Presentation: 2001 - A Year of Transformation

DBS Group Holdings

FY2001 Financial Results

Presentation to Media and Analysts

2001 - A Year of Transformation

February 18, 2002

Disclaimer: The material that follows is a presentation of general background information about the Bank’s activities current at the date of thepresentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

2



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

A Year of Transformation

Implementing the strategy

3

Highlights of 2001 progress

`

Total revenue

$3,545m (2000 : $2,931m)

21%

Non-interest income

$1,288m (2000 : $892m)

45%

Net interest income

$2,257m (2000 : $2,039m)

11%

Normalized expenses

(a)

_{$1,445m (2000 : $1,246m)}

_16%

Operating profit

(b)

_{$1,804m (2000 : $1,685m)}

_7%

(a) Exclude acquisitions

(b) Exclude goodwill amortisation

4

Net interest margin

1.87% (2000 : 2.02% )

NPLs

5.7% (2000 : 6.2%)

Most ratios resilient under challenging economic

conditions

Cost-to-income

(a)

49.1% (2000 : 42.5%)

Non-interest income /

operating income

36.3% (2000 : 30.4%)

Cash ROA

0.9% (2000 : 1.3%)

Cash ROE

10.1% (2000 : 12.9%)

Loan-to-deposit

63.9% (2000 : 64.5%)

Cash EPS

89 cents (2000 : 113 cents)

5

(S$ million)

(S$ million)

Growth in operating profit offset by provisions

Net interest income 2,039 2,257 10.7

Fees and commissions 509 639 25.7

Non-interest income 892 1,288 44.5 Total revenue 2,931 3,545 20.9

Staff costs 613 866 41.1

Other operating expenses 633 876 38.5

Operating expenses 1,246 1,742 39.8 Operating profit 1,685 1,804 7.0

Goodwill amortisation - 131 NM

Provisions 54 379 606.2

Net profit attributable to members 1,389 999 (28.1) Cash net profit attributable to members 1,389 1,131 (18.6)

Net interest income 2,039 2,257 10.7

Fees and commissions 509 639 25.7

Non-interest income 892 1,288 44.5

Total revenue 2,931 3,545 20.9

Staff costs 613 866 41.1

Other operating expenses 633 876 38.5

Operating expenses 1,246 1,742 39.8

Operating profit 1,685 1,804 7.0

Goodwill amortisation - 131 NM

Provisions 54 379 606.2

Net profit attributable to members 1,389 999 (28.1)

Cash net profit attributable to members 1,389 1,131 (18.6)

6

Other operating expenses 158 291 84.0 226 28.9

Operating expenses 311 523 67.8 470 11.2

Operating profit 408 450 10.3 574 (21.6)

Goodwill amortisation - 68 NM 64 6.7

Provisions 16 87 438.2 246 (64.6)

Net profit attributable

to members 347 169 (51.4) 201 (16.1)

Cash net profit attributable

to members 347 237 (31.9) 265 (10.6)

Fees and commissions 117 214 83.2 174 23.0

Positive trends in interest income and fee

income

(S$ million)

(S$ million)

DBS

4Q00 4Q01DBS Change% 3Q01DBS Change %

Net interest income 480 707 47.3 588 20.2

Non-interest income 239 266 11.1 456 (41.7)

Total revenue 719 973 35.2 1,044 (6.8)

7

DBS half on half operating profit up 36.6%

Net interest income

Fees and commissions

Non-interest income Total revenue

Staff costs

Other operating expenses

Operating expenses Operating profit

Goodwill amortisation Provisions

Net profit attributable to members

Cash net profit attributable to members

(S$ million) (S$ million) 962 251 567 1,529 389 360 749 780 -47 630 630

1H01 2H01 _Change(%)

1,295 388 721 2,017 476 476 952 1,065 131 332 370 501 34.7 54.9 27.2 31.9 22.1 32.4 27.1 36.6 NM 606.0 (41.3) (20.4)

8

(S$ million)

962

993

1,046

1,046

989

1,295

2.00% 2.04% 2.07% 1.97%

1.78%

1.94%

1H99 2H99 1H00

2H00 1H01 2H01

Net interest income Net interest margin (gross basis)

Interest margins stabilise in second half

2,039

2,257

2000 2001

2.02%

9

Strong fee income growth

Trade finance Deposit-related Credit card

Loan-related

Investment banking Stockbroking

Fund management Others

Total

Fee-to-income ratio (%)

(S$ million)

(S$ million)

2000 2001 _Change%

75 60 33 51 98 77 62 52 509 17.3

110 94 82 81 78 73 72 50 639 18.0

45.8 55.0 147.0 59.0 (20.0) (5.9) 16.3 (3.4) 25.7

10

Expense growth on target

DBSH (excluding DHB and DBSV) (a)

