Presentation: Sustained Regional Growth Across Businesses

Sustained regional growth

across businesses

October 29, 2004

DBS Group Holdings

3Q 2004 Financial Results

Presentation to Media and Analysts

2

Sustained regional growth across businesses

T

One of our best quarterly earnings

T

Continued progress in regional operations

One of our best quarterly earnings

% change 2Q 2004 3Q 2004 3Q 2003 % change 651 405 1,056 226 256 482 574 110 11 350 460 (1) 9 3 7 (2) 2 4 0 55 3 3 10 (16) (2) 10 5 7 (9) 3 (89) 24 19 645 442 1,087 241 250 491 596 110 17 362 472 588 525 1,113 219 239 458 655 107 154 291 398 a (S$m)

Net interest income Non-interest income Operating income

Staff costs

Other operating expenses Operating expenses Operating profit Goodwill amortisation Provisions NPAM Cash NPAM

4

9M recurrent earnings up 64%

(S$m)

Net interest income Non-interest income Operating income

Staff costs

Other operating expenses Operating expenses Operating profit Goodwill amortisation Provisions NPAM Cash NPAM 9M 2004 9M 2003 % change 10 6 8 11 7 9 8 3 (83) 64 45 1,930 1,479 3,409 717 759 1,476 1,933 330 78 1,200 1,530 1,747 1,398 3,145 648 711 1,359 1,786 320 459 733 1,053 a

Most key operating ratios were better

9M

2004

3Q

2003

3Q

2004

a

2Q

2004

a

9M

2003

(%)

Net interest margin

1.83

1.79

1.72

1.81

1.76

Non-interest income/total income

41

38

47

43

45

Cost/income 45

46

41

43

43

GAAP ROE

9.0

9.0

8.0

10.5

6.8

Cash ROE

11.7

11.9

10.9

13.3

9.7

Loans/deposits

63

60

60

63

60

Loan + non-trading debt securities/

deposits

84

81

78

84

78

6

Interest margins highest in six quarters

(S$m) Net interest margin (%)

599 588 634 651 645

1,930 2,375

2,645

560 628

1.83 1.79

1.79 1.81

1.72 1.68

1.87 1.81

1.78 1.99

2002 2003 9M 2004

1Q 2Q 3Q 4Q 1Q 2Q 3Q

2003

2004

If DTDB had been deconsolidated, net interest income would have been $566m in 3Q03 and $627m in 2Q04. Net interest margin would have been 1.70% and 1.77% respectively.

Customer loans rose 10% from year ago (ex-DTDB)

(S$m) _{DTDB loans}

2,883 2,915

2,915

67,221

65,053

59,940 61,019

61,420 62,429 2,774

3,275

Jun Sep Dec Mar Jun Sep

3%

62,714 63,902

64,335 65,344

68,328

2003 2004

4%

2%

8

Non-interest income boosted by better treasury

income and wealth management revenue in 3Q

548

852

627

275

183 241 ₁₅₃ 342 ₁₂₁

213 164 31 44 13 21 25 28 13 88 87 60 797 884 247 240 277 251 259 160 764 442 405 632 425 525 424 448 41 58 51 40 43 47 43 43 36 38 44 50 0 300 600 900 1200 1500

2002 2003 9M 2004

1Q 2Q 3Q 4Q 1Q 2Q 3Q

Dividend & rental Other income Fee income

(S$m)

Non-interest income / total income (%)

b 2003 2004 1,405 1,823 b 1,479 b b 35 a a

(a) Excluding one-time gains of $96m (b) Excluding one-time gains of $497m

1,068 1,078 1,224 ₈₉₁

710

1,396

4,824

4,199

1,047 1,004

1,370 1,403 1,515

1,168 1,516

1,061 775

880 3,982 2,826

3,039 1,552

379 65

453

2,226 8,806

2,059 2,739

2,481 2,438

2,065 1,822

7,025

4,434

2,005

1998 1999 2000 2001 2002 2003 9M 2004

1Q 2Q 3Q 4Q 1Q 2Q 3Q

Singapore Hong Kong

(S$m)

Retail wealth management sales picked up in 3Q

10

Treasury income better than 2Q04

T

Better Treasury non-interest income compared to 2Q04 from higher

trading gains

T

Treasury non-interest income lower compared to favourable 3Q03 base

T

DEaR returned to more normal levels after temporary rise at end-2Q04

1 Jul 2003 to 30 Jun 2004 1 Oct 2003 to

30 Sep 2004

Average DEaR

DEaR as at 30 Sep 2004

(S$m)

