3Q13 performance summary
DBS Group Holdings Ltd
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The Board of Directors of DBS Group Holdings Ltd (“DBSH”) reports the following:
Unaudited Financial Results for the Third Quarter Ended 30 September 2013
Details of the unaudited financial results are in the accompanying Performance Summary.
Dividends
For the third quarter of 2013, no dividend has been declared for DBSH non-voting redeemable
convertible preference shares and DBSH ordinary shares.
By order of the Board
Goh Peng Fong
Group Secretary
31 October 2013
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Third Quarter ended
30 September 2013
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 Segments
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Customer Deposits
Debts Issued
Value at Risk and Trading Income
Capital Adequacy
Additional Pillar 3 Disclosures
Unrealised Valuation Surplus
Unaudited Consolidated Income Statement
Unaudited Consolidated Statement of Comprehensive Income
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
Interested Person Transactions
Selected Notes to the Interim Financial Statements
Confirmation by the Board
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1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its consolidated DBSH Group (“Group”) financial statements in accordance with
Singapore Financial Reporting Standard (“FRS”), 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 2012, with the exception of the adoption of new or revised FRS.
On 1 January 2013, the Group adopted the following new or revised FRS that are issued by the Accounting Standards Council
and relevant for the Group:
FRS 113 Fair Value Measurement
Amendments to FRS 107 Disclosures- Offsetting Financial Assets and Financial Liabilities
Amendments to FRS 1 – Presentation of Items of Other Comprehensive Income
Improvements to FRSs (issued in August 2012)
FRS 113 defines fair value, establishes a framework for measuring fair value and sets out the disclosure requirements for fair
value measurements. It explains how to measure the fair value when it is required by other FRS. It does not introduce new fair
value measurements; neither does it eliminate the practicability exceptions to fair value measurements that currently exist in
certain standards.
Amendments to FRS 107 Disclosures introduce more extensive disclosures that focus on quantitative information about
recognised financial instruments that are offset on the balance sheet as well as those that are subject to master netting or
similar arrangements irrespective of whether they are offset on the balance sheet.
There is no significant impact on the Group’s financial statements from the adoption of the above FRS or revised FRS.
Selected income statement
items ($m)
Net interest income
Net fee and commission
income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and
other losses
Profit before tax
Net profit
Selected balance sheet
items ($m)
1/
Customer loans
2/
Interbank assets
Total assets
3/
Customer deposits
4/
Interbank liabilities
Total liabilities
Shareholders’ funds
Key financial ratios (%)
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
1,406
462
282
2,150
949
1,201
1,332
422
250
2,004
901
1,103
6
9
13
7
5
9
1,382
477
450
2,309
987
1,322
2
(3)
(37)
(7)
(4)
(9)
4,115
1,446
1,215
6,776
2,888
3,888
3,992
1,207
906
6,105
2,671
3,434
3
20
34
11
8
13
151
55
>100
245
(38)
619
303
>100
1,067
1,076
(1)
1,099
(3)
3,335
3,234
3
862
856
1
887
(3)
2,699
2,599
4
241,723
40,616
401,373
202,493
42,912
360,602
19
(5)
11
234,787
33,659
386,600
3
21
4
241,723
40,616
401,373
202,493
42,912
360,602
19
(5)
11
270,211
28,688
364,484
32,573
240,178
28,907
325,762
30,529
13
(1)
12
7
261,397
26,596
349,892
32,442
3
8
4
-
270,211
28,688
364,484
32,573
240,178
28,907
325,762
30,529
13
(1)
12
7
1.60
34.6
44.1
0.87
10.5
89.5
1.2
1.67
33.5
45.0
0.95
11.2
84.3
1.3
1.62
40.1
42.7
0.94
10.9
89.8
1.2
1.62
39.3
42.6
0.96
11.3
89.5
1.2
1.72
34.6
43.8
0.99
11.7
84.3
1.3
15
7
22
20
8
5/
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)
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Common Equity Tier 1 capital
6/
adequacy ratio
6/
Tier 1 capital adequacy ratio
6/
Total capital adequacy ratio
3rd Qtr
2013
3rd Qtr
2012
2nd Qtr
2013
9 Mths
2013
9 Mths
2012
13.3
NA
12.9
13.3
NA
13.3
15.9
13.4
16.5
12.9
15.5
13.3
15.9
13.4
16.5
1.40
13.26
1.40
12.50
1.46
13.21
1.48
13.26
1.44
12.50
1.38
13.16
1.38
12.41
1.44
13.12
1.46
13.16
1.42
12.41
Per share data ($)
Per basic share
– earnings
7/
– net book value
Per diluted share
– earnings
7/
– net book value
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
3/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
4/ Includes interbank liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
5/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data are computed on an annualised basis
6/ With effect from 1 January 2013, Basel III capital adequacy requirements came into effect in Singapore. Changes due to Basel III affected both eligible capital and risk-weighted assets.
Capital adequacy disclosures relating to dates prior to 1 January 2013 are calculated in accordance with the then prevailing capital adequacy regulations and are thus not directly
comparable to those pertaining to dates from 1 January 2013.
7/ Non-controlling interests are not included as equity in the computation of return on equity and net book value per share
NA Not Applicable
Net profit for the third quarter was $862 million. Net
interest income reached a record and fee income from
annuity businesses was maintained at recent highs. The
results were slightly higher than a year ago as the
increase in total income was offset by higher general and
specific allowances. Compared to the previous quarter,
net profit was 3% lower as trading activity was pared given
the uncertain market outlook.
Net interest income rose 6% from a year ago and 2% from
the previous quarter to $1.41 billion. Loans grew 19% from
a year ago but the impact was partially offset by lower loan
spreads and yields on investment securities. Compared to
the previous quarter, loans were 3% higher while net
interest margin eased slightly.
Non-interest income of $744 million was 11% higher than
a year ago. Trade and transaction services, wealth
management and treasury cross-selling contributed to the
increase. Compared to the previous quarter, non-interest
income fell 20% due to lower contributions from marketrelated activities.
Expenses were managed at $949 million, rising less
quickly by 5% from a year ago than the 7% increase in
total income. Expenses were 4% lower than the previous
quarter.
Asset quality remained healthy as the non-performing
loan rate was unchanged from the previous quarter at
1.2%. Specific allowances for loans of 15 basis points
were double the exceptionally low levels a year ago but
lower than the previous quarter’s 22 basis points.
Allowance coverage of 136% was in line with recent
quarters’ levels.
Funding from deposits and wholesale sources grew
faster than loans during the quarter as liquidity buffers
were enhanced. Capital ratios continued to exceed
regulatory standards.
For the nine months, net profit rose 4% to a record $2.70
billion. Total income and profit before allowances rose to
new highs, growing by double-digit percentage terms. The
impact was partially offset by higher general and specific
allowances. Return on equity was 11.3% compared to
11.7% a year ago.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
3rd Qtr 2012
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
237,705
47,921
63,396
349,022
1,560
120
326
2,006
2.60
0.99
2.04
2.28
204,122
53,988
59,517
317,627
1,434
139
366
1,939
2.80
1.02
2.45
2.43
228,998
46,538
66,183
341,719
1,509
111
355
1,975
2.64
0.96
2.15
2.32
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
262,957
63,441
326,398
453
147
600
0.68
0.92
0.73
236,021
57,924
293,945
444
163
607
0.75
1.12
0.82
255,323
61,953
317,276
442
151
593
0.69
0.98
0.75
1,406
1.60
1,332
1.67
1,382
1.62
Net interest
income/margin
1/
9 Mths 2013
Average balance
sheet
Average
balance
($m)
9 Mths 2012
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
228,631
47,156
64,622
340,409
4,536
341
1,024
5,901
2.65
0.97
2.12
2.32
199,638
51,375
58,909
309,922
4,219
378
1,124
5,721
2.82
0.98
2.55
2.47
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
257,108
59,647
316,755
1,332
454
1,786
0.69
1.02
0.75
231,421
55,342
286,763
1,241
488
1,729
0.72
1.18
0.81
4,115
1.62
3,992
1.72
Net interest
1/
income/margin
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest income rose 6% from a year ago and 2%
from the previous quarter to $1.41 billion from higher
customer loan volumes.
For the nine months, net interest income rose 3% to
$4.12 billion. Higher customer loans volumes more
than offset the impact of a ten basis point decline in
net interest margins to 1.62%.
Net interest margin fell seven basis points from a year
ago and two basis points from the previous quarter to
1.60%. The decline from both periods was due to lower
corporate and trade loan spreads, and lower yields on
investment securities.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2013 versus 3rd Qtr 2012
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2013 versus 2nd Qtr 2013
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
237
(16)
23
(111)
(3)
(63)
126
(19)
(40)
58
4
(24)
4
34
8
Total
244
(177)
67
(15)
47
(18)
(38)
(33)
9
51
15
66
(42)
(31)
(73)
9
(16)
(7)
13
4
17
(7)
(10)
(17)
6
(6)
-
178
(104)
74
30
(21)
9
Interest income
Interest expense
Customer deposits
Other borrowings
Total
Net impact on interest income
Due to change in number of days
Net Interest Income
-
15
74
24
9 Mths 2013 versus 9 Mths 2012
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
613
(31)
109
691
(280)
(5)
(205)
(490)
333
(36)
(96)
201
Interest expense
Customer deposits
Other borrowings
Total
138
48
186
(42)
(81)
(123)
96
(33)
63
Net impact on interest income
505
(367)
138
Interest income
Due to change in number of days
(15)
Net Interest Income
123
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and transaction services
Loan-related
2/
Cards
Wealth management
Others
1/
Fee and commission income
Less: fee and commission
expense
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
49
37
135
98
83
102
17
43
60
116
98
72
74
10
14
(38)
16
15
38
70
57
47
137
94
82
101
17
(14)
(21)
(1)
4
1
1
-
168
148
406
295
243
316
48
135
121
358
263
217
223
36
24
22
13
12
12
42
33
521
473
10
535
(3)
1,624
1,353
20
59
51
16
58
2
178
146
22
462
422
9
477
(3)
1,446
1,207
20
Notes:
1/ Includes trade & remittances, guarantees and deposit-related fees
2/ Net of interchange fees paid
For the nine months, net fee and commission income
rose 20% to a record $1.45 billion. All fee segments
were higher, with wealth management leading the
increase. Higher contributions from stockbroking and
investment banking were due to strong capital market
activities in the first half of the year.
