Earnings resilience despite market volatility DBS Group Holdings financial results May 7, 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.
Earnings resilience despite market volatility Key operating trends intact Lower Hong Kong margins offset by stronger non-interest income Balance sheet remains strong 2
Net profit up 8% on quarter, down 2% on year (S$m) YoY % QoQ % Net interest income 1,057 9 (0) Fee income 353 14 (7) Trading income (161) nm nm Other income 314 >100 >100 Non-interest income 506 (11) 7 Income 1,563 1 2 Staff expenses 352 (2) 9 Other expenses 304 2 (6) Expenses 656 (0) 1 Profit before allowances 907 3 2 Allowances for credit & other losses 140 33 (23) Net profit 603 (2) 8 Excluding one-time gains and impairment charges 3
Key ratios stable on quarter (%) 4Q Net interest margin 2.09 2.11 2.21 Fee income/total income 23 25 20 Non-interest income/total income 32 31 37 Cost/income 42 42 43 ROE 11.6 10.9 13.0 Loans/deposits 73 71 69 NPL ratio 1.0 1.1 1.5 Excluding one-time gains and impairment charges 4
Net interest income maintained at previous quarter s level despite stronger headwinds (S$m) Net interest margin (%) 3,591 4,108 2,943 2.20 2.17 2.21 2.21 2.14 2.11 2.09 1.91 974 1,027 1,048 1,059 1,057 2005 2006 2Q 3Q 4Q 5
Loans up 5% on quarter, 21% on year (S$m) 85,254 83,410 2% 6% 79,462 71,055 (1%) 114,227 5% 108,433 4% 104,714 6% 98,957 5% 94,294 9% 86,630 2% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 2005 2006 6
Fee income down 7% on quarter as capital market revenues fall (S$m) Fee income 1,753 2,055 Other income Non-interest income / total income (%) 1,395 32 33 33 1,155 1,462 37 34 32 31 32 986 568 524 489 506 474 409 598 593 309 259 371 403 379 353 153 86 95 153 2005 2006 2Q 3Q 4Q Excluding one-time gains 7
Wealth management fees decline on lower unit trust sales (S$m) Structured deposits 7,428 4,334 6,912 2,492 7,768 1,889 144 Bancassurance Unit trusts 612 247 2,847 3,808 5,735 1,962 690 28 1,244 2,125 248 61 1,816 1,829 1,852 472 28 479 27 1,329 1,346 1,237 560 27 650 2005 2006 2Q 3Q 4Q Sales (all products) S pore HK 3,560 3,868 3,477 3,435 3,924 3,844 Fees (unit trusts and bancassurance only) S pore + HK 129 170 249 993 969 47 1,116 1,009 68 958 871 64 857 995 70 662 575 40 8
Cost-income ratio maintained at 42% (S$m) Cost/Income (%) 2,618 2,026 47 2,369 44 42 43 43 42 42 42 658 660 652 648 656 2005 2006 2Q 3Q 4Q Headcount 12,728 12,907 14,523 13,177 13,364 13,842 14,523 14,551 Staff costs (S$m) 1,052 1,244 1,384 360 354 347 323 352 Cost-income ratio excluding one-time gains 9
Earnings resilience despite market volatility Key operating trends intact Lower Hong Kong margins offset by stronger non-interest income Balance sheet remains strong 10
Hong Kong s net profit up 13% on quarter and 1% on year in Singapore-dollar terms (S$m) YoY % QoQ % Net interest income 225 (17) (10) Non-interest income 177 31 13 Income 402 (1) (1) Expenses 173 2 (8) Profit before allowances 229 (3) 5 Allowances for credit & other losses 19 (14) (30) Net profit 180 1 13 Figures for Hong Kong geographical basis and converted to S$ using monthly closing rates. Based on Singapore GAAP. Excluding one-time gains 11
Lower Hong Kong margins offset by higher noninterest income contributions (%) 4Q Net interest margin 1.90 2.03 2.34 Non-interest / total income 44 38 33 Cost/income ratio 43 47 42 ROA 1.32 1.15 1.40 Loans/deposit 78 72 73 Excluding one-time gains 12
Earnings resilience despite market volatility Key operating trends intact Lower Hong Kong margins offset by stronger non-interest income Balance sheet remains strong 13
NPL rate improves to 1.0%, allowance coverage rises to 138% (S$m) Substandard Doubtful Loss 2.1 1,865 1.7 1.1 1.5 1.4 1.2 NPL ratio (%) 1.1 1.0 1,533 1,442 1,460 1,494 1,426 1,442 1,464 65% 61% 59% 61% 61% 62% 59% 58% 15% 20% 16% 23% 23% 18% 15% 24% 18% 21% 19% 19% 23% 18% 25% 17% 2005 2006 Mar Jun Sep Dec Mar Cumulative general and specific allowances as % of: NPAs 97 115 135 125 124 130 135 138 Unsecured NPAs 198 237 245 254 254 256 245 241 14
Non-performing assets up slightly (S$m) 4Q NPAs at start of period 1,442 1,426 1,533 New NPAs 195 270 90 Net recoveries of existing NPAs (146) (162) (125) Write-offs (27) (92) (38) NPAs at end of period 1,464 1,442 1,460 15
Specific allowances for loans remain low (S$m) 4Q Add charges for New NPLs 26 42 32 Existing NPLs 51 38 21 77 80 53 Subtract charges for Upgrading 1 1 1 Settlements 33 55 44 Recoveries 6 8 7 40 63 52 Total SP charges 37 16 1 16
CDO exposure reduced due to repayments and exchange rate movements (S$m) Amount as at: 31 Mar 31 Jan allowance charges Cumulative allowances % coverage ABS CDOs 259 267 (8) 232 90 (with US sub-prime) Non-ABS CDOs 1,178 1,232 20 50 -- of which in: Investment portfolio 875 907 20 50 6 Trading portfolio 303 325 -- -- -- Total 1,437 1,499 12 282 -- 17
CAR maintained, RWA decreases under Basel II (%) 14.8 14.5 13.4 13.4 Tier 2 (Basel I) Tier 1 (Basel I) Tier 2 (Basel II) Tier 1 (Basel II) 4.2 4.3 4.5 4.2 10.6 10.2 8.9 9.2 (S$bn) Tier-1 capital RWA Dec Dec Dec Mar 2005 2006 13.1 14.8 16.4 16.5 123.8 144.1 184.6 178.7 18
one-tier dividends of 20 cents (S ) Special (gross) Ordinary (gross) Ordinary (one-tier) 17 15 15 11 5 20 20 20 17 20 17 17 20 20 2005 2006 19
Earnings resilience despite market volatility Key operating trends intact Lower Hong Kong margins offset by stronger non-interest income Balance sheet remains strong 20
Earnings resilience despite market volatility DBS Group Holdings financial results May 7, 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.