financial performance 2q10
DBS Group Holdings Ltd
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The DBS Group Holdings Ltd (“DBSH” or “the Company”) Board of Directors report unaudited financial
results for the second quarter ended 30 June 2010.
For the second quarter of 2010, the Directors have declared an interim one-tier tax-exempt dividend of
14 cents (second quarter 2009: 14 cents) for each DBSH non-voting convertible preference share
(“CPS”) and each DBSH non-voting redeemable CPS, and an interim one-tier tax-exempt dividend of
14 cents (second quarter 2009: 14 cents) for each DBSH ordinary share. The DBSH Scrip Dividend
Scheme will be applied to these dividends.
The DBSH shares will be quoted ex-dividend on 20 August 2010. Notice is hereby given that the Share
Transfer Books and Register of Members of the Company will be closed on 25 August 2010. Duly
completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration Services
of 8 Cross Street #11-00 PWC Building, Singapore 048424 up to 5.00 p.m. on 24 August 2010 will be
registered to determine shareholders' entitlement to the second quarter 2010 dividend.
The issue price for new shares to be allotted to shareholders who have elected to receive the second
quarter 2010 dividend in scrip shall be the average of the last dealt prices of each DBSH ordinary share
on the Singapore Exchange Securities Trading Limited for each of 20, 23 and 24 August 2010, to which
a discount of 5% shall be applied.
The payment date for cash dividends / crediting of shares is 13 October 2010. In respect of ordinary
shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the second quarter
2010 one-tier tax-exempt dividend will be paid by DBSH to CDP, which will in turn distribute the
dividend entitlements to shareholders, either in cash or by crediting the securities accounts of
shareholders with the relevant shares.
A separate announcement which will outline further administrative details on the application of the
DBSH Scrip Dividend Scheme to the second quarter 2010 dividend will be made in due course.
By order of the Board
Linda Hoon
Group Secretary
29 July 2010
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the First Half / Second Quarter ended
30 June 2010
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
Funding Sources
Customer Deposits
Other Borrowings & Liabilities
Value at Risk and Trading Income
Capital Adequacy
Unrealised Valuation Surplus/(Losses)
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
Adoption of New or Revised FRS and INT FRS
Impairment review of Goodwill
Confirmation by the Board
Page
2
4
6
6
7
7
8
11
14
15
18
19
19
20
21
21
22
22
23
24
25
26
27
27
28
29
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its condensed consolidated DBSH Group (“Group”) interim financial statements in
accordance with Singapore Financial Reporting Standard (“FRS”) No. 34 Interim Financial Reporting, as modified by the
requirements of Notice to Banks No. 612 “Credit Files, Grading and Provisioning” issued by the Monetary Authority of
Singapore. The accounting policies and methods of computation applied for the current financial periods are consistent with
those applied for the financial year ended 31 December 2009, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
On 1 January 2010, the Group adopted the following new or revised FRS and INT FRS that are issued by the Accounting
Standard Council (ASC), and are relevant for the Group.
•
FRS 27 Consolidated and Separate Financial Statements
•
FRS 103 Business Combinations
•
FRS 39 (Amendments)
Financial Instruments: Recognition and Measurement
- Eligible Hedged Items
- Embedded Derivatives
•
FRS 102 (Amendments) Share-Based Payment – Group Cash-settled Share-based Payment Transactions
•
INT FRS 109 (Amendments): Reassessment of Embedded Derivatives
•
INT FRS 117: Distributions of Non-cash Assets to Owners
•
Improvements to FRSs
Refer to page 27 for more information.
2nd Qtr
2010
2nd Qtr
2009
%
chg
1st Qtr
2010
%
chg
1st Half
2010
1st Half
2009
%
chg
1,067
358
390
1,815
717
1,098
204
919
1,112
358
322
1,792
631
1,161
466
708
(4)
21
1
14
(5)
(56)
30
1,066
341
306
1,713
702
1,011
355
678
5
27
6
2
9
(43)
36
2,133
699
696
3,528
1,419
2,109
559
1,597
2,188
675
591
3,454
1,269
2,185
880
1,338
(3)
4
18
2
12
(3)
(36)
19
Selected income statement items ($m)
Net interest income
Net fee and commission income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and other losses
Profit before tax
Net profit
Goodwill charges
One-time items 1/
Net (loss)/profit including goodwill charges
and one-time items
Selected balance sheet items ($m)
2/
Customer loans
Interbank assets 3/
Total assets
4/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios (%) (excluding
5/
goodwill charges and one-time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
6/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
(bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
718
552
30
532
35
1,250
1,008
24
(1,018)
-
-
NM
-
-
NM
-
(1,018)
-
(23)
NM
NM
(300)
552
NM
532
NM
232
985
(76)
146,070
21,846
276,250
127,970
35,204
262,948
14
(38)
5
133,908
18,672
262,036
9
17
5
146,070
21,846
276,250
127,970
35,204
262,948
14
(38)
5
183,929
246,522
25,616
179,033
234,274
24,465
3
5
5
181,560
231,716
26,183
1
6
(2)
183,929
246,522
25,616
179,033
234,274
24,465
3
5
5
1.84
41.2
39.5
1.07
11.08
79.4
2.3
2.01
37.9
35.2
0.82
9.10
71.5
2.8
1.93
37.8
41.0
0.82
8.24
73.8
2.7
1.88
39.5
40.2
0.93
9.80
79.4
2.3
2.01
36.7
36.7
0.78
8.52
71.5
2.8
19
83
97
56
77
13.1
16.5
12.6
16.2
13.4
17.1
13.1
16.5
12.6
16.2
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr
2010
2nd Qtr
2009
1st Qtr
2010
1st Half
2010
1st Half
2009
1.25
0.96
0.92
1.09
0.91
0.80
10.88
0.96
10.45
0.92
11.20
0.64
10.88
0.90
10.45
1.20
0.93
0.89
1.04
0.88
0.78
10.68
0.93
10.27
0.89
10.99
0.62
10.68
0.87
10.27
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
6/ 7/
– net book value
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
6/ 7/
– net book value
Notes:
1/ One-time items include impairment charges for Thai investment
2/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
3/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
4/ Includes customer deposits 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 for the quarters are computed on an annualised basis
6/ Minority interests are not included as equity in the computation of net book value and return on equity
7/ Takes into account 15.8 million shares to be issued on 8 July 2010 pursuant to the Scrip Dividend Scheme
NM Not Meaningful
Second-quarter net profit before a goodwill impairment
charge rose 35% from the previous quarter to $718
million, a quarterly record. Operating trends continued to
strengthen. There was broad-based loan growth while
non-interest income increased from higher customer flows.
Allowance coverage exceeded 100% as additional general
allowances were set aside and asset quality improved
further.
Net interest income was stable from the previous quarter
at $1.07 billion. Loans rose 9% from corporate borrowings
across the region and housing loan drawdowns in
Singapore and Hong Kong. Net interest margin fell nine
basis points to 1.84%.
Higher non-interest income resulted in an overall revenue
increase of 6% from the previous quarter. Net fee income
rose on better wealth management and credit card
revenues, while trading income benefited from higher
customer flows.
Expenses of $717 million were 2% higher than the
previous quarter. The cost-income ratio was little changed
at 40%.
The non-performing loan rate improved from 2.7% in the
previous quarter to 2.3% due to customer repayments.
Allowances of $204 million were significantly below the
previous quarter as specific allowances fell. General
allowances increased in line with loan growth.
Allowance coverage of non-performing assets improved
to 101% and to 126% if collateral was considered.
Compared to a year ago, net profit before a one-time
charge was 30% higher due mainly to lower allowance
charges.
Return on assets was 1.07% while return on equity was
11.1%. Both ratios were better than the previous
quarter.
The total capital adequacy ratio stood at 16.5% with tier1 at 13.1%.
A one-time goodwill impairment charge of $1.02 billion
was taken for DBS Bank (Hong Kong) Limited to reflect
heightened deposit competition. The charge has no
impact on DBS’ ability to carry out ongoing business or
pay dividends as goodwill was deducted from regulatory
capital on consolidation.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2010
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2009
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2010
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
138,617
43,195
51,138
232,950
984
82
343
1,409
2.85
0.76
2.69
2.43
127,447
42,582
51,638
221,667
1,017
95
431
1,543
3.20
0.90
3.34
2.79
132,388
42,548
49,457
224,393
934
74
364
1,372
2.86
0.71
2.98
2.48
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
182,951
31,270
214,221
241
101
342
0.53
1.30
0.64
177,983
28,067
206,050
297
134
431
0.67
1.90
0.84
181,335
25,148
206,483
215
91
306
0.48
1.46
0.60
1,067
1.84
1,112
2.01
1,066
1.93
Net interest
income/margin 1/
Average balance
sheet
1st Half 2010
1st Half 2009
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
135,532
42,275
51,004
228,811
1,918
156
707
2,781
2.85
0.74
2.80
2.45
127,791
41,604
50,347
219,742
2,125
202
871
3,198
3.36
0.98
3.50
2.94
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
182,002
28,648
210,650
456
192
648
0.51
1.35
0.62
176,283
28,022
204,305
685
325
1,010
0.79
2.34
1.00
2,133
1.88
2,188
2.01
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest was stable from the previous quarter at $1.07
billion.
The impact of the margin decline on net interest income
was offset by the strong 9% increase in customer loans.
Net interest margins fell nine basis points from the previous
quarter to 1.84%. Securities yields were lower as higheryielding securities were replaced by higher-quality bonds
with lower yields. In addition, deposit costs were higher due
to competition for US and Hong Kong dollar funding.
Net interest income was 4% below a year ago as lower
interest margins more than offset the benefit of higher asset
volumes.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2010 versus 2nd Qtr 2009
Volume and rate analysis ($m)
Increase/(decrease) due to change in
2nd Qtr 2010 versus 1st Qtr 2010
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
89
1
(4)
(122)
(14)
(84)
(33)
(13)
(88)
44
1
(2)
5
42
6
Total
86
(220)
(134)
12
57
(36)
(33)
(24)
24
Interest expense
Customer deposits
Other borrowings
Total
8
2
10
(64)
(35)
(99)
(56)
(33)
(89)
2
12
14
23
(3)
20
25
9
34
Net impact on interest income
76
(121)
(45)
43
(53)
(10)
Interest income
Due to change in number of days
Net Interest Income
-
11
(45)
1
1st Half 2010 versus 1st Half 2009
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
129
3
11
143
(336)
(49)
(175)
(560)
(207)
(46)
(164)
(417)
Interest expense
Customer deposits
Other borrowings
Total
22
(10)
12
(251)
(123)
(374)
(229)
(133)
(362)
Net impact on interest income
131
(186)
(55)
Interest income
Due to change in number of days
Net Interest Income
(55)
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
2nd Qtr
2010
2nd Qtr
2009
% chg
1st Qtr
2010
% chg
1st Half
2010
1st Half
2009
% chg
42
29
57
101
16
22
36
6
34
15
358
50
27
59
108
14
22
37
6
21
14
358
(16)
7
(3)
(6)
14
(3)
62
7
-
42
27
59
100
13
21
33
5
27
14
341
7
(3)
1
23
5
9
20
26
7
5
84
56
116
201
29
43
69
11
61
29
699
78
44
133
204
29
42
70
11
37
27
675
8
27
(13)
(1)
2
(1)
65
7
4
Net fee and commission income rose 5% from the previous
quarter to $358 million. There was broad-based
improvement across fee activities, led by wealth
management and credit card revenues on higher volumes.