Net fee and commission income increased 9% from a
year ago to $462 million, led by wealth management,
trade and transaction services and cards, in line with
efforts to grow these businesses. Compared to the
previous quarter, declines in contributions from
investment banking and stockbroking resulted in a 3%
decrease in net fee and commission income.
OTHER NON-INTEREST INCOME
($m)
Net trading income
Net (loss)/income from financial
instruments designated at fair value
Net income from financial
investments
Net gain on fixed assets
Others (include rental income)
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
206
137
50
330
(38)
946
601
57
(18)
(7)
(>100)
6
NM
(14)
(46)
70
83
110
(25)
45
84
194
316
(39)
11
10
10
44
25
NM
(56)
44
45
8
27
>100
67
282
250
13
450
(37)
1,215
906
34
Note:
NM Not Meaningful
Total other non-interest income rose 13% from a year
ago to $282 million. Trading income (including net
income from financial instruments designated at fair
value) rose 45% to $188 million as trading gains and
income from treasury customer flows were higher.
Compared to the previous quarter, total other noninterest income was 37% lower as trading income fell
44%.
For the nine months, total other non-interest income
increased 34% to $1.22 billion, due mainly to a 68%
increase in trading income. The increase in total noninterest income was also due to higher gains from the
sale of fixed assets of $44 million compared to $8
million a year ago.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
511
91
160
56
131
949
18,930
482
82
148
46
143
901
18,216
6
11
8
22
(8)
5
4
521
95
167
58
146
987
18,631
(2)
(4)
(4)
(3)
(10)
(4)
2
1,538
274
494
164
418
2,888
18,930
1,433
241
442
162
393
2,671
18,216
7
14
12
1
6
8
4
Included in the above table were:
Depreciation of properties and other fixed
assets
Directors’ fees
Audit fees payable
52
2
43
1
21
100
53
1
(2)
100
160
4
126
2
27
100
2
2
-
1
100
5
5
-
For the nine months, costs rose 8% to $2.89 billion from
higher headcount and investments to support business
growth. The cost-income ratio improved from 44% a year
ago to 43%.
Expenses rose 5% from a year ago to $949 million as staff
and other operating costs were higher. Expenses fell 4%
from the previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
General allowances (GP)
Specific allowances (SP) for loans
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
1/
Specific allowances (SP) for securities,
properties and other assets
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths 9 Mths
2013
2012
%
chg
57
15
>100
113
(50)
280
164
71
93
18
9
19
34
13
36
1
6
1
9
19
>100
>100
50
>100
>100
(32)
128
41
12
9
35
31
(27)
(56)
(25)
>100
(3)
(58)
335
66
29
30
102
108
119
32
13
(2)
27
49
>100
>100
>100
NM
>100
>100
1
4
(75)
4
(75)
4
20
(80)
151
55
>100
245
(38)
619
303
>100
Notes:
1/ Specific allowances for loans are classified according to where the borrower is incorporated.
NM Not Meaningful
Specific allowances for loans rose to $93 million from
$36 million a year ago, or to 15 basis points of loans
from seven basis points a year ago. General
allowances also rose, from $15 million to $57 million, in
line with faster loan growth. Both general allowances
and specific allowances were lower than the previous
quarter.
For the nine months, total allowances doubled to $619
million. General allowances were 71% higher due to
faster loan growth, while specific allowances rose to
$335 million, or to 20 basis points of loans from an
exceptionally low eight basis points a year ago.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS
($m)
Consumer
Banking/
Wealth
Mangement
Institutional
Banking
Treasury
Others
Total
Selected income items
3rd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
381
255
636
432
25
179
759
387
1,146
345
73
728
169
56
225
121
(3)
107
97
46
143
51
56
17
53
1,406
744
2,150
949
151
17
1,067
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
364
259
623
427
20
176
742
440
1,182
346
193
643
180
106
286
119
(1)
168
96
122
218
95
33
22
112
1,382
927
2,309
987
245
22
1,099
3rd Qtr 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
356
213
569
407
28
134
697
378
1,075
318
(18)
775
160
64
224
112
(1)
113
119
17
136
64
46
28
54
1,332
672
2,004
901
55
28
1,076
9 Mths 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
1,104
777
1,881
1,259
63
559
2,219
1,311
3,530
1,010
439
2,081
512
322
834
350
(4)
488
280
251
531
269
121
66
207
4,115
2,661
6,776
2,888
619
66
3,335
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer
Banking/
Wealth
Mangement
9 Mths 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Institutional
Banking
Treasury
Others
Total
1,079
659
1,738
1,157
75
506
2,079
1,129
3,208
907
127
2,174
541
287
828
332
(3)
499
293
38
331
275
104
103
55
3,992
2,113
6,105
2,671
303
103
3,234
70,906
202,892
84,769
38,004
139,313
19
7
127,222
8
2
82,662
1
2
15,287
41
41
396,571
4,802
401,373
364,484
69
52
68,186
198,432
78,313
36,867
139,914
11
8
121,567
9
2
76,288
6
2
12,123
29
41
61,705
169,570
82,656
41,869
134,727
20
7
98,968
8
3
82,449
2
9,618
65
31
Selected balance sheet and other
1/
items
30 Sept 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 3rd Qtr 2013
Depreciation for 3rd Qtr 2013
30 Jun 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2013
Depreciation for 2nd Qtr 2013
30 Sept 2012
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 3rd Qtr 2012
Depreciation for 3rd Qtr 2012
381,798
4,802
386,600
349,892
55
53
355,800
4,802
360,602
325,762
93
43
Note:
1/ Refer to sections on Customer Loans and Non-Performing Assets and Loss Allowance Coverage for more information on business segments
The business segment results are prepared based on
the Group’s internal management reporting which
reflects the organisation management structure. As the
activities of the Group are highly integrated, internal
allocation has been made in preparing the segment
information. Amounts for each business segment are
shown after the allocation of certain centralised costs,
funding income and the application of transfer pricing,
where appropriate. Transactions between segments are
recorded within the segment as if they are third party
transactions and are eliminated on consolidation.
The various business segments are described below:
Consumer Banking/ Wealth Management
Consumer Banking/ Wealth Management provides individual
customers with a diverse range of banking and related
financial services. The products and services available to
customers include current and savings accounts, fixed
deposits, loans and home finance, cards, payments,
investment and insurance products.
Compared to the previous quarter, profit before tax rose
marginally to $179 million. Total income increased 2% to
$636 million driven by higher net interest income from loan
and deposit volume growth while non-interest income was
little changed. Expenses were stable at $432 million.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Allowances rose 25% to $25 million mainly due to
increased general allowances in line with loan growth.
Compared to a year ago, profit before tax rose
34%.Total Income increased 12%. Net interest income
rose 7% to $381 million, while non-interest income rose
20% to $255 million from continued customer growth
and stronger cross-selling. Expenses rose 6% while
allowances declined 11%.
For the nine months of the year, profit before tax was
$559 million, 10% higher than a year ago. Income grew
8% to $1.88 billion. Net-interest income rose 2%. Noninterest income increased 18% to $777 million driven by
higher contributions from wealth management and cards
fees. Expenses rose 9% to $1.26 billion due to
headcount growth, investment in business capabilities
and higher marketing and advertising activities.
Allowances declined 16% to $63 million from both lower
general and specific allowances.
Institutional Banking
Institutional Banking provides financial services and
products to institutional clients including bank and
non-bank financial institutions, government- linked
companies, large corporates and small and mediumsized businesses. The business focuses on
broadening and deepening customer
relationships. Products and services comprise the full
range of credit facilities from short term working
capital financing to specialized lending. It also
provides global transactional services such as cash
management, trade finance and securities and
fiduciary services; treasury and markets products;
corporate finance and advisory banking as well as
capital markets solutions. In addition, Institutional
Banking also includes Islamic Bank of Asia.
Compared to the previous quarter, profit before tax
rose 13% to $728 million as allowances were 62%
lower. Net interest income rose 2% on the back of
similar growth in assets. Non-interest income was
12% lower due to slower sales of treasury products.
Total income was marginally lower by 3% at $1.15
billion. Expenses were little changed at $345 million
as the business remained disciplined in the
management of cost. Allowances declined as general
allowances were lower due to slower loan growth.
Compared to a year ago, profit before tax declined
6%. Allowances were normalised in the current
quarter compared to a write-back a year ago. The
higher allowances were partially offset by a 7%
increase in total income.
For the nine months of the year, profit before tax was 4%
lower at $2.08 billion. Total income increased 10%, largely
due to higher non-interest income from increased
customer focus and cross-selling. Expenses increased
11% from headcount growth and investment in business
capabilities. Allowances tripled as general allowances
increased in line with the faster loan growth and specific
allowances rose from an exceptionally low level a year
ago.