26.1 6.9 4.6 (13.3) 24.3 Interest rate

FX Equity

Diversification effect Total

27.2 6.0 5.2 (13.3) 25.1

28.6 3.4 6.2 (11.6) 26.6

Revenues for most core activities rose

Change

Consumer Banking

Enterprise Banking

Investment Banking

Treasury & Markets Funding Portfolio

Central Operations a

Total

3Q 2004 9M

2004 90 362 156 190 115 200 1,113 Change 3Q 2003 Total T&M 1,050 458 501 456 3,144 205 679 406 273 9M 2003 395 184 176 102 90 140 1,087 192 (13) 0 317 325 (89) 52 Revenue by businesses (S$m)

33 1,165 115

28 549 91

(14) 541 40

(13) 642 (37)

(60) 512 56

12

Cost-income ratio stable at 45% as expenses

kept in line with business growth

1,476

491 482

503 482

458 459

442

31 38

40 46

41 47

42 45

46

45 43

44

2002 2003 9M 2004

1Q 2Q 3Q 4Q 1Q 2Q 3Q

Cost/Income (%)

b

(S$m)

1,851

2003 2004

1,841

b

46

a

Annualised cost / average assets (%) 1.17

1.22 1.17 1.16 1.17 1.15 1.21 1.20 1.12 1.18

(a) Excluding one-time gains of $96m in 2002

Sustained regional growth across businesses

T

One of our best quarterly earnings

T

Continued progress in regional operations

14

DBS Hong Kong’s net profit up 14%

% change 2Q 2004 3Q 2004 3Q 2003 % change 212 95 307 123 184 28 140 (4) (1) (3) 6 (9) (25) (6) 3 (16) (4) 10 (12) (59) 14 204 94 298 130 168 21 131 197 112 309 118 191 51 115 (S$m)

Net interest income Non-interest income Operating income Operating expenses Operating profit Provisions

Net profit after taxation

9M earnings up 45%

9M 2004

9M 2003

% change (S$m)

Net interest income Non-interest income Operating income Operating expenses Operating profit Provisions

Net profit after taxation

630 298 928 377 551 74 421

582 276 858 353 505 152 291

8 8 8 7 9 (52) 45

16

DBS HK’s ratios remain better than group average

3Q

2004

9M

2004

9M

2003

2Q

2004

3Q

2003

(%)

Net interest margin

2.28

2.45

2.34

2.40

2.36

Non-interest income/total income

32

31

36

32

32

Cost/income 44

40

38

41

41

ROE 13.8

15.4

14.3

15.4

11.4

ROA 1.39

1.52

1.31

1.52

1.12

Loans/deposits 81

83

75

81

75

Regional contributions growing faster than group

average

2003 2004

9M revenues

Region and rest of world a

Hong Kong b

Singapore c

Total

145 987 1,913 3,045

(a) Excluding DTDB in all periods

YoY change (%) Amount (S$m)

178 1,039 2,122 3,339

23 5 11 10

51 327 650 1,028

80 468 956 1,504

57 43 47 46 9M cash profit

Region and rest of world a

Hong Kong b

Singapore c

18

Sustained regional growth across businesses

T

One of our best quarterly earnings

T

Continued progress in regional operations

NPLs at lowest level since 1997

Doubtful Substandard Loss 2.6 3.0 4.6 5.2 6.1 5.7 11.8 5.9 5.9 5.2 5.7 7.6 13.0 0 2500 5000 7500

1998 1999 2000 2001 2002 2003 Mar Jun Sep Dec Mar Jun Sep 8,149

NPL rate (%)

7,086 63% 32% 5% 54% 13% 33% 4,411 82% 6% 12% 4,512 4,224 76% 6% 18% 74% 6% 20% 73% 5% 22% 3,780 (S$m) 4,133 74% 6% 20% 4,163 4,143 3,359 73% 7% 20% 71% 8% 21% 75% 6% 19% 73% 5% 22% 3,780 2,182 72% 9% 19% 2003 2004 1,934 70% 9% 21%

20

NPLs fell 11% over 2Q04 as recoveries accelerated

2Q 2004

3Q 2003

3Q 2004

NPLs at start of period

2,182

4,163

3,359

New NPLs

114

218

99

Net recoveries of existing NPLs

(283)

