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DBS Group Holdings Ltd Annual Report 2015

Live more,
Bank less.

Living, Breathing Asia

About us
Live more, Bank less. DBS is a leading financial services group in Asia, with over
280 branches across 18 markets. Headquartered and
As the bank that helped build Singapore, listed in Singapore, DBS has a growing presence in the
DBS has always believed that banking is three key Asian axes of growth: Greater China, Southeast
about doing real things for real people. Asia and South Asia. The bank’s capital position, as well
as “AA-” and “Aa1” credit ratings, is among the highest
in Asia-Pacific. DBS has been recognised for its leadership
This means bringing an understanding
in the region, having been named “Asia’s Best Bank”
of the fast-changing world in which we by The Banker, a member of the Financial Times group,
live – with all its attendant challenges “Best Bank in Asia-Pacific” by Global Finance, and “Asian
and opportunities – to bear on the Bank of the Year” by IFR Asia. The bank has also been
design of our products, services named “Safest Bank in Asia” by Global Finance for seven
and initiatives. consecutive years from 2009 to 2015.

In the future, technology and mobility About this report
will seamlessly integrate banking with
The Board is responsible for the preparation of this Annual
our customers’ everyday lives. The
Report. It is prepared in accordance with the following
result is banking that is so easy, fast and regulations, frameworks and guidelines:
effortless that it enables people to do
more of what they want – Live more. • The Banking (Corporate Governance) Regulations 2005,
and all material aspects of the Guidelines on Corporate
By creating banking experiences that Governance for Financial Holding Companies, Banks,
save time and take the pain out of Direct Insurers, Reinsurers and Captive Insurers issued
on 3 April 2013 by the Monetary Authority of Singapore.
banking, our customers actually get
to Bank less. • The International Integrated Reporting <IR> Framework
issued in December 2014. Whilst DBS has been applying
This speaks to our purpose of ‘Making the guiding principles of <IR> since 2013, this is the first
Banking Joyful’, whereby as Asia’s year DBS has complied with the requirements of the
Safest and Best Bank, not only are we framework in all material aspects.
a bank that people trust and depend
• The Global Reporting Initiative (GRI) G4 Sustainability
on, we are also one that brings joy Reporting Guidelines. This is the first time the Annual
to our stakeholders. This reflects a Report fully meets the GRI requirements. Please refer
higher purpose that goes beyond to page 196 for the GRI Index.
banking, recognising the role we play
in benefitting society at large and the In addition, we implemented most of the Enhanced
communities we are present in. Disclosure Task Force (EDTF) recommendations, including
those pertaining to IFRS 9 as outlined in the EDTF’s report
“Impact of Expected Credit Loss Approaches on Bank Risk
Disclosures” issued in November 2015.

View our report online
Our Annual Report, accounts and
other information about DBS can
be found at

Overview 2 Who we are
4 Board of Directors
This section provides 6 Group Management Committee
information on who we are, 8 Letter from the Chairman and CEO
our leadership team, business 12 CEO reflections
model and strategy. It also 14 Business model – how we create value
contains messages from the 16 How we use our resources
Chairman and CEO. 18 How we distribute value created
19 Material matters
20 What our stakeholders are telling us

Performance 22 CFO statement
27 Our 2015 priorities
This section provides 28 Customers
information on our priorities 30 Institutional Banking
and performance by customer 33 Consumer Banking
segments and geographies. It 35 Wealth Management
also details what we are doing 36 POSB
for employees and society. 38 Countries
40 Employees
44 Society and environment

Governance and 48 Corporate governance
68 Remuneration
Risk Management 74 Summary of disclosures
78 CRO statement
This section details our 81 Risk management
commitment to sound and 109 Capital management and planning
effective governance, as well
as how we manage risks.