Treasury
Income reflected in the Treasury segment refers to trading
and market-making income. Total income fell 21% from
the previous quarter to $225 million as trading gains in
foreign exchange products were lower, partially offset by
higher trading gains on interest rate and credit products.
Geographically, the decline in income came mainly from
Singapore, Hong Kong and Taiwan, while income from
Indonesia and India were higher. Expenses rose
marginally by 2% to $121 million as business related costs
increased. Profit before tax fell 36% to $107 million.
Income from treasury customer flows is reflected in the
Institutional Banking and Consumer Banking/Wealth
Management segments and not in Treasury. Income from
customer flows fell 19% to $228 million from the previous
quarter due to declines in customer related transactions in
Hong Kong, Singapore, China and Taiwan as market
outlook was uncertain. This was partially offset by
increase in customer flows from Indonesia.
Compared to a year ago, profit before tax was 5% lower
due to higher expenses. Total expenses rose 8% as
headcount grew to support business growth, and
occupancy and business related costs were higher. Total
income was little changed as higher contributions from
China, Indonesia, India, Hong Kong and Korea, were
offset by lower income from Singapore. Income from
customer flows rose 4% from a year ago.
For the nine months of the year, profit before tax fell
marginally by 2% to $488 million as income was little
changed. Expenses increased 5% to $350 million from
higher staff, occupancy and other business expenses.
Income from treasury customer flows for the first nine
months rose 12% from a year ago to $805 million from
higher sales to corporate, retail and wealth management
customers in Hong Kong, Taiwan, China and Korea.
Others
Others encompasses a range of activities from corporate
decisions and includes income and expenses not attributed
to other business segments, including capital and balance
sheet management, funding and liquidity. DBS Vickers
Securities is also included in this segment.
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
1/
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
Selected income items
3rd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
880
395
1,275
530
18
4
731
76
603
263
166
429
179
61
189
30
159
119
76
195
145
27
3
26
10
16
94
76
170
74
30
10
76
21
54
50
31
81
21
15
45
15
30
1,406
744
2,150
949
151
17
1,067
152
862
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
864
505
1,369
575
143
3
654
94
510
250
274
524
186
41
297
43
254
104
80
184
133
19
3
35
14
21
111
37
148
71
31
16
62
9
53
53
31
84
22
11
51
2
49
1,382
927
2,309
987
245
22
1,099
162
887
3rd Qtr 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
813
463
1,276
527
69
5
685
95
535
228
145
373
168
(20)
225
38
187
110
32
142
124
8
1
11
11
118
22
140
66
8
22
88
18
70
63
10
73
16
(10)
67
14
53
1,332
672
2,004
901
55
28
1,076
165
856
9 Mths 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
2,579
1,514
4,093
1,684
259
11
2,161
253
1,754
744
683
1,427
533
143
751
116
635
324
225
549
396
52
7
108
34
74
314
157
471
214
72
48
233
56
176
154
82
236
61
93
82
22
60
4,115
2,661
6,776
2,888
619
66
3,335
481
2,699
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
9 Mths 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
2,404
1,364
3,768
1,586
268
18
1,932
231
1,544
665
472
1,137
491
(14)
660
106
554
411
115
526
349
15
4
166
33
133
337
107
444
192
44
81
289
64
225
175
55
230
53
(10)
187
44
143
3,992
2,113
6,105
2,671
303
103
3,234
478
2,599
Selected balance sheet items
30 Sept 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
254,682
4,802
259,484
2,278
156,263
69,992
69,992
349
52,974
41,821
41,821
104
20,079
17,046
17,046
29
8,639
13,030
13,030
3
7,325
396,571
4,802
401,373
2,763
245,280
30 Jun 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
246,092
4,802
250,894
2,223
153,224
63,587
63,587
351
48,283
41,490
41,490
106
19,949
17,579
17,579
19
9,408
13,050
13,050
2
7,529
381,798
4,802
386,600
2,701
238,393
30 Sept 2012
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
236,463
4,802
241,265
1,843
131,646
56,899
56,899
357
39,611
32,567
32,567
110
17,398
17,327
17,327
20
10,171
12,544
12,544
1
6,909
355,800
4,802
360,602
2,331
205,735
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked
2/ Includes investment in associates, properties and other fixed assets, and investment properties
The performance by geography is classified based on the
location in which income and assets are recorded.
Singapore
Net profit rose 18% from the previous quarter to $603
million. Total income fell 7% to $1.28 billion. Net interest
income rose 2% to $880 million from higher loan volumes.
Non-interest income was 22% lower at $395 million as
stockbroking and investment banking fees fell. Trading
gains were also lower.
Expenses were 8% lower at $530 million and profit before
allowances was 6% lower at $745 million. Allowances fell
87% to $18 million from lower specific and general
allowances.
Compared to a year ago, net profit rose 13% as income
and expenses were little changed while allowances fell
from lower general allowances.
For the nine months, net profit rose 14% to $1.75 billion.
Total income increased 9% to $4.09 billion from higher
loan volumes and broad-based non-interest income
growth. Expenses were 6% higher at $1.68 billion.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Hong Kong
Currency effects were minimal compared to the previous
quarter and a year ago.
Net profit fell 37% from the previous quarter to $159 million
as total income fell 18% to $429 million. Net interest income
increased 5% to $263 million from higher loan volumes.
Loans rose 10% from growth in trade finance while deposits
increased 8%. Net interest margin fell five basis points to
1.55%.
Non-interest income decreased 39% to $166 million, as the
previous quarter had property disposal gains. Excluding the
gains, non-interest income would be 28% lower. Fee
income decreased as investment banking, stockbroking
and loan related fees fell. Trading income fell from lower
treasury customer flows given the uncertain market outlook
Expenses were 4% lower at $179 million as staff costs fell.
Allowances rose 49% to $61 million as general allowances
increased in line with loan growth.
margins, while non-interest income fell 5% to $76 million
from lower trading gains. Expenses rose 9% to $145 million
due to higher staff costs. Allowances rose 42% to $27
million as specific allowances were higher.
Compared to a year ago, net profit rose 45%. Higher net
interest and non-interest income were partially offset by
higher expenses and total allowances.
For the nine months, net profit fell 44% to $74 million. Total
income rose 4% to $549 million as a decline in net interest
income from lower net interest margin was partially offset
by increased fee income and treasury income from
customer flows. Expenses rose 13% to $396 million while
allowances tripled to $52 million due to higher specific
allowances.
Net profit for South and South-east Asia was little changed
from the previous quarter. Net interest income fell 15% to
$94 million partly due to currency effects. Non-interest
income doubled to $76 million from higher treasury gains
and income from customer flows. Expenses rose 4% to $74
million, while total allowances were stable at $30 million.
Compared to a year ago, net profit was 15% lower as an
increase in total income was more than offset by higher
total allowances. Net interest income increased 15% from
higher loan volumes. Non-interest income was 14% higher
from increased treasury customer flows and higher trading
gains. Expenses rose 7%. Allowances increased to $61
million compared to a write back of $20 million a year ago
as general and specific allowances were higher.
Compared to a year ago, net profit was 23% lower as an
increase in income was offset by higher expenses and
allowances, and a decline in share of profits of associates.
For the nine months, net profit rose 15% to $635 million as
total income increased 26% to $1.43 billion. Net interest
income was higher from loan growth and lower funding
costs. Net interest margin rose nine basis points to 1.56%.
Non-interest income rose 45% due to higher treasury
customer flows and trading gains as well as asset disposal
gains. Expenses were 9% higher at $533 million while
allowances increased as higher general allowances were
taken in line with loan growth.
Net profit for Rest of the World fell 39% to $30 million
from the previous quarter. Total income declined 4% to
$81 million as net interest income fell 6% from lower loan
and higher deposit volumes. Non-interest income was
unchanged at $31 million. Expenses were stable at $21
million, while allowances rose 36% to $15 million.
Compared to a year ago, total income rose 11% while
expenses rose 31%. Total allowances were higher as
there had been a net write-back of allowances a year ago.
Other regions
Net profit for Rest of Greater China fell 24% from the
previous quarter to $16 million as higher income was more
than offset by an increase in expenses and allowances. Net
interest income was 14% higher at $119 million from better
For the nine months, net profit fell 22% to $176 million.
Total income rose 6% to $471 million, while expenses were
11% higher at $214 million. Allowances rose 64% to $72
million mainly due to higher specific allowances.
For the nine months, net profit fell 58% to $60 million.
Total income rose 3% to $236 million, while expenses
were 15% higher at $61 million. Allowances rose to $93
million from higher specific allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
245,280
238,393
213,828
205,735
General allowances
Net total
1,197
2,360
241,723
1,286
2,320
234,787
1,217
2,092
210,519
1,189
2,053
202,493
By business unit
Consumer Banking/ Wealth Management
Institutional Banking
Others
Total (Gross)
68,838
173,489
2,953
245,280
66,195
169,293
2,905
238,393
61,720
149,077
3,031
213,828
60,122
143,436
2,177
205,735
116,333
40,093
46,463
21,628
20,763
245,280
114,626
37,760
41,641
23,161
21,205
238,393
101,485
38,119
30,678
23,045
20,501
213,828
98,624
37,538
27,538
22,751
19,284
205,735
30,023
42,089
48,263
52,196
19,743
10,527
32,556
40,177
47,202
48,230
19,816
9,976
27,037
36,179
45,570
38,230
17,745
11,155
26,456
34,939
44,147
35,691
17,114
10,158
18,230
16,989
14,969
14,950
24,209
245,280
23,447
238,393
22,943
213,828
22,280
205,735
98,663
29,660
82,354
34,603
245,280
97,779
28,811
80,146
31,657
238,393
90,503
29,443
67,156
26,726
213,828
87,617
29,162
62,254
26,702
205,735
Gross
Less:
Specific allowances
2/
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total (Gross)
3/
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals
(excluding housing loans)
Others
Total (Gross)
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ Loans by geography are classified according to where the borrower is incorporated
3/ Certain loans to investment holding companies have been reclassified to better reflect the underlying principal activity of the companies owned by the holding company. The
amounts for prior periods have also been reclassified to conform to the current presentation.