Net fee and commission income was unchanged from a
year ago as improvements in wealth management were
offset by declines in stockbroking and loan syndication
activities.
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2010
2nd Qtr
2009
% chg
1st Qtr
2010
% chg
1st Half
2010
1st Half
2009
% chg
Net trading income
Net income/(loss) from financial
instruments designated at fair value
Net income on financial
investments
Net gain on fixed assets
Others (include rental income)
266
234
14
260
2
526
438
20
12
(62)
NM
(30)
NM
(18)
(116)
84
98
138
(29)
50
96
148
244
(39)
3
11
12
NM
(8)
14
12
(79)
(8)
17
23
25
NM
(8)
Total
390
322
21
306
27
696
591
18
Note:
NM Not Meaningful
Net trading income (including net income from financial
instruments designated at fair value) rose to $278
million from $230 million in the previous quarter.
Customer revenues rose 45% from the previous quarter
and accounted for more than half of net trading income.
Net trading income was also better than the $172 million
a year ago.
Net income from financial investments doubled from the
previous quarter to $98 million but was 29% below a
year ago.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
2nd Qtr 2nd Qtr
2010
2009
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
% chg
1st Qtr
2010
% chg 1st Half 1st Half
2010
2009
% chg
362
65
131
35
124
717
14,615
330
67
104
33
97
631
13,928
10
(3)
26
6
28
14
5
338
70
129
31
134
702
14,267
7
(7)
2
13
(7)
2
2
700
135
260
66
258
1,419
14,615
657
138
216
66
192
1,269
13,928
7
(2)
20
34
12
5
46
1
42
1
10
-
48
1
(4)
-
94
2
83
2
13
-
2
2
-
2
-
4
4
-
Included in the above table were:
Depreciation of properties and other fixed
assets
Directors’ fees
Audit fees payable
Expenses of $717 million were 2% above the previous
quarter. Staff costs rose with a higher headcount, but they
were partially offset by lower non-staff costs. Compared to
a year ago, costs were 14% higher as both staff and nonstaff costs rose.
The cost-income ratio of 40% was similar to the
previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr 2nd Qtr
2010
2009
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,
2/
properties and other assets
Total
% chg
1st Qtr
2010
% chg 1st Half 1st Half % chg
2010
2009
124
183
(32)
25
>100
149
365
(59)
68
1
(4)
13
6
52
272
74
66
11
8
113
(75)
(99)
NM
18
(25)
(54)
324
10
7
(3)
6
304
(79)
(90)
NM
NM
(83)
392
11
3
10
12
356
497
104
157
25
18
193
(21)
(89)
(98)
(60)
(33)
84
12
11
9
6
100
18
18
-
204
466
(56)
355
(43)
559
880
(36)
Notes:
1/ Specific allowances for loans are classified according to where the borrower is incorporated. Historical comparatives have been restated to conform to the current year presentation
2/ Exclude one-time items
Specific allowances for loans fell to $68 million, one-fifth
the amount in the previous quarter, as charges for
corporate loans in Rest of the World declined.
Allowances for other regions remained low.
General allowances of $124 million were taken for loan
growth, compared to $25 million in the previous quarter.
Total allowances of $204 million were 43% below the
previous quarter and 56% lower than a year ago.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS 1/
($m)
Consumer/
Private
Banking
Institutional
Banking
Treasury
Others
Total
Selected income items
2nd Qtr 2010 2/
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
353
168
521
363
23
135
21
114
503
417
920
259
175
8
494
100
401
183
173
356
90
266
37
229
28
(10)
18
5
6
17
24
(10)
(26)
1,067
748
1,815
717
204
25
919
148
718
1st Qtr 2010
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
359
157
516
350
12
154
23
131
474
330
804
247
328
6
235
28
208
214
161
375
81
5
289
50
239
19
(1)
18
24
10
16
(12)
(46)
1,066
647
1,713
702
355
22
678
89
532
2nd Qtr 2009
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
337
151
488
291
38
159
27
132
450
348
798
244
245
6
315
59
265
340
(46)
294
89
(2)
207
50
157
(15)
227
212
7
185
7
27
(32)
(2)
1,112
680
1,792
631
466
13
708
104
552
1st Half 2010 2/
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
712
325
1,037
713
35
289
44
245
977
747
1,724
506
503
14
729
128
609
397
334
731
171
5
555
87
468
47
(11)
36
29
16
33
24
(22)
(72)
2,133
1,395
3,528
1,419
559
47
1,597
237
1,250
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer/
Private
Banking
Institutional
Banking
Treasury
Others
Total
2/
1st Half 2009
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
Selected balance sheet and other
items 3/
30 Jun 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2010
Depreciation for 2nd Qtr 2010
Goodwill charge for 2nd Qtr 2010
31 Mar 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 1st Qtr 2010
Depreciation for 1st Qtr 2010
Goodwill charge for 1st Qtr 2010
30 Jun 2009
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2009
Depreciation for 2nd Qtr 2009
Goodwill charge for 2nd Qtr 2009
670
293
963
563
73
327
53
274
877
683
1,560
462
456
11
653
138
526
638
142
780
185
48
547
116
432
3
148
151
59
303
22
(189)
(88)
(224)
2,188
1,266
3,454
1,269
880
33
1,338
219
1,008
49,247
113,994
100,057
8,150
115,824
11
13
68,520
3
5
49,489
2
12,689
19
26
1,018
271,448
4,802
276,250
246,522
33
46
1,018
46,799
100,758
98,434
10,225
115,590
3
12
64,087
6
6
38,180
2
2
13,859
7
28
39,750
101,200
106,363
9,788
116,129
4
12
60,919
6
6
42,296
3
2
14,930
8
22
256,216
5,820
262,036
231,716
18
48
-
257,101
5,847
262,948
234,274
21
42
-
Notes:
1/ With effect from 1 January 2010, the Group has adopted a revised capital benefit and fund transfer policy. The business segments have also been reaggregated following a
review. Comparative figures have been restated to conform to the current year presentation
2/ Allowances for credit and other losses and profits exclude goodwill charges and one-time items
3/ 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. During the
quarter, no one group of related customers generated more
than 10% of the Group’s revenues.
The external presentation of the business segment results
has been revised from first-quarter 2010 to better reflect
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
internal management reporting. In addition, the Group
adopted a revised capital benefit and fund transfer policy
with effect from 1 January 2010. Comparative figures
have been restated to conform to the current
presentation.
The various business segments are described below:
Consumer/ Private Banking
Consumer/ Private Banking 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, net interest income
declined as higher housing loan volumes were more than
offset by a decline in their yields. Expenses rose due to
higher advertising and promotion costs. Both general
allowances and specific allowances were higher than the
previous quarter.
Institutional Banking
Institutional Banking provides financial services and
products to large corporate, institutional clients and
small and medium-sized businesses. The products
and services available to customers include corporate
finance and advisory banking services for mergers
and acquisitions, capital raising through debt and
equity markets, capital restructuring, syndicated
finance, securities and fiduciary services, cash
management and trade services, private equity and
credit facilities, deposit and treasury products.
Institutional Banking also provides equity services
through DBS Vickers Securities (DBSV). DBSV offers
a wide range of services to retail and corporate
customers including research, sales and trading,
share placement, nominees and securities custodian
services and distribution of primary and secondary issues.
Asset management activities also fall under this segment.
Net interest income increased from higher loan volumes
partially offset by lower margins, while non-interest income
benefited from increased fee income activities and
treasury product sales. Allowance charges declined as
specific allowances for existing NPLs in Rest of the World
fell.
Treasury
Treasury provides treasury services to corporations,
institutional and private investors, financial institutions and
other market participants. It is primarily involved in market
making, structuring, equity and debt sales and trading
across a broad range of financial products including
foreign exchange, interest rate/credit/equity and other
structured derivatives. Income from these financial
products and services offered to the customer of other
business segments, such as Consumer/Private Banking
and Institutional Banking, is reflected in the respective
segments. Treasury is also responsible for the
management of the Group’s asset and liability interest rate
positions and investment of the Group’s excess liquidity
and shareholders’ funds.
Treasury’s revenues were lower than the previous quarter
due to weaker net interest income. This was partially offset
by stronger trading performance and higher customer
flows.
Others
Others encompasses a range of activities from corporate
decisions and income and expenses not attributed to other
business segments.
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
world
Total
Selected income items
2nd Qtr 2010 2/
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
643
513
1,156
323
148
2
687
96
538
198
165
363
249
32
82
17
65
79
25
104
78
18
7
15
3
12
70
52
122
52
14
16
72
17
55
77
(7)
70
15
(8)
63
15
48
1,067
748
1,815
717
204
25
919
148
718
1st Qtr 2010
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
657
369
1,026
419
278
3
332
26
249
202
165
367
147
7
213
33
180
76
31
107
69
6
4
36
6
30
77
54
131
53
11
15
82
20
62
54
28
82
14
53
15
4
11
1,066
647
1,713
702
355
22
678
89
532
2nd Qtr 2009
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
673
471
1,144
360
372
4
416
40
324
222
120
342
151
71
120
21
99
74
29
103
63
13
3
30
9
21
90
31
121
41
10
6
76
18
58
53
29
82
16
66
16
50
1,112
680
1,792
631
466
13
708
104
552
1st Half 2010 2/
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
1,300
882
2,182
742
426
5
1,019
122
787
400
330
730
396
39
295
50
245
155
56
211
147
24
11
51
9
42
147
106
253
105
25
31
154
37
117
131
21
152
29
45
78
19
59
2,133
1,395
3,528
1,419
559
47
1,597
237
1,250
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
S’pore
1st Half 2009 2/
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
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Total
Rest of
world
1,328
775
2,103
735
598
7
777
83
583
446
247
693
301
159
233
40
193
154
66
220
123
25
6
78
18
60
163
113
276
82
44
20
170
49
121
97
65
162
28
54
80
29
51
2,188
1,266
3,454
1,269
880
33
1,338
219
1,008
Selected balance sheet items
30 Jun 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Non-current assets 3/
Gross customer loans
172,591
171
172,762
1,486
84,467
54,420
4,631
59,051
508
38,052
16,974
16,974
131
11,524
14,344
14,344
40
8,664
13,119
13,119
2
6,441
271,448
4,802
276,250
2,167
149,148
31 Mar 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
3/
Non-current assets
Gross customer loans
163,380
171
163,551
1,478
77,723
49,718
5,649
55,367
518
34,008
15,724
15,724
143
10,798
14,313
14,313
43
7,483
13,081
13,081
1
6,983
256,216
5,820
262,036
2,183
136,995
30 Jun 2009
Total assets before goodwill
Goodwill on consolidation
Total assets
3/
Non-current assets
Gross customer loans
169,570
198
169,768
1,465
73,610
46,754
5,649
52,403
573
31,951
13,778
13,778
143
9,154
13,243
13,243
45
8,437
13,756
13,756
2
7,254
257,101
5,847
262,948
2,228
130,406
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked
2/ Allowances for credit and other losses and profits exclude goodwill charges and one-time items
3/ Includes investment in associates, properties and other fixed assets, and investment properties
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
The performance by geography is classified based on the
location in which income and assets are recorded.
