Transcript No Slide Title

Primed For Growth,
Well-Positioned Against
Downside Risks
FY2000 Results Briefing
March 5, 2001
Panelists
DBS Corporate Office
S. Dhanabalan
Chairman
Philippe Paillart
Chief Executive Officer
Jackson Tai
Chief Operating Officer
Kee Choe Ng
Vice Chairman
Frank Wong
Senior Managing Director
Also available for questions
Chong Kie Cheong
Finance Director
Ong Siew Mooi
Head, Group Finance
Lim Lay Hong
Financial Reporting
Tony Raza
Investor Relations
2
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
3
Net Profits increased by 30%
(S$ million)
Net interest income
Fee and commission income
Dividends and rental income
Other income
Income before operating expenses
Excluding exceptionals
Operating expenses
Operating profit
Excluding exceptionals
Provisions
Associated companies
Taxes
Minority interest
NPAM
Excluding exceptionals
1999
2000
Change (%)
2,035
423
62
509
2,039
508
115
268
0.2
20.2
85.3
(47.3)
3,029
2,854
1,065
1,964
1,790
(1,064)
140
(379)
(410)
2,931
2,881
1,246
1,685
1,636
(54)
43
(315)
(29)
(3.2)
0.9
17.0
(14.2)
(8.6)
(94.9)
(69.3)
(16.9)
(92.9)
1,072
897
1,389
1,351
29.6
50.5
4
Core profits up 51%
(S$ million)
1,389
1,400
Excluding
exceptionals,
growth was
50.5%
38
1,200
1,072
1,000
175
800
1,351
600
436
897
400
112
200
0
1997
1998
1999
2000
5
Net interest income and margins were maintained
(S$ million)
(%)
2500
2.5
Net interest income
Net interest margin (gross)
2,035
2,039
2.02
2.02
2000
1,430
1500
2.0
1,002
1000
1.73
1.77
500
0
1.5
1997

1998
1999
2000
Excluding the funding costs for BPI, interest margins for 2000 would
have been 2.09%
6
Fee income rose 20%
(S$ million)
Investment banking
Stockbroking
Trade-related
Fund management
Deposit-related
Loan-related
Credit card
Guarantees
Others
Total fee income
Fee to Income Ratio (%)
1998
1999
2000
42
48
51
10
20
29
22
27
29
274
85
102
63
20
33
38
25
28
29
423
98
77
75
62
60
51
33
26
26
508
14.6
14.0
17.3
Proforma for
FY00 the Vickers
merger raises DBS’s
fee to income ratio
to 21.6%
7
Other Income: Treasury FX improved 32%
(S$'million)
Net Gains on Trading in
Foreign Exchange
1999 2000 Change (%)
90
119
32.0
Net Gains on Sale of Trading
Securities & Derivatives
186
55
(70.1)
Net Gains on Disposal of
Investment Securities:
Sale of SPC shares
117
Others
Net Gains Arising from
Divestment
DBS Tampines
Net Gains onofDisposal
of Fixed
26
58
-
(100.0)
41
-
57.7
(100.0)
Assets
1
9
726.6
Others
31
44
39.2
509
268
(47.3)
Total Other Income
8
Operating costs increased within budget
(S$ million)
Staff costs
Occupancy expenses
Technology-related expenses
Professional & consultancy fees
Others
Total
Cost-to-income (%)
1999
2000
529.3
138.5
108.6
62.8
225.5
1,064.7
613.2
147.4
132.4
72.5
280.2
1,245.7
35.2
42.5
Change (%)
15.9
6.3
21.9
15.5
24.2
17.0
Excluding the variance from DKOB, which was consolidated from
May 1999, the expense increase would have been 12%
9
Most costs tied to specific investments
+12
1,246
-76
-10
+57
DKOB
Advertising
DBS China Square
+18
DBS Securities
+26
Computerisation
Staff costs
Consultancy
1,065
+10
Others
+61
+16
Other subsidiaries
+67
DBS Thai Danu
(S$ million)
(+17.0%)
DBS Bank (+182m)
1999