Staff costs

Occupancy expenses

Technology-related expenses

Professional and consultancy fees Others

Total (excluding DHB and DBSV) DHB

DBSV

Restructuring costs Total

Cost-to-income ratio (%)

(S$ million)

(S$ million)

2000 2001 _Change%

613 147 132 73 280 1,246 -1,246 42.5 734 172 180 49 311 1,445 218 38 40 1,742 49.1 19.7 16.3 36.0 (33.1) 11.0 16.0 NM NM NM 39.8

(a) Dao Heng Bank (“DHB”), DBS Vickers (“DBSV”)

11

16

345 93

749 33

389 87

696

0 300 600 900

Managing our costs and investments

IT-related Expenses

Staff Costs

Professional & Consulting Total Operating Expenses (excl. DHB & DBSV)

7%

7% 53% 11%

1st Half 2001 2nd Half 2001

(S$ million)

12

A Year of Transformation

Implementing the strategy



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

13

Building three core businesses

Investment Banking

883 Consumer

Banking 1,528

Treasury 372

Central Operations

148

Operating Revenue 2000

(S$ million)

(S$ million)

Investment Banking

852 Consumer

Banking 1,983

Treasury 561

Central Operations

149

Operating Revenue 2001

Total Operating Revenue S$2,931 million

Total Operating Revenue S$3,545 million

52%

30%

13% 5%

56%

24%

16% 4%

14

Consumer Banking highlight -

Credit cards

Singapore

Cards in issue (‘000)

Receivables outstanding

(S$ million)

Market position

Hong Kong

Cards in issue (‘000)

Receivables outstanding

(S$ million)

Market position

359

326

#3

2000

2001

_Change

%

850

1,300

#3

450

424

#2

25

30

0

0

-NM

NM

15

Consumer Banking highlight -

Wealth management

Sales Volume

314

558

322

611 764

222

180

189 174

15

4

0 200 400 600 800 1000 1200

2H99 1H00 2H00

(a) Treasury investment products include Growth and equity-linked notes (b) Unit trusts include Horizon, Ei8ht, Up! and other DBSAM programmes

1H01

314

573

544

795

2H01

1,127

(S$ million)

Unit trusts (b)

Insurance / asset plan Treasury investment products (a)

16

Bancassurance alliance with CGNU extended

to Hong Kong

 _{10 year Bancassurance alliance with CGNU for} life and general insurance

 Sale of DBS HK’s insurance subsidiaries, DBS Kwong On Insurance and Dao Heng

Assurance, to CGNU

 _{Total proceeds of S$112 million of which:}

– _{S$71 million return of book value of}

subsidiaries

– S$30 million book gain on subsidiaries

– _{S$11 million upfront advanced payment for}

bancassurance

 _{Accelerates revenue growth in DBS HK’s wealth} management business

 Expands DBS sales channels in Hong Kong with the establishment of a specialist sales force dedicated to insurance and wealth management products

 _{Provides DBS with a dedicated bancassurance} product provider without equity investment  _{DBS retains ownership of customers and}

concentrates on distribution, leaving product manufacturing to CGNU

 _{Allows DBS to exit the Hong Kong insurance} underwriting business

17

Extending Investment Banking capabilities

Equity capital markets 8.9 -83%

Debt capital markets 32.2 36%

Syndicated loans 13.3 75%

Mergers & acquisitions 7.6 7%

Equity capital markets 8.9 -83%

Debt capital markets 32.2 36%

Syndicated loans 13.3 75%

Mergers & acquisitions 7.6 7%

Fee income 2001

(S$ million)

% Change from 2000

18

Treasury highlight - FX & securities activities

(S$ million)

(S$ million)

2000 2001 Change%

Net gains on

- Foreign exchange

- Securities and derivatives

- Singapore government securities

Net gains on

- Foreign exchange

- Securities and derivatives

- Singapore government securities

119 23 33

119 23 33

230 94 80

230 94 80

93.1 308.7 142.5

93.1 308.7 142.5

19

A Year of Transformation

Implementing the strategy



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

20

Improving the geographical balance

Singapore 80.8%

Rest of the World 4.5% Hong Kong

32.5%

Total Assets S$151.3 billion

Assets 2001

Regional 5

Countries 3.4%

Singapore 59.6% Rest of

the World 5.6% Hong Kong

9.2%

Assets 2000

Total Assets S$111.2 billion

Regional 5 Countries

21

Dao Heng’s top line improving

Net interest income 150 171 14.0

Fees and commissions 51 57 10.8

Non-interest income 75 64 (14.6)

Total revenue 225 235 4.5

Staff costs 56 57 2.0

Other operating expenses (a) _{50 74 46.6}

Operating expenses 106 131 22.9

Operating profit 118 104 (12.2)

