financial performance 2Q08
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 second quarter ended 30 June 2008.
For the second quarter of 2008, the Directors have declared an interim one-tier tax-exempt dividend of 10
cents (second quarter 2007: 10 cents less 18% tax) for each DBSH non-voting convertible preference
share (“CPS”) and each DBSH non-voting redeemable CPS, and an interim one-tier tax-exempt dividend
of 20 cents (second quarter 2007: 20 cents less 18% tax) for each DBSH ordinary share.
The second quarter 2008 dividend will be payable on 3 September 2008. The DBSH shares will be
quoted ex-dividend on 19 August 2008. Notice is hereby given that the Share Transfer Books and
Register of Members of the Company will be closed on 22 August 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 August 2008 will be registered to
determine shareholders' entitlement to the second quarter 2008 dividend. In respect of ordinary shares
in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the second 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
Heng Lee Cheng (Ms)
Group Secretary
7 August 2008
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Second Quarter ended
30 June 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
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
29
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
Selected income statement items ($m)
Net interest income
Net fee and commission income
Net trading income/(loss)
Net income/(loss) from financial instruments
designated at fair value
Net income from financial investments
Other income
Total income
2nd Qtr
2008
2nd Qtr
2007 1/
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007 1/
% chg
1,058
342
111
1,027
371
97
3
(8)
14
1,057
2,115
695
(50)
2,001
680
268
6
2
NM
353
(161)
26
(49)
NM
85
111
(95)
NM
49
13
1,599
94
11
1,551
(48)
18
3
211
18
1,563
260
31
3,162
218
21
3,093
19
48
2
Less: Expenses
687
660
4
656
1,343
1,318
2
Profit before allowances
912
891
2
907
1,819
1,775
2
Less: Allowances for credit and other losses
56
64
(13)
140
196
169
16
Share of profits of associates
21
25
(16)
23
44
51
(14)
Profit before tax
Net profit attributable to shareholders
(Net profit)
877
852
3
790
1,667
1,657
1
668
664
1
603
1,271
1,281
(1)
Add: One-time items 2/
(16)
(104)
85
-
(16)
(104)
85
Net profit including one-time items
652
560
16
603
1,255
1,177
7
118,615
30,535
248,688
158,726
224,300
20,284
98,957
30,858
222,891
141,272
200,602
19,641
20
(1)
12
12
12
3
114,227
28,606
251,453
157,379
227,996
20,850
118,615
30,535
248,688
158,726
224,300
20,284
98,957
30,858
222,891
141,272
200,602
19,641
20
(1)
12
12
12
3
2.04
33.8
43.0
1.07
13.00
74.7
1.4
2.21
33.8
42.6
1.23
13.60
70.1
1.4
2.09
32.4
42.0
0.99
11.61
72.6
1.0
2.07
33.1
42.5
1.05
12.41
74.7
1.4
2.21
35.3
42.6
1.22
13.41
70.1
1.4
18
19
13
16
10
10.0
13.8
9.4
14.7
9.2
13.4
10.0
13.8
9.4
14.7
Selected balance sheet items ($m)
3/
Customer loans
4/
Interbank assets
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios (%) (excluding one6/
time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
7/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
(bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
– net book value 7/
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
7/
– net book value
2nd Qtr
2008
2nd Qtr
2007
1.76
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
1.76
1.58
1.67
1.69
1.74
13.05
1.69
12.66
1.58
13.43
1.66
13.05
1.63
12.66
1.69
1.69
1.52
1.61
1.63
1.68
12.78
1.63
12.45
1.52
13.15
1.60
12.78
1.56
12.45
% chg
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ One-time items include gains on sale of office buildings in Hong Kong, impairment charges for Thai investment 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
Second-quarter net profit of $668 million was 1% above
a year ago. Revenues were sustained and cost
pressures managed amid a lower interest rate
environment and subdued capital markets. Compared
to the previous quarter, net profit was 11% higher as
trading income recovered and total allowances
declined.
Bowa Commercial Bank (Bowa) was consolidated from
24 May 2008. The consolidation had little impact on the
Group’s second quarter results except for certain
balance sheet items.
Interest income rose 3% from a year ago to $1.06
billion, unchanged from the previous quarter. Although
loans continued to grow during the quarter, the impact
was offset by a decline in interest margins. Lower
stockbroking and investment banking activities
contributed to a fall in net fee income of 8% from a year
ago and 3% from the previous quarter to $342 million.
Trading performance improved during the quarter,
rising to $111 million from $97 million a year ago and
compared to a loss of $161 million in the previous
quarter. The improvement in trading income was offset
by lower net income from the sale of financial
investments.
The cost-income ratio of 43% was similar to a year ago
and slightly higher than the 42% in the previous quarter.
Compared to the previous quarter, expenses grew 5%
to $687 million.
Excluding Bowa, the non-performing loan (NPL) rate
rose slightly from 1.0% in the previous quarter to 1.1%,
but remained below the 1.4% a year ago. Specific loan
allowances rose to 18 basis points of loans compared
with 13 basis points in the previous quarter, but was
little changed from the 19 basis points a year ago. Total
allowances were lower than both comparative periods.
Allowances for loans continued to provide adequate
coverage for total loan exposures net of collateral.
Including Bowa, the NPL rate increased to 1.4%. There
was no allowance charge in the second quarter for
Bowa as allowances amounting to 67% of its NPLs had
already been set aside prior to its consolidation. With
the consolidation of Bowa, total cumulative allowances
amounted to 116% of non-performing assets and 195%
of unsecured non-performing assets.
Return on assets was 1.07% compared to 1.23% a year
ago and 0.99% in the previous quarter. Return on
equity of 13.0% was below the 13.6% a year ago but
improved from 11.6% in the previous quarter.
There was a separate one-time charge of $16 million
comprising a $34 million impairment charge for the
group’s investment in TMB Bank in Thailand and a gain
of $18 million from the sale of office buildings in Hong
Kong. Including these non-operating items, net profit for
the second quarter was $652 million.
For the first half, net profit excluding one-time items
fell 1% from a year ago to $1.27 billion, with return on
equity declining from 13.4% to 12.4%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2008
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2007
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2008
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
113,462
41,293
53,628
208,383
1,154
262
519
1,935
4.09
2.54
3.89
3.73
94,742
36,341
55,368
186,451
1,322
303
627
2,252
5.60
3.35
4.54
4.85
111,027
38,219
54,256
203,502
1,308
258
581
2,147
4.74
2.72
4.31
4.24
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
157,807
40,799
198,606
487
390
877
1.24
3.84
1.77
139,705
36,900
176,605
754
471
1,225
2.17
5.12
2.78
154,445
39,979
194,424
673
417
1,090
1.75
4.19
2.26
1,058
2.04
1,027
2.21
1,057
2.09
Net interest
income/margin 1/
Average balance
sheet
1st Half 2008
1st Half 2007
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
112,002
39,955
53,689
205,646
2,462
520
1,100
4,082
4.42
2.61
4.12
3.99
92,108
35,880
54,005
181,993
2,570
604
1,202
4,376
5.63
3.40
4.49
4.85
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
155,947
40,364
196,311
1,160
807
1,967
1.50
4.02
2.01
137,089
35,447
172,536
1,500
875
2,375
2.21
4.98
2.78
2,115
2.07
2,001
2.21
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
The 3% increase in net interest income from a year ago
to $1.06 billion was due to an increase in asset
volumes, particularly customer loans. The benefit was
partially offset by a 17 basis point decline in net interest
margins to 2.04% as interest spreads in both Singapore
and Hong Kong were lower.
Compared to the previous quarter, net interest income
was little changed as a rise in asset volumes was offset
by a five basis point decline in interest margins. Interest
margins in Hong Kong increased slightly but fell in
Singapore as asset yields for corporate loans declined.
Funding costs also fell, but at a slower pace than asset
yields.