Singapore
Net profit rose from $249 million in the previous quarter to
$538 million as revenues increased and both expenses
and allowances declined.
Net interest income fell 2% as lower interest margins
more than offset strong corporate and housing loan
growth. Non-interest income rose 39% from better trading
income and gains from financial investments.
Expenses fell 23% as expenses accrued at Group level
for compensation to investors in Constellation notes were
reversed and reflected in Hong Kong. Allowances were
lower as lower specific allowances were partially offset by
an increase in general allowances.
Hong Kong
The second quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 1%
from the previous quarter and 5% from a year ago.
Net profit fell from $180 million in the previous quarter to
$65 million as compensation for investors in Constellation
notes was booked in Hong Kong’s accounts. General
allowances were also higher in line with loan growth.
Net interest income decreased 2% from the previous
quarter as net interest margins declined 12 basis points to
1.68% as the securities portfolio shifted from higher-yielding
corporate bonds to high-grade government paper. Deposit
costs were also higher due to competitive pressures. Loans
rose 12% from the previous quarter as corporate loans,
trade finance and housing loans grew.
Non-interest income was stable from the previous quarter.
Higher fees from loan syndication and trade finance,
together with higher sales of treasury products, were offset
by a decline in gains from financial investments.
Expenses would have been unchanged from the previous
quarter if Constellation notes compensation charges were
excluded.
Specific allowances declined from the previous quarter as
write-backs rose and charges for new NPLs declined.
Total allowances were higher due to an increase in
general allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
149,148
136,995
133,420
130,406
1,748
1,339
133,908
1,512
1,325
130,583
1,090
General allowances
Net total
1,645
1,433
146,070
1,346
127,970
By business unit 2/
Consumer/ Private Banking
Institutional Banking
Others
Total (Gross)
48,386
100,427
335
149,148
46,117
90,586
292
136,995
44,162
88,503
755
133,420
40,175
89,542
689
130,406
By geography 3/
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
70,698
36,982
11,455
13,653
16,360
149,148
64,184
33,492
11,647
12,020
15,652
136,995
61,713
32,999
11,211
11,726
15,771
133,420
61,064
31,959
10,161
11,026
16,196
130,406
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Others
Total (Gross)
18,404
20,282
37,082
14,798
13,294
20,202
10,480
14,606
149,148
17,098
18,852
34,949
13,617
12,598
16,813
10,397
12,671
136,995
16,239
18,433
33,120
13,335
12,277
16,710
10,873
12,433
133,420
15,589
18,220
29,821
12,117
13,043
17,107
10,660
13,849
130,406
60,852
26,731
34,121
33,073
575
32,498
36,355
3,530
32,825
18,868
2,586
16,282
149,148
58,238
24,468
33,770
30,876
619
30,257
31,047
2,680
28,367
16,834
2,725
14,109
136,995
56,712
22,489
34,223
30,274
621
29,653
29,449
2,500
26,949
16,985
2,940
14,045
133,420
56,448
18,842
37,606
29,141
631
28,510
28,076
1,583
26,493
16,741
2,460
14,281
130,406
Gross
Less:
Specific allowances
By currency and fixed/variable pricing
Singapore dollar
Fixed rates
Floating or adjustable rates
Hong Kong dollar
Fixed rates
Floating or adjustable rates
US dollar
Fixed rates
Floating or adjustable rates
Others
Fixed rates
Floating or adjustable rates
Total (Gross)
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ The business segments have been reaggregated following a review. Historical comparatives have been restated to conform to the current year presentation.
3/ Loans by geography are classified according to where the borrower is incorporated. Historical comparatives have been restated to conform to the current year presentation.
Gross customer loans rose 9% from the previous
quarter to $149.1 billion. There was broad-based
regional corporate loan growth as well as housing loan
drawdowns in Singapore and Hong Kong.
Gross loans were 14% higher than a year ago, with the
expansion spread across most regions and across
corporate and consumer borrowers.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
By business unit
1/
2/
30 Jun 2010
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Mar 2010
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Dec 2009
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Jun 2009
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
396
168
482
0.8
164
263
3,035
1,570
951
3.0
83
102
3,431
1,738
1,433
2.3
92
117
101
80
116
-
194
239
192
120
260
-
198
216
3,724
1,938
1,809
-
101
126
496
190
459
1.1
131
242
3,268
1,637
880
3.6
77
97
3,764
1,827
1,339
2.7
84
111
127
104
99
-
160
187
177
103
250
-
199
219
4,068
2,034
1,688
-
92
119
513
195
440
1.2
124
236
3,363
1,410
885
3.8
68
86
3,876
1,605
1,325
2.9
76
100
160
106
92
-
124
164
183
97
255
-
192
209
4,219
1,808
1,672
-
83
108
681
262
399
1.7
97
196
3,011
889
947
3.4
61
88
3,692
1,151
1,346
2.8
68
103
192
134
339
-
246
275
167
79
214
-
175
192
4,051
1,364
1,899
-
81
119
Notes:
1/ Allowances for credit and other losses exclude one-time items
2/ The business segments have been reaggregated following a review. Historical comparatives have been restated to conform to the current year presentation.
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Jun 2010
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 Mar 2010
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 2009
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 2009
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
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
648
442
316
203
253
190
588
371
125
0.9
1.2
2.8
122
141
100
258
210
140
138
80
191
1.0
197
203
1,887
1,012
158
11.5
62
67
3,431
1,738
1,433
2.3
92
117
101
80
116
-
194
239
192
120
260
-
198
216
3,724
1,938
1,809
-
101
126
700
540
361
211
308
199
559
335
126
1.1
1.6
3.1
110
119
90
277
180
143
149
72
170
1.2
162
180
2,014
1,037
149
12.9
59
64
3,764
1,827
1,339
2.7
84
111
127
104
99
-
160
187
177
103
250
-
199
219
4,068
2,034
1,688
-
92
119
731
567
352
213
327
213
546
330
121
1.2
1.7
3.1
104
116
95
244
173
143
157
82
174
1.3
163
186
2,069
770
154
13.1
45
49
3,876
1,605
1,325
2.9
76
100
160
106
92
-
124
164
183
97
255
-
192
209
4,219
1,808
1,672
-
83
108
803
769
441
190
394
229
573
319
109
1.3
2.4
4.3
95
93
77
246
154
126
250
79
182
2.3
104
129
1,429
259
163
8.8
30
36
3,692
1,151
1,346
2.8
68
103
192
134
339
-
246
275
167
79
214
-
175
192
4,051
1,364
1,899
-
81
119
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
SP
NPA
SP
NPA
SP
NPA
SP
612
47
140
411
351
13
21
197
697
131
175
459
375
24
27
280
735
89
188
472
386
22
30
238
782
203
242
509
361
46
42
185
284
115
290
121
264
97
221
10
Financial institutions, investment &
holding companies
1,622
882
1,649
818
1,738
621
1,209
236
Professionals & private individuals
(except housing loans)
176
75
212
94
234
113
310
146
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
139
84
151
88
156
98
216
125
3,431
101
1,738
80
3,764
127
1,827
104
3,876
160
1,605
106
3,692
192
1,151
134
192
120
177
103
183
97
167
79
Total non-performing assets
3,724
1,938
4,068
2,034
1,808
4,051
1,364
By loan classification
($m)
30 Jun 2010
Total non-performing loans
Debt securities
Contingent liabilities & others
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Mar 2010
4,219
31 Dec 2009
30 Jun 2009
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,798
1,390
536
3,724
249
1,153
536
1,938
2,078
1,311
679
4,068
269
1,086
679
2,034
2,155
1,431
633
4,219
195
977
636
1,808
2,816
791
444
4,051
268
652
444
1,364
385
116
35
536
40
94
36
170
402
106
34
542
47
86
34
167
389
90
54
533
51
73
54
178
467
169
57
693
69
105
56
230
By collateral type
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
NPA
NPA
NPA
2,972
3,133
3,233
2,741
Secured non-performing assets by collateral type
Properties
349
520
540
800
Shares and debentures
116
106
124
231
45
24
22
13
242
285
300
266
3,724
4,068
4,219
4,051
Unsecured non-performing assets
Fixed deposits
Others
Total
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
969
771
141
1,843
1,653
265
245
1,905
1,802
358
113
1,946
1,547
1,036
468
1,000
Total
3,724
4,068
4,219
4,051
Non-performing loans fell 9% from the previous quarter to
$3.43 billion or 2.3% of the loan portfolio from customer
loan repayments. There were improvements across
corporate and consumer borrowers, and across all
regions.
Allowance coverage rose to 101% of non-performing
assets and to 126% if collateral was considered,
compared to 92% and 119% respectively in the previous
quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
Interbank liabilities 2/
2/
Other borrowings and liabilities
Shareholders’ funds
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
183,929
21,152
45,553
25,616
276,250
181,560
10,382
43,911
26,183
262,036
183,432
9,320
40,519
25,373
258,644
179,033
11,177
48,273
24,465
262,948
Notes:
1/
Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
2/
Includes liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
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 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
105,209
17,921
72,073
14,392
823
23,555
13,281
6,942
3,252
80
26,104
13,185
3,193
7,053
2,673
29,061
22,636
1,981
2,499
1,945
183,929
67,023
84,189
27,196
5,521
104,748
18,691
71,473
13,213
1,371
23,195
12,040
7,526
3,477
152
27,282
14,490
3,412
7,253
2,127
26,335
19,405
2,124
2,485
2,321
181,560
64,626
84,535
26,428
5,971
103,842
20,617
69,160
12,697
1,368
23,625
12,285
7,932
3,254
154
29,018
14,912
3,468
8,846
1,792
26,947
20,441
2,191
2,908
1,407
183,432
68,255
82,751
27,705
4,721
99,415
18,616
66,680
12,742
1,377
25,414
14,837
7,081
3,046
450
29,013
18,737
2,878
6,853
545
25,191
19,836
1,615
2,218
1,522
179,033
72,026
78,254
24,859
3,894
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 1% from the previous quarter to
$183.9 billion as foreign currency fixed deposits grew.
Singapore-dollar savings and current accounts also
continued to increase.