2000
At the Bank level, staff costs, technology expenses and advertising
expenses accounted for 58% of the increase in operating expenses
10
Consultants now limited to implementation of
specific, technical projects
Technology Procurement
• Phone Banking
• Procurement
• DBS Securities’ Projects
• Customer Relationship Mgt
• Treasury & Mkts System
• E-Commerce
• Risk Mgt System
• Datawarehouse
• Call Centre Automation
• Business Intelligence
• Achieve
Measurement
• Cost & Profitability Mgt System
Re-engineering Processing & Services
• Institutional Banking Group Reorganisation
• Process Improvement
Customer Service
• Branch Reconfiguration
Integration
• POSBank, DTDB & DKOB
Strategy Development
• Retail Strategy
• Improving Profitability (DTDB NPL,
Recapitalisation of DTDB, Sale of DBSL
shares, acquisition of BPI)
1998
1H99
1999
9M00
2000 1H01
2001
11
Provisions declined by S$1 billion
(S$ million)
1999
2000
Change
DBS Thai Danu Bank
395.3
12.4
(382.9)
5 regional countries
117.1
49.1
(68.0)
Singapore
131.4
(49.8)
(181.2)
Other countries
60.2
18.0
(42.2)
Non-loan provisions
34.5
51.9
17.4
Specific provisions
738.5
81.6
(656.9)
General provisions
(48.3)
(57.4)
(9.1)
Total DBSH share
690.2
24.2
(666.0)
Minority interests’ share
373.0
29.4
(343.6)
1,063.2
53.6
(1,009.6)
Total group provisions
12
Profitability surpassing pre-crisis levels
1.5
ROA (%)
1.28
1.28
1.04

ROA has returned to
pre-crisis levels

ROE has surpassed
pre-crisis levels even
though CAR has
returned to similar
levels.
1.0
0.72
0.5
0.14
0.0
1996
14
12
10
8
6
4
2
0
1997
1998
1999
ROE (%)
10.30
2000
12.89
10.35
5.72
1.29
1996
1997
1998
1999
2000
13
Assets are mostly from Singapore
Other Asia-Pacific
10%
Rest of World
5%
Other ASEAN
4%
Singapore
81%

Assets as of December 1999 were 81% from Singapore, 5% from Other
ASEAN, 9% from Other Asia-Pacific, and 5% from the Rest of World
14
Overseas revenues are starting to
contribute more
Other Asia-Pacific
12%
Rest of World
2%
Other ASEAN
4%
Singapore
82%

Revenues as of December 1999 were 86% from Singapore, 5% from
Other ASEAN, 8% from Other Asia-Pacific, and 2% from the Rest of
World
15
Balance sheet shrank due to soft loan demand
and shedding of low-yielding assets
Customer loans
(S$ billion)
(%)
Customer deposits
L/D ratio
90
83.1
80
140
82.3
80.7
80.4
73.9
120
119.6
70
104.5
56.2
60
50
43.6
40.1
40
57.8
100
54.4
52.4
52.0
80
41.8
76.1
33.6
69.5
66.1
65.2
64.5
60
30
40
20
20
10
0
0
Dec 97
Jun 98
Dec 98
Jun 99
Dec 99
Jun 00
Dec 00
16
Decline in gross loans tapers off
(S$ million)
16000
13,959
Change in Loans (Half on Half)
14000
35
30
30.7%
12000
25
10000
20
8000
15
6000
4000
4,290
10
10.4%
2,041
2000
5
3.4%
0
0
-4.8%
-3.8%
-3.7%
(2,220)
(2,053)
Jun 00
Dec 00
-2000
(2,965)
-4000
Jun 98

Dec 98
Jun 99
Dec 99
-5
-10
Excluding the S$1.2 billion DTDB NPL sale, the loan contraction
would have only been S$0.8 billion or down -1.5%(HoH) for 2H00.
17
Decline in deposits offset by other products
(S$ million)
Change in balance (Half on Half)
Deposits
Other products
1000
500
526
320
314
347
0
-500
-1000
(847)
-1500
(1,866)
-2000
Dec 99