For the first half, net interest income rose 6% to $2.12
billion as the benefit of higher asset volumes was partially
offset by lower interest margins.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2008 versus 2nd Qtr 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
2nd Qtr 2008 versus 1st Qtr 2008
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
261
41
(20)
282
(429)
(82)
(88)
(599)
(168)
(41)
(108)
(317)
28
21
(7)
42
(182)
(17)
(55)
(254)
(154)
4
(62)
(212)
Interest expense
Customer deposits
Other borrowings
Total
98
66
164
(365)
(147)
(512)
(267)
(81)
(348)
15
9
24
(201)
(36)
(237)
(186)
(27)
(213)
Net impact on interest income
118
(87)
31
18
(17)
1
Volume
Rate
Net
change
Interest income
Due to change in number of days
Net Interest Income
-
-
31
1
1st Half 2008 versus 1st Half 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
555
69
(7)
617
(678)
(157)
(100)
(935)
(123)
(88)
(107)
(318)
Interest expense
Customer deposits
Other borrowings
Total
206
146
352
(553)
(219)
(772)
(347)
(73)
(420)
Net impact on interest income
265
(163)
102
Interest income
Due to change in number of days
Net Interest Income
12
114
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
39
25
56
82
14
22
38
9
45
12
342
58
48
50
55
9
22
35
13
68
13
371
(33)
(48)
12
49
56
9
(31)
(34)
(8)
(8)
50
29
52
90
11
19
31
14
40
17
353
89
54
108
172
25
41
69
23
85
29
695
111
77
98
113
17
41
62
22
115
24
680
(20)
(30)
10
52
47
11
5
(26)
21
2
investment banking fees were lower. Contributions from
loan related activities declined from a strong previous
quarter.
Net fee and commission income fell 8% from a year ago
to $342 million as subdued capital markets saw lower
contributions from stockbroking, investment banking and
wealth management. These declines were partially
offset by higher contributions from trade and
remittances and loan related activities.
For the first half, net fee income rose 2% to $695 million
with higher contributions from corporate and consumer
activities such as loan syndication, trade, remittances
and credit cards, partially offset by a fall in capital
market activities.
Compared to the previous quarter, net fee and
commission income declined 3% as stockbroking and
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2008
Net trading income/(loss)
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/
Others (include rental income)
Total
2nd Qtr
2007 1/
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007 1/
% chg
111
97
14
(161)
(50)
268
NM
88
23
100
(3)
(12)
NM
(152)
(9)
(64)
14
269
(1)
NM
NM
26
(49)
NM
85
111
(95)
NM
49
-
94
2
(48)
NM
211
3
260
3
218
4
(25)
13
9
44
15
28
17
65
199
153
30
153
352
412
(15)
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ Exclude one-time items
NM Not Meaningful
Net trading income from the trading businesses recorded
a gain of $88 million from trading activity in foreign
exchange and interest rates, recovering from a loss of
$152 million in the previous quarter due to difficult credit
markets.
Net income from the sale of financial investments fell to
$49 million. The previous quarter’s $211 million had
included gains from the initial public offering of Visa Inc.
For the first half, net trading income from the trading
businesses recorded a loss of $64 million compared to a
gain of $269 million a year ago. This was partially offset
by a 19% increase in net income from the sale of
financial investments which amounted to $260 million.
6
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
Included in the above table were:
Depreciation of properties and other
fixed assets
Director’s fees
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
370
61
109
40
107
687
15,219
354
51
111
35
109
660
13,364
5
20
(2)
14
(2)
4
14
352
58
102
34
110
656
14,551
722
119
211
74
217
1,343
15,219
714
104
223
60
217
1,318
13,364
1
14
(5)
23
2
14
37
1
30
#
23
NM
34
1
71
2
62
1
15
100
2
2
-
2
4
3
33
Audit fees payable
# Amount under $500,000
NM Not Meaningful
Expenses of $687 million were 4% higher than a year
ago and 5% above the previous quarter, with both wage
and non-wage costs contributing to the rise. Headcount
increased 8% from a year ago but fell 1% from the
previous quarter to 14,376. Including the consolidation
from Bowa, headcount was 15,219.
For the first half, expenses rose 2% to $1.34 billion as
increases in occupancy and revenue-related costs were
partially offset by lower computerisation charges. The
increase was in line with revenues, leaving the costincome ratio at 43%.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
(31)
24
NM
90
59
126
(53)
Specific allowances (SP) for loans
Singapore
Hong Kong
Other countries
52
9
37
6
47
9
18
20
11
>100
(70)
37
23
15
(1)
89
32
52
5
48
(9)
37
20
85
NM
41
(75)
Specific allowances (SP) for securities, properties
and other assets 1/
35
(7)
NM
13
48
(5)
NM
Total
56
64
(13)
140
196
169
16
General allowances (GP)
Note:
1/ Excludes one-time items
NM Not Meaningful
Specific allowances for loans rose from $37 million in the
previous quarter to $52 million. The increase was led by
Hong Kong, where specific allowances were made for
some equity related lending to individuals. No additional
general allowances for loans were made in the second
quarter given the adequacy of total allowances (net of
collaterals) against loans.
General allowances of $31 million that were previously
taken for sub-prime ABS CDOs were reclassified as a
specific allowance given a specific deterioration in the
credit quality of a CDO. This resulted in a general
allowance write-back of $31 million which was offset by
increases in specific allowance for securities.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
Selected income items
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
1st Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
326
160
255
5
226
190
120
94
15
201
206
158
98
76
190
325
(20)
132
23
152
130
40
13
13
144
(120)
48
64
8
(123)
1,057
506
656
140
790
423
175
258
5
335
201
91
87
45
160
172
188
102
36
222
236
51
125
3
163
94
(8)
9
77
(99)
27
79
(25)
(105)
1,027
524
660
64
852
Profit before tax
618
334
531
16
405
379
222
190
46
365
425
320
201
70
474
619
40
286
24
349
294
(14)
21
18
241
(220)
145
114
22
(167)
2,115
1,047
1,343
196
1,667
1st Half 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
873
319
524
14
654
395
209
178
63
363
330
380
190
79
441
416
119
253
4
287
156
10
20
146
(169)
55
153
9
(234)
2,001
1,092
1,318
169
1,657
Selected balance sheet and other
items
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
31 Mar 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 1st Qtr 2008
Depreciation for 1st Qtr 2008
32,874
85,003
5
7
23,876
21,383
2
1
64,119
35,181
1
1
91,445
58,315
1
3
28,734
1,837
-
4,564
26,277
5
22
245,612
227,996
14
34
1/
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1st Half 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
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 June 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2007
Depreciation for 2nd Qtr 2007
31,871
81,168
11
7
22,028
19,898
1
-
47,354
22,305
4
1
85,218
49,193
2
2
27,228
1,404
-
3,349
26,634
18
20
217,048
200,602
36
30
Consumer Banking’s (CBG) net interest income fell
from both the previous quarter and a year ago with
lower deposit margins in Singapore despite higher
loan and deposit volumes. Non-interest income
improved from the previous quarter due to wealth
management sales. Expenses were higher than both
comparative periods as operating costs increased
while wage costs were stable. Allowances rose from
the previous quarter due to higher general
allowances.
Enterprise Banking’s (EB) net interest income fell from
both comparative periods as higher loan volumes and
margins were more than offset by lower deposit
margins. Non-interest income was lower than the
previous quarter due to a decline in treasury product
sales. Expenses rose from a year ago due to higher
staff and non-staff costs. Allowances were higher than
the previous quarter due to lower recoveries in specific
allowances. Compared to a year ago, a decline in
specific allowances was partially offset by higher
general allowances.
Corporate and Investment Banking’s (CIB) net interest
income rose from the previous quarter and a year ago
due to higher loan margins. Compared to a year ago,
higher loan and deposit volumes also contributed to
the increase in net interest income. Non-interest
income was lower than a year ago as higher loan
syndication fees were more than offset by lower sales
of treasury products. There was a general allowance
write-back in the current quarter compared to a charge
in both comparative periods. Specific allowances were
higher than the previous quarter but little changed from
a year ago.
Global Financial Markets’ (GFM) non-interest income
recorded a gain from interest rate and foreign
exchange activities, recovering from a loss in credit
trading in the previous quarter. Expenses were higher
than both comparative periods due to higher 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.
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
2nd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
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
1st Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
721
247
401
97
473
225
177
173
19
210
41
36
34
12
33
41
40
34
7
58
29
6
14
5
16
1,057
506
656
140
790
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
672
317
414
(8)
277
127
163
21
25
28
29
21
35
34
38
21
18
18
16
9
1,027
524
660
64
Profit before tax
591
220
3
27
11
852
Selected income items
1/
1/
1st Half 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,430
522
813
108
1,036
439
315
348
59
347
107
53
73
14
84
79
115
78
5
139
60
42
31
10
61
2,115
1,047
1,343
196
1,667
1st Half 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,320
660
842
51
1,102
548
262
333
43
434
42
56
50
21
27
57
86
65
27
87
34
28
28
27
7
2,001
1,092
1,318
169
1,657
16,115
11,667
10,905
9,137
10,059
8,817
8,199
7,265
12,097
11,621
11,519
10,589
242,850
245,612
227,749
217,048
Total assets before goodwill
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
159,295
165,837
149,462
143,238
45,284
47,670
47,664
46,819
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 higher than a year ago as loans
and deposits expanded. Compared to the previous
quarter, higher asset volumes were more than offset by
lower margins. Non-interest income improved from the
previous quarter due to a recovery in trading income.