OTHER BORROWINGS & LIABILITIES
($m)
Subordinated term debts1/
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
2/
Secured
Unsecured
Others
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
6,956
7,662
7,702
9,047
601
312
248
331
44
369
248
497
913
37,684
45,553
579
35,670
43,911
75
338
32,404
40,519
426
319
38,481
48,273
Notes:
1/ All subordinated term debts issued are unsecured
2/ These are mainly secured by properties and securities
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. The following table shows the period-end, average,
high and low VaR for the trading risk exposure of the Group for the period from 1 July 2009 to 30 June 2010. The Group’s
trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 Jun 2010
Total
Average
28
1 Jul 2009 to 30 Jun 2010
High
30
Low
50
19
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 July 2009 to 30 June 2010.
D BS H Gr oup V a R f or Tr a ding Book
45
40
35
No. of Days
30
25
20
15
10
5
>49-50
>48-49
>47-48
>46-47
>45-46
>44-45
>43-44
>42-43
>41-42
>40-41
>39-40
>38-39
>37-38
>36-37
>35-36
>34-35
>33-34
>32-33
>31-32
>30-31
>29-30
>28-29
>27-28
>26-27
>25-26
>24-25
>23-24
>22-23
>21-22
>20-21
>19-20
0
VaR ( S$ m illio n)
Note:
With effect from 1 Jun 2009, the number of historical scenarios used for the VaR calculation was revised from 500 days to 250 days
Daily Distribution of Treasury & Markets Group Trading Income
(1 Jul 2009 to 30 Jun 2010)
40
35
25
20
15
10
5
>30-32
>26-28
>22-24
>18-20
>14-16
>10-12
>6-8
>2-4
>(2)-0
>(6)-(4)
>(10)-(8)
>(14)-(12)
0
>(18)-(16)
No. of days
30
Trading income (S$ million)
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Tier 1 Deductions
Eligible Tier 1
Tier 2
Loan allowances admitted as Tier 2
Subordinated debts
Revaluation surplus from equity securities
Less: Tier 2 Deductions
Total eligible capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier 1 ratio
Tier 2 ratio
Total (Tier 1 & 2) ratio
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
8,650
20,547
(5,044)
24,153
8,440
21,194
(6,084)
23,550
8,435
20,928
(6,098)
23,265
8,424
20,557
(6,068)
22,913
757
5,714
94
(139)
30,579
184,824
662
5,955
102
(142)
30,127
175,850
434
5,970
87
(128)
29,628
177,222
580
6,140
42
(136)
29,539
182,635
13.1
3.4
16.5
13.4
3.7
17.1
13.1
3.6
16.7
12.6
3.6
16.2
The Group’s capital adequacy ratio moved from 17.1% in the previous quarter to 16.5% due to strong loan growth.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
507
94
601
499
73
572
511
119
630
542
(132)
410
The amount of unrealised valuation surplus increased $29 million to $601 million in second quarter 2010.
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
In $ millions
2nd Qtr 2nd Qtr +/(-)
2010
2009
%
1st Qtr +/(-) 1st Half 1st Half +/(-)
2010
%
2010
2009
%
Income
Interest income
Interest expense
Net interest income
Net fee and commission income
Net trading income
Net income/(loss) from financial instruments designated at fair value
Net income from financial investments
Other income
1,409
342
1,067
358
266
12
98
14
1,543
431
1,112
358
234
(62)
138
12
(9)
(21)
(4)
14
NM
(29)
17
1,372
306
1,066
341
260
(30)
50
26
3
12
5
2
NM
96
(46)
2,781
648
2,133
699
526
(18)
148
40
3,198 (13)
1,010 (36)
2,188
(3)
675
4
438
20
(116) >100
244 (39)
25
60
Total income
1,815
1,792
1
1,713
6
3,528
3,454
2
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Goodwill charges
Allowances for credit and other losses
362
46
309
1,018
204
330
42
259
466
10
10
19
NM
(56)
338
48
316
355
7
(4)
(2)
NM
(43)
700
94
625
1,018
559
657
83
529
903
7
13
18
NM
(38)
Total expenses
1,939
1,097
77
1,057
83
2,996
2,172
38
(Loss)/Profit
Share of profits of associates
(Loss)/Profit before tax
(124)
25
(99)
695
13
708
NM
92
NM
656
22
678
NM
14
NM
532
47
579
1,282
33
1,315
(59)
42
(56)
Income tax expense
Net (loss)/profit
148
(247)
104
604
42
NM
89
589
66
NM
237
342
219
1,096
8
(69)
(300)
53
(247)
552
52
604
NM
2
NM
532
57
589
NM
(7)
NM
232
110
342
985
111
1,096
(76)
(1)
(69)
Attributable to:
Shareholders
Minority interests
Unaudited Consolidated Statement of Comprehensive Income
In $ millions
Net (loss)/profit
Other comprehensive income:
Foreign currency translation differences for foreign operations
Share of other comprehensive income of associates
Available-for-sale financial assets
Net valuation taken to equity
Transferred to income statement on sale
Tax on items taken directly to or transferred from equity
Other comprehensive income, net of tax
Total comprehensive income
Attributable to:
Shareholders
Minority interests
2nd Qtr 2nd Qtr
2010
2009
+/(-)
%
1st Qtr +/(-) 1st Half 1st Half +/(-)
2010
%
2010
2009
%
(247)
604
NM
589
NM
342
1,096
(69)
(12)
7
(82)
9
85
(22)
31
(3)
NM
NM
19
4
53
15
(64)
(73)
227
(59)
(1)
162
752
(140)
(76)
463
(70)
58
99
(65)
230
23
(22)
259
(1)
NM
95
(37)
457
(36)
(23)
421
360
27
(252)
86
(30)
23
146 >100
(85)
1,067
NM
848
NM
763
1,242
(39)
(135)
50
(85)
1,070
(3)
1,067
NM
NM
NM
795
53
848
NM
(6)
NM
660
103
763
1,097
145
1,242
(40)
(29)
(39)
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets
In $ millions
30 Jun
2010
GROUP
31 Mar
31 Dec
2010
2009 1/
30 Jun
2009
30 Jun
2010
COMPANY
31 Mar
31 Dec
2010
2009 1/
30 Jun
2009
ASSETS
Cash and balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value though profit or loss 2/
Positive fair values for financial derivatives
Loans and advances to customers
Financial investments
Securities pledged
Subsidiaries
Investments in associates
Goodwill on consolidation
Properties and other fixed assets
Investment properties
Deferred tax assets
Other assets
22,571
15,364
19,237
11,660
17,558
145,403
27,420
2,076
29,273
13,967
15,850
13,133
15,588
133,268
22,695
1,596
22,515
15,960
22,203
11,257
16,015
129,973
25,731
784
11,566
15,659
33,152
11,704
21,213
127,362
26,567
1,045
9,726
9,713
9,698
10,312
694
4,802
1,066
407
105
7,887
687
5,820
1,087
409
118
8,545
672
5,847
1,134
398
144
6,011
642
5,847
1,205
381
153
6,452
65
65
93
99
TOTAL ASSETS
276,250
262,036
258,644
262,948
9,791
9,778
9,791
10,411
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 3/
Negative fair values for financial derivatives
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue
Subordinated term debts
21,066
178,540
10,919
17,443
744
873
53
9,015
913
6,956
10,081
176,309
10,340
15,300
761
816
52
9,816
579
7,662
9,108
178,448
9,217
16,406
501
807
54
6,489
413
7,702
10,767
173,729
10,121
20,503
717
830
59
7,756
745
9,047
451
5
5
4
TOTAL LIABILITIES
246,522
231,716
229,145
234,274
451
5
5
4
29,728
30,320
29,499
28,674
9,340
9,773
9,786
10,407
8,650
(86)
7,300
9,752
8,440
(86)
7,124
10,705
8,435
(114)
6,879
10,173
8,424
(120)
6,392
9,769
8,650
8,440
8,435
8,424
64
626
53
1,280
71
1,280
47
1,936
9,340
9,773
9,786
10,407
9,340
9,773
9,786
10,407
3.98
3.92
4.17
4.10
4.18
4.11
4.45
4.37
LIABILITIES
Incorporated in the Republic of Singapore
Company Registration Number: 199901152M
To: Shareholders
The DBS Group Holdings Ltd (“DBSH” or “the Company”) Board of Directors report unaudited financial
results for the second quarter ended 30 June 2010.
For the second quarter of 2010, the Directors have declared an interim one-tier tax-exempt dividend of
14 cents (second quarter 2009: 14 cents) for each DBSH non-voting convertible preference share
(“CPS”) and each DBSH non-voting redeemable CPS, and an interim one-tier tax-exempt dividend of
14 cents (second quarter 2009: 14 cents) for each DBSH ordinary share. The DBSH Scrip Dividend
Scheme will be applied to these dividends.
The DBSH shares will be quoted ex-dividend on 20 August 2010. Notice is hereby given that the Share
Transfer Books and Register of Members of the Company will be closed on 25 August 2010. Duly
completed transfers received by the Company's Registrar, Tricor Barbinder Share Registration Services
of 8 Cross Street #11-00 PWC Building, Singapore 048424 up to 5.00 p.m. on 24 August 2010 will be
registered to determine shareholders' entitlement to the second quarter 2010 dividend.
The issue price for new shares to be allotted to shareholders who have elected to receive the second
quarter 2010 dividend in scrip shall be the average of the last dealt prices of each DBSH ordinary share
on the Singapore Exchange Securities Trading Limited for each of 20, 23 and 24 August 2010, to which
a discount of 5% shall be applied.
The payment date for cash dividends / crediting of shares is 13 October 2010. In respect of ordinary
shares in the securities accounts with The Central Depository (Pte) Limited (“CDP”), the second quarter
2010 one-tier tax-exempt dividend will be paid by DBSH to CDP, which will in turn distribute the
dividend entitlements to shareholders, either in cash or by crediting the securities accounts of
shareholders with the relevant shares.
A separate announcement which will outline further administrative details on the application of the
DBSH Scrip Dividend Scheme to the second quarter 2010 dividend will be made in due course.
By order of the Board
Linda Hoon
Group Secretary
29 July 2010
Singapore
More information on the above announcement is available at www.dbs.com/investor
Performance Summary
Unaudited Financial Results
For the First Half / Second Quarter ended
30 June 2010
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
Funding Sources
Customer Deposits
Other Borrowings & Liabilities
Value at Risk and Trading Income
Capital Adequacy
Unrealised Valuation Surplus/(Losses)
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
Adoption of New or Revised FRS and INT FRS
Impairment review of Goodwill
Confirmation by the Board
Page
2
4
6
6
7
7
8
11
14
15
18
19
19
20
21
21
22
22
23
24
25
26
27
27
28
29
1
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
OVERVIEW
DBS Group Holdings Ltd (“DBSH”) prepares its condensed consolidated DBSH Group (“Group”) interim financial statements in
accordance with Singapore Financial Reporting Standard (“FRS”) No. 34 Interim Financial Reporting, as modified by the
requirements of Notice to Banks No. 612 “Credit Files, Grading and Provisioning” issued by the Monetary Authority of
Singapore. The accounting policies and methods of computation applied for the current financial periods are consistent with
those applied for the financial year ended 31 December 2009, with the exception of the adoption of new or revised FRS and
Interpretations to FRS (“INT FRS”).