Gross customer loans rose 3% from the previous
quarter to $245 billion. The increase was due to trade
loans and secured consumer borrowing.
Gross loans grew 19% from a year ago, with the
expansion spread across most regions and across
corporate and consumer borrowers. Trade loans
accounted for one-third of loan growth over the past 12
months.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
By business unit
30 Sept 2013
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Jun 2013
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Dec 2012
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Sept 2012
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
300
70
688
0.4
253
468
2,638
1,244
1,672
1.5
111
149
2,938
1,314
2,360
1.2
125
174
9
3
125
-
1,422
3,200
107
48
315
-
339
789
3,054
1,365
2,800
-
136
192
297
71
661
0.4
246
452
2,578
1,306
1,659
1.5
115
150
2,875
1,377
2,320
1.2
129
173
9
3
127
-
1,444
2,600
82
48
303
-
428
763
2,966
1,428
2,750
-
141
191
288
70
617
0.5
239
421
2,339
1,232
1,475
1.6
116
142
2,627
1,302
2,092
1.2
129
165
13
4
117
-
931
2,420
86
49
302
-
408
747
2,726
1,355
2,511
-
142
183
302
81
600
0.5
225
394
2,347
1,183
1,453
1.6
112
138
2,649
1,264
2,053
1.3
125
159
13
4
115
-
915
2,380
173
65
294
-
208
506
2,835
1,333
2,462
-
134
176
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sept 2013
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
30 Jun 2013
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
31 Dec 2012
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
30 Sept 2012
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
492
266
286
152
123
154
967
404
486
0.4
0.7
0.6
227
198
224
461
316
398
425
202
282
2.0
114
224
1,469
683
221
7.1
62
68
2,938
1,314
2,360
1.2
125
174
9
3
125
-
1,422
3,200
107
48
315
-
339
789
3,054
1,365
2,800
-
136
192
468
262
266
165
126
133
978
380
437
0.4
0.7
0.6
244
193
214
468
307
401
374
193
302
1.6
132
226
1,505
760
223
7.1
65
72
2,875
1,377
2,320
1.2
129
173
9
3
127
-
1,444
2,600
82
48
303
-
428
763
2,966
1,428
2,750
-
141
191
410
244
232
130
126
129
864
392
320
0.4
0.6
0.8
242
212
194
520
314
335
207
130
302
0.9
209
234
1,534
787
214
7.5
65
72
2,627
1,302
2,092
1.2
129
165
13
4
117
-
931
2,420
86
49
302
-
408
747
2,726
1,355
2,511
-
142
183
561
270
216
185
145
115
886
387
288
0.6
0.7
0.8
191
197
187
425
289
333
194
129
291
0.9
216
238
1,408
690
201
7.3
63
66
2,649
1,264
2,053
1.3
125
159
13
4
115
-
915
2,380
173
65
294
-
208
506
2,835
1,333
2,462
-
134
176
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
1/
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
SP
NPA
SP
NPA
SP
NPA
SP
526
122
119
424
319
50
11
153
481
114
118
406
289
50
12
229
352
83
106
277
240
38
12
155
363
84
103
268
234
37
12
140
1,211
527
1,231
545
1,201
520
1,167
474
Financial institutions, investment &
holding companies
301
175
297
172
404
265
412
267
Professionals & private individuals
(excluding housing loans)
156
46
158
46
162
46
174
56
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
Total non-performing loans
Debt securities
Contingent liabilities & others
Total non-performing assets
79
33
70
34
42
26
78
44
2,938
9
1,314
3
2,875
9
1,377
3
2,627
13
1,302
4
2,649
13
1,264
4
107
48
82
48
86
49
173
65
3,054
1,365
2,966
1,428
2,726
1,355
2,835
1,333
Note:
1/ Certain loans to investment holding companies have been reclassified to better reflect the underlying principal activity of the companies owned by the holding company.
The amounts for prior periods have also been reclassified to conform to the current presentation.
By loan classification
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Non-performing assets
Substandard
Doubtful
Loss
Total
1,846
863
345
3,054
305
715
345
1,365
1,620
983
363
2,966
260
805
363
1,428
1,405
752
569
2,726
268
518
569
1,355
1,519
947
369
2,835
284
680
369
1,333
Restructured assets
Substandard
Doubtful
Loss
Total
907
360
74
1,341
186
337
74
597
942
363
72
1,377
182
338
72
592
888
223
276
1,387
200
114
276
590
805
111
38
954
203
96
38
337
By collateral type
($m)
30 Sept 2013
30 Jun 2013
NPA
NPA
NPA
NPA
2,167
2,190
2,115
2,162
Secured non-performing assets by collateral type
Properties
377
343
269
330
Shares and debentures
Fixed deposits
228
35
145
27
58
32
62
34
Others
247
261
252
247
3,054
2,966
2,726
2,835
Unsecured non-performing assets
Total
31 Dec 2012 30 Sept 2012
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
1,292
232
304
1,226
1,244
249
319
1,154
1,245
297
193
991
877
360
239
1,359
Total
3,054
2,966
2,726
2,835
The NPL rate was unchanged from the previous quarter at
1.2% while non-performing assets rose 3% to $3.05
billion.
Allowance coverage of 136% of non-performing assets
and 192% if collateral was considered were similar to
recent quarters’ levels.
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
1/
($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 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
136,024
18,984
95,416
20,696
928
27,084
16,310
6,495
4,016
263
62,087
30,143
5,991
17,644
8,309
45,016
35,917
2,879
4,755
1,465
270,211
101,354
110,781
47,111
10,965
138,947
21,190
94,347
22,227
1,183
25,584
15,897
5,902
3,692
93
49,895
23,891
4,666
16,319
5,019
46,971
37,379
2,900
5,330
1,362
261,397
98,357
107,815
47,568
7,657
131,000
19,501
90,561
20,024
914
25,730
15,690
6,283
3,516
241
45,981
24,124
4,256
15,332
2,269
40,196
32,644
2,412
3,969
1,171
242,907
91,959
103,512
42,841
4,595
129,199
20,310
88,839
19,308
742
22,729
12,694
5,858
3,869
308
48,353
24,119
4,422
15,620
4,192
39,897
32,589
2,022
3,486
1,800
240,178
89,712
101,141
42,283
7,042
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 3% from the previous quarter to
$270 billion, led by US dollar deposits.
Customer deposits grew 13% from a year ago, with US
dollar deposits accounting for half the growth. Deposits
in Singapore dollars, Hong Kong dollars and other
currencies were also higher.
DEBTS ISSUED
($m)
Subordinated term debts
Medium term notes
Commercial papers
1/
Certificates of deposit
Other debt securities in issue
Total
Due within 1 year
Due after 1 year
Total
2/
30 Sep 2013
30 Jun 2013
31 Dec 2012
30 Sep 2012
5,528
4,864
15,976
1,122
4,300
31,790
5,532
4,511
14,186
967
4,370
29,566
5,505
3,168
5,820
1,149
3,617
19,259
5,507
3,184
9,013
1,425
3,432
22,561
17,976
13,814
31,790
16,458
13,108
29,566
8,498
10,761
19,259
11,836
10,725
22,561
Notes:
1/ Includes certificates of deposit classified as financial liabilities at fair value through profit or loss on the balance sheet
2/ Includes other debt securities in issue classified as financial liabilities at fair value through profit or loss on the balance sheet
19
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.
Back-testing is a procedure used to verify the predictive power of the VaR calculations involving comparison of actual daily
profits and losses adjusted with the estimates from the VaR model. There were no outliers in the back-testing for the period
from 1 October 2012 to 30 September 2013 and the corresponding prior period.
The following table shows the period-end, average, high and low VaR for the trading risk exposure of the Group for the period
from 1 October 2012 to 30 September 2013. The Group’s trading book VaR methodology is based on Historical Simulation
VaR.
($m)
As at 30 Sept 2013
Total
Average
29
1 Oct 2012 to 30 Sept 2013
High
21
33
Low
13
The chart below shows the histogram of VaR for the Group’s trading book for the period from 1 October 2012 to 30 September
2013.
DBSH Group VaR for Trading Book
120
100
No. of Days
80
60
40
20
>30-33
>27-30
>24-27
>21-24
>18-21
>15-18
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The Board of Directors of DBS Group Holdings Ltd (“DBSH”) reports the following:
Unaudited Financial Results for the Third Quarter Ended 30 September 2013
Details of the unaudited financial results are in the accompanying Performance Summary.
Dividends
For the third quarter of 2013, no dividend has been declared for DBSH non-voting redeemable
convertible preference shares and DBSH ordinary shares.