The second quarter’s results incorporate an appreciation
of the Singapore dollar against the Hong Kong dollar of
3% from the previous quarter and 11% from a year ago.
Expenses were higher than the previous quarter due to
higher wage costs.
Allowances were higher in the previous quarter due to
general allowances set aside for the strong loan growth.
Net interest income was below a year ago as higher loan
and deposit volumes were more than offset by lower
margins. Net interest income declined from the previous
quarter as interbank assets fell.
Non-interest income fell from the previous quarter due to
lower stockbroking commissions and treasury product
sales.
Expenses rose from a year ago as staff and non-staff
costs rose. The increase in allowances from the previous
quarter was led by specific allowances for margin lending
to individuals.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
Gross
Less:
Specific allowances
120,314
115,660
109,774
100,475
702
437
436
544
General allowances
Net total
997
118,615
996
114,227
905
108,433
974
98,957
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
33,166
25,167
54,986
6,995
120,314
31,116
22,343
55,572
6,629
115,660
31,213
22,334
48,940
7,287
109,774
31,082
21,984
40,374
7,035
100,475
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
68,056
30,679
9,542
5,062
6,975
120,314
67,294
29,423
6,916
5,198
6,829
115,660
62,019
29,141
6,371
4,737
7,506
109,774
54,954
29,729
4,884
3,784
7,124
100,475
15,417
15,906
28,039
12,303
11,854
12,499
10,697
15,457
14,403
26,581
11,057
11,511
14,236
10,022
14,469
13,004
26,306
10,042
11,169
13,919
9,758
13,321
12,179
26,124
9,677
9,984
11,979
9,269
13,599
120,314
12,393
115,660
11,107
109,774
7,942
100,475
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
45,902
11,769
34,133
26,344
608
25,736
27,406
1,992
25,414
16,008
2,711
13,297
115,660
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
39,328
6,866
32,462
27,536
730
26,806
19,763
277
19,486
13,848
1,294
12,554
100,475
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 4% from the previous quarter,
including $2.3 billion of loans from Bowa. Underlying loan
growth was led by SME loans in Hong Kong and consumer
loans in Singapore. The increase was partially offset by
repayments of short-term corporate loans.
Three-fifths of Bowa’s loans were consumer (mainly
housing) loans and the remainder SME loans.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
1/
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
327
129
331
1.0
141
253
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
972
482
247
3.9
75
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
229
671
62
324
311
220
0.7
3.0
163
81
379
159
226
54
555
0.4
269
409
62
53
(32)
0.9
34
41
1,188
493
1,054
1.0
130
242
Debt securities
167
160
182
-
205
212
Contingent liabilities
Total non-performing
assets (NPA)
109
7
130
-
125
344
1,464
660
1,366
-
138
241
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 Jun 2008
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
31 Mar 2008
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
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
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
282
76
310
0.9
137
330
Enterprise Banking
729
349
217
3.3
78
150
Corporate and Investment
Banking
324
149
413
0.8
173
295
37
28
83
0.6
297
460
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
30 Jun 2007
Others
Total non-performing loans
(“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Jun 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Mar 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
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
494
419
76
227
186
28
425
284
94
0.8
1.5
0.9
132
112
159
255
202
438
65
42
137
0.8
275
339
134
10
114
1.2
93
173
1,188
493
1,054
1.0
130
242
167
109
160
7
182
130
-
205
125
212
344
1,464
660
1,366
-
138
241
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
707
356
72
321
159
24
487
299
70
1.4
1.2
1.1
114
129
131
239
246
395
147
74
88
2.5
111
127
90
24
79
0.9
114
325
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
453
105
202
216
41
61
328
73
145
156
18
32
336
69
152
160
19
35
338
91
184
197
39
43
General commerce
Transportation, storage &
communications
369
23
187
8
273
8
138
4
286
21
143
5
339
34
150
11
Financial institutions, investment
& holding companies
160
25
114
9
54
8
101
19
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
192
102
127
56
126
55
142
61
178
1,682
113
753
120
1,188
80
493
124
1,168
66
491
143
1,372
82
602
198
98
191
7
167
109
160
7
160
114
152
9
37
85
17
5
Total non-performing assets
1,978
951
1,464
660
1,442
652
1,494
624
By loan classification
($m)
30 Jun 2008
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Dec 2007
30 Jun 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,159
491
328
1,978
171
451
329
951
846
373
245
1,464
63
351
246
660
845
338
259
1,442
73
319
260
652
904
273
317
1,494
73
232
319
624
231
31
128
390
67
28
128
223
171
30
37
238
22
27
37
86
168
25
38
231
27
23
38
88
200
47
55
302
28
45
55
128
By collateral type
($m)
Unsecured non-performing assets
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
Total
31 Mar 2008
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
NPA
NPA
NPA
1,182
842
794
731
472
93
22
209
385
19
9
209
376
24
13
235
454
47
41
221
1,978
1,464
1,442
1,494
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2008
Not overdue
180 days overdue
Total
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
NPA
NPA
NPA
826
309
191
559
284
108
542
255
94
333
388
144
652
1,978
513
1,464
551
1,442
629
1,494
Compared to the previous quarter, the amount of nonperforming loans (NPLs) rose from $1.19 billion to $1.68
billion, including $385 million from Bowa. Of Bowa’s
NPLs, $276 million were for SME loans and the
remainder for consumer loans.
By business segment and excluding Bowa, most of the
increase in NPLs from the previous quarter was due to
margin lending to individuals (in Others). NPLs for CBG
and CIB declined 5% from the previous quarter while
those for EB loans rose 4%. The NPL rate for CBG and
CIB loans was unchanged from the previous
quarter. For EB loans, the rate declined from
3.0% in the previous quarter to 2.9%.
By region and excluding Bowa, the NPL rate
was unchanged in Hong Kong, and rose
slightly for other regions.
With the consolidation of Bowa, 42% of nonperforming assets were still current in their payment
compared with 38% in the previous quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
2/
Interbank liabilities
Other borrowings and liabilities 2/
Shareholders’ funds
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
158,726
19,921
49,757
157,379
21,376
51,848
153,572
16,481
43,057
141,272
11,898
50,080
20,284
248,688
20,850
251,453
20,481
233,591
19,641
222,891
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
Total
Fixed deposits
Savings accounts
Current accounts
Others
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
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
88,440
27,523
49,772
10,512
633
22,706
15,402
4,618
1,904
782
27,489
18,688
1,791
4,772
2,238
18,744
13,653
683
2,164
2,244
157,379
75,266
56,864
19,352
5,897
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
79,798
24,247
45,739
9,124
688
23,583
16,507
4,364
1,818
894
25,556
18,418
1,992
2,981
2,165
12,335
9,899
512
1,617
307
141,272
69,071
52,607
15,540
4,054
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 1% from the previous quarter to
$158.7 billion, including $3.2 billion from Bowa. The overall
deposit mix improved as savings deposits rose and fixed
deposits declined, with Singapore-dollar deposits
accounting for most of the change in mix.
OTHER BORROWINGS & LIABILITIES
($m)
1/
Subordinated term debts
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
Secured 2/
Unsecured
Others
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
8,470
8,704
8,954
9,324
1,458
831
974
366
960
239
5,755
178
473
1,816
38,998
49,757
425
915
41,804
51,848
369
830
32,904
43,057
2,367
3,566
34,823
50,080
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 July 2007 to 30 June 2008. The Group’s
trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 June 2008
Total
Average
36
1 July 2007 to 30 June 2008
High
Low
23
43
12
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 July 2007 to 30 June 2008.