Financial Reports
114 Financial statements
174 Directors’ statement
178 Independent auditor’s report
179 Five-year summary

180 Further information on Board of Directors
185 Further information on Group Management Committee
187 Main subsidiaries & associated companies
188 International banking offices
190 Awards and accolades
196 GIobal reporting initiative (GRI) index

Shareholder Information
202 Share price
203 Financial calendar
204 Shareholding statistics
206 Notice of Annual General Meeting
Proxy form


Who we are


*includes sub-branches and centres

DBS, a Singapore-headquartered
commercial bank, provides a full
range of services in consumer
banking, wealth management
and institutional banking. As a
bank born and bred in Asia, we
understand the intricacies of Institutional
doing business in the region’s Total Assets Banking Customers
most dynamic markets.
458 billion 200,000

Consumer Banking/
Income Wealth Management
10.8 billion 6 million
Safest Bank in Asia
by Global Finance 2009 – 2015

Asian Bank
of the Year
by IFR Asia 2015
Net Profit Employees
Most Valuable
Banking Brand SGD OVER
in ASEAN and Singapore
by Brand Finance 2015 4.45 billion 22,000

2 DBS Annual Report 2015

Footprint in our six priority markets Singapore Hong Kong China Taiwan India Indonesia Singapore Greater China South and Southeast Asia s/URHOMEMARKET s(ONG+ONG!NCHOROFOUR s%XTENSIVENETWORKOFMORE 'REATER#HINAFRANCHISEWITH s)NDIABRANCHESINCITIES THAN.










† Touchpoints include DBS/POSB branches,
self-service banking machines, AXS
terminals and strategic partnerships

of group income
31%of group income
of group income

Who we are 3

of Directors

The Board is committed to
helping the bank achieve long-
term success. The Board provides
direction to management by
setting the Group’s strategy and
overseeing its implementation.
It ensures risks and rewards
are appropriately balanced.
Euleen Goh

Ow Foong Pheng

Board independence
Out of nine directors, seven Piyush Gupta
(including the Chairman) are Bart Broadman Danny Teoh
independent directors, one
is a non-executive and non-
independent director and one
is an executive director (CEO).

Ho Tian Yee
Gender diversity Peter Seah
Two of nine directors are female. Nihal Kaviratne Andre Sekulic

Deep banking
knowledge and
Two-thirds of the Board are
seasoned bankers, while the
rest have extensive industry
experience ranging from
consumer goods to accounting.

For profiles of our directors, please
refer to page 180. For our corporate
governance report, please refer to
page 48.

4 DBS Annual Report 2015 Board of Directors 5

The Group Management
Committee sets the strategy
and direction of the Group.
It drives business performance
and organisational synergies.
It is also responsible for
protecting and enhancing 1 2 3 4 5 6
our brand and reputation. Piyush Gupta* Jerry Chen Chng Sok Hui* Eng-Kwok Seat Moey Neil Ge David Gledhill*
Chief Executive Officer Taiwan Finance Capital Markets China Technology & Operations

Average years of
experience of the Group
Management Committee

7 8 9 10 11 12
Lam Chee Kin Lee Yan Hong Sim S Lim* Andrew Ng* Jimmy Ng Karen Ngui
Legal, Compliance & Human Resources Singapore Treasury & Markets Audit Strategic Marketing
Secretariat & Communications

One-third of our Group
Management Committee
members are women

Those marked by * are also in the Group
Executive Committee.

For more information on the Group
Management Committee, please refer
to page 185.

13 14 15 16 17 18
Sebastian Paredes* Elbert Pattijn* Surojit Shome Paulus Sutisna Tan Su Shan* Jeanette Wong*
Hong Kong Risk Management India Indonesia Consumer Banking/ Institutional Banking
Wealth Management

6 DBS Annual Report 2015 Group Management Committee 7

Letter from the
Chairman and CEO

“Given the challenging operating environment,
the Board and senior management are very
pleased with how we were able to manage our
risks and still grow the business sensibly.”
Chairman Peter Seah

