"While DBS remains financially sound and strong, as we operate in this difficult and competitive environment, the bank has decided to embark on a strategic imperative to make DBS a more effective, productive and efficient organisation. We have carefully deliberated on various options and have decided to make streamlining measures which regrettably result in the need to reduce our workforce by 6%, or around 900, primarily in Singapore and Hong Kong, by the end of the month," the firm said in a statement emailed to WealthBriefing.

Asked to comment on whether the cuts will affect wealth management, DBS declined to comment. DBS operates a substantial wealth management business.

“We must run a tighter ship,” chief executive Richard Stanley told reporters, according to a Bloomberg report. “This is a painful decision for DBS and for me personally but it's something we have to do in a difficult environment.”

According to DBS's website, it employed a total of 15,591 people in the third quarter of 2008, up from 13,842 a year before.

The comments by Mr Stanley prompted large falls in the DBS share price which at one stage dropped almost 9 per cent.

DBS will also have to grapple with lower income as the Singapore economy slows Daphne Roth the Singapore-based head of equity research at ABN Amro Private Bank told Bloomberg.

The bank also faces the possible default of Las Vegas Sand Corp. which has borrowed money from DBS for a $4 billion casino in the city-state and is now suffering a cash shortage that threatens the development’s future.

Meanwhile, in its results statement for the third quarter of 2008, DBS said its net profit fell to SGd$402 million, a drop of 40 per cent from the previous quarter and down by 38 per cent from a year ago. At the wealth management arm, net fee and commission income dropped to SGd$35 million, a fall of 45 per cent on the third quarter of 2007.