DBSH Group VaR for Trading Book
25
No. of Days
20
15
10
5
>43-44
>41-42
>39-40
>37-38
>35-36
>33-34
>31-32
>29-30
>27-28
>25-26
>23-24
>21-22
>19-20
>17-18
>15-16
>13-14
>9-10
>11-12
0
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 Jul 2007 to 30 Jun 2008)
30
25
15
10
5
Trading income (S$ million)
19
>38-40
>36-38
>34-36
>32-34
>30-32
>28-30
>26-28
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>10-12
>6-8
>8-10
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
>(20)-(18)
>(22)-(20)
>(24)-(22)
>(26)-(24)
>(28)-(26)
>(30)-(28)
>(32)-(30)
>(34)-(32)
>(36)-(34)
>(38)-(36)
>(40)-(38)
>(42)-(40)
>(44)-(42)
>(46)-(44)
>(48)-(46)
>(50)-(48)
0
>(52)-(50)
No. of days
20
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 Jun 2007
1/
30 Jun 2008
31 Mar 2008
4,206
20,080
(5,987)
18,299
4,178
18,289
(5,999)
16,468
4,164
18,092
(5,897)
16,359
4,127
17,522
(5,886)
15,763
564
6,323
84
(102)
25,168
182,254
583
6,890
100
(114)
23,927
178,678
1,210
7,087
177
(102)
24,731
184,601
1,157
7,612
213
(94)
24,651
167,830
10.0
3.8
13.8
9.2
4.2
13.4
8.9
4.5
13.4
9.4
5.3
14.7
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
The Group’s total capital adequacy ratio increased from 13.4% in March 2008 to 13.8% in June 2008, due to the $1.5 billion
Hybrid Tier 1 issue in May 2008, offset in part by growth in credit risk weighted assets, which included assets acquired from
Bowa.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
704
(11)
693
677
(29)
648
650
43
693
406
17
423
The amount of unrealised valuation surplus increased from $648 million in the previous quarter to $693 million. The valuation
surplus for properties rose as market valuations improved.
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
In $ millions
2nd Qtr 2nd Qtr
1/
2008 2007
+/(-)
%
1st Qtr 1st Half 1st Half
1/
2008
2008 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
1,935
877
1,058
342
111
26
49
31
2,252
1,225
1,027
371
97
(49)
94
11
(14)
(28)
3
(8)
14
NM
(48)
>100
2,147
1,090
1,057
353
(161)
85
211
18
4,082
1,967
2,115
695
(50)
111
260
49
4,376
2,375
2,001
680
268
(95)
218
21
(7)
(17)
6
2
NM
NM
19
>100
Total income
1,617
1,551
4
1,563
3,180
3093
3
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
370
37
280
90
354
30
276
145
5
23
1
(38)
352
34
270
140
722
71
550
230
714
62
542
250
1
15
1
(8)
Total expenses
777
805
(3)
796
1,573
1,568
-
Profit
Share of profits of associates
Profit before tax
840
21
861
746
25
771
13
(16)
12
767
23
790
1,607
44
1,651
1,525
51
1,576
5
(14)
5
Income tax expense
Net profit
159
702
151
620
5
13
151
639
310
1,341
303
1,273
2
5
652
50
702
560
60
620
16
(17)
13
603
36
639
1,255
86
1,341
1,177
96
1,273
7
(10)
5
Attributable to:
Shareholders
Minority interests
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 Jun
2008
GROUP
31 Mar
31 Dec
2008
2007 1/
30 Jun
2007
30 Jun
2008
COMPANY
31 Mar
31 Dec
2008
2007 1/
30 Jun
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
13,593
16,001
28,164
17,278
19,313
117,844
20,779
2,129
608
5,838
1,585
26
5,530
13,274
17,604
26,874
17,675
23,053
113,624
21,264
2,345
656
5,841
1,490
21
7,732
18,564
15,433
23,304
19,543
13,119
106,344
19,182
4,115
715
5,842
1,534
25
5,871
11,848
14,909
28,161
21,103
9,627
96,909
23,026
2,517
643
5,843
1,524
20
6,761
TOTAL ASSETS
248,688
251,453
233,591
222,891
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
19,331
150,390
15,967
18,354
1,262
938
41
7,258
2,289
8,470
20,590
150,558
15,062
22,534
499
925
97
7,687
1,340
8,704
15,464
145,368
18,242
12,554
380
882
172
7,218
1,199
8,954
9,956
132,294
22,903
9,766
539
874
140
8,873
5,933
9,324
TOTAL LIABILITIES
224,300
227,996
210,433
24,388
23,457
4,206
(106)
6,798
9,386
-
-
-
-
6,779
6,758
6,748
6,744
6,779
6,758
6,748
6,744
4
4
7
6
200,602
4
4
7
6
23,158
22,289
6,775
6,754
6,741
6,738
4,178
(105)
7,435
9,342
4,164
(102)
7,680
8,739
4,127
(74)
7,449
8,139
4,206
(31)
32
2,568
4,178
(30)
37
2,569
4,164
(27)
37
2,567
4,127
53
2,558
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,284
20,850
20,481
19,641
6,775
6,754
6,741
6,738
Minority interests
4,104
2,607
2,677
2,648
-
-
-
-
TOTAL EQUITY
24,388
23,457
23,158
22,289
6,775
6,754
6,741
6,738
16,799
89,095
1,918,487
15,284
86,509
1,937,019
14,656
92,305
1,816,007
13,790
93,567
1,818,734
4.40
4.39
4.39
4.49
4.27
4.26
4.25
4.34
SHAREHOLDERS’ FUNDS
OFF BALANCE SHEET ITEMS
Contingent liabilities
Commitments
Financial derivatives
OTHER INFORMATION
Net asset value per ordinary share ($)
(i) Based on existing ordinary share capital
(ii) Assuming conversion of outstanding preference
shares to ordinary shares
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
(86)
(119)
37
37
Net exchange translation adjustments
(33)
Share of associates’ reserves
(47)
Cost of share-based payments
14
Share buyback during the period
Reclassification of reserves upon exercise of share options
(47)
14
(4)
5
(4)
(5)
-
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
(701)
(701)
- Transferred to income statement on sale
(227)
(227)
- Tax on items taken directly to or transferred from equity
128
Transfer from / (to) revenue reserve
(11)
128
11
Net profit for the period
1,255
Final dividends paid for previous year
(302)
Interim dividends paid for current year
(317)
Dividends paid to minority interests
Change in minority interests
86
1,341
(302)
(317)
(74)
(74)
1,501
1,501
Balance at 30 June 2008
4,140
66
(106)
6,798
9,386
4,104
24,388
Balance at 1 January 2007
3,976
66
(111)
7,182
7,562
2,371
21,046
(1)
17
Exercise of share options
85
85
Net exchange translation adjustments
18
Share of associates’ reserves
18
18
Cost of share-based payments
18
18
(37)
-
Draw-down of reserves upon vesting of performance shares
37
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
- Transferred to income statement on sale
- Tax on items taken directly to or transferred from equity
334
334
(105)
(105)
(9)
Net profit for the period
(9)
1,177
Appropriation from income statement 1/
30
96
1,273
(30)
-
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(260)
(260)
Dividends paid to minority interests
(72)
(72)
Change in minority interests
254
254
2,648
22,289
Balance at 30 June 2007
4,061
66
(74)
7,449
8,139
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
Reclassification of reserves upon exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
66
Other
reserves
Treasury
shares
(27)
37
Revenue
reserve
Total equity
2,567
6,741
37
37
(5)
5
Net profit for the period
620
620
(302)
(302)
(4)
Share buyback during the period
(4)
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 June 2008
4,140
66
(31)
32
(317)
2,568
(317)
6,775
Balance at 1 January 2007
3,976
66
-
53
2,824
6,919
304
304
Exercise of share options
85
85
Net profit for the period
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
Balance at 30 June 2007
(260)
2,558
(260)
6,738
4,061
66
-
53
24
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Cash Flow Statement
In $ millions
1st Half
2008
1st Half
2007
Cash flows from operating activities
Profit before tax
1,651
1,576
Adjustments for non-cash items:
Allowances for credit and other losses
Depreciation of properties and other fixed assets
Share of profits of associates
Net gain on disposal of properties and other fixed assets
Net gain on disposal of financial investments
Profit before change
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 second quarter ended 30 June 2008.
For the second quarter of 2008, the Directors have declared an interim one-tier tax-exempt dividend of 10
cents (second quarter 2007: 10 cents less 18% tax) for each DBSH non-voting convertible preference
share (“CPS”) and each DBSH non-voting redeemable CPS, and an interim one-tier tax-exempt dividend
of 20 cents (second quarter 2007: 20 cents less 18% tax) for each DBSH ordinary share.