Provisions 24 (2) NM

Net profit after tax 84 114 36.4

Net interest income 150 171 14.0

Fees and commissions 51 57 10.8

Non-interest income 75 64 (14.6)

Total revenue 225 235 4.5

Staff costs 56 57 2.0

Other operating expenses (a) _{50 74 46.6}

Operating expenses 106 131 22.9

Operating profit 118 104 (12.2)

Provisions 24 (2) NM

Net profit after tax 84 114 36.4

(S$ million)

(S$ million) _DHB

3Q01 4Q01DHB Change %

22

DBS Kwong On Bank’s operating profit

growing

(S$ million)

(S$ million) _DKOB

2000 DKOB2001 Change %

(a) Restructuring cost of S$4 million included

Net interest income 184 223 21.2

Fees and commissions 19 32 68.5

Non-interest income 43 49 13.9

Total revenue 226 271 19.8

Staff costs 79 96 20.3

Other operating expenses (a) _{49 73 50.1}

Operating expenses 128 169 31.6

Operating profit 98 103 4.4

Provisions 0.2 67 NM

Net profit after tax 84 28 (67.4)

Net interest income 184 223 21.2

Fees and commissions 19 32 68.5

Non-interest income 43 49 13.9

Total revenue 226 271 19.8

Staff costs 79 96 20.3

Other operating expenses (a) _{49 73 50.1}

Operating expenses 128 169 31.6

Operating profit 98 103 4.4

Provisions 0.2 67 NM

23

DBS Thai Danu turns S$7.1m net profit

(S$ million)

(S$ million) _DTDB

2000

% Change DTDB

2001

Net interest income 76 90 18.6

Fees and commissions 13 15 21.8

Other income 16 16 (2.5)

Non-interest income 29 31 8.0

Total revenue 105 121 15.8

Operating expenses (a) _{89 86 (2.6)}

Operating profit 16 35 118.2

Non-operating expenses 11 9 (21.5)

Provisions 23 18.9 (18.2)

Net profit after tax (529) 7.1 NM

Net interest income 76 90 18.6

Fees and commissions 13 15 21.8

Other income 16 16 (2.5)

Non-interest income 29 31 8.0

Total revenue 105 121 15.8

Operating expenses (a) _{89 86 (2.6)}

Operating profit 16 35 118.2

Non-operating expenses 11 9 (21.5)

Provisions 23 18.9 (18.2)

Net profit after tax (529) 7.1 NM

24

A Year of Transformation

Implementing the strategy



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

25

2,705 2,824

2,425 2,452

1,735 _{1,610 1,528}

642 772 1,239 1,408 _1,365 1,144 624 1,735 2,874 3,018 _3,207 3,000 1,238 1,143 _1,004 1,249 649 605 770 1,070 1,152 871 267 151 631 366 667 744 815 2.7% 11.8% 13.1% 13.0% 8.5% 12.7% 7.6% 6.2%

Asset quality improving with further decline

in NPLs to 5.7%

Dao Heng Bank

DBS Thai Danu Bank Regional 5 Countries Others

Singapore

NBk NPLs / NBk Loans (%)

5.7% 1,112 3,907 7,086 8,121 8,149 7,666

4,411 4,834 4,512

Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Dec 01

(S$ million)

26

Provision coverage improved from 52% to 60%

801 1,115 1,294 1,191 1,174 2,558 2,804 2,032 3,095 1,237 179 948 1,463 1,658 1,049 1,180 946 1,061

General Provisions (GP) Specific Provisions (SP) SP+GP / NPLs (SEC) (%) SP+GP / Unsec NPLs (%) SP+GP / NPLs (%)

980 1,894 3,147 3,852 4,286 3,978 2,286 2,643 2,719

Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Dec 01

146.5% 164.6% 119.6% 102.7% 110.6% 118.4% 114.8% 129.9% 54.7% 51.8% 51.9% 52.6% 47.4% 44.4% 48.5% 88.1% 59.9%

55.3% 63.0% 60.8% 61.4%

142.5%

64.1% 60.2% (S$ million)

Post Dao Heng consolidation

27

906 (20.1%) 2,144 (28.0%) 844 (17.5%) 546 (12.4%) 2,576 (31.6%) 358 (8.1%) 621 (7.6%) 579 (7.6%) 520 (11.5%) 435 (9.0%) 3,508 (79.5%) 4,943 (64.5%) 4,952 (60.8%) 3,086 (68.4%) 3,554 (73.5%) 13.0% 12.7%

7.6% 6.2% _5.7%

-800 200 1200 2200 3200 4200 5200 6200 7200 8200

Dec 99 Jun 00 Dec 00 Jun 01 Dec 01

NPLs down but migrating to doubtful and loss

categories

Loss Doubtful

(S$ million) Substandard

8,149

7,666

4,411 4,834 4,512

NPLs / Loans (%)