By order of the Board
Goh Peng Fong
Group Secretary
31 October 2013
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the Third Quarter ended
30 September 2013
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 Segments
Performance by Geography
Customer Loans
Non-Performing Assets and Loss Allowance Coverage
Customer Deposits
Debts Issued
Value at Risk and Trading Income
Capital Adequacy
Additional Pillar 3 Disclosures
Unrealised Valuation Surplus
Unaudited Consolidated Income Statement
Unaudited Consolidated Statement of Comprehensive Income
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
Interested Person Transactions
Selected Notes to the Interim Financial Statements
Confirmation by the Board
Page
2
4
6
6
7
7
8
11
14
15
19
19
20
21
22
22
23
23
24
25
26
27
28
28
29
35
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its consolidated DBSH Group (“Group”) financial statements in accordance with
Singapore Financial Reporting Standard (“FRS”), 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 2012, with the exception of the adoption of new or revised FRS.
On 1 January 2013, the Group adopted the following new or revised FRS that are issued by the Accounting Standards Council
and relevant for the Group:
FRS 113 Fair Value Measurement
Amendments to FRS 107 Disclosures- Offsetting Financial Assets and Financial Liabilities
Amendments to FRS 1 – Presentation of Items of Other Comprehensive Income
Improvements to FRSs (issued in August 2012)
FRS 113 defines fair value, establishes a framework for measuring fair value and sets out the disclosure requirements for fair
value measurements. It explains how to measure the fair value when it is required by other FRS. It does not introduce new fair
value measurements; neither does it eliminate the practicability exceptions to fair value measurements that currently exist in
certain standards.
Amendments to FRS 107 Disclosures introduce more extensive disclosures that focus on quantitative information about
recognised financial instruments that are offset on the balance sheet as well as those that are subject to master netting or
similar arrangements irrespective of whether they are offset on the balance sheet.
There is no significant impact on the Group’s financial statements from the adoption of the above FRS or revised FRS.
Selected income statement
items ($m)
Net interest income
Net fee and commission
income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and
other losses
Profit before tax
Net profit
Selected balance sheet
items ($m)
1/
Customer loans
2/
Interbank assets
Total assets
3/
Customer deposits
4/
Interbank liabilities
Total liabilities
Shareholders’ funds
Key financial ratios (%)
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
1,406
462
282
2,150
949
1,201
1,332
422
250
2,004
901
1,103
6
9
13
7
5
9
1,382
477
450
2,309
987
1,322
2
(3)
(37)
(7)
(4)
(9)
4,115
1,446
1,215
6,776
2,888
3,888
3,992
1,207
906
6,105
2,671
3,434
3
20
34
11
8
13
151
55
>100
245
(38)
619
303
>100
1,067
1,076
(1)
1,099
(3)
3,335
3,234
3
862
856
1
887
(3)
2,699
2,599
4
241,723
40,616
401,373
202,493
42,912
360,602
19
(5)
11
234,787
33,659
386,600
3
21
4
241,723
40,616
401,373
202,493
42,912
360,602
19
(5)
11
270,211
28,688
364,484
32,573
240,178
28,907
325,762
30,529
13
(1)
12
7
261,397
26,596
349,892
32,442
3
8
4
-
270,211
28,688
364,484
32,573
240,178
28,907
325,762
30,529
13
(1)
12
7
1.60
34.6
44.1
0.87
10.5
89.5
1.2
1.67
33.5
45.0
0.95
11.2
84.3
1.3
1.62
40.1
42.7
0.94
10.9
89.8
1.2
1.62
39.3
42.6
0.96
11.3
89.5
1.2
1.72
34.6
43.8
0.99
11.7
84.3
1.3
15
7
22
20
8
5/
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
7/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances
(loans)/average loans (bp)
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Common Equity Tier 1 capital
6/
adequacy ratio
6/
Tier 1 capital adequacy ratio
6/
Total capital adequacy ratio
3rd Qtr
2013
3rd Qtr
2012
2nd Qtr
2013
9 Mths
2013
9 Mths
2012
13.3
NA
12.9
13.3
NA
13.3
15.9
13.4
16.5
12.9
15.5
13.3
15.9
13.4
16.5
1.40
13.26
1.40
12.50
1.46
13.21
1.48
13.26
1.44
12.50
1.38
13.16
1.38
12.41
1.44
13.12
1.46
13.16
1.42
12.41
Per share data ($)
Per basic share
– earnings
7/
– net book value
Per diluted share
– earnings
7/
– net book value
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
3/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
4/ Includes interbank liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
5/ Return on assets, return on equity, specific allowances (loan)/average loan and per share data are computed on an annualised basis
6/ With effect from 1 January 2013, Basel III capital adequacy requirements came into effect in Singapore. Changes due to Basel III affected both eligible capital and risk-weighted assets.
Capital adequacy disclosures relating to dates prior to 1 January 2013 are calculated in accordance with the then prevailing capital adequacy regulations and are thus not directly
comparable to those pertaining to dates from 1 January 2013.
7/ Non-controlling interests are not included as equity in the computation of return on equity and net book value per share
NA Not Applicable
Net profit for the third quarter was $862 million. Net
interest income reached a record and fee income from
annuity businesses was maintained at recent highs. The
results were slightly higher than a year ago as the
increase in total income was offset by higher general and
specific allowances. Compared to the previous quarter,
net profit was 3% lower as trading activity was pared given
the uncertain market outlook.
Net interest income rose 6% from a year ago and 2% from
the previous quarter to $1.41 billion. Loans grew 19% from
a year ago but the impact was partially offset by lower loan
spreads and yields on investment securities. Compared to
the previous quarter, loans were 3% higher while net
interest margin eased slightly.
Non-interest income of $744 million was 11% higher than
a year ago. Trade and transaction services, wealth
management and treasury cross-selling contributed to the
increase. Compared to the previous quarter, non-interest
income fell 20% due to lower contributions from marketrelated activities.
Expenses were managed at $949 million, rising less
quickly by 5% from a year ago than the 7% increase in
total income. Expenses were 4% lower than the previous
quarter.
Asset quality remained healthy as the non-performing
loan rate was unchanged from the previous quarter at
1.2%. Specific allowances for loans of 15 basis points
were double the exceptionally low levels a year ago but
lower than the previous quarter’s 22 basis points.
Allowance coverage of 136% was in line with recent
quarters’ levels.
Funding from deposits and wholesale sources grew
faster than loans during the quarter as liquidity buffers
were enhanced. Capital ratios continued to exceed
regulatory standards.
For the nine months, net profit rose 4% to a record $2.70
billion. Total income and profit before allowances rose to
new highs, growing by double-digit percentage terms. The
impact was partially offset by higher general and specific
allowances. Return on equity was 11.3% compared to
11.7% a year ago.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
3rd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
3rd Qtr 2012
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2013
Average
Average
balance Interest
rate
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
237,705
47,921
63,396
349,022
1,560
120
326
2,006
2.60
0.99
2.04
2.28
204,122
53,988
59,517
317,627
1,434
139
366
1,939
2.80
1.02
2.45
2.43
228,998
46,538
66,183
341,719
1,509
111
355
1,975
2.64
0.96
2.15
2.32
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
262,957
63,441
326,398
453
147
600
0.68
0.92
0.73
236,021
57,924
293,945
444
163
607
0.75
1.12
0.82
255,323
61,953
317,276
442
151
593
0.69
0.98
0.75
1,406
1.60
1,332
1.67
1,382
1.62
Net interest
income/margin
1/
9 Mths 2013
Average balance
sheet
Average
balance
($m)
9 Mths 2012
Average Average
Interest
rate balance
($m)
(%)
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
228,631
47,156
64,622
340,409
4,536
341
1,024
5,901
2.65
0.97
2.12
2.32
199,638
51,375
58,909
309,922
4,219
378
1,124
5,721
2.82
0.98
2.55
2.47
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
257,108
59,647
316,755
1,332
454
1,786
0.69
1.02
0.75
231,421
55,342
286,763
1,241
488
1,729
0.72
1.18
0.81
4,115
1.62
3,992
1.72
Net interest
1/
income/margin
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest income rose 6% from a year ago and 2%
from the previous quarter to $1.41 billion from higher
customer loan volumes.
For the nine months, net interest income rose 3% to
$4.12 billion. Higher customer loans volumes more
than offset the impact of a ten basis point decline in
net interest margins to 1.62%.
Net interest margin fell seven basis points from a year
ago and two basis points from the previous quarter to
1.60%. The decline from both periods was due to lower
corporate and trade loan spreads, and lower yields on
investment securities.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
3rd Qtr 2013 versus 3rd Qtr 2012
Volume and rate analysis ($m)
Increase/(decrease) due to change in
3rd Qtr 2013 versus 2nd Qtr 2013
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
237
(16)
23
(111)
(3)
(63)
126
(19)
(40)
58
4
(24)
4
34
8
Total
244
(177)
67
(15)
47
(18)
(38)
(33)
9
51
15
66
(42)
(31)
(73)
9
(16)
(7)
13
4
17
(7)
(10)
(17)
6
(6)
-
178
(104)
74
30
(21)
9
Interest income
Interest expense
Customer deposits
Other borrowings
Total
Net impact on interest income
Due to change in number of days
Net Interest Income
-
15
74
24
9 Mths 2013 versus 9 Mths 2012
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
613
(31)
109
691
(280)
(5)
(205)
(490)
333
(36)
(96)
201
Interest expense
Customer deposits
Other borrowings
Total
138
48
186
(42)
(81)
(123)
96
(33)
63
Net impact on interest income
505
(367)
138
Interest income
Due to change in number of days
(15)
Net Interest Income
123
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and transaction services
Loan-related
2/
Cards
Wealth management
Others
1/
Fee and commission income
Less: fee and commission
expense
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
49
37
135
98
83
102
17
43
60
116
98
72
74
10
14
(38)
16
15
38
70
57
47
137
94
82
101
17
(14)
(21)
(1)
4
1
1
-
168
148
406
295
243
316
48
135
121
358
263
217
223
36
24
22
13
12
12
42
33
521
473
10
535
(3)
1,624
1,353
20
59
51
16
58
2
178
146
22
462
422
9
477
(3)
1,446
1,207
20
Notes:
1/ Includes trade & remittances, guarantees and deposit-related fees
2/ Net of interchange fees paid
For the nine months, net fee and commission income
rose 20% to a record $1.45 billion. All fee segments
were higher, with wealth management leading the
increase. Higher contributions from stockbroking and
investment banking were due to strong capital market
activities in the first half of the year.