Jun 00
Dec 00
Other products include the Horizon, Eight, and Up programs
18
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
19
Significant decline in NPLs in second half 2000
(S$ million)
10,000
13.1%
11.8%
8,121
8,000
13.0%
12.7%
8,149
7,666
7,085
3,018
8.5%
6,000
3,907
4,000
1,239
1,735
0
3,000
2,874
543
2,000
3,207
2.7% 772
1,112
151
366
97
649
1,408
267
328
2,705
2,824
717
637
1,365
1,144
435
433
2,425
2,452
DBS Thai Danu Bank
DBS Kwong On Bank
5 Regional Countries
Others
Singapore
NBk NPL/NBk
Loans (%)
7.6%
4,411
1,238
412
667
358
1,735
1,249
Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00
20
Most NPLs are classified substandard; some
are still current
NPLs (2000)
Substandard
Doubtful
Total
(ex-DTDB)
325 295
2,552
3,172
Loss
80%
32
Approx. S$0.7 bn
current, or 20%
of Substandard
DTDB
956
77%
3,508
Total
(Incl-DTDB)
1,500
80%2,000
0
500
358
2,500
3,000
3,500
250
1,238
3% 20%
546
4,411
4,00012%
4,500
8%
5,000
1,000
(S$ million)
21
Provision coverage at 52% of NPLs or 61% on
SEC basis
General Provisions (GP)
Specific Provisions (SP)
(S$ million)
4,500
4,286
1,191
3,500
3,000
3,147
1,500
1,000
500
3,095
1,115
1,894
1,174
1,294
164.6%
2,500
2,000
3,978
3,852
4,000
SP+GP/Unsec NPLs (%)
SP+GP/NPLs (SEC) (%)
SP+GP/NPLS (%)
2,558
102.7% 110.6%
88.1% 119.6%
946
2,032
55.3%
980
48.5% 44.4% 47.4%
801
948
179
2,804
118.4% 114.8%
2,286
130.2%
1,049
63.0%
60.8%
61.4%
52.6% 51.9%
51.8%
1,237
0
Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00
22
NPLs much lower under SEC reporting and
after adjusting for restructured loans
Singapore
Non accrual loans
Non-restructured
Restructured
1999
2000
1859
1471
388
1403
897
506
Regional countries
Non accrual loans
Non-restructured
Restructured
4,173
3,666
507
1,784
698
1,087
Other countries
Non accrual loans
Non-restructured
Restructured
770
695
74
537
417
120
6,801
969
3,724
1,712
14.3%
11.6%
10.0%
46.0%
6.8%
3.7%
Total non accrual loans
Total restructured loans
Restructured / non accrual
NPL under SEC reporting
Non-restructured NPLs / total loans

Under SEC
reporting NPL
rate drops from
7.5% to 6.8%.

Assuming
restructured
loans are
upgraded, NPLs
under SEC
reporting falls
to 3.7%
23
Overseas NPLs fell by S$3 billion or 53%
(S$ million)
December 1999
December 2000
NPLs
NPL (%)
NPLs
NPL (%)
Malaysia
412
62.2
304
47.1
Indonesia
566
97.9
176
58.5
Thailand excluding DTDB
234
49.3
49
16.2
Korea
76
17.4
51
13.2
The Philippines
77
20.1
87
17.0
DTDB
3,207
70.4
1,238
42.7
Total regional NPLs
4,571
65.3
1,905
38.9
Hong Kong
852
15.5
541
8.7
China
124
12.3
153
15.9
5,547
41.1
2,599
21.5
Total
24
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
25
Strong capital continues to provide a cushion
against possible global economic slowdown
(S$ million)
1998
1999
2000
Tier 1
9,621
10,463
10,200
Tier 2
793
2,379
3,211
Total Capital
10,414
12,842
13,411
Risk Weighted Assets
65,989
66,790
70,963
Tier 1
14.6
15.7
14.4
Total (Tier 1 + Tier 2)
15.8
19.2
18.9
Capital Adequacy Ratio (%)(BIS)
26
Capital further supported by valuation surplus
(S$ million)
3,500
3,210
Properties
Quoted investments
3,000
2,500
1,204
1,971
2,000
1,500
1,000
1,164
1,416
1,175
729
827
807
692
589
498
1997
1998
1999
2000
1,916
500
1,421
677
0
1996
Few remaining non-core assets to dispose
27
Pro-active management of capital base






Raised US$1.25 billion of Tier II Capital
Divested non-core assets, generated S$1.3 billion in proceeds
Redeemed S$600 million NVPS
S$5.0 billion excess capital for growth, and contingencies
Expecting to raise S$1.4 billion through a issue of Hybrid Tier I
Migrating toward optimal capital structure
(%)
25
Tier 2
Hybrid Tier 1
Tier 1
20
15
CAR (BIS)
19.2
18.9
3.5
4.5
15.6
15.8
2.0
1.2
13.6
14.6
15.7
14.4
Dec-97
Dec-98
Dec-99
Dec-00
10
5
0
Optimal
Structure*
(*) Not to scale
28
Increasing the returns on capital
CAR
14.0
25
ROE
12.0

The improvement in ROE is
not a gimmick of equity
reductions as the CAR is
back to pre-crisis levels.

