649
5,335
84,099
27,708
46,622
9,258
511
24,775
17,302
4,556
1,935
982
28,507
20,375
1,849
3,976
2,307
16,191
13,152
778
1,477
784
153,572
78,537
53,805
16,646
4,584
78,493
23,082
45,733
9,029
649
24,274
17,448
3,967
1,777
1,082
28,073
19,798
2,143
3,628
2,504
13,345
10,756
492
1,489
608
144,185
71,084
52,335
15,923
4,843
Total
Fixed deposits
Savings accounts
Current accounts
Others
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
For the nine months, customer deposits rose 8%, led by
Singapore-dollar savings accounts.
Customer deposits rose 5% from the previous quarter to
$166.4 billion. The increase was in foreign currency fixed
deposits and Singapore-dollar savings deposits. The mix
of Singapore dollar deposits shifted towards savings
accounts as fixed deposits fell.
OTHER BORROWINGS & LIABILITIES
($m)
Subordinated term debts1/
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
2/
Secured
Unsecured
Others
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
8,882
8,470
8,954
9,171
830
1,094
1,458
831
960
239
4,705
403
269
1,655
43,230
54,036
473
1,816
38,998
49,757
369
830
32,904
43,057
1,106
4,002
36,442
50,721
Notes:
1/ All subordinated term debts issued are unsecured and due after 1 year
2/ These are mainly secured by properties and securities
18
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 Group for the period from 1 October 2007 to 30 September 2008. The
Group’s trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 September 2008
Total
1 October 2007 to 30 September 2008
Average
High
Low
51
27
53
17
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 October 2007 to 30 September 2008.
DBSH Group VaR for Trading Book
25
No. of Days
20
15
10
5
>15-16
>16-17
>17-18
>18-19
>19-20
>20-21
>21-22
>22-23
>23-24
>24-25
>25-26
>26-27
>27-28
>28-29
>29-30
>30-31
>31-32
>32-33
>33-34
>34-35
>35-36
>36-37
>37-38
>38-39
>39-40
>40-41
>41-42
>42-43
>43-44
>44-45
>45-46
>46-47
>47-48
>48-49
>49-50
>50-51
>51-52
>52-53
>53-54
0
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 Oct 2007 to 30 Sep2008)
30
25
15
10
5
0
>(82)-(80)
>(80)-(78)
>(78)-(76)
>(76)-(74)
>(74)-(72)
>(72)-(70)
>(70)-(68)
>(68)-(66)
>(66)-(64)
>(64)-(62)
>(62)-(60)
>(60)-(58)
>(58)-(56)
>(56)-(54)
>(54)-(52)
>(52)-(50)
>(50)-(48)
>(48)-(46)
>(46)-(44)
>(44)-(42)
>(42)-(40)
>(40)-(38)
>(38)-(36)
>(36)-(34)
>(34)-(32)
>(32)-(30)
>(30)-(28)
>(28)-(26)
>(26)-(24)
>(24)-(22)
>(22)-(20)
>(20)-(18)
>(18)-(16)
>(16)-(14)
>(14)-(12)
>(12)-(10)
>(10)-(8)
>(8)-(6)
>(6)-(4)
>(4)-(2)
>(2)-0
>0-2
>2-4
>4-6
>6-8
>8-10
>10-12
>12-14
>14-16
>16-18
>18-20
>20-22
>22-24
>24-26
>26-28
>28-30
>30-32
>32-34
>34-36
>36-38
>38-40
>40-42
No. of days
20
Trading income (S$ million)
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Tier 1 Deductions
Eligible Tier 1
Tier 2
Loan allowances admitted as Tier 2
Subordinated debts
Revaluation surplus from equity securities
Less: Tier 2 Deductions
Total eligible capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier 1 ratio
Tier 2 ratio
Total (Tier 1 & 2) ratio
31 Dec 2007
1/
30 Sept 2007
1/
30 Sept 2008
30 Jun 2008
4,214
20,268
(6,011)
18,471
4,206
20,080
(5,987)
18,299
4,164
18,092
(5,897)
16,359
4,138
17,922
(5,888)
16,172
680
6,413
27
(117)
25,474
190,188
564
6,323
84
(102)
25,168
182,254
1,210
7,087
177
(102)
24,731
184,601
1,170
7,254
239
(101)
24,734
176,533
9.7
3.7
13.4
10.0
3.8
13.8
8.9
4.5
13.4
9.2
4.8
14.0
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
The Group’s total capital adequacy ratio decreased from 13.8% in June 2008 to 13.4% in September 2008 due mainly to an
increase in credit risk weighted assets.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Sept 2008
30 Jun 2008
31 Dec 2007
30 Sept 2007
687
62
749
704
(11)
693
650
43
693
423
(73)
350
The amount of unrealised valuation surplus increased from $693 million in the previous quarter to $749 million as the
valuation surplus for financial investments rose due to an increase in general allowances.