The second quarter 2008 dividend will be payable on 3 September 2008. The DBSH shares will be
quoted ex-dividend on 19 August 2008. Notice is hereby given that the Share Transfer Books and
Register of Members of the Company will be closed on 22 August 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 August 2008 will be registered to
determine shareholders' entitlement to the second quarter 2008 dividend. In respect of ordinary shares
in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the second 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
Heng Lee Cheng (Ms)
Group Secretary
7 August 2008
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Second Quarter ended
30 June 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
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
29
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
Selected income statement items ($m)
Net interest income
Net fee and commission income
Net trading income/(loss)
Net income/(loss) from financial instruments
designated at fair value
Net income from financial investments
Other income
Total income
2nd Qtr
2008
2nd Qtr
2007 1/
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007 1/
% chg
1,058
342
111
1,027
371
97
3
(8)
14
1,057
2,115
695
(50)
2,001
680
268
6
2
NM
353
(161)
26
(49)
NM
85
111
(95)
NM
49
13
1,599
94
11
1,551
(48)
18
3
211
18
1,563
260
31
3,162
218
21
3,093
19
48
2
Less: Expenses
687
660
4
656
1,343
1,318
2
Profit before allowances
912
891
2
907
1,819
1,775
2
Less: Allowances for credit and other losses
56
64
(13)
140
196
169
16
Share of profits of associates
21
25
(16)
23
44
51
(14)
Profit before tax
Net profit attributable to shareholders
(Net profit)
877
852
3
790
1,667
1,657
1
668
664
1
603
1,271
1,281
(1)
Add: One-time items 2/
(16)
(104)
85
-
(16)
(104)
85
Net profit including one-time items
652
560
16
603
1,255
1,177
7
118,615
30,535
248,688
158,726
224,300
20,284
98,957
30,858
222,891
141,272
200,602
19,641
20
(1)
12
12
12
3
114,227
28,606
251,453
157,379
227,996
20,850
118,615
30,535
248,688
158,726
224,300
20,284
98,957
30,858
222,891
141,272
200,602
19,641
20
(1)
12
12
12
3
2.04
33.8
43.0
1.07
13.00
74.7
1.4
2.21
33.8
42.6
1.23
13.60
70.1
1.4
2.09
32.4
42.0
0.99
11.61
72.6
1.0
2.07
33.1
42.5
1.05
12.41
74.7
1.4
2.21
35.3
42.6
1.22
13.41
70.1
1.4
18
19
13
16
10
10.0
13.8
9.4
14.7
9.2
13.4
10.0
13.8
9.4
14.7
Selected balance sheet items ($m)
3/
Customer loans
4/
Interbank assets
Total assets
5/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios (%) (excluding one6/
time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
7/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
(bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
– net book value 7/
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
7/
– net book value
2nd Qtr
2008
2nd Qtr
2007
1.76
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
1.76
1.58
1.67
1.69
1.74
13.05
1.69
12.66
1.58
13.43
1.66
13.05
1.63
12.66
1.69
1.69
1.52
1.61
1.63
1.68
12.78
1.63
12.45
1.52
13.15
1.60
12.78
1.56
12.45
% chg
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ One-time items include gains on sale of office buildings in Hong Kong, impairment charges for Thai investment 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
Second-quarter net profit of $668 million was 1% above
a year ago. Revenues were sustained and cost
pressures managed amid a lower interest rate
environment and subdued capital markets. Compared
to the previous quarter, net profit was 11% higher as
trading income recovered and total allowances
declined.
Bowa Commercial Bank (Bowa) was consolidated from
24 May 2008. The consolidation had little impact on the
Group’s second quarter results except for certain
balance sheet items.
Interest income rose 3% from a year ago to $1.06
billion, unchanged from the previous quarter. Although
loans continued to grow during the quarter, the impact
was offset by a decline in interest margins. Lower
stockbroking and investment banking activities
contributed to a fall in net fee income of 8% from a year
ago and 3% from the previous quarter to $342 million.
Trading performance improved during the quarter,
rising to $111 million from $97 million a year ago and
compared to a loss of $161 million in the previous
quarter. The improvement in trading income was offset
by lower net income from the sale of financial
investments.
The cost-income ratio of 43% was similar to a year ago
and slightly higher than the 42% in the previous quarter.
Compared to the previous quarter, expenses grew 5%
to $687 million.
Excluding Bowa, the non-performing loan (NPL) rate
rose slightly from 1.0% in the previous quarter to 1.1%,
but remained below the 1.4% a year ago. Specific loan
allowances rose to 18 basis points of loans compared
with 13 basis points in the previous quarter, but was
little changed from the 19 basis points a year ago. Total
allowances were lower than both comparative periods.
Allowances for loans continued to provide adequate
coverage for total loan exposures net of collateral.
Including Bowa, the NPL rate increased to 1.4%. There
was no allowance charge in the second quarter for
Bowa as allowances amounting to 67% of its NPLs had
already been set aside prior to its consolidation. With
the consolidation of Bowa, total cumulative allowances
amounted to 116% of non-performing assets and 195%
of unsecured non-performing assets.
Return on assets was 1.07% compared to 1.23% a year
ago and 0.99% in the previous quarter. Return on
equity of 13.0% was below the 13.6% a year ago but
improved from 11.6% in the previous quarter.
There was a separate one-time charge of $16 million
comprising a $34 million impairment charge for the
group’s investment in TMB Bank in Thailand and a gain
of $18 million from the sale of office buildings in Hong
Kong. Including these non-operating items, net profit for
the second quarter was $652 million.
For the first half, net profit excluding one-time items
fell 1% from a year ago to $1.27 billion, with return on
equity declining from 13.4% to 12.4%.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2008
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2007
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2008
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
113,462
41,293
53,628
208,383
1,154
262
519
1,935
4.09
2.54
3.89
3.73
94,742
36,341
55,368
186,451
1,322
303
627
2,252
5.60
3.35
4.54
4.85
111,027
38,219
54,256
203,502
1,308
258
581
2,147
4.74
2.72
4.31
4.24
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
157,807
40,799
198,606
487
390
877
1.24
3.84
1.77
139,705
36,900
176,605
754
471
1,225
2.17
5.12
2.78
154,445
39,979
194,424
673
417
1,090
1.75
4.19
2.26
1,058
2.04
1,027
2.21
1,057
2.09
Net interest
income/margin 1/
Average balance
sheet
1st Half 2008
1st Half 2007
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
112,002
39,955
53,689
205,646
2,462
520
1,100
4,082
4.42
2.61
4.12
3.99
92,108
35,880
54,005
181,993
2,570
604
1,202
4,376
5.63
3.40
4.49
4.85
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
155,947
40,364
196,311
1,160
807
1,967
1.50
4.02
2.01
137,089
35,447
172,536
1,500
875
2,375
2.21
4.98
2.78
2,115
2.07
2,001
2.21
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
The 3% increase in net interest income from a year ago
to $1.06 billion was due to an increase in asset
volumes, particularly customer loans. The benefit was
partially offset by a 17 basis point decline in net interest
margins to 2.04% as interest spreads in both Singapore
and Hong Kong were lower.
Compared to the previous quarter, net interest income
was little changed as a rise in asset volumes was offset
by a five basis point decline in interest margins. Interest
margins in Hong Kong increased slightly but fell in
Singapore as asset yields for corporate loans declined.
Funding costs also fell, but at a slower pace than asset
yields.
For the first half, net interest income rose 6% to $2.12
billion as the benefit of higher asset volumes was partially
offset by lower interest margins.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2008 versus 2nd Qtr 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
2nd Qtr 2008 versus 1st Qtr 2008
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
261
41
(20)
282
(429)
(82)
(88)
(599)
(168)
(41)
(108)
(317)
28
21
(7)
42
(182)
(17)
(55)
(254)
(154)
4
(62)
(212)
Interest expense
Customer deposits
Other borrowings
Total
98
66
164
(365)
(147)
(512)
(267)
(81)
(348)
15
9
24
(201)
(36)
(237)
(186)
(27)
(213)
Net impact on interest income
118
(87)
31
18
(17)
1
Volume
Rate
Net
change
Interest income
Due to change in number of days
Net Interest Income
-
-
31
1
1st Half 2008 versus 1st Half 2007
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
555
69
(7)
617
(678)
(157)
(100)
(935)
(123)
(88)
(107)
(318)
Interest expense
Customer deposits
Other borrowings
Total
206
146
352
(553)
(219)
(772)
(347)
(73)
(420)
Net impact on interest income
265
(163)
102
Interest income
Due to change in number of days
Net Interest Income
12
114
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
39
25
56
82
14
22
38
9
45
12
342
58
48
50
55
9
22
35
13
68
13
371
(33)
(48)
12
49
56
9
(31)
(34)
(8)
(8)
50
29
52
90
11
19
31
14
40
17
353
89
54
108
172
25
41
69
23
85
29
695
111
77
98
113
17
41
62
22
115
24
680
(20)
(30)
10
52
47
11
5
(26)
21
2
investment banking fees were lower. Contributions from
loan related activities declined from a strong previous
quarter.
Net fee and commission income fell 8% from a year ago
to $342 million as subdued capital markets saw lower
contributions from stockbroking, investment banking and
wealth management. These declines were partially
offset by higher contributions from trade and
remittances and loan related activities.
For the first half, net fee income rose 2% to $695 million
with higher contributions from corporate and consumer
activities such as loan syndication, trade, remittances
and credit cards, partially offset by a fall in capital
market activities.