On 1 January 2010, the Group adopted the following new or revised FRS and INT FRS that are issued by the Accounting
Standard Council (ASC), and are relevant for the Group.
•
FRS 27 Consolidated and Separate Financial Statements
•
FRS 103 Business Combinations
•
FRS 39 (Amendments)
Financial Instruments: Recognition and Measurement
- Eligible Hedged Items
- Embedded Derivatives
•
FRS 102 (Amendments) Share-Based Payment – Group Cash-settled Share-based Payment Transactions
•
INT FRS 109 (Amendments): Reassessment of Embedded Derivatives
•
INT FRS 117: Distributions of Non-cash Assets to Owners
•
Improvements to FRSs
Refer to page 27 for more information.
2nd Qtr
2010
2nd Qtr
2009
%
chg
1st Qtr
2010
%
chg
1st Half
2010
1st Half
2009
%
chg
1,067
358
390
1,815
717
1,098
204
919
1,112
358
322
1,792
631
1,161
466
708
(4)
21
1
14
(5)
(56)
30
1,066
341
306
1,713
702
1,011
355
678
5
27
6
2
9
(43)
36
2,133
699
696
3,528
1,419
2,109
559
1,597
2,188
675
591
3,454
1,269
2,185
880
1,338
(3)
4
18
2
12
(3)
(36)
19
Selected income statement items ($m)
Net interest income
Net fee and commission income
Other non-interest income
Total income
Expenses
Profit before allowances
Allowances for credit and other losses
Profit before tax
Net profit
Goodwill charges
One-time items 1/
Net (loss)/profit including goodwill charges
and one-time items
Selected balance sheet items ($m)
2/
Customer loans
Interbank assets 3/
Total assets
4/
Customer deposits
Total liabilities
Shareholders’ funds
Key financial ratios (%) (excluding
5/
goodwill charges and one-time items)
Net interest margin
Non-interest/total income
Cost/income ratio
Return on assets
6/
Return on equity
Loan/deposit ratio
NPL ratio
Specific allowances (loans)/average loans
(bp)
Tier 1 capital adequacy ratio
Total capital adequacy ratio
718
552
30
532
35
1,250
1,008
24
(1,018)
-
-
NM
-
-
NM
-
(1,018)
-
(23)
NM
NM
(300)
552
NM
532
NM
232
985
(76)
146,070
21,846
276,250
127,970
35,204
262,948
14
(38)
5
133,908
18,672
262,036
9
17
5
146,070
21,846
276,250
127,970
35,204
262,948
14
(38)
5
183,929
246,522
25,616
179,033
234,274
24,465
3
5
5
181,560
231,716
26,183
1
6
(2)
183,929
246,522
25,616
179,033
234,274
24,465
3
5
5
1.84
41.2
39.5
1.07
11.08
79.4
2.3
2.01
37.9
35.2
0.82
9.10
71.5
2.8
1.93
37.8
41.0
0.82
8.24
73.8
2.7
1.88
39.5
40.2
0.93
9.80
79.4
2.3
2.01
36.7
36.7
0.78
8.52
71.5
2.8
19
83
97
56
77
13.1
16.5
12.6
16.2
13.4
17.1
13.1
16.5
12.6
16.2
2
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr
2010
2nd Qtr
2009
1st Qtr
2010
1st Half
2010
1st Half
2009
1.25
0.96
0.92
1.09
0.91
0.80
10.88
0.96
10.45
0.92
11.20
0.64
10.88
0.90
10.45
1.20
0.93
0.89
1.04
0.88
0.78
10.68
0.93
10.27
0.89
10.99
0.62
10.68
0.87
10.27
Per share data ($)
Per basic share
– earnings excluding one-time items and
goodwill charges
– earnings
6/ 7/
– net book value
Per diluted share
– earnings excluding one-time items and
goodwill charges
– earnings
6/ 7/
– net book value
Notes:
1/ One-time items include impairment charges for Thai investment
2/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
3/ Includes interbank assets classified as financial assets at fair value through profit or loss on the balance sheet
4/ Includes customer deposits 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 for the quarters are computed on an annualised basis
6/ Minority interests are not included as equity in the computation of net book value and return on equity
7/ Takes into account 15.8 million shares to be issued on 8 July 2010 pursuant to the Scrip Dividend Scheme
NM Not Meaningful
Second-quarter net profit before a goodwill impairment
charge rose 35% from the previous quarter to $718
million, a quarterly record. Operating trends continued to
strengthen. There was broad-based loan growth while
non-interest income increased from higher customer flows.
Allowance coverage exceeded 100% as additional general
allowances were set aside and asset quality improved
further.
Net interest income was stable from the previous quarter
at $1.07 billion. Loans rose 9% from corporate borrowings
across the region and housing loan drawdowns in
Singapore and Hong Kong. Net interest margin fell nine
basis points to 1.84%.
Higher non-interest income resulted in an overall revenue
increase of 6% from the previous quarter. Net fee income
rose on better wealth management and credit card
revenues, while trading income benefited from higher
customer flows.
Expenses of $717 million were 2% higher than the
previous quarter. The cost-income ratio was little changed
at 40%.
The non-performing loan rate improved from 2.7% in the
previous quarter to 2.3% due to customer repayments.
Allowances of $204 million were significantly below the
previous quarter as specific allowances fell. General
allowances increased in line with loan growth.
Allowance coverage of non-performing assets improved
to 101% and to 126% if collateral was considered.
Compared to a year ago, net profit before a one-time
charge was 30% higher due mainly to lower allowance
charges.
Return on assets was 1.07% while return on equity was
11.1%. Both ratios were better than the previous
quarter.
The total capital adequacy ratio stood at 16.5% with tier1 at 13.1%.
A one-time goodwill impairment charge of $1.02 billion
was taken for DBS Bank (Hong Kong) Limited to reflect
heightened deposit competition. The charge has no
impact on DBS’ ability to carry out ongoing business or
pay dividends as goodwill was deducted from regulatory
capital on consolidation.
3
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET INTEREST INCOME
Average balance
sheet
2nd Qtr 2010
Average
Average
balance Interest
rate
($m)
($m)
(%)
2nd Qtr 2009
Average
Average
balance Interest
rate
($m)
($m)
(%)
1st Qtr 2010
Average
balance
($m)
Interest
($m)
Average
rate
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
138,617
43,195
51,138
232,950
984
82
343
1,409
2.85
0.76
2.69
2.43
127,447
42,582
51,638
221,667
1,017
95
431
1,543
3.20
0.90
3.34
2.79
132,388
42,548
49,457
224,393
934
74
364
1,372
2.86
0.71
2.98
2.48
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
182,951
31,270
214,221
241
101
342
0.53
1.30
0.64
177,983
28,067
206,050
297
134
431
0.67
1.90
0.84
181,335
25,148
206,483
215
91
306
0.48
1.46
0.60
1,067
1.84
1,112
2.01
1,066
1.93
Net interest
income/margin 1/
Average balance
sheet
1st Half 2010
1st Half 2009
Average
Average Average
Average
balance Interest
rate balance Interest
rate
($m)
($m)
(%)
($m)
($m)
(%)
Interest-bearing
assets
Customer loans
Interbank assets
Securities
Total
135,532
42,275
51,004
228,811
1,918
156
707
2,781
2.85
0.74
2.80
2.45
127,791
41,604
50,347
219,742
2,125
202
871
3,198
3.36
0.98
3.50
2.94
Interest-bearing
liabilities
Customer deposits
Other borrowings
Total
182,002
28,648
210,650
456
192
648
0.51
1.35
0.62
176,283
28,022
204,305
685
325
1,010
0.79
2.34
1.00
2,133
1.88
2,188
2.01
Net interest
income/margin 1/
Note:
1/ Net interest margin is net interest income expressed as a percentage of average interest-earning assets
Net interest was stable from the previous quarter at $1.07
billion.
The impact of the margin decline on net interest income
was offset by the strong 9% increase in customer loans.
Net interest margins fell nine basis points from the previous
quarter to 1.84%. Securities yields were lower as higheryielding securities were replaced by higher-quality bonds
with lower yields. In addition, deposit costs were higher due
to competition for US and Hong Kong dollar funding.
Net interest income was 4% below a year ago as lower
interest margins more than offset the benefit of higher asset
volumes.
4
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
2nd Qtr 2010 versus 2nd Qtr 2009
Volume and rate analysis ($m)
Increase/(decrease) due to change in
2nd Qtr 2010 versus 1st Qtr 2010
Volume
Rate
Net
change
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
89
1
(4)
(122)
(14)
(84)
(33)
(13)
(88)
44
1
(2)
5
42
6
Total
86
(220)
(134)
12
57
(36)
(33)
(24)
24
Interest expense
Customer deposits
Other borrowings
Total
8
2
10
(64)
(35)
(99)
(56)
(33)
(89)
2
12
14
23
(3)
20
25
9
34
Net impact on interest income
76
(121)
(45)
43
(53)
(10)
Interest income
Due to change in number of days
Net Interest Income
-
11
(45)
1
1st Half 2010 versus 1st Half 2009
Volume and rate analysis ($m)
Increase/(decrease) due to change in
Volume
Rate
Net
change
Customer loans
Interbank assets
Securities
Total
129
3
11
143
(336)
(49)
(175)
(560)
(207)
(46)
(164)
(417)
Interest expense
Customer deposits
Other borrowings
Total
22
(10)
12
(251)
(123)
(374)
(229)
(133)
(362)
Net impact on interest income
131
(186)
(55)
Interest income
Due to change in number of days
Net Interest Income
(55)
5
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NET FEE AND COMMISSION INCOME
($m)
Stockbroking
Investment banking
Trade and remittances
Loan related
Guarantees
Deposit related
Credit card
Fund management
Wealth management
Others
Total
2nd Qtr
2010
2nd Qtr
2009
% chg
1st Qtr
2010
% chg
1st Half
2010
1st Half
2009
% chg
42
29
57
101
16
22
36
6
34
15
358
50
27
59
108
14
22
37
6
21
14
358
(16)
7
(3)
(6)
14
(3)
62
7
-
42
27
59
100
13
21
33
5
27
14
341
7
(3)
1
23
5
9
20
26
7
5
84
56
116
201
29
43
69
11
61
29
699
78
44
133
204
29
42
70
11
37
27
675
8
27
(13)
(1)
2
(1)
65
7
4
Net fee and commission income rose 5% from the previous
quarter to $358 million. There was broad-based
improvement across fee activities, led by wealth
management and credit card revenues on higher volumes.