Net fee and commission income increased 9% from a
year ago to $462 million, led by wealth management,
trade and transaction services and cards, in line with
efforts to grow these businesses. Compared to the
previous quarter, declines in contributions from
investment banking and stockbroking resulted in a 3%
decrease in net fee and commission income.
OTHER NON-INTEREST INCOME
($m)
Net trading income
Net (loss)/income from financial
instruments designated at fair value
Net income from financial
investments
Net gain on fixed assets
Others (include rental income)
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
206
137
50
330
(38)
946
601
57
(18)
(7)
(>100)
6
NM
(14)
(46)
70
83
110
(25)
45
84
194
316
(39)
11
10
10
44
25
NM
(56)
44
45
8
27
>100
67
282
250
13
450
(37)
1,215
906
34
Note:
NM Not Meaningful
Total other non-interest income rose 13% from a year
ago to $282 million. Trading income (including net
income from financial instruments designated at fair
value) rose 45% to $188 million as trading gains and
income from treasury customer flows were higher.
Compared to the previous quarter, total other noninterest income was 37% lower as trading income fell
44%.
For the nine months, total other non-interest income
increased 34% to $1.22 billion, due mainly to a 68%
increase in trading income. The increase in total noninterest income was also due to higher gains from the
sale of fixed assets of $44 million compared to $8
million a year ago.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths
2013
9 Mths
2012
%
chg
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
511
91
160
56
131
949
18,930
482
82
148
46
143
901
18,216
6
11
8
22
(8)
5
4
521
95
167
58
146
987
18,631
(2)
(4)
(4)
(3)
(10)
(4)
2
1,538
274
494
164
418
2,888
18,930
1,433
241
442
162
393
2,671
18,216
7
14
12
1
6
8
4
Included in the above table were:
Depreciation of properties and other fixed
assets
Directors’ fees
Audit fees payable
52
2
43
1
21
100
53
1
(2)
100
160
4
126
2
27
100
2
2
-
1
100
5
5
-
For the nine months, costs rose 8% to $2.89 billion from
higher headcount and investments to support business
growth. The cost-income ratio improved from 44% a year
ago to 43%.
Expenses rose 5% from a year ago to $949 million as staff
and other operating costs were higher. Expenses fell 4%
from the previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
General allowances (GP)
Specific allowances (SP) for loans
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
1/
Specific allowances (SP) for securities,
properties and other assets
Total
3rd Qtr
2013
3rd Qtr
2012
%
chg
2nd Qtr
2013
%
chg
9 Mths 9 Mths
2013
2012
%
chg
57
15
>100
113
(50)
280
164
71
93
18
9
19
34
13
36
1
6
1
9
19
>100
>100
50
>100
>100
(32)
128
41
12
9
35
31
(27)
(56)
(25)
>100
(3)
(58)
335
66
29
30
102
108
119
32
13
(2)
27
49
>100
>100
>100
NM
>100
>100
1
4
(75)
4
(75)
4
20
(80)
151
55
>100
245
(38)
619
303
>100
Notes:
1/ Specific allowances for loans are classified according to where the borrower is incorporated.
NM Not Meaningful
Specific allowances for loans rose to $93 million from
$36 million a year ago, or to 15 basis points of loans
from seven basis points a year ago. General
allowances also rose, from $15 million to $57 million, in
line with faster loan growth. Both general allowances
and specific allowances were lower than the previous
quarter.
For the nine months, total allowances doubled to $619
million. General allowances were 71% higher due to
faster loan growth, while specific allowances rose to
$335 million, or to 20 basis points of loans from an
exceptionally low eight basis points a year ago.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS
($m)
Consumer
Banking/
Wealth
Mangement
Institutional
Banking
Treasury
Others
Total
Selected income items
3rd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
381
255
636
432
25
179
759
387
1,146
345
73
728
169
56
225
121
(3)
107
97
46
143
51
56
17
53
1,406
744
2,150
949
151
17
1,067
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
364
259
623
427
20
176
742
440
1,182
346
193
643
180
106
286
119
(1)
168
96
122
218
95
33
22
112
1,382
927
2,309
987
245
22
1,099
3rd Qtr 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
356
213
569
407
28
134
697
378
1,075
318
(18)
775
160
64
224
112
(1)
113
119
17
136
64
46
28
54
1,332
672
2,004
901
55
28
1,076
9 Mths 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
1,104
777
1,881
1,259
63
559
2,219
1,311
3,530
1,010
439
2,081
512
322
834
350
(4)
488
280
251
531
269
121
66
207
4,115
2,661
6,776
2,888
619
66
3,335
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer
Banking/
Wealth
Mangement
9 Mths 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Institutional
Banking
Treasury
Others
Total
1,079
659
1,738
1,157
75
506
2,079
1,129
3,208
907
127
2,174
541
287
828
332
(3)
499
293
38
331
275
104
103
55
3,992
2,113
6,105
2,671
303
103
3,234
70,906
202,892
84,769
38,004
139,313
19
7
127,222
8
2
82,662
1
2
15,287
41
41
396,571
4,802
401,373
364,484
69
52
68,186
198,432
78,313
36,867
139,914
11
8
121,567
9
2
76,288
6
2
12,123
29
41
61,705
169,570
82,656
41,869
134,727
20
7
98,968
8
3
82,449
2
9,618
65
31
Selected balance sheet and other
1/
items
30 Sept 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 3rd Qtr 2013
Depreciation for 3rd Qtr 2013
30 Jun 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2013
Depreciation for 2nd Qtr 2013
30 Sept 2012
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 3rd Qtr 2012
Depreciation for 3rd Qtr 2012
381,798
4,802
386,600
349,892
55
53
355,800
4,802
360,602
325,762
93
43
Note:
1/ Refer to sections on Customer Loans and Non-Performing Assets and Loss Allowance Coverage for more information on business segments
The business segment results are prepared based on
the Group’s internal management reporting which
reflects the organisation management structure. As the
activities of the Group are highly integrated, internal
allocation has been made in preparing the segment
information. Amounts for each business segment are
shown after the allocation of certain centralised costs,
funding income and the application of transfer pricing,
where appropriate. Transactions between segments are
recorded within the segment as if they are third party
transactions and are eliminated on consolidation.
The various business segments are described below:
Consumer Banking/ Wealth Management
Consumer Banking/ Wealth Management provides individual
customers with a diverse range of banking and related
financial services. The products and services available to
customers include current and savings accounts, fixed
deposits, loans and home finance, cards, payments,
investment and insurance products.
Compared to the previous quarter, profit before tax rose
marginally to $179 million. Total income increased 2% to
$636 million driven by higher net interest income from loan
and deposit volume growth while non-interest income was
little changed. Expenses were stable at $432 million.
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Allowances rose 25% to $25 million mainly due to
increased general allowances in line with loan growth.
Compared to a year ago, profit before tax rose
34%.Total Income increased 12%. Net interest income
rose 7% to $381 million, while non-interest income rose
20% to $255 million from continued customer growth
and stronger cross-selling. Expenses rose 6% while
allowances declined 11%.
For the nine months of the year, profit before tax was
$559 million, 10% higher than a year ago. Income grew
8% to $1.88 billion. Net-interest income rose 2%. Noninterest income increased 18% to $777 million driven by
higher contributions from wealth management and cards
fees. Expenses rose 9% to $1.26 billion due to
headcount growth, investment in business capabilities
and higher marketing and advertising activities.
Allowances declined 16% to $63 million from both lower
general and specific allowances.
Institutional Banking
Institutional Banking provides financial services and
products to institutional clients including bank and
non-bank financial institutions, government- linked
companies, large corporates and small and mediumsized businesses. The business focuses on
broadening and deepening customer
relationships. Products and services comprise the full
range of credit facilities from short term working
capital financing to specialized lending. It also
provides global transactional services such as cash
management, trade finance and securities and
fiduciary services; treasury and markets products;
corporate finance and advisory banking as well as
capital markets solutions. In addition, Institutional
Banking also includes Islamic Bank of Asia.
Compared to the previous quarter, profit before tax
rose 13% to $728 million as allowances were 62%
lower. Net interest income rose 2% on the back of
similar growth in assets. Non-interest income was
12% lower due to slower sales of treasury products.
Total income was marginally lower by 3% at $1.15
billion. Expenses were little changed at $345 million
as the business remained disciplined in the
management of cost. Allowances declined as general
allowances were lower due to slower loan growth.
Compared to a year ago, profit before tax declined
6%. Allowances were normalised in the current
quarter compared to a write-back a year ago. The
higher allowances were partially offset by a 7%
increase in total income.
For the nine months of the year, profit before tax was 4%
lower at $2.08 billion. Total income increased 10%, largely
due to higher non-interest income from increased
customer focus and cross-selling. Expenses increased
11% from headcount growth and investment in business
capabilities. Allowances tripled as general allowances
increased in line with the faster loan growth and specific
allowances rose from an exceptionally low level a year
ago.