Absolute capital has been
increasing substantially as
well.
20
10.0
8.0
15
6.0
10
4.0
5
2.0
0.0
0
1994
1995
1996
1997
1998
1999
2000
Capital
12,000
14.00
ROE
12.00
10,000
10.00
8,000
8.00
6,000
Even with excess capital,
ROE has been improving
6.00
4,000
4.00
2,000
2.00
0
0
1994
1995
1996
1997
1998
1999
2000
29
Dividend rate hiked 80%
(Cents)
50
150%
Special dividend
128%
Dividend rate
40
15
Dividend payout
110%
30
70%
20
10
5
18%
16
22%
16
15% 14%
16
16
13%
16
23%
25
18
18
22%
30
30%
31%
0
-10%
1992 1993 1994 1995 1996 1997 1998 1999 2000
30
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
31
DBS’s expansion strategy remains unchanged



DBS has a disciplined expansion strategy
Acquisition plans are not as haphazard as reported
Management moves are being carefully planned
Recent Reports about DBS:

DBS increasing its stake in BPI to 40%

DBS to purchase a stake in PCI Equitable (Philippines)

DBS acquires a 20% investment in Far Eastern Bank (Taiwan)

DBS looking to purchase Korean credit card business for
US$1.6bn

Standard Chartered Bank and DBS to merge

DBS to issue more Tier II capital

DBS to increase stake in Wing Lung Bank
32
Building Asia’s best bank
Focus on ASEAN and Hong Kong
Japan and Korea
Greater China
Southeast Asia
and Hong
Kong
Australia and
India
We have the capital resources and
commitment to achieve this goal
33
Progress in Hong Kong

Integrated DBS IT systems, treasury operations and
product platforms

35 Customer Contact Points: Closed unprofitable
branches and opened two new branches in Central, (one
of which was best performer for 2000)

Pre-provision profits up 10% to HK$450m: achieved
significant deposit (15.2%) and loan (17.5%) growth

NPLs fell by 57%, to 5.6% rate (under HKMA standards)

Refining skills to eventually take on a larger market share

Issued over 40,000 credit cards since the end of
December 2000, easily on track for 100,000 target in 2001
(Note: at Chase deal values, 40,000 DBS cards would
have cost US$60 million, more than our entire overhead
for all of DBS Kwong On Bank)
34
DBS Vickers extends our cross-selling to clients
Treasury & Markets
- FX
- Derivative
DBS Bank
- Asset Management
- Financial Planning
- On-line services
Research
— DBS Vickers
Branding
— Products &
Services
Origination
- Leading IPO, Debt market share
- Securitisation capability
Distribution
- 368 remisers & dealers
- 11% market share
- Singapore, HK, Thailand
Fulfillment
Regional IT/OP Platform
35
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
36
A stronger bank, better protected against
downside risks

Enhanced, regionally integrated credit and risk management
systems

Sharp improvement in asset quality, and ability to resolve
problem loans

Much stronger management depth, implementing best global
practices

Continue to offer high CAR support even as we optimise capital,
improve our returns on capital

Enhancing MIS, Costing systems to provide better analysis of
businesses, exposures

No longer paralyzed overseas, cleaned up problems in Thailand

Investment in IT, operations will raise service quality, lower costs
37
Positioned for a breakout
Consumer Banking

Ideally positioned in mass affluent wealth management with dynamic
asset management programs (Horizon, Eight, Up, Moneyplus).

Regionally integrating product and channel strategies; launching new
products; credit cards and mortgage applications up
Treasury and Markets

Largest Singapore Dollar treasury player

FX and derivatives growing rapidly, based increasingly on sustainable
customer related transactions
Investment Banking


Leadership in equity capital markets will be enhanced by Vickers’
distribution and research
Leader in debt capital markets
38
Primed for growth, well-positioned
against downside risks

Progress in our financial performance

Significant turnaround in asset quality

Migrating toward optimal capital structure

Maintaining a disciplined expansion plan

Protected on the downside, ready for a breakout
39
Primed For Growth,
Well-Positioned Against
Downside Risks
FY2000 Results Briefing
March 5, 2001