Net fee and commission income was unchanged from a
year ago as improvements in wealth management were
offset by declines in stockbroking and loan syndication
activities.
OTHER NON-INTEREST INCOME
($m)
2nd Qtr
2010
2nd Qtr
2009
% chg
1st Qtr
2010
% chg
1st Half
2010
1st Half
2009
% chg
Net trading income
Net income/(loss) from financial
instruments designated at fair value
Net income on financial
investments
Net gain on fixed assets
Others (include rental income)
266
234
14
260
2
526
438
20
12
(62)
NM
(30)
NM
(18)
(116)
84
98
138
(29)
50
96
148
244
(39)
3
11
12
NM
(8)
14
12
(79)
(8)
17
23
25
NM
(8)
Total
390
322
21
306
27
696
591
18
Note:
NM Not Meaningful
Net trading income (including net income from financial
instruments designated at fair value) rose to $278
million from $230 million in the previous quarter.
Customer revenues rose 45% from the previous quarter
and accounted for more than half of net trading income.
Net trading income was also better than the $172 million
a year ago.
Net income from financial investments doubled from the
previous quarter to $98 million but was 29% below a
year ago.
6
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
EXPENSES
($m)
2nd Qtr 2nd Qtr
2010
2009
Staff
Occupancy
Computerisation
Revenue-related
Others
Total
Staff headcount at period-end
% chg
1st Qtr
2010
% chg 1st Half 1st Half
2010
2009
% chg
362
65
131
35
124
717
14,615
330
67
104
33
97
631
13,928
10
(3)
26
6
28
14
5
338
70
129
31
134
702
14,267
7
(7)
2
13
(7)
2
2
700
135
260
66
258
1,419
14,615
657
138
216
66
192
1,269
13,928
7
(2)
20
34
12
5
46
1
42
1
10
-
48
1
(4)
-
94
2
83
2
13
-
2
2
-
2
-
4
4
-
Included in the above table were:
Depreciation of properties and other fixed
assets
Directors’ fees
Audit fees payable
Expenses of $717 million were 2% above the previous
quarter. Staff costs rose with a higher headcount, but they
were partially offset by lower non-staff costs. Compared to
a year ago, costs were 14% higher as both staff and nonstaff costs rose.
The cost-income ratio of 40% was similar to the
previous quarter.
ALLOWANCES FOR CREDIT AND OTHER LOSSES
($m)
2nd Qtr 2nd Qtr
2010
2009
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,
2/
properties and other assets
Total
% chg
1st Qtr
2010
% chg 1st Half 1st Half % chg
2010
2009
124
183
(32)
25
>100
149
365
(59)
68
1
(4)
13
6
52
272
74
66
11
8
113
(75)
(99)
NM
18
(25)
(54)
324
10
7
(3)
6
304
(79)
(90)
NM
NM
(83)
392
11
3
10
12
356
497
104
157
25
18
193
(21)
(89)
(98)
(60)
(33)
84
12
11
9
6
100
18
18
-
204
466
(56)
355
(43)
559
880
(36)
Notes:
1/ Specific allowances for loans are classified according to where the borrower is incorporated. Historical comparatives have been restated to conform to the current year presentation
2/ Exclude one-time items
Specific allowances for loans fell to $68 million, one-fifth
the amount in the previous quarter, as charges for
corporate loans in Rest of the World declined.
Allowances for other regions remained low.
General allowances of $124 million were taken for loan
growth, compared to $25 million in the previous quarter.
Total allowances of $204 million were 43% below the
previous quarter and 56% lower than a year ago.
7
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
PERFORMANCE BY BUSINESS SEGMENTS 1/
($m)
Consumer/
Private
Banking
Institutional
Banking
Treasury
Others
Total
Selected income items
2nd Qtr 2010 2/
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
353
168
521
363
23
135
21
114
503
417
920
259
175
8
494
100
401
183
173
356
90
266
37
229
28
(10)
18
5
6
17
24
(10)
(26)
1,067
748
1,815
717
204
25
919
148
718
1st Qtr 2010
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
359
157
516
350
12
154
23
131
474
330
804
247
328
6
235
28
208
214
161
375
81
5
289
50
239
19
(1)
18
24
10
16
(12)
(46)
1,066
647
1,713
702
355
22
678
89
532
2nd Qtr 2009
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
337
151
488
291
38
159
27
132
450
348
798
244
245
6
315
59
265
340
(46)
294
89
(2)
207
50
157
(15)
227
212
7
185
7
27
(32)
(2)
1,112
680
1,792
631
466
13
708
104
552
1st Half 2010 2/
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
712
325
1,037
713
35
289
44
245
977
747
1,724
506
503
14
729
128
609
397
334
731
171
5
555
87
468
47
(11)
36
29
16
33
24
(22)
(72)
2,133
1,395
3,528
1,419
559
47
1,597
237
1,250
8
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
Consumer/
Private
Banking
Institutional
Banking
Treasury
Others
Total
2/
1st Half 2009
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
Selected balance sheet and other
items 3/
30 Jun 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2010
Depreciation for 2nd Qtr 2010
Goodwill charge for 2nd Qtr 2010
31 Mar 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 1st Qtr 2010
Depreciation for 1st Qtr 2010
Goodwill charge for 1st Qtr 2010
30 Jun 2009
Total assets before goodwill
Goodwill on consolidation
Total assets
Total liabilities
Capital expenditure for 2nd Qtr 2009
Depreciation for 2nd Qtr 2009
Goodwill charge for 2nd Qtr 2009
670
293
963
563
73
327
53
274
877
683
1,560
462
456
11
653
138
526
638
142
780
185
48
547
116
432
3
148
151
59
303
22
(189)
(88)
(224)
2,188
1,266
3,454
1,269
880
33
1,338
219
1,008
49,247
113,994
100,057
8,150
115,824
11
13
68,520
3
5
49,489
2
12,689
19
26
1,018
271,448
4,802
276,250
246,522
33
46
1,018
46,799
100,758
98,434
10,225
115,590
3
12
64,087
6
6
38,180
2
2
13,859
7
28
39,750
101,200
106,363
9,788
116,129
4
12
60,919
6
6
42,296
3
2
14,930
8
22
256,216
5,820
262,036
231,716
18
48
-
257,101
5,847
262,948
234,274
21
42
-
Notes:
1/ With effect from 1 January 2010, the Group has adopted a revised capital benefit and fund transfer policy. The business segments have also been reaggregated following a
review. Comparative figures have been restated to conform to the current year presentation
2/ Allowances for credit and other losses and profits exclude goodwill charges and one-time items
3/ 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. During the
quarter, no one group of related customers generated more
than 10% of the Group’s revenues.
The external presentation of the business segment results
has been revised from first-quarter 2010 to better reflect
9
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
internal management reporting. In addition, the Group
adopted a revised capital benefit and fund transfer policy
with effect from 1 January 2010. Comparative figures
have been restated to conform to the current
presentation.
The various business segments are described below:
Consumer/ Private Banking
Consumer/ Private Banking 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, net interest income
declined as higher housing loan volumes were more than
offset by a decline in their yields. Expenses rose due to
higher advertising and promotion costs. Both general
allowances and specific allowances were higher than the
previous quarter.
Institutional Banking
Institutional Banking provides financial services and
products to large corporate, institutional clients and
small and medium-sized businesses. The products
and services available to customers include corporate
finance and advisory banking services for mergers
and acquisitions, capital raising through debt and
equity markets, capital restructuring, syndicated
finance, securities and fiduciary services, cash
management and trade services, private equity and
credit facilities, deposit and treasury products.
Institutional Banking also provides equity services
through DBS Vickers Securities (DBSV). DBSV offers
a wide range of services to retail and corporate
customers including research, sales and trading,
share placement, nominees and securities custodian
services and distribution of primary and secondary issues.
Asset management activities also fall under this segment.
Net interest income increased from higher loan volumes
partially offset by lower margins, while non-interest income
benefited from increased fee income activities and
treasury product sales. Allowance charges declined as
specific allowances for existing NPLs in Rest of the World
fell.
Treasury
Treasury provides treasury services to corporations,
institutional and private investors, financial institutions and
other market participants. It is primarily involved in market
making, structuring, equity and debt sales and trading
across a broad range of financial products including
foreign exchange, interest rate/credit/equity and other
structured derivatives. Income from these financial
products and services offered to the customer of other
business segments, such as Consumer/Private Banking
and Institutional Banking, is reflected in the respective
segments. Treasury is also responsible for the
management of the Group’s asset and liability interest rate
positions and investment of the Group’s excess liquidity
and shareholders’ funds.
Treasury’s revenues were lower than the previous quarter
due to weaker net interest income. This was partially offset
by stronger trading performance and higher customer
flows.
Others
Others encompasses a range of activities from corporate
decisions and income and expenses not attributed to other
business segments.
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
world
Total
Selected income items
2nd Qtr 2010 2/
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
643
513
1,156
323
148
2
687
96
538
198
165
363
249
32
82
17
65
79
25
104
78
18
7
15
3
12
70
52
122
52
14
16
72
17
55
77
(7)
70
15
(8)
63
15
48
1,067
748
1,815
717
204
25
919
148
718
1st Qtr 2010
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
657
369
1,026
419
278
3
332
26
249
202
165
367
147
7
213
33
180
76
31
107
69
6
4
36
6
30
77
54
131
53
11
15
82
20
62
54
28
82
14
53
15
4
11
1,066
647
1,713
702
355
22
678
89
532
2nd Qtr 2009
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
673
471
1,144
360
372
4
416
40
324
222
120
342
151
71
120
21
99
74
29
103
63
13
3
30
9
21
90
31
121
41
10
6
76
18
58
53
29
82
16
66
16
50
1,112
680
1,792
631
466
13
708
104
552
1st Half 2010 2/
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
1,300
882
2,182
742
426
5
1,019
122
787
400
330
730
396
39
295
50
245
155
56
211
147
24
11
51
9
42
147
106
253
105
25
31
154
37
117
131
21
152
29
45
78
19
59
2,133
1,395
3,528
1,419
559
47
1,597
237
1,250
11
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
($m)
S’pore
1st Half 2009 2/
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
Hong
Kong
Rest of
Greater
China
South
and
Southeast Asia
Total
Rest of
world
1,328
775
2,103
735
598
7
777
83
583
446
247
693
301
159
233
40
193
154
66
220
123
25
6
78
18
60
163
113
276
82
44
20
170
49
121
97
65
162
28
54
80
29
51
2,188
1,266
3,454
1,269
880
33
1,338
219
1,008
Selected balance sheet items
30 Jun 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
Non-current assets 3/
Gross customer loans
172,591
171
172,762
1,486
84,467
54,420
4,631
59,051
508
38,052
16,974
16,974
131
11,524
14,344
14,344
40
8,664
13,119
13,119
2
6,441
271,448
4,802
276,250
2,167
149,148
31 Mar 2010
Total assets before goodwill
Goodwill on consolidation
Total assets
3/
Non-current assets
Gross customer loans
163,380
171
163,551
1,478
77,723
49,718
5,649
55,367
518
34,008
15,724
15,724
143
10,798
14,313
14,313
43
7,483
13,081
13,081
1
6,983
256,216
5,820
262,036
2,183
136,995
30 Jun 2009
Total assets before goodwill
Goodwill on consolidation
Total assets
3/
Non-current assets
Gross customer loans
169,570
198
169,768
1,465
73,610
46,754
5,649
52,403
573
31,951
13,778
13,778
143
9,154
13,243
13,243
45
8,437
13,756
13,756
2
7,254
257,101
5,847
262,948
2,228
130,406
Notes:
1/ The geographical segment analysis is based on the location where transactions and assets are booked
2/ Allowances for credit and other losses and profits exclude goodwill charges and one-time items
3/ Includes investment in associates, properties and other fixed assets, and investment properties
12
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
The performance by geography is classified based on the
location in which income and assets are recorded.