Compared to the previous quarter, net fee and
commission income declined 3% as stockbroking and
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2008
Net trading income/(loss)
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/
Others (include rental income)
Total
2nd Qtr
2007 1/
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007 1/
% chg
111
97
14
(161)
(50)
268
NM
88
23
100
(3)
(12)
NM
(152)
(9)
(64)
14
269
(1)
NM
NM
26
(49)
NM
85
111
(95)
NM
49
-
94
2
(48)
NM
211
3
260
3
218
4
(25)
13
9
44
15
28
17
65
199
153
30
153
352
412
(15)
Notes:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
2/ Exclude one-time items
NM Not Meaningful
Net trading income from the trading businesses recorded
a gain of $88 million from trading activity in foreign
exchange and interest rates, recovering from a loss of
$152 million in the previous quarter due to difficult credit
markets.
Net income from the sale of financial investments fell to
$49 million. The previous quarter’s $211 million had
included gains from the initial public offering of Visa Inc.
For the first half, net trading income from the trading
businesses recorded a loss of $64 million compared to a
gain of $269 million a year ago. This was partially offset
by a 19% increase in net income from the sale of
financial investments which amounted to $260 million.
6
19
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
Included in the above table were:
Depreciation of properties and other
fixed assets
Director’s fees
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
370
61
109
40
107
687
15,219
354
51
111
35
109
660
13,364
5
20
(2)
14
(2)
4
14
352
58
102
34
110
656
14,551
722
119
211
74
217
1,343
15,219
714
104
223
60
217
1,318
13,364
1
14
(5)
23
2
14
37
1
30
#
23
NM
34
1
71
2
62
1
15
100
2
2
-
2
4
3
33
Audit fees payable
# Amount under $500,000
NM Not Meaningful
Expenses of $687 million were 4% higher than a year
ago and 5% above the previous quarter, with both wage
and non-wage costs contributing to the rise. Headcount
increased 8% from a year ago but fell 1% from the
previous quarter to 14,376. Including the consolidation
from Bowa, headcount was 15,219.
For the first half, expenses rose 2% to $1.34 billion as
increases in occupancy and revenue-related costs were
partially offset by lower computerisation charges. The
increase was in line with revenues, leaving the costincome ratio at 43%.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr
2008
2nd Qtr
2007
% chg
1st Qtr
2008
1st Half
2008
1st Half
2007
% chg
(31)
24
NM
90
59
126
(53)
Specific allowances (SP) for loans
Singapore
Hong Kong
Other countries
52
9
37
6
47
9
18
20
11
>100
(70)
37
23
15
(1)
89
32
52
5
48
(9)
37
20
85
NM
41
(75)
Specific allowances (SP) for securities, properties
and other assets 1/
35
(7)
NM
13
48
(5)
NM
Total
56
64
(13)
140
196
169
16
General allowances (GP)
Note:
1/ Excludes one-time items
NM Not Meaningful
Specific allowances for loans rose from $37 million in the
previous quarter to $52 million. The increase was led by
Hong Kong, where specific allowances were made for
some equity related lending to individuals. No additional
general allowances for loans were made in the second
quarter given the adequacy of total allowances (net of
collaterals) against loans.
General allowances of $31 million that were previously
taken for sub-prime ABS CDOs were reclassified as a
specific allowance given a specific deterioration in the
credit quality of a CDO. This resulted in a general
allowance write-back of $31 million which was offset by
increases in specific allowance for securities.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS UNIT
($m)
CBG
EB
CIB
GFM
CTU
Central
Ops
Total
Selected income items
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
1st Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
326
160
255
5
226
190
120
94
15
201
206
158
98
76
190
325
(20)
132
23
152
130
40
13
13
144
(120)
48
64
8
(123)
1,057
506
656
140
790
423
175
258
5
335
201
91
87
45
160
172
188
102
36
222
236
51
125
3
163
94
(8)
9
77
(99)
27
79
(25)
(105)
1,027
524
660
64
852
Profit before tax
618
334
531
16
405
379
222
190
46
365
425
320
201
70
474
619
40
286
24
349
294
(14)
21
18
241
(220)
145
114
22
(167)
2,115
1,047
1,343
196
1,667
1st Half 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
873
319
524
14
654
395
209
178
63
363
330
380
190
79
441
416
119
253
4
287
156
10
20
146
(169)
55
153
9
(234)
2,001
1,092
1,318
169
1,657
Selected balance sheet and other
items
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
31 Mar 2008
Total assets before goodwill
Total liabilities
Capital expenditure for 1st Qtr 2008
Depreciation for 1st Qtr 2008
32,874
85,003
5
7
23,876
21,383
2
1
64,119
35,181
1
1
91,445
58,315
1
3
28,734
1,837
-
4,564
26,277
5
22
245,612
227,996
14
34
1/
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1st Half 2008 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
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 June 2007
Total assets before goodwill
Total liabilities
Capital expenditure for 2nd Qtr 2007
Depreciation for 2nd Qtr 2007
31,871
81,168
11
7
22,028
19,898
1
-
47,354
22,305
4
1
85,218
49,193
2
2
27,228
1,404
-
3,349
26,634
18
20
217,048
200,602
36
30
Consumer Banking’s (CBG) net interest income fell
from both the previous quarter and a year ago with
lower deposit margins in Singapore despite higher
loan and deposit volumes. Non-interest income
improved from the previous quarter due to wealth
management sales. Expenses were higher than both
comparative periods as operating costs increased
while wage costs were stable. Allowances rose from
the previous quarter due to higher general
allowances.
Enterprise Banking’s (EB) net interest income fell from
both comparative periods as higher loan volumes and
margins were more than offset by lower deposit
margins. Non-interest income was lower than the
previous quarter due to a decline in treasury product
sales. Expenses rose from a year ago due to higher
staff and non-staff costs. Allowances were higher than
the previous quarter due to lower recoveries in specific
allowances. Compared to a year ago, a decline in
specific allowances was partially offset by higher
general allowances.
Corporate and Investment Banking’s (CIB) net interest
income rose from the previous quarter and a year ago
due to higher loan margins. Compared to a year ago,
higher loan and deposit volumes also contributed to
the increase in net interest income. Non-interest
income was lower than a year ago as higher loan
syndication fees were more than offset by lower sales
of treasury products. There was a general allowance
write-back in the current quarter compared to a charge
in both comparative periods. Specific allowances were
higher than the previous quarter but little changed from
a year ago.
Global Financial Markets’ (GFM) non-interest income
recorded a gain from interest rate and foreign
exchange activities, recovering from a loss in credit
trading in the previous quarter. Expenses were higher
than both comparative periods due to higher 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.
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
2nd Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
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
1st Qtr 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
721
247
401
97
473
225
177
173
19
210
41
36
34
12
33
41
40
34
7
58
29
6
14
5
16
1,057
506
656
140
790
2nd Qtr 2007
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
672
317
414
(8)
277
127
163
21
25
28
29
21
35
34
38
21
18
18
16
9
1,027
524
660
64
Profit before tax
591
220
3
27
11
852
Selected income items
1/
1/
1st Half 2008
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,430
522
813
108
1,036
439
315
348
59
347
107
53
73
14
84
79
115
78
5
139
60
42
31
10
61
2,115
1,047
1,343
196
1,667
1st Half 2007 1/
Net interest income
Non-interest income
Expenses
Allowances for credit and other losses
Profit before tax
1,320
660
842
51
1,102
548
262
333
43
434
42
56
50
21
27
57
86
65
27
87
34
28
28
27
7
2,001
1,092
1,318
169
1,657
16,115
11,667
10,905
9,137
10,059
8,817
8,199
7,265
12,097
11,621
11,519
10,589
242,850
245,612
227,749
217,048
Total assets before goodwill
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
159,295
165,837
149,462
143,238
45,284
47,670
47,664
46,819
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 higher than a year ago as loans
and deposits expanded. Compared to the previous
quarter, higher asset volumes were more than offset by
lower margins. Non-interest income improved from the
previous quarter due to a recovery in trading income.
The second quarter’s results incorporate an appreciation
of the Singapore dollar against the Hong Kong dollar of
3% from the previous quarter and 11% from a year ago.
Expenses were higher than the previous quarter due to
higher wage costs.
Allowances were higher in the previous quarter due to
general allowances set aside for the strong loan growth.
Net interest income was below a year ago as higher loan
and deposit volumes were more than offset by lower
margins. Net interest income declined from the previous
quarter as interbank assets fell.
Non-interest income fell from the previous quarter due to
lower stockbroking commissions and treasury product
sales.