Post Dao Heng consolidation

28

Provision charge up but disproportionately

to loan growth

Provisions / RWA (%)

379 54

1,063 996

496

85 _0.08% 0.44%

1.59% 1.53% 0 400 800 1200

1996 1997 1998 1999 2000 2001

(S $ m ill io n ) (S $ m ill io n ) NPLs (%)

Provisions (S$ million)

5.7% 7.6% 13.0% 11.8% B as is P o in t C h an g e P er Y ea r ( % ) 8 10 12 14 2 1

~

~

29

Tier I 8.5 Tier I 12.2 Tier I 14.4 - 0.4 Tier II 5.6 Tier II 5.2 Tier II 4.5 1.2 1.7 1.3 1.8 2.6 -2.1 -7.5 0 5 10 15 20 25 30

35

Efficient capital management

DBS Group Holdings Consolidated Capital Adequacy Ratio

(%)

(%)

Dec

2000 Dec

2000 Hybrid Tier 1 Hybrid Tier 1 Preference Shares Preference Shares Tier 2

Sub-debtTier 2

Sub-debt 2001 Net Income 2001 Net Income Adjustments for Dao Heng/ Other Adjustments for Dao Heng/ Other Dec 2001 Dec 2001 Equity Issue Equity Issue March

March MayMay MayMay NovNov

18.9 17.4 14.1 Dec 2001 Proforma for Dao Heng 2nd tranche Dec 2001 Proforma for Dao Heng 2nd tranche Dividends Dividends RWA ExpansionRWA Expansion

30

Maintaining dividend rate for shareholders

9 9 9 14 14

9 9 16

16 16

15

32% 31%

22% 128%

23%

0 10 20 30 40 50

1997 1998 1999 2000 2001

0 70 140

Interim dividends Final dividends

Special dividends Payout (%)

31

A Year of Transformation

Implementing the strategy



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

2001 - A Year of Transformation

February 18, 2002

DBS Group Holdings

FY2001 Financial Results

27

906 (20.1%) 2,144

(28.0%)

844 (17.5%) 546

(12.4%) 2,576

(31.6%)

358 (8.1%) 621

(7.6%) 579 (7.6%)

520 (11.5%) 435

(9.0%) 3,508

(79.5%) 4,943

(64.5%) 4,952

(60.8%)

3,086 (68.4%) 3,554

(73.5%)

13.0%

12.7%

7.6%

6.2%

_5.7%

-800 200 1200 2200 3200 4200 5200 6200 7200 8200

Dec 99

Jun 00

Dec 00

Jun 01

Dec 01

NPLs down but migrating to doubtful and loss

categories

Loss

Doubtful

(S$ million)

Substandard

8,149

7,666

4,411

4,834

4,512

NPLs / Loans (%)

Post Dao Heng

consolidation

28

Provision charge up but disproportionately

to loan growth

Provisions / RWA (%)

379

54

1,063

996

496

85

_0.08% 0.44%

1.59% 1.53%

0

400

800

1200

1996

1997

1998

1999

2000

2001

(S

$

m

ill

io

n

)

(S

$

m

ill

io

n

)

NPLs (%)

Provisions (S$ million)

5.7%

7.6%

13.0%

11.8%

B as is P o in t C h an g e P er Y ea r ( % ) 8 10 12 14 2 1

~

~

29

Tier I 8.5 Tier I 12.2 Tier I 14.4 - 0.4 Tier II 5.6 Tier II 5.2 Tier II 4.5 1.2 1.7 1.3 1.8 2.6 -2.1 -7.5

0

5

10

15

20

25

30

35

Efficient capital management

DBS Group Holdings Consolidated Capital Adequacy Ratio

(%)

(%)

Dec 2000 Dec

2000 Hybrid Tier 1 Hybrid Tier 1 Preference Shares Preference Shares Tier 2 Sub-debtTier 2

Sub-debt 2001 Net Income 2001 Net Income Adjustments for Dao Heng/ Other Adjustments for Dao Heng/ Other Dec 2001 Dec 2001 Equity Issue Equity Issue March

March MayMay MayMay NovNov

18.9

17.4

14.1

Dec 2001 Proforma for Dao Heng 2nd tranche Dec 2001 Proforma for Dao Heng 2nd tranche Dividends Dividends RWA ExpansionRWA Expansion

30

Maintaining dividend rate for shareholders

9

9

9

14

14

9

9

16

16

16

15

32%

31%

22%

128%

23%

0

10

20

30

40

50

1997

1998

1999

2000

2001

0

70

140

Interim dividends

Final dividends

Special dividends

Payout (%)

31

A Year of Transformation

Implementing the strategy



Resilient operating profit



Building three core businesses



Improving the geographical balance



Strong asset quality and capitalisation

2001 - A Year of Transformation

February 18, 2002

DBS Group Holdings

FY2001 Financial Results