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
3rd Qtr
2008
3rd Qtr
1/
2007
9 Mths
2008
9 Mths
1/
2007
+/(-)
%
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
2,025
954
1,071
316
(281)
268
3
21
2,362
1,314
1,048
403
(63)
5
128
16
(14)
(27)
2
(22)
(>100)
>100
(98)
31
1,935
877
1,058
342
111
26
49
31
6,107
2,921
3,186
1,011
(331)
379
263
70
6,738
3,689
3,049
1,083
205
(90)
346
37
(9)
(21)
4
(7)
NM
NM
(24)
89
Total income
1,398
1,537
(9)
1,617
4,578
4,630
(1)
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
188
42
348
342
347
32
273
118
(46)
31
27
>100
370
37
280
90
910
113
898
572
1,061
94
815
368
(14)
20
10
55
Total expenses
920
770
19
777
2,493
2,338
7
Profit
Share of profits of associates
Profit before tax
478
21
499
767
27
794
(38)
(22)
(37)
840
21
861
2,085
65
2,150
2,292
78
2,370
(9)
(17)
(9)
Income tax expense
Net profit
59
440
146
648
(60)
(32)
159
702
369
1,781
449
1,921
(18)
(7)
379
61
440
610
38
648
(38)
61
(32)
652
50
702
1,634
147
1,781
1,787
134
1,921
(9)
10
(7)
In $ millions
Attributable to:
Shareholders
Minority interests
+/(-) 2nd Qtr
%
2008
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets
In $ millions
30 Sept
2008
GROUP
30 Jun
31 Dec
2008
2007 1/
30 Sept
2007
30 Sept
2008
COMPANY
30 Jun
31 Dec
2008
2007 1/
30 Sept
2007
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 2/
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
15,044
15,000
27,331
11,575
23,007
126,893
23,996
3,218
620
5,847
1,632
41
6,037
13,593
16,001
28,164
17,278
19,313
117,844
20,779
2,129
608
5,838
1,585
26
5,530
18,564
15,433
23,304
19,543
13,119
106,344
19,182
4,115
715
5,842
1,534
25
5,871
8,450
16,646
30,465
20,748
10,925
103,405
21,855
2,706
666
5,843
1,511
17
7,340
TOTAL ASSETS
260,241
248,688
233,591
230,577
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 3/
Negative replacement values
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue
Subordinated term debts
19,200
158,340
15,161
23,535
762
885
11
7,208
1,924
8,882
19,331
150,390
15,967
18,354
1,262
938
41
7,258
2,289
8,470
15,464
145,368
18,242
12,554
380
882
172
7,218
1,199
8,954
13,678
133,941
23,271
10,863
590
943
191
9,792
5,108
9,171
TOTAL LIABILITIES
235,908
224,300
210,433
24,333
24,388
4,213
(137)
6,605
9,460
6,767
6,779
6,748
6,736
74
-
-
-
6,841
6,779
6,748
6,736
18
4
7
7
207,548
18
4
7
7
23,158
23,029
6,823
6,775
6,741
6,729
4,206
(106)
6,798
9,386
4,164
(102)
7,680
8,739
4,138
(74)
7,751
8,496
4,213
(62)
82
2,590
4,206
(31)
32
2,568
4,164
(27)
37
2,567
4,138
53
2,538
6,823
6,775
6,741
6,729
6,823
6,775
6,741
6,729
4.43
4.40
4.39
4.39
4.30
4.27
4.25
4.25
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,141
20,284
20,481
20,311
Minority interests
4,192
4,104
2,677
2,718
TOTAL EQUITY
24,333
24,388
23,158
23,029
17,063
93,129
2,005,986
16,799
89,095
1,918,487
14,656
92,305
1,816,007
13,808
90,334
1,887,740
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
Notes:
1/
Audited
2/ Includes customer loans, interbank assets, other government securities and treasury bills, corporate debt securities and equity securities
3/ Includes customer deposits, interbank liabilities, other debt securities in issue and other financial liabilities
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Statement of Changes in Equity
GROUP
In $ millions
Balance at 1 January 2008
Exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
Treasury
shares
Other
reserves
Revenue
reserve
Minority
interests
Total equity
66
(102)
7,680
8,739
2,677
23,158
(17)
(11)
43
43
Net exchange translation adjustments
6
Share of associates’ reserves
(24)
Cost of share-based payments
22
Share buyback during the period
Reclassification of reserves upon exercise of share options
(24)
22
(35)
6
(35)
(6)
-
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
(992)
(992)
- Transferred to income statement on sale
(238)
(238)
- Tax on items taken directly to or transferred from equity
173
Transfer from / (to) revenue reserve
(16)
173
16
Net profit for the period
1,634
Final dividends paid for previous year
(302)
Interim dividends paid for current year
(627)
147
1,781
(302)
(627)
Dividends paid to minority interests
(116)
(116)
Change in minority interests
1,501
1,501
Balance at 30 September 2008
4,147
66
(137)
6,605
9,460
4,192
24,333
Balance at 1 January 2007
3,976
66
(111)
7,182
7,562
2,371
21,046
(41)
(66)
Exercise of share options
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
798
798
(177)
(177)
(64)
- Tax on items taken directly to or transferred from equity
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
Balance at 30 September 2007
4,072
66
(74)
7,751
8,496
(513)
(116)
(116)
370
370
2,718
23,029
Note:
1/ Includes appropriation from prior year’s net profit
23
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Statement of Changes in Equity
COMPANY
In $ millions
Balance at 1 January 2008
Exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
66
Other
reserves
Treasury
shares
(27)
Total equity
2,567
6,741
43
43
51
Cost of share-based payments
Reclassification of reserves upon exercise of share options
37
Revenue
reserve
51
(6)
6
Net profit for the period
954
954
(304)
(304)
(35)
Share buyback during the period
(35)
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 September 2008
4,147
66
(62)
82
(627)
2,590
(627)
6,823
Balance at 1 January