Expenses rose from a year ago as staff and non-staff
costs rose. The increase in allowances from the previous
quarter was led by specific allowances for margin lending
to individuals.
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
Gross
Less:
Specific allowances
120,314
115,660
109,774
100,475
702
437
436
544
General allowances
Net total
997
118,615
996
114,227
905
108,433
974
98,957
By business unit
Consumer Banking
Enterprise Banking
Corporate and Investment Banking
Others
Total (Gross)
33,166
25,167
54,986
6,995
120,314
31,116
22,343
55,572
6,629
115,660
31,213
22,334
48,940
7,287
109,774
31,082
21,984
40,374
7,035
100,475
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
68,056
30,679
9,542
5,062
6,975
120,314
67,294
29,423
6,916
5,198
6,829
115,660
62,019
29,141
6,371
4,737
7,506
109,774
54,954
29,729
4,884
3,784
7,124
100,475
15,417
15,906
28,039
12,303
11,854
12,499
10,697
15,457
14,403
26,581
11,057
11,511
14,236
10,022
14,469
13,004
26,306
10,042
11,169
13,919
9,758
13,321
12,179
26,124
9,677
9,984
11,979
9,269
13,599
120,314
12,393
115,660
11,107
109,774
7,942
100,475
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
45,902
11,769
34,133
26,344
608
25,736
27,406
1,992
25,414
16,008
2,711
13,297
115,660
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
39,328
6,866
32,462
27,536
730
26,806
19,763
277
19,486
13,848
1,294
12,554
100,475
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 4% from the previous quarter,
including $2.3 billion of loans from Bowa. Underlying loan
growth was led by SME loans in Hong Kong and consumer
loans in Singapore. The increase was partially offset by
repayments of short-term corporate loans.
Three-fifths of Bowa’s loans were consumer (mainly
housing) loans and the remainder SME loans.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
1/
By business unit
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
327
129
331
1.0
141
253
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
972
482
247
3.9
75
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
229
671
62
324
311
220
0.7
3.0
163
81
379
159
226
54
555
0.4
269
409
62
53
(32)
0.9
34
41
1,188
493
1,054
1.0
130
242
Debt securities
167
160
182
-
205
212
Contingent liabilities
Total non-performing
assets (NPA)
109
7
130
-
125
344
1,464
660
1,366
-
138
241
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 Jun 2008
Debt securities
Contingent liabilities
Total non-performing
assets (NPA)
31 Mar 2008
Consumer Banking
Enterprise Banking
Corporate and
Investment Banking
Others
Total non-performing
loans (NPL)
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
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
Consumer Banking
282
76
310
0.9
137
330
Enterprise Banking
729
349
217
3.3
78
150
Corporate and Investment
Banking
324
149
413
0.8
173
295
37
28
83
0.6
297
460
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
30 Jun 2007
Others
Total non-performing loans
(“NPL”)
Debt securities
Contingent liabilities
Total non-performing
assets (“NPA”)
Note:
1/ Allowances for credit and other losses exclude one-time items
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Jun 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Mar 2008
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
31 Dec 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
30 Jun 2007
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
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
494
419
76
227
186
28
425
284
94
0.8
1.5
0.9
132
112
159
255
202
438
65
42
137
0.8
275
339
134
10
114
1.2
93
173
1,188
493
1,054
1.0
130
242
167
109
160
7
182
130
-
205
125
212
344
1,464
660
1,366
-
138
241
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
707
356
72
321
159
24
487
299
70
1.4
1.2
1.1
114
129
131
239
246
395
147
74
88
2.5
111
127
90
24
79
0.9
114
325
1,372
602
1,023
1.4
118
229
37
85
17
5
80
129
-
260
158
587
2,137
1,494
624
1,232
-
124
254
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Manufacturing
Building and construction
Housing loans
453
105
202
216
41
61
328
73
145
156
18
32
336
69
152
160
19
35
338
91
184
197
39
43
General commerce
Transportation, storage &
communications
369
23
187
8
273
8
138
4
286
21
143
5
339
34
150
11
Financial institutions, investment
& holding companies
160
25
114
9
54
8
101
19
Professionals & private
individuals (except housing
loans)
Others
Total non-performing loans
192
102
127
56
126
55
142
61
178
1,682
113
753
120
1,188
80
493
124
1,168
66
491
143
1,372
82
602
198
98
191
7
167
109
160
7
160
114
152
9
37
85
17
5
Total non-performing assets
1,978
951
1,464
660
1,442
652
1,494
624
By loan classification
($m)
30 Jun 2008
Debt securities
Contingent liabilities
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Dec 2007
30 Jun 2007
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,159
491
328
1,978
171
451
329
951
846
373
245
1,464
63
351
246
660
845
338
259
1,442
73
319
260
652
904
273
317
1,494
73
232
319
624
231
31
128
390
67
28
128
223
171
30
37
238
22
27
37
86
168
25
38
231
27
23
38
88
200
47
55
302
28
45
55
128
By collateral type
($m)
Unsecured non-performing assets
Secured non-performing assets by collateral type
Properties
Shares and debentures
Fixed deposits
Others
Total
31 Mar 2008
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
NPA
NPA
NPA
1,182
842
794
731
472
93
22
209
385
19
9
209
376
24
13
235
454
47
41
221
1,978
1,464
1,442
1,494
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2008
Not overdue
180 days overdue
Total
31 Mar 2008
31 Dec 2007
30 Jun 2007
NPA
NPA
NPA
NPA
826
309
191
559
284
108
542
255
94
333
388
144
652
1,978
513
1,464
551
1,442
629
1,494
Compared to the previous quarter, the amount of nonperforming loans (NPLs) rose from $1.19 billion to $1.68
billion, including $385 million from Bowa. Of Bowa’s
NPLs, $276 million were for SME loans and the
remainder for consumer loans.
By business segment and excluding Bowa, most of the
increase in NPLs from the previous quarter was due to
margin lending to individuals (in Others). NPLs for CBG
and CIB declined 5% from the previous quarter while
those for EB loans rose 4%. The NPL rate for CBG and
CIB loans was unchanged from the previous
quarter. For EB loans, the rate declined from
3.0% in the previous quarter to 2.9%.
By region and excluding Bowa, the NPL rate
was unchanged in Hong Kong, and rose
slightly for other regions.
With the consolidation of Bowa, 42% of nonperforming assets were still current in their payment
compared with 38% in the previous quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
2/
Interbank liabilities
Other borrowings and liabilities 2/
Shareholders’ funds
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
158,726
19,921
49,757
157,379
21,376
51,848
153,572
16,481
43,057
141,272
11,898
50,080
20,284
248,688
20,850
251,453
20,481
233,591
19,641
222,891
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
Total
Fixed deposits
Savings accounts
Current accounts
Others
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
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
88,440
27,523
49,772
10,512
633
22,706
15,402
4,618
1,904
782
27,489
18,688
1,791
4,772
2,238
18,744
13,653
683
2,164
2,244
157,379
75,266
56,864
19,352
5,897
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
79,798
24,247
45,739
9,124
688
23,583
16,507
4,364
1,818
894
25,556
18,418
1,992
2,981
2,165
12,335
9,899
512
1,617
307
141,272
69,071
52,607
15,540
4,054
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 1% from the previous quarter to
$158.7 billion, including $3.2 billion from Bowa. The overall
deposit mix improved as savings deposits rose and fixed
deposits declined, with Singapore-dollar deposits
accounting for most of the change in mix.
OTHER BORROWINGS & LIABILITIES
($m)
1/
Subordinated term debts
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
Secured 2/
Unsecured
Others
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
8,470
8,704
8,954
9,324
1,458
831
974
366
960
239
5,755
178
473
1,816
38,998
49,757
425
915
41,804
51,848
369
830
32,904
43,057
2,367
3,566
34,823
50,080
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 July 2007 to 30 June 2008. The Group’s
trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 June 2008
Total
Average
36
1 July 2007 to 30 June 2008
High
Low
23
43
12
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 July 2007 to 30 June 2008.
