Solid results amid market disruptions

Transcription

1 Solid results amid market disruptions DBS Group Holdings 3Q financial results October 26, Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

2 Regional franchise continues to deliver strong growth China Received approval from China Banking Regulatory Commission to offer RMB products and services to local Chinese residents Changsheng Fund Management Company received Qualified Domestic Institutional Investor (QDII) licence; Changsheng now able to help clients invest their funds in overseas markets Islamic Bank of Asia Completed numerous transactions in GCC and Asia; lead arranger for: Barwa Real Estate Company : US$600 million Murabaha ILIC : US$50 million Murabaha, US$100 million Murabaha NIG : US$1.5 billion Sukuk AREF Investment Group : US$50 million Murabaha Received banking licence from Central Bank of Bahrain to set up representative office in Bahrain 2

3 Regional franchise continues to deliver strong growth (cont d) Indonesia Present in fourteen branches and sub-branches in 7 major Indonesian cities Ascendas India Trust: Genting International: Venture Corporation: Singapore S$600 million fund raising S$2.2 billion rights issue S$600 million syndicated loan 3

4 3Q net profit up 17% YoY, down 2% from 2Q (Net profit, S$m) Q Q Q Q Q 2Q 3Q 9M net profit: $1.929 billion 19% YoY Exclude one-off gains/charge, goodwill charge 4

5 We set new highs again: Customer loans rose 23% YoY and 6% QoQ to record $104.7 billion (S$bn) Loans up 80% from December Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Sep 07 Exclude DBS Thai Danu Bank 5

6 We set new highs again: Net interest income up 15% YoY and 2% QoQ to $1.05 billion (S$m) Eleven consecutive quarters of growth 1,027 1,048 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 6

7 We set new highs again: Fee income grew 38% YoY and 9% QoQ to $403 million; highest since we started quarterly reporting (S$m) Grew by 20% CAGR (a) 986 1,155 1, M07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 (a) CAGR from 1998 to ( estimate based on annualized 9M fee income) 7

8 Dividend policy: paying progressively rising, sustainable dividends (S ) Q Q Q Q Q 2Q 3Q Exclude special dividends of 5 cents per share declared in 4Q

9 Solid results amid market disruptions DBS Group Holdings 3Q financial results October 26, Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

10 Solid results amid market disruptions CDO-related charges amount to S$85m Underlying operating trends sustained Less favourable Hong Kong performance Balance sheet remains strong 10

11 CDO exposure largely unchanged (S$bn) 27 Aug 30 Sep Financial investments with US sub-prime without US sub-prime Red Orchid Secured Assets (Rosa) Total No credit defaults on total CDO portfolio of S$2.36bn No ratings migration except for rating downgrade on one CDO with US subprime exposure from AA to A. We owned a principal value of US$10m of this CDO Financial investments : 15% AAA, 30% AA, 55% A Rosa investments : 98% AAA, 2% AA Minor changes in current portfolio size from 27 Aug due to normal obligor prepayments and exchange rate translation USD/SGD exchange rate used is for August and for September 11

12 3Q earnings impact of S$85m (S$m) SP GP MTM loss taken to other income Taken to 3Q P&L Financial investments 33 37* 0 43 with US sub-prime 33 37* 0 43 without US sub-prime Rosa Specific allowances of S$33m charged to profit and loss for three CDOs with high degree of US sub-prime exposure, including the one partially downgraded General allowances of S$37m taken for CDOs with US sub-prime assets, comprising S$10m charged to profit and loss and S$27m set aside from existing cumulative general allowances No credit weakness in remaining portfolio based on performance indicators * Only S$10m of S$37m in GPs had P&L impact 12

13 Policy intention Financial investments The CDOs will be held until they mature Rosa No further CP issuance is envisaged Rosa will be fully funded by liquidity facility when final CP matures on 23 November to give DBS greater flexibility to manage the CDOs 13

14 Unrealised gains from financial investments rose by $302m in 3Q (S$m) Jun Sep Change AFS (year to date gains) Non-AFS (cumulative gains) 17 (73) (90)

15 Solid results amid market disruptions CDO-related charges amount to S$85m Underlying operating trends sustained Less favourable Hong Kong performance Balance sheet remains strong 15

16 Net profit up 17% on year, net interest income and fee growth sustained (S$m) 3Q YoY % QoQ % Net interest income 1, Fee income Trading income (63) nm nm Other income 149 nm >100 Non-interest income (7) Income 1, (1) Staff expenses (2) Other expenses (0) Expenses (1) Profit before allowances (1) Allowances for credit & other losses Net profit (2) Excluding one-time gains and impairment charges 16

17 9M net profit up 19% on year (S$m) Net interest income Fee income Trading income Other income Non-interest income Income Staff costs Other expenses Expenses Profit before allowances Allowances for credit & other losses Net profit 9M 3,049 1, ,581 4,630 1, ,970 2, ,929 YoY % (55) nm Excluding one-time gains and impairment charges 17

18 Several key ratios improve (%) 3Q 2Q 3Q M 9M 2006 Net interest margin Fee income/total income Non-interest income/total income Cost/income ROE Loans/deposits NPL ratio Excluding one-time gains and impairment charges 18