Singapore
Net profit rose from $249 million in the previous quarter to
$538 million as revenues increased and both expenses
and allowances declined.
Net interest income fell 2% as lower interest margins
more than offset strong corporate and housing loan
growth. Non-interest income rose 39% from better trading
income and gains from financial investments.
Expenses fell 23% as expenses accrued at Group level
for compensation to investors in Constellation notes were
reversed and reflected in Hong Kong. Allowances were
lower as lower specific allowances were partially offset by
an increase in general allowances.
Hong Kong
The second quarter’s results incorporate an appreciation of
the Singapore dollar against the Hong Kong dollar of 1%
from the previous quarter and 5% from a year ago.
Net profit fell from $180 million in the previous quarter to
$65 million as compensation for investors in Constellation
notes was booked in Hong Kong’s accounts. General
allowances were also higher in line with loan growth.
Net interest income decreased 2% from the previous
quarter as net interest margins declined 12 basis points to
1.68% as the securities portfolio shifted from higher-yielding
corporate bonds to high-grade government paper. Deposit
costs were also higher due to competitive pressures. Loans
rose 12% from the previous quarter as corporate loans,
trade finance and housing loans grew.
Non-interest income was stable from the previous quarter.
Higher fees from loan syndication and trade finance,
together with higher sales of treasury products, were offset
by a decline in gains from financial investments.
Expenses would have been unchanged from the previous
quarter if Constellation notes compensation charges were
excluded.
Specific allowances declined from the previous quarter as
write-backs rose and charges for new NPLs declined.
Total allowances were higher due to an increase in
general allowances.
13
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CUSTOMER LOANS
1/
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
149,148
136,995
133,420
130,406
1,748
1,339
133,908
1,512
1,325
130,583
1,090
General allowances
Net total
1,645
1,433
146,070
1,346
127,970
By business unit 2/
Consumer/ Private Banking
Institutional Banking
Others
Total (Gross)
48,386
100,427
335
149,148
46,117
90,586
292
136,995
44,162
88,503
755
133,420
40,175
89,542
689
130,406
By geography 3/
Singapore
Hong Kong
Rest of Greater China
South and South-east Asia
Rest of the world
Total (Gross)
70,698
36,982
11,455
13,653
16,360
149,148
64,184
33,492
11,647
12,020
15,652
136,995
61,713
32,999
11,211
11,726
15,771
133,420
61,064
31,959
10,161
11,026
16,196
130,406
By industry
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage & communications
Financial institutions, investment & holding companies
Professionals & private individuals (except housing loans)
Others
Total (Gross)
18,404
20,282
37,082
14,798
13,294
20,202
10,480
14,606
149,148
17,098
18,852
34,949
13,617
12,598
16,813
10,397
12,671
136,995
16,239
18,433
33,120
13,335
12,277
16,710
10,873
12,433
133,420
15,589
18,220
29,821
12,117
13,043
17,107
10,660
13,849
130,406
60,852
26,731
34,121
33,073
575
32,498
36,355
3,530
32,825
18,868
2,586
16,282
149,148
58,238
24,468
33,770
30,876
619
30,257
31,047
2,680
28,367
16,834
2,725
14,109
136,995
56,712
22,489
34,223
30,274
621
29,653
29,449
2,500
26,949
16,985
2,940
14,045
133,420
56,448
18,842
37,606
29,141
631
28,510
28,076
1,583
26,493
16,741
2,460
14,281
130,406
Gross
Less:
Specific allowances
By currency and fixed/variable pricing
Singapore dollar
Fixed rates
Floating or adjustable rates
Hong Kong dollar
Fixed rates
Floating or adjustable rates
US dollar
Fixed rates
Floating or adjustable rates
Others
Fixed rates
Floating or adjustable rates
Total (Gross)
Notes:
1/ Includes customer loans classified as financial assets at fair value through profit or loss on the balance sheet
2/ The business segments have been reaggregated following a review. Historical comparatives have been restated to conform to the current year presentation.
3/ Loans by geography are classified according to where the borrower is incorporated. Historical comparatives have been restated to conform to the current year presentation.
Gross customer loans rose 9% from the previous
quarter to $149.1 billion. There was broad-based
regional corporate loan growth as well as housing loan
drawdowns in Singapore and Hong Kong.
Gross loans were 14% higher than a year ago, with the
expansion spread across most regions and across
corporate and consumer borrowers.
14
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
NON-PERFORMING ASSETS AND LOSS ALLOWANCE COVERAGE
By business unit
1/
2/
30 Jun 2010
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Mar 2010
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
31 Dec 2009
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
30 Jun 2009
Consumer/ Private
Banking
Institutional Banking
Total non-performing
loans (NPL)
Debt securities
Contingent liabilities &
others
Total non-performing
assets (NPA)
NPA
($m)
SP
($m)
GP
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
396
168
482
0.8
164
263
3,035
1,570
951
3.0
83
102
3,431
1,738
1,433
2.3
92
117
101
80
116
-
194
239
192
120
260
-
198
216
3,724
1,938
1,809
-
101
126
496
190
459
1.1
131
242
3,268
1,637
880
3.6
77
97
3,764
1,827
1,339
2.7
84
111
127
104
99
-
160
187
177
103
250
-
199
219
4,068
2,034
1,688
-
92
119
513
195
440
1.2
124
236
3,363
1,410
885
3.8
68
86
3,876
1,605
1,325
2.9
76
100
160
106
92
-
124
164
183
97
255
-
192
209
4,219
1,808
1,672
-
83
108
681
262
399
1.7
97
196
3,011
889
947
3.4
61
88
3,692
1,151
1,346
2.8
68
103
192
134
339
-
246
275
167
79
214
-
175
192
4,051
1,364
1,899
-
81
119
Notes:
1/ Allowances for credit and other losses exclude one-time items
2/ The business segments have been reaggregated following a review. Historical comparatives have been restated to conform to the current year presentation.
15
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By geography
30 Jun 2010
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 Mar 2010
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 2009
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 2009
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
($m)
NPL
(% of loans)
(GP+SP)/NPA
(%)
(GP+SP)/
unsecured
NPA
(%)
648
442
316
203
253
190
588
371
125
0.9
1.2
2.8
122
141
100
258
210
140
138
80
191
1.0
197
203
1,887
1,012
158
11.5
62
67
3,431
1,738
1,433
2.3
92
117
101
80
116
-
194
239
192
120
260
-
198
216
3,724
1,938
1,809
-
101
126
700
540
361
211
308
199
559
335
126
1.1
1.6
3.1
110
119
90
277
180
143
149
72
170
1.2
162
180
2,014
1,037
149
12.9
59
64
3,764
1,827
1,339
2.7
84
111
127
104
99
-
160
187
177
103
250
-
199
219
4,068
2,034
1,688
-
92
119
731
567
352
213
327
213
546
330
121
1.2
1.7
3.1
104
116
95
244
173
143
157
82
174
1.3
163
186
2,069
770
154
13.1
45
49
3,876
1,605
1,325
2.9
76
100
160
106
92
-
124
164
183
97
255
-
192
209
4,219
1,808
1,672
-
83
108
803
769
441
190
394
229
573
319
109
1.3
2.4
4.3
95
93
77
246
154
126
250
79
182
2.3
104
129
1,429
259
163
8.8
30
36
3,692
1,151
1,346
2.8
68
103
192
134
339
-
246
275
167
79
214
-
175
192
4,051
1,364
1,899
-
81
119
16
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By industry
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
SP
NPA
SP
NPA
SP
NPA
SP
612
47
140
411
351
13
21
197
697
131
175
459
375
24
27
280
735
89
188
472
386
22
30
238
782
203
242
509
361
46
42
185
284
115
290
121
264
97
221
10
Financial institutions, investment &
holding companies
1,622
882
1,649
818
1,738
621
1,209
236
Professionals & private individuals
(except housing loans)
176
75
212
94
234
113
310
146
Manufacturing
Building and construction
Housing loans
General commerce
Transportation, storage &
communications
Others
139
84
151
88
156
98
216
125
3,431
101
1,738
80
3,764
127
1,827
104
3,876
160
1,605
106
3,692
192
1,151
134
192
120
177
103
183
97
167
79
Total non-performing assets
3,724
1,938
4,068
2,034
1,808
4,051
1,364
By loan classification
($m)
30 Jun 2010
Total non-performing loans
Debt securities
Contingent liabilities & others
Non-performing assets
Substandard
Doubtful
Loss
Total
Restructured assets
Substandard
Doubtful
Loss
Total
31 Mar 2010
4,219
31 Dec 2009
30 Jun 2009
NPA
SP
NPA
SP
NPA
SP
NPA
SP
1,798
1,390
536
3,724
249
1,153
536
1,938
2,078
1,311
679
4,068
269
1,086
679
2,034
2,155
1,431
633
4,219
195
977
636
1,808
2,816
791
444
4,051
268
652
444
1,364
385
116
35
536
40
94
36
170
402
106
34
542
47
86
34
167
389
90
54
533
51
73
54
178
467
169
57
693
69
105
56
230
By collateral type
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
NPA
NPA
NPA
2,972
3,133
3,233
2,741
Secured non-performing assets by collateral type
Properties
349
520
540
800
Shares and debentures
116
106
124
231
45
24
22
13
242
285
300
266
3,724
4,068
4,219
4,051
Unsecured non-performing assets
Fixed deposits
Others
Total
17
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
By period overdue
($m)
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
NPA
NPA
NPA
NPA
Not overdue
180 days overdue
969
771
141
1,843
1,653
265
245
1,905
1,802
358
113
1,946
1,547
1,036
468
1,000
Total
3,724
4,068
4,219
4,051
Non-performing loans fell 9% from the previous quarter to
$3.43 billion or 2.3% of the loan portfolio from customer
loan repayments. There were improvements across
corporate and consumer borrowers, and across all
regions.
Allowance coverage rose to 101% of non-performing
assets and to 126% if collateral was considered,
compared to 92% and 119% respectively in the previous
quarter.
