Wealth Income Drops At Singapore's DBS

Tom Burroughes

13 February 2009

DBS Group, the Singapore-listed banking firm, suffered a 45 per cent drop in net fee and commission income on its wealth management operations in 2008, falling to S$137 million ($90.8 million) from S$249 million in the previous year.

In a statement, DBS said its consumer banking division, which includes wealth management, reported a fall in pre-tax profit to S$557 million for 2008 compared with 2007’s figure of S$1.292 billion.

Full-year net profit for the entire group, including one-off items, fell 15 per cent to S$1.93 billion from S$2.28 billion in 2007.

DBS Chairman Koh Boon Hwee said in a statement the bank was well placed to weather the uncertainties of 2009 after it boosted its books with a S$4 billion rights issue last month.

DBS took S$269 million impairments on bad debts, a rise of 48 per cent, led by higher charges for loans made to private banking clients and smaller-and-medium sized businesses.

The bank's Hong Kong unit led the rise in provisions, signalling a deterioration of asset quality in the bank's most significant market outside Singapore. DBS earns 90 per cent of its profit from Singapore and Hong Kong.

Staffing numbers grew in 2008 to 14,683 from 14,523 a year before. Total expenses in the latest quarter rose by 19 per cent; the cost-income ratio increased in the quarter to 47 per cent from 41 per cent.