DBSH Group VaR for Trading Book
25
No. of Days
20
15
10
5
>43-44
>41-42
>39-40
>37-38
>35-36
>33-34
>31-32
>29-30
>27-28
>25-26
>23-24
>21-22
>19-20
>17-18
>15-16
>13-14
>9-10
>11-12
0
VaR (S$ million)
Daily Distribution of Group Trading Income
(1 Jul 2007 to 30 Jun 2008)
30
25
15
10
5
Trading income (S$ million)
19
>38-40
>36-38
>34-36
>32-34
>30-32
>28-30
>26-28
>24-26
>22-24
>20-22
>18-20
>16-18
>14-16
>12-14
>10-12
>6-8
>8-10
>4-6
>2-4
>0-2
>(2)-0
>(4)-(2)
>(6)-(4)
>(8)-(6)
>(10)-(8)
>(12)-(10)
>(14)-(12)
>(16)-(14)
>(18)-(16)
>(20)-(18)
>(22)-(20)
>(24)-(22)
>(26)-(24)
>(28)-(26)
>(30)-(28)
>(32)-(30)
>(34)-(32)
>(36)-(34)
>(38)-(36)
>(40)-(38)
>(42)-(40)
>(44)-(42)
>(46)-(44)
>(48)-(46)
>(50)-(48)
0
>(52)-(50)
No. of days
20
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 Jun 2007
1/
30 Jun 2008
31 Mar 2008
4,206
20,080
(5,987)
18,299
4,178
18,289
(5,999)
16,468
4,164
18,092
(5,897)
16,359
4,127
17,522
(5,886)
15,763
564
6,323
84
(102)
25,168
182,254
583
6,890
100
(114)
23,927
178,678
1,210
7,087
177
(102)
24,731
184,601
1,157
7,612
213
(94)
24,651
167,830
10.0
3.8
13.8
9.2
4.2
13.4
8.9
4.5
13.4
9.4
5.3
14.7
Note:
1/ Figures have been reclassified to make them consistent with the current period’s presentation
The Group’s total capital adequacy ratio increased from 13.4% in March 2008 to 13.8% in June 2008, due to the $1.5 billion
Hybrid Tier 1 issue in May 2008, offset in part by growth in credit risk weighted assets, which included assets acquired from
Bowa.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Jun 2008
31 Mar 2008
31 Dec 2007
30 Jun 2007
704
(11)
693
677
(29)
648
650
43
693
406
17
423
The amount of unrealised valuation surplus increased from $648 million in the previous quarter to $693 million. The valuation
surplus for properties rose as market valuations improved.
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
In $ millions
2nd Qtr 2nd Qtr
1/
2008 2007
+/(-)
%
1st Qtr 1st Half 1st Half
1/
2008
2008 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
1,935
877
1,058
342
111
26
49
31
2,252
1,225
1,027
371
97
(49)
94
11
(14)
(28)
3
(8)
14
NM
(48)
>100
2,147
1,090
1,057
353
(161)
85
211
18
4,082
1,967
2,115
695
(50)
111
260
49
4,376
2,375
2,001
680
268
(95)
218
21
(7)
(17)
6
2
NM
NM
19
>100
Total income
1,617
1,551
4
1,563
3,180
3093
3
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Allowances for credit and other losses
370
37
280
90
354
30
276
145
5
23
1
(38)
352
34
270
140
722
71
550
230
714
62
542
250
1
15
1
(8)
Total expenses
777
805
(3)
796
1,573
1,568
-
Profit
Share of profits of associates
Profit before tax
840
21
861
746
25
771
13
(16)
12
767
23
790
1,607
44
1,651
1,525
51
1,576
5
(14)
5
Income tax expense
Net profit
159
702
151
620
5
13
151
639
310
1,341
303
1,273
2
5
652
50
702
560
60
620
16
(17)
13
603
36
639
1,255
86
1,341
1,177
96
1,273
7
(10)
5
Attributable to:
Shareholders
Minority interests
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 Jun
2008
GROUP
31 Mar
31 Dec
2008
2007 1/
30 Jun
2007
30 Jun
2008
COMPANY
31 Mar
31 Dec
2008
2007 1/
30 Jun
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
13,593
16,001
28,164
17,278
19,313
117,844
20,779
2,129
608
5,838
1,585
26
5,530
13,274
17,604
26,874
17,675
23,053
113,624
21,264
2,345
656
5,841
1,490
21
7,732
18,564
15,433
23,304
19,543
13,119
106,344
19,182
4,115
715
5,842
1,534
25
5,871
11,848
14,909
28,161
21,103
9,627
96,909
23,026
2,517
643
5,843
1,524
20
6,761
TOTAL ASSETS
248,688
251,453
233,591
222,891
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
19,331
150,390
15,967
18,354
1,262
938
41
7,258
2,289
8,470
20,590
150,558
15,062
22,534
499
925
97
7,687
1,340
8,704
15,464
145,368
18,242
12,554
380
882
172
7,218
1,199
8,954
9,956
132,294
22,903
9,766
539
874
140
8,873
5,933
9,324
TOTAL LIABILITIES
224,300
227,996
210,433
24,388
23,457
4,206
(106)
6,798
9,386
-
-
-
-
6,779
6,758
6,748
6,744
6,779
6,758
6,748
6,744
4
4
7
6
200,602
4
4
7
6
23,158
22,289
6,775
6,754
6,741
6,738
4,178
(105)
7,435
9,342
4,164
(102)
7,680
8,739
4,127
(74)
7,449
8,139
4,206
(31)
32
2,568
4,178
(30)
37
2,569
4,164
(27)
37
2,567
4,127
53
2,558
LIABILITIES
NET ASSETS
EQUITY
Share capital
Treasury shares
Other reserves
Revenue reserves
20,284
20,850
20,481
19,641
6,775
6,754
6,741
6,738
Minority interests
4,104
2,607
2,677
2,648
-
-
-
-
TOTAL EQUITY
24,388
23,457
23,158
22,289
6,775
6,754
6,741
6,738
16,799
89,095
1,918,487
15,284
86,509
1,937,019
14,656
92,305
1,816,007
13,790
93,567
1,818,734
4.40
4.39
4.39
4.49
4.27
4.26
4.25
4.34
SHAREHOLDERS’ FUNDS
OFF BALANCE SHEET ITEMS
Contingent liabilities
Commitments
Financial derivatives
OTHER INFORMATION
Net asset value per ordinary share ($)
(i) Based on existing ordinary share capital
(ii) Assuming conversion of outstanding preference
shares to ordinary shares
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
(86)
(119)
37
37
Net exchange translation adjustments
(33)
Share of associates’ reserves
(47)
Cost of share-based payments
14
Share buyback during the period
Reclassification of reserves upon exercise of share options
(47)
14
(4)
5
(4)
(5)
-
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
(701)
(701)
- Transferred to income statement on sale
(227)
(227)
- Tax on items taken directly to or transferred from equity
128
Transfer from / (to) revenue reserve
(11)
128
11
Net profit for the period
1,255
Final dividends paid for previous year
(302)
Interim dividends paid for current year
(317)
Dividends paid to minority interests
Change in minority interests
86
1,341
(302)
(317)
(74)
(74)
1,501
1,501
Balance at 30 June 2008
4,140
66
(106)
6,798
9,386
4,104
24,388
Balance at 1 January 2007
3,976
66
(111)
7,182
7,562
2,371
21,046
(1)
17
Exercise of share options
85
85
Net exchange translation adjustments
18
Share of associates’ reserves
18
18
Cost of share-based payments
18
18
(37)
-
Draw-down of reserves upon vesting of performance shares
37
Available-for-sale investments/Cash flow hedge:
- Net valuation taken to equity
- Transferred to income statement on sale
- Tax on items taken directly to or transferred from equity
334
334
(105)
(105)
(9)
Net profit for the period
(9)
1,177
Appropriation from income statement 1/
30
96
1,273
(30)
-
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
(260)
(260)
Dividends paid to minority interests
(72)
(72)
Change in minority interests
254
254
2,648
22,289
Balance at 30 June 2007
4,061
66
(74)
7,449
8,139
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
Reclassification of reserves upon exercise of share options
Ordinary
shares
4,098
Convertible
preference
shares
66
Other
reserves
Treasury
shares
(27)
37
Revenue
reserve
Total equity
2,567
6,741
37
37
(5)
5
Net profit for the period
620
620
(302)
(302)
(4)
Share buyback during the period
(4)
Final dividends paid for previous year
Interim dividends paid for current year
Balance at 30 June 2008
4,140
66
(31)
32
(317)
2,568
(317)
6,775
Balance at 1 January 2007
3,976
66
-
53
2,824
6,919
304
304
Exercise of share options
85
85
Net profit for the period
Final dividends paid for previous year
(310)
(310)
Interim dividends paid for current year
Balance at 30 June 2007
(260)
2,558
(260)
6,738
4,061
66
-
53
24
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Cash Flow Statement
In $ millions
1st Half
2008
1st Half
2007
Cash flows from operating activities
Profit before tax
1,651
1,576
Adjustments for non-cash items:
Allowances for credit and other losses
Depreciation of properties and other fixed assets
Share of profits of associates
Net gain on disposal of properties and other fixed assets
Net gain on disposal of financial investments
Profit before change