(163)

(229)

Write-offs

(79)

(75)

(100)

DTDB deconsolidation

-

-

(947)

NPLs at end of period

1,934

4,143

2,182

Provision coverage of 91% highest since 1997

3,095

1,237 1,658 1,511 1,323 1,544

794 715

1,049

1,061

989 _1,064 1,061

1,025 _1,037 1,191

1,752 1,819

2,605 2,387

2,500 2,719

2,286

0 1000 2000 3000 4000 5000

1999 2000 2001 2002 2003 Sep

2003

Jun 2004

Sep 2004

GP SP 4,286

(S$m)

Coverage ratios (%)

SP+GP / Unsec NPLs 118 130 143 121 124 122 156 183 SP+GP / NPLs 53 52 60 59 63 63 83 91

22

Specific provision write-backs greater than charges

2Q 2004

3Q 2003

3Q 2004

Add charges for

New NPLs

46

84

39

Existing NPLs

28

79

47

74

163

86

Subtract charges for

Loan upgrading

3

2

14

Settlements 67

34

42

Recoveries

7

6

7

77

42

63

Total SP charges

(3)

121

24

Capital adequacy ratios maintained

12.2

10.5 _{9.8 9.7} 10.5 10.7 10.4 11.6 11.8

5.2 4.6 _{4.7 4.5} 4.7 4.6 4.5 _4.1 4.0 3.6

10.5 10.3

5.2

15.4 15.6

14.5 15.2

15.1 15.2

14.2 14.5

15.1 15.5

17.4

0 4 8 12 16 20 24 28

2001 2002 2003 Mar Jun Sep Dec Mar Mar Jun Sep

Tier-1 CAR (%) Tier-2 CAR (%)

a a

2003 2004

a

Group capital (S$bn)

Tier-1 capital 10.5 8.4 9.6 8.9 9.1 9.5 9.6 10.2 10.2 11.2 11.5 RWA 85.9 81.2 92.1 90.8 93.9 90.5 92.1 95.5 97.8 96.6 97.5

24

Sustained regional growth across businesses

T

One of our best quarterly earnings

T

Continued progress in regional operations

Sustained regional growth

across businesses

October 29, 2004

DBS Group Holdings

3Q 2004 Financial Results

Presentation to Media and Analysts

NPLs fell 11% over 2Q04 as recoveries accelerated

2Q 2004 3Q 2003

3Q 2004

NPLs at start of period 2,182 4,163 3,359

New NPLs 114 218 99

Net recoveries of existing NPLs (283) (163) (229)

Write-offs (79) (75) (100)

DTDB deconsolidation - - (947) NPLs at end of period 1,934 4,143 2,182

Provision coverage of 91% highest since 1997

3,095

1,237 1,658 1,511 1,323 1,544

794 715

1,049

1,061

989 _1,064 1,061

1,025 _1,037 1,191 1,752 1,819 2,605 2,387 2,500 2,719 2,286 0 1000 2000 3000 4000 5000

1999 2000 2001 2002 2003 Sep 2003 Jun 2004 Sep 2004 GP SP 4,286 (S$m)

Coverage ratios (%)

Specific provision write-backs greater than charges

2Q 2004 3Q 2003

3Q 2004

Add charges for

New NPLs 46 84 39

Existing NPLs 28 79 47

74 163 86

Subtract charges for

Loan upgrading 3 2 14

Settlements 67 34 42

Recoveries 7 6 7

77 42 63

Total SP charges (3) 121 24

Capital adequacy ratios maintained

12.2

10.5 _{9.8 9.7} 10.5 10.7 10.4 11.6 11.8

5.2 4.6 _{4.7 4.5} 4.7 4.6 4.5 _4.1 4.0 3.6

10.5 10.3 5.2 15.4 15.6 14.5 15.2 15.1 15.2 14.2 14.5 15.1 15.5 17.4 0 4 8 12 16 20 24 28

2001 2002 2003 Mar Jun Sep Dec Mar Mar Jun Sep

Tier-1 CAR (%) Tier-2 CAR (%)

a a

2003 2004

a

Group capital (S$bn)

Sustained regional growth across businesses

T One of our best quarterly earnings

T Continued progress in regional operations

Sustained regional growth

across businesses

October 29, 2004

DBS Group Holdings

3Q 2004 Financial Results