Treasury
Income reflected in the Treasury segment refers to trading
and market-making income. Total income fell 21% from
the previous quarter to $225 million as trading gains in
foreign exchange products were lower, partially offset by
higher trading gains on interest rate and credit products.
Geographically, the decline in income came mainly from
Singapore, Hong Kong and Taiwan, while income from
Indonesia and India were higher. Expenses rose
marginally by 2% to $121 million as business related costs
increased. Profit before tax fell 36% to $107 million.
Income from treasury customer flows is reflected in the
Institutional Banking and Consumer Banking/Wealth
Management segments and not in Treasury. Income from
customer flows fell 19% to $228 million from the previous
quarter due to declines in customer related transactions in
Hong Kong, Singapore, China and Taiwan as market
outlook was uncertain. This was partially offset by
increase in customer flows from Indonesia.
Compared to a year ago, profit before tax was 5% lower
due to higher expenses. Total expenses rose 8% as
headcount grew to support business growth, and
occupancy and business related costs were higher. Total
income was little changed as higher contributions from
China, Indonesia, India, Hong Kong and Korea, were
offset by lower income from Singapore. Income from
customer flows rose 4% from a year ago.
For the nine months of the year, profit before tax fell
marginally by 2% to $488 million as income was little
changed. Expenses increased 5% to $350 million from
higher staff, occupancy and other business expenses.
Income from treasury customer flows for the first nine
months rose 12% from a year ago to $805 million from
higher sales to corporate, retail and wealth management
customers in Hong Kong, Taiwan, China and Korea.
Others
Others encompasses a range of activities from corporate
decisions and includes income and expenses not attributed
to other business segments, including capital and balance
sheet management, funding and liquidity. DBS Vickers
Securities is also included in this segment.
10
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY GEOGRAPHY
1/
($m)
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
Selected income items
3rd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
880
395
1,275
530
18
4
731
76
603
263
166
429
179
61
189
30
159
119
76
195
145
27
3
26
10
16
94
76
170
74
30
10
76
21
54
50
31
81
21
15
45
15
30
1,406
744
2,150
949
151
17
1,067
152
862
2nd Qtr 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
864
505
1,369
575
143
3
654
94
510
250
274
524
186
41
297
43
254
104
80
184
133
19
3
35
14
21
111
37
148
71
31
16
62
9
53
53
31
84
22
11
51
2
49
1,382
927
2,309
987
245
22
1,099
162
887
3rd Qtr 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
813
463
1,276
527
69
5
685
95
535
228
145
373
168
(20)
225
38
187
110
32
142
124
8
1
11
11
118
22
140
66
8
22
88
18
70
63
10
73
16
(10)
67
14
53
1,332
672
2,004
901
55
28
1,076
165
856
9 Mths 2013
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
2,579
1,514
4,093
1,684
259
11
2,161
253
1,754
744
683
1,427
533
143
751
116
635
324
225
549
396
52
7
108
34
74
314
157
471
214
72
48
233
56
176
154
82
236
61
93
82
22
60
4,115
2,661
6,776
2,888
619
66
3,335
481
2,699
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
9 Mths 2012
Net interest income
Non-interest income
Total income
Expenses
Allowances for credit and other losses
Share of profits of associates
Profit before tax
Income tax expense
Net profit
S’pore
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Rest of
the World
Total
2,404
1,364
3,768
1,586
268
18
1,932
231
1,544
665
472
1,137
491
(14)
660
106
554
411
115
526
349
15
4
166
33
133
337
107
444
192
44
81
289
64
225
175
55
230
53
(10)
187
44
143
3,992
2,113
6,105
2,671
303
103
3,234
478
2,599
Selected balance sheet items
30 Sept 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
254,682
4,802
259,484
2,278
156,263
69,992
69,992
349
52,974
41,821
41,821
104
20,079
17,046
17,046
29
8,639
13,030
13,030
3
7,325
396,571
4,802
401,373
2,763
245,280
30 Jun 2013
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
246,092
4,802
250,894
2,223
153,224
63,587
63,587
351
48,283
41,490
41,490
106
19,949
17,579
17,579
19
9,408
13,050
13,050
2
7,529
381,798
4,802
386,600
2,701
238,393
30 Sept 2012
Total assets before goodwill
Goodwill on consolidation
Total assets
2/
Non-current assets
Gross customer loans
236,463
4,802
241,265
1,843
131,646
56,899
56,899
357
39,611
32,567
32,567
110
17,398
17,327
17,327
20
10,171
12,544
12,544
1
6,909
355,800
4,802
360,602
2,331
205,735
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked
2/ Includes investment in associates, properties and other fixed assets, and investment properties
The performance by geography is classified based on the
location in which income and assets are recorded.
Singapore
Net profit rose 18% from the previous quarter to $603
million. Total income fell 7% to $1.28 billion. Net interest
income rose 2% to $880 million from higher loan volumes.
Non-interest income was 22% lower at $395 million as
stockbroking and investment banking fees fell. Trading
gains were also lower.
Expenses were 8% lower at $530 million and profit before
allowances was 6% lower at $745 million. Allowances fell
87% to $18 million from lower specific and general
allowances.
Compared to a year ago, net profit rose 13% as income
and expenses were little changed while allowances fell
from lower general allowances.
For the nine months, net profit rose 14% to $1.75 billion.
Total income increased 9% to $4.09 billion from higher
loan volumes and broad-based non-interest income
growth. Expenses were 6% higher at $1.68 billion.
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Hong Kong
Currency effects were minimal compared to the previous
quarter and a year ago.
Net profit fell 37% from the previous quarter to $159 million
as total income fell 18% to $429 million. Net interest income
increased 5% to $263 million from higher loan volumes.
Loans rose 10% from growth in trade finance while deposits
increased 8%. Net interest margin fell five basis points to
1.55%.
Non-interest income decreased 39% to $166 million, as the
previous quarter had property disposal gains. Excluding the
gains, non-interest income would be 28% lower. Fee
income decreased as investment banking, stockbroking
and loan related fees fell. Trading income fell from lower
treasury customer flows given the uncertain market outlook
Expenses were 4% lower at $179 million as staff costs fell.
Allowances rose 49% to $61 million as general allowances
increased in line with loan growth.
margins, while non-interest income fell 5% to $76 million
from lower trading gains. Expenses rose 9% to $145 million
due to higher staff costs. Allowances rose 42% to $27
million as specific allowances were higher.
Compared to a year ago, net profit rose 45%. Higher net
interest and non-interest income were partially offset by
higher expenses and total allowances.
For the nine months, net profit fell 44% to $74 million. Total
income rose 4% to $549 million as a decline in net interest
income from lower net interest margin was partially offset
by increased fee income and treasury income from
customer flows. Expenses rose 13% to $396 million while
allowances tripled to $52 million due to higher specific
allowances.
Net profit for South and South-east Asia was little changed
from the previous quarter. Net interest income fell 15% to
$94 million partly due to currency effects. Non-interest
income doubled to $76 million from higher treasury gains
and income from customer flows. Expenses rose 4% to $74
million, while total allowances were stable at $30 million.
Compared to a year ago, net profit was 15% lower as an
increase in total income was more than offset by higher
total allowances. Net interest income increased 15% from
higher loan volumes. Non-interest income was 14% higher
from increased treasury customer flows and higher trading
gains. Expenses rose 7%. Allowances increased to $61
million compared to a write back of $20 million a year ago
as general and specific allowances were higher.
Compared to a year ago, net profit was 23% lower as an
increase in income was offset by higher expenses and
allowances, and a decline in share of profits of associates.
For the nine months, net profit rose 15% to $635 million as
total income increased 26% to $1.43 billion. Net interest
income was higher from loan growth and lower funding
costs. Net interest margin rose nine basis points to 1.56%.
Non-interest income rose 45% due to higher treasury
customer flows and trading gains as well as asset disposal
gains. Expenses were 9% higher at $533 million while
allowances increased as higher general allowances were
taken in line with loan growth.
Net profit for Rest of the World fell 39% to $30 million
from the previous quarter. Total income declined 4% to
$81 million as net interest income fell 6% from lower loan
and higher deposit volumes. Non-interest income was
unchanged at $31 million. Expenses were stable at $21
million, while allowances rose 36% to $15 million.
Compared to a year ago, total income rose 11% while
expenses rose 31%. Total allowances were higher as
there had been a net write-back of allowances a year ago.
Other regions
Net profit for Rest of Greater China fell 24% from the
previous quarter to $16 million as higher income was more
than offset by an increase in expenses and allowances. Net
interest income was 14% higher at $119 million from better
For the nine months, net profit fell 22% to $176 million.
Total income rose 6% to $471 million, while expenses were
11% higher at $214 million. Allowances rose 64% to $72
million mainly due to higher specific allowances.
For the nine months, net profit fell 58% to $60 million.