FUNDING SOURCES
($m)
1/
Customer deposits
Interbank liabilities 2/
2/
Other borrowings and liabilities
Shareholders’ funds
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
183,929
21,152
45,553
25,616
276,250
181,560
10,382
43,911
26,183
262,036
183,432
9,320
40,519
25,373
258,644
179,033
11,177
48,273
24,465
262,948
Notes:
1/
Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
2/
Includes liabilities classified as financial liabilities at fair value through profit or loss on the balance sheet
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 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
105,209
17,921
72,073
14,392
823
23,555
13,281
6,942
3,252
80
26,104
13,185
3,193
7,053
2,673
29,061
22,636
1,981
2,499
1,945
183,929
67,023
84,189
27,196
5,521
104,748
18,691
71,473
13,213
1,371
23,195
12,040
7,526
3,477
152
27,282
14,490
3,412
7,253
2,127
26,335
19,405
2,124
2,485
2,321
181,560
64,626
84,535
26,428
5,971
103,842
20,617
69,160
12,697
1,368
23,625
12,285
7,932
3,254
154
29,018
14,912
3,468
8,846
1,792
26,947
20,441
2,191
2,908
1,407
183,432
68,255
82,751
27,705
4,721
99,415
18,616
66,680
12,742
1,377
25,414
14,837
7,081
3,046
450
29,013
18,737
2,878
6,853
545
25,191
19,836
1,615
2,218
1,522
179,033
72,026
78,254
24,859
3,894
Note:
1/ Includes customer deposits classified as financial liabilities at fair value through profit or loss on the balance sheet
Customer deposits rose 1% from the previous quarter to
$183.9 billion as foreign currency fixed deposits grew.
Singapore-dollar savings and current accounts also
continued to increase.
OTHER BORROWINGS & LIABILITIES
($m)
Subordinated term debts1/
Other debt securities in issue
Due within 1 year
Due after 1 year
Comprising:
2/
Secured
Unsecured
Others
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
6,956
7,662
7,702
9,047
601
312
248
331
44
369
248
497
913
37,684
45,553
579
35,670
43,911
75
338
32,404
40,519
426
319
38,481
48,273
Notes:
1/ All subordinated term debts issued are unsecured
2/ These are mainly secured by properties and securities
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. The following table shows the period-end, average,
high and low VaR for the trading risk exposure of the Group for the period from 1 July 2009 to 30 June 2010. The Group’s
trading book VaR methodology is based on Historical Simulation VaR.
($m)
As at 30 Jun 2010
Total
Average
28
1 Jul 2009 to 30 Jun 2010
High
30
Low
50
19
The charts below provide the range of VaR and the daily distribution of trading income in the trading portfolio for the
period from 1 July 2009 to 30 June 2010.
D BS H Gr oup V a R f or Tr a ding Book
45
40
35
No. of Days
30
25
20
15
10
5
>49-50
>48-49
>47-48
>46-47
>45-46
>44-45
>43-44
>42-43
>41-42
>40-41
>39-40
>38-39
>37-38
>36-37
>35-36
>34-35
>33-34
>32-33
>31-32
>30-31
>29-30
>28-29
>27-28
>26-27
>25-26
>24-25
>23-24
>22-23
>21-22
>20-21
>19-20
0
VaR ( S$ m illio n)
Note:
With effect from 1 Jun 2009, the number of historical scenarios used for the VaR calculation was revised from 500 days to 250 days
Daily Distribution of Treasury & Markets Group Trading Income
(1 Jul 2009 to 30 Jun 2010)
40
35
25
20
15
10
5
>30-32
>26-28
>22-24
>18-20
>14-16
>10-12
>6-8
>2-4
>(2)-0
>(6)-(4)
>(10)-(8)
>(14)-(12)
0
>(18)-(16)
No. of days
30
Trading income (S$ million)
20
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
CAPITAL ADEQUACY
($m)
Tier 1
Share capital
Disclosed reserves and others
Less: Tier 1 Deductions
Eligible Tier 1
Tier 2
Loan allowances admitted as Tier 2
Subordinated debts
Revaluation surplus from equity securities
Less: Tier 2 Deductions
Total eligible capital
Risk-weighted assets
Capital adequacy ratio (%)
Tier 1 ratio
Tier 2 ratio
Total (Tier 1 & 2) ratio
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
8,650
20,547
(5,044)
24,153
8,440
21,194
(6,084)
23,550
8,435
20,928
(6,098)
23,265
8,424
20,557
(6,068)
22,913
757
5,714
94
(139)
30,579
184,824
662
5,955
102
(142)
30,127
175,850
434
5,970
87
(128)
29,628
177,222
580
6,140
42
(136)
29,539
182,635
13.1
3.4
16.5
13.4
3.7
17.1
13.1
3.6
16.7
12.6
3.6
16.2
The Group’s capital adequacy ratio moved from 17.1% in the previous quarter to 16.5% due to strong loan growth.
UNREALISED VALUATION SURPLUS/(LOSSES)
($m)
Properties
Financial investments
Total
30 Jun 2010
31 Mar 2010
31 Dec 2009
30 Jun 2009
507
94
601
499
73
572
511
119
630
542
(132)
410
The amount of unrealised valuation surplus increased $29 million to $601 million in second quarter 2010.
21
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Consolidated Income Statement
In $ millions
2nd Qtr 2nd Qtr +/(-)
2010
2009
%
1st Qtr +/(-) 1st Half 1st Half +/(-)
2010
%
2010
2009
%
Income
Interest income
Interest expense
Net interest income
Net fee and commission income
Net trading income
Net income/(loss) from financial instruments designated at fair value
Net income from financial investments
Other income
1,409
342
1,067
358
266
12
98
14
1,543
431
1,112
358
234
(62)
138
12
(9)
(21)
(4)
14
NM
(29)
17
1,372
306
1,066
341
260
(30)
50
26
3
12
5
2
NM
96
(46)
2,781
648
2,133
699
526
(18)
148
40
3,198 (13)
1,010 (36)
2,188
(3)
675
4
438
20
(116) >100
244 (39)
25
60
Total income
1,815
1,792
1
1,713
6
3,528
3,454
2
Expenses
Employee benefits
Depreciation of properties and other fixed assets
Other expenses
Goodwill charges
Allowances for credit and other losses
362
46
309
1,018
204
330
42
259
466
10
10
19
NM
(56)
338
48
316
355
7
(4)
(2)
NM
(43)
700
94
625
1,018
559
657
83
529
903
7
13
18
NM
(38)
Total expenses
1,939
1,097
77
1,057
83
2,996
2,172
38
(Loss)/Profit
Share of profits of associates
(Loss)/Profit before tax
(124)
25
(99)
695
13
708
NM
92
NM
656
22
678
NM
14
NM
532
47
579
1,282
33
1,315
(59)
42
(56)
Income tax expense
Net (loss)/profit
148
(247)
104
604
42
NM
89
589
66
NM
237
342
219
1,096
8
(69)
(300)
53
(247)
552
52
604
NM
2
NM
532
57
589
NM
(7)
NM
232
110
342
985
111
1,096
(76)
(1)
(69)
Attributable to:
Shareholders
Minority interests
Unaudited Consolidated Statement of Comprehensive Income
In $ millions
Net (loss)/profit
Other comprehensive income:
Foreign currency translation differences for foreign operations
Share of other comprehensive income of associates
Available-for-sale financial assets
Net valuation taken to equity
Transferred to income statement on sale
Tax on items taken directly to or transferred from equity
Other comprehensive income, net of tax
Total comprehensive income
Attributable to:
Shareholders
Minority interests
2nd Qtr 2nd Qtr
2010
2009
+/(-)
%
1st Qtr +/(-) 1st Half 1st Half +/(-)
2010
%
2010
2009
%
(247)
604
NM
589
NM
342
1,096
(69)
(12)
7
(82)
9
85
(22)
31
(3)
NM
NM
19
4
53
15
(64)
(73)
227
(59)
(1)
162
752
(140)
(76)
463
(70)
58
99
(65)
230
23
(22)
259
(1)
NM
95
(37)
457
(36)
(23)
421
360
27
(252)
86
(30)
23
146 >100
(85)
1,067
NM
848
NM
763
1,242
(39)
(135)
50
(85)
1,070
(3)
1,067
NM
NM
NM
795
53
848
NM
(6)
NM
660
103
763
1,097
145
1,242
(40)
(29)
(39)
22
DBS GROUP HOLDINGS LTD AND ITS SUBSIDIARIES
Unaudited Balance Sheets
In $ millions
30 Jun
2010
GROUP
31 Mar
31 Dec
2010
2009 1/
30 Jun
2009
30 Jun
2010
COMPANY
31 Mar
31 Dec
2010
2009 1/
30 Jun
2009
ASSETS
Cash and balances with central banks
Singapore Government securities and treasury bills
Due from banks
Financial assets at fair value though profit or loss 2/
Positive fair values for financial derivatives
Loans and advances to customers
Financial investments
Securities pledged
Subsidiaries
Investments in associates
Goodwill on consolidation
Properties and other fixed assets
Investment properties
Deferred tax assets
Other assets
22,571
15,364
19,237
11,660
17,558
145,403
27,420
2,076
29,273
13,967
15,850
13,133
15,588
133,268
22,695
1,596
22,515
15,960
22,203
11,257
16,015
129,973
25,731
784
11,566
15,659
33,152
11,704
21,213
127,362
26,567
1,045
9,726
9,713
9,698
10,312
694
4,802
1,066
407
105
7,887
687
5,820
1,087
409
118
8,545
672
5,847
1,134
398
144
6,011
642
5,847
1,205
381
153
6,452
65
65
93
99
TOTAL ASSETS
276,250
262,036
258,644
262,948
9,791
9,778
9,791
10,411
Due to banks
Due to non-bank customers
Financial liabilities at fair value through profit or loss 3/
Negative fair values for financial derivatives
Bills payable
Current tax liabilities
Deferred tax liabilities
Other liabilities
Other debt securities in issue
Subordinated term debts
21,066
178,540
10,919
17,443
744
873
53
9,015
913
6,956
10,081
176,309
10,340
15,300
761
816
52
9,816
579
7,662
9,108
178,448
9,217
16,406
501
807
54
6,489
413
7,702
10,767
173,729
10,121
20,503
717
830
59
7,756
745
9,047
451
5
5
4
TOTAL LIABILITIES
246,522
231,716
229,145
234,274
451
5
5
4
29,728
30,320
29,499
28,674
9,340
9,773
9,786
10,407
8,650
(86)
7,300
9,752
8,440
(86)
7,124
10,705
8,435
(114)
6,879
10,173
8,424
(120)
6,392
9,769
8,650
8,440
8,435
8,424
64
626
53
1,280
71
1,280
47
1,936
9,340
9,773
9,786
10,407
9,340
9,773
9,786
10,407
3.98
3.92
4.17
4.10
4.18
4.11
4.45
4.37
LIABILITIES