19 Net interest income at quarterly high (S$m) Net interest margin (%) 3,591 2,691 2, ,027 1, Q 2Q 3Q 4Q 1Q 2Q 3Q

20 Loans up 6% on quarter (S$m) 98, ,714 6% 94,294 5% 78,712 78,776 79,462 78,818 11% 0% 1% (1%) 83,410 6% 85,254 2% 86,630 2% 9% 69,659 71,055 2% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep

21 Fee income up 38% on year from growth across a broad range of activities (S$m) 1, , , Fee income Dividends and rentals Other income Non-interest income / total income (%) Q 2Q 3Q 4Q 1Q 2Q 3Q Excluding one-time gains 1,

22 Wealth management fees up 21% on year, down 6% on quarter (S$m) Structured deposits 9,242 Bancassurance 5,908 7,428 6,912 Unit trusts 4,334 2, , ,847 3,808 1, ,262 2,125 1,529 1,586 1,880 1,962 1, ,244 1,816 1, Q 2Q 3Q 4Q 1Q 2Q 3Q 2006 Sales (all products) S pore 3,874 3,560 3,477 HK 5,368 3,868 3,435 Fees (unit trusts and bancassurance only) S pore + HK , ,116 1,

23 Cost-income ratio improves to 42% (S$m) Cost/Income (%) 2,369 1,956 2, Q 2Q 3Q 4Q 1Q 2Q 3Q 2006 Headcount 11,454 12,728 12,907 12,673 12,453 12,670 12,907 13,177 13,364 13,842 Staff expenses (S$m) 993 1,052 1, Cost-income ratio excluding one-time gains 23

24 Profit before allowances by business segments (S$m) 3Q YoY % QoQ % Consumer Banking (3) Enterprise Banking (6) Corporate and Investment Banking (16) Global Financial Markets 80 (31) (51) Profit before allowances is total income excluding one-time gains less expenses 24

25 Solid results amid market disruptions CDO-related charges amount to S$85m Underlying operating trends sustained Less favourable Hong Kong performance Balance sheet remains strong 25

26 Hong Kong s net profit up 5% on year, down 10% on quarter (S$m) 3Q YoY % QoQ % Net interest income 265 (9) (4) Non-interest income Income (1) Expenses Profit before allowances (7) Allowances for credit & other losses 26 (4) 24 Net profit (10) Figures for Hong Kong geographical basis and converted to S$ using monthly closing rates. Based on Singapore GAAP. Excluding one-time gains 26

27 Hong Kong s 9M net profit up 14% on year (S$m) Net interest income Non-interest income Income Expenses Profit before allowances Allowances for credit & other losses Net profit 9M , YoY % (5) (3) 14 Figures for Hong Kong geographical basis and converted to S$ using monthly closing rates. Based on Singapore GAAP. Excluding one-time gains 27

28 Hong Kong s key ratios lower on quarter (%) 3Q 2Q 3Q M 9M 2006 Net interest margin Non-interest income/total income Cost/income ROA Loans/deposits Excluding one-time gains 28

29 Solid results amid market disruptions CDO-related charges amount to S$85m Underlying operating trends sustained Less favourable Hong Kong performance Balance sheet remains strong 29

30 NPL rate improves to 1.2%, cumulative allowances rise to 130% of NPAs (S$m) 2.5 1,919 71% 2.1 1,865 65% 1.7 1,533 61% 2.1 1,750 64% 1.9 1,646 64% 1.8 1,646 65% 1.7 1,533 61% 1.5 1,460 61% Substandard Doubtful Loss NPL ratio (%) 1.4 1,494 61% 1.2 1,426 62% 9% 20% 15% 20% 16% 23% 14% 22% 14% 22% 14% 21% 16% 23% 15% 24% 18% 21% 19% 19% Mar Jun Sep Dec Mar Jun Sep 2006 Cumulative general and specific allowances as % of: NPAs Unsecured NPAs

31 Non-performing assets down 5% on quarter (S$m) 3Q 2Q 3Q 2006 NPAs at start of period 1,494 1,460 1,646 New NPAs Net recoveries of existing NPAs (177) (166) (99) Write-offs (79) (60) (61) NPAs at end of period 1,426 1,494 1,646 31

32 Specific allowances for loans remain low (S$m) 3Q 2Q 3Q 2006 Add charges for New NPLs Existing NPLs Subtract charges for Upgrading Settlements Recoveries Total SP charges tangerinesin\analyst presentation\1h2001 Results\06 Analyst Presentation.ppt 32

33 CAR declines as RWA increases due to strong loans growth (%) Tier-2 Tier (S$bn) Tier-1 capital RWA Mar Jun Sep Dec Mar Jun Sep

34 9M dividends up 18% on year to 60 cents per share (S ) Final Interim Quarterly Special

35 Solid results amid market disruptions CDO-related charges amount to S$85m Underlying operating trends sustained Less favourable Hong Kong performance Balance sheet remains strong 35

36 Solid results amid market disruptions DBS Group Holdings 3Q financial results October 26, Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.