Total income rose 3% to $236 million, while expenses
were 15% higher at $61 million. Allowances rose to $93
million from higher specific allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
245,280
238,393
213,828
205,735
General allowances
Net total
1,197
2,360
241,723
1,286
2,320
234,787
1,217
2,092
210,519
1,189
2,053
202,493
By business unit
Consumer Banking/ Wealth Management
Institutional Banking
Others
Total (Gross)
68,838
173,489
2,953
245,280
66,195
169,293
2,905
238,393
61,720
149,077
3,031
213,828
60,122
143,436
2,177
205,735
116,333
40,093
46,463
21,628
20,763
245,280
114,626
37,760
41,641
23,161
21,205
238,393
101,485
38,119
30,678
23,045
20,501
213,828
98,624
37,538
27,538
22,751
19,284
205,735
30,023
42,089
48,263
52,196
19,743
10,527
32,556
40,177
47,202
48,230
19,816
9,976
27,037
36,179
45,570
38,230
17,745
11,155
26,456
34,939
44,147
35,691
17,114
10,158
18,230
16,989
14,969
14,950
24,209
245,280
23,447
238,393
22,943
213,828
22,280
205,735
98,663
29,660
82,354
34,603
245,280
97,779
28,811
80,146
31,657
238,393
90,503
29,443
67,156
26,726
213,828
87,617
29,162
62,254
26,702
205,735
Gross
Less:
Specific allowances
2/
By geography
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the World
Total (Gross)
3/
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals
(excluding housing loans)
Others
Total (Gross)
By currency
Singapore dollar
Hong Kong dollar
US dollar
Others
Total (Gross)
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ Loans by geography are classified according to where the borrower is incorporated
3/ Certain loans to investment holding companies have been reclassified to better reflect the underlying principal activity of the companies owned by the holding company. The
amounts for prior periods have also been reclassified to conform to the current presentation.
Gross customer loans rose 3% from the previous
quarter to $245 billion. The increase was due to trade
loans and secured consumer borrowing.
Gross loans grew 19% from a year ago, with the
expansion spread across most regions and across
corporate and consumer borrowers. Trade loans
accounted for one-third of loan growth over the past 12
months.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
By business unit
30 Sept 2013
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Jun 2013
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Dec 2012
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Sept 2012
Consumer Banking/
Wealth Management
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
300
70
688
0.4
253
468
2,638
1,244
1,672
1.5
111
149
2,938
1,314
2,360
1.2
125
174
9
3
125
-
1,422
3,200
107
48
315
-
339
789
3,054
1,365
2,800
-
136
192
297
71
661
0.4
246
452
2,578
1,306
1,659
1.5
115
150
2,875
1,377
2,320
1.2
129
173
9
3
127
-
1,444
2,600
82
48
303
-
428
763
2,966
1,428
2,750
-
141
191
288
70
617
0.5
239
421
2,339
1,232
1,475
1.6
116
142
2,627
1,302
2,092
1.2
129
165
13
4
117
-
931
2,420
86
49
302
-
408
747
2,726
1,355
2,511
-
142
183
302
81
600
0.5
225
394
2,347
1,183
1,453
1.6
112
138
2,649
1,264
2,053
1.3
125
159
13
4
115
-
915
2,380
173
65
294
-
208
506
2,835
1,333
2,462
-
134
176
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Sept 2013
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
30 Jun 2013
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
31 Dec 2012
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
30 Sept 2012
Singapore
Hong Kong
Rest of Greater China
South and South-east
Asia
Rest of the World
Total non-performing
loans
Debt securities
Contingent liabilities
& others
Total non-performing
assets
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
492
266
286
152
123
154
967
404
486
0.4
0.7
0.6
227
198
224
461
316
398
425
202
282
2.0
114
224
1,469
683
221
7.1
62
68
2,938
1,314
2,360
1.2
125
174
9
3
125
-
1,422
3,200
107
48
315
-
339
789
3,054
1,365
2,800
-
136
192
468
262
266
165
126
133
978
380
437
0.4
0.7
0.6
244
193
214
468
307
401
374
193
302
1.6
132
226
1,505
760
223
7.1
65
72
2,875
1,377
2,320
1.2
129
173
9
3
127
-
1,444
2,600
82
48
303
-
428
763
2,966
1,428
2,750
-
141
191
410
244
232
130
126
129
864
392
320
0.4
0.6
0.8
242
212
194
520
314
335
207
130
302
0.9
209
234
1,534
787
214
7.5
65
72
2,627
1,302
2,092
1.2
129
165
13
4
117
-
931
2,420
86
49
302
-
408
747
2,726
1,355
2,511
-
142
183
561
270
216
185
145
115
886
387
288
0.6
0.7
0.8
191
197
187
425
289
333
194
129
291
0.9
216
238
1,408
690
201
7.3
63
66
2,649
1,264
2,053
1.3
125
159
13
4
115
-
915
2,380
173
65
294
-
208
506
2,835
1,333
2,462
-
134
176
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
1/
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
SP
NPA
SP
NPA
SP
NPA
SP
526
122
119
424
319
50
11
153
481
114
118
406
289
50
12
229
352
83
106
277
240
38
12
155
363
84
103
268
234
37
12
140
1,211
527
1,231
545
1,201
520
1,167
474
Financial institutions, investment &
holding companies
301
175
297
172
404
265
412
267
Professionals & private individuals
(excluding housing loans)
156
46
158
46
162
46
174
56
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
Total non-performing loans
Debt securities
Contingent liabilities & others
Total non-performing assets
79
33
70
34
42
26
78
44
2,938
9
1,314
3
2,875
9
1,377
3
2,627
13
1,302
4
2,649
13
1,264
4
107
48
82
48
86
49
173
65
3,054
1,365
2,966
1,428
2,726
1,355
2,835
1,333
Note:
1/ Certain loans to investment holding companies have been reclassified to better reflect the underlying principal activity of the companies owned by the holding company.
The amounts for prior periods have also been reclassified to conform to the current presentation.
By loan classification
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
SP
NPA
SP
NPA
SP
NPA
SP
Non-performing assets
Substandard
Doubtful
Loss
Total
1,846
863
345
3,054
305
715
345
1,365
1,620
983
363
2,966
260
805
363
1,428
1,405
752
569
2,726
268
518
569
1,355
1,519
947
369
2,835
284
680
369
1,333
Restructured assets
Substandard
Doubtful
Loss
Total
907
360
74
1,341
186
337
74
597
942
363
72
1,377
182
338
72
592
888
223
276
1,387
200
114
276
590
805
111
38
954
203
96
38
337
By collateral type
($m)
30 Sept 2013
30 Jun 2013
NPA
NPA
NPA
NPA
2,167
2,190
2,115
2,162
Secured non-performing assets by collateral type
Properties
377
343
269
330
Shares and debentures
Fixed deposits
228
35
145
27
58
32
62
34
Others
247
261
252
247
3,054
2,966
2,726
2,835
Unsecured non-performing assets
Total
31 Dec 2012 30 Sept 2012
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
1,292
232
304
1,226
1,244
249
319
1,154
1,245
297
193
991
877
360
239
1,359
Total
3,054
2,966
2,726
2,835
The NPL rate was unchanged from the previous quarter at
1.2% while non-performing assets rose 3% to $3.05
billion.
Allowance coverage of 136% of non-performing assets
and 192% if collateral was considered were similar to
recent quarters’ levels.
18
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER DEPOSITS
1/
($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 Sept 2013
30 Jun 2013
31 Dec 2012
30 Sept 2012
136,024
18,984
95,416
20,696
928
27,084
16,310
6,495
4,016
263
62,087
30,143
5,991
17,644
8,309
45,016
35,917
2,879
4,755
1,465
270,211
101,354
110,781
47,111
10,965
138,947
21,190
94,347
22,227
1,183
25,584
15,897
5,902
3,692
93
49,895
23,891
4,666
16,319
5,019
46,971
37,379
2,900
5,330
1,362
261,397
98,357
107,815
47,568
7,657
131,000
19,501
90,561
20,024
914
25,730
15,690
6,283
3,516
241
45,981
24,124
4,256
15,332
2,269
40,196
32,644
2,412
3,969
1,171
242,907
91,959
103,512
42,841
4,595
129,199
20,310
88,839
19,308
742
22,729
12,694
5,858
3,869
308
48,353
24,119
4,422
15,620
4,192
39,897
32,589
2,022
3,486
1,800
240,178
89,712
101,141
42,283
7,042
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 3% from the previous quarter to
$270 billion, led by US dollar deposits.
Customer deposits grew 13% from a year ago, with US
dollar deposits accounting for half the growth. Deposits
in Singapore dollars, Hong Kong dollars and other
currencies were also higher.
DEBTS ISSUED
($m)
Subordinated term debts
Medium term notes
Commercial papers
1/
Certificates of deposit
Other debt securities in issue
Total
Due within 1 year
Due after 1 year
Total
2/
30 Sep 2013
30 Jun 2013
31 Dec 2012
30 Sep 2012
5,528
4,864
15,976
1,122
4,300
31,790
5,532
4,511
14,186
967
4,370
29,566
5,505
3,168
5,820
1,149
3,617
19,259
5,507
3,184
9,013
1,425
3,432
22,561
17,976
13,814
31,790
16,458
13,108
29,566
8,498
10,761
19,259
11,836
10,725
22,561
Notes:
1/ Includes certificates of deposit classified as financial liabilities at fair value through profit or loss on the balance sheet
2/ Includes other debt securities in issue classified as financial liabilities at fair value through profit or loss on the balance sheet
19
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.
Back-testing is a procedure used to verify the predictive power of the VaR calculations involving comparison of actual daily
profits and losses adjusted with the estimates from the VaR model. There were no outliers in the back-testing for the period
from 1 October 2012 to 30 September 2013 and the corresponding prior period.
The following table shows the period-end, average, high and low VaR for the trading risk exposure of the Group for the period
from 1 October 2012 to 30 September 2013. The Group’s trading book VaR methodology is based on Historical Simulation
VaR.
($m)
As at 30 Sept 2013
Total
Average
29
1 Oct 2012 to 30 Sept 2013
High
21
33
Low
13
The chart below shows the histogram of VaR for the Group’s trading book for the period from 1 October 2012 to 30 September
2013.
DBSH Group VaR for Trading Book
120
100
No. of Days
80
60
40
20
>30-33
>27-30
>24-27
>21-24
>18-21
>15-18