8 DBS Annual Report 2015

Best Asia Investment Bank. to customers. thought to be a bright SME banking. up from cash management and credit cards. oil about the strength of the only 6. bancassurance fees also grew strongly management information systems can and we will continue to bolster this measure profitability at granular levels. with our expectations. the Board and senior management are very Wealth Management and SME Banking pleased with how we were able to manage contribute 27% of Group income from 22% 11. Our risk architecture Higher dividends is more robust. turning in record income and earnings. the world’s second-largest economy. income and earnings in 2010. registering growth of portfolios. stewards our capital and liquidity. Our and play” new business applications. where in addition to market capability and product set that increasingly share gains. SGD 10 billion for the first time.1%. have acknowledged for our customer service a testament to our commitment built resilience into the franchise. A strong. Policy actions by the start of the year to 3.9% to 11. and a Singapore. We reviewed several also slowed in 2015. we are today widely Despite headwinds. The texture Given the challenging operating environment. banking and capital markets. We have repositioned our Hong Kong franchise for profitable growth. Our commitment to customers. satisfied that potential losses. We have entrenched our position in Higher return on equity the strength of the DBS brand. while customer activities contributed half of Treasury income both rose 12%. India and Indonesia to improve trade loans by growing other forms of 60 lending. This and gas. and residential exposures. large corporate bolstered markets and growth stuck at around 2% per annum. Customer experience Since unveiling our strategy six years ago. rival the best in Asia and the world. with the Our core Singapore franchise had a stellar 2015 was a year of two IMF revising GDP forecasts from 3. are manageable. Income The diversity of our franchise was best and earnings reached a record in 2015. the resiliency of our Non-interest income benefitted from technology platforms has been strengthened We proposed full-year dividends strong growth in wealth management. resilient franchise we have been delivering consistently strong financial performance. four-market A dedicated corporate treasury now partnership with Manulife Financial Asia. Letter from the Chairman and CEO 9 . Strong and innovation. also undergird our business. Best Asia Commercial to a collapse in commodity prices across the Bank. which took crude prices to an 11-year low. plumbing of the bank. Income from transaction services has doubled. We grew Singapore housing loans by gaining share in a competitive market. China’s financial sector reforms further for seven consecutive years. through a new 15-year. We were We have expanded our franchises in China. and remained a leader in various central banks spot. With net interest margin at its highest since We have also strengthened the internal 2012. belies the country’s two-speed economy. investments and corporate restructuring. China’s manufacturing and investment sectors are suffering from We are pleased that we continue to receive overcapacity with some sectors in recession. halves. non-performing loans and specific in the second half on the allowances inched up. even under While the services industry is growing stressed conditions. and our systems are designed to “plug of 60 cents per share. of our franchise has changed considerably. our geographical mix and our ability to intermediate regional trade and capital flows.8 bn was exacerbated by a supply glut. US GDP decelerated in the fourth quarter.5% at year. Despite the headwinds. net interest income rose to a record.2%. We are world economy. quite strongly. these were in line back of growing uncertainty China. We have also been named Safest Bank in Asia by Global Finance.9% – its weakest in 25 years. recognition from the street: Asian Bank of The manufacturing slowdown contributed the Year from IFR. Income from these growth markets cents We also extended credit for regional clients’ has risen 95% since 2009. including China. from 36% in 2010. For full-year 2015. unsettled markets. commodities. with full-year savings and current deposits. able to compensate for a decline in China Taiwan. and Best SGD board. name a few of our accolades. Our 58 cents per share in 2014. Even growth We gained market share in consumer and in the US economy. The impact on the oil and gas sector Asian Private Bank from FinanceAsia to 10. While business confidence faltered showing a mixed picture. ROE improved. exemplified by our loan book. investor and but the job market continued to improve. Asset quality remained resilient. a New York-based publication. as well as strong governance and risk management processes brand and resilient franchise.2% our risks and still grow the business sensibly. and this was organisation amplified by policy actions that sometimes Our total income crossed contradicted each other. return on equity improved from 10. However. remained unconvincing. Faster-than-expected market liberalisation created volatility Building a sustainable Record income across several asset classes. sentiment in the first half. Global growth slowed in 2015.

taking effort and anxiety out of facilitating home ownership. While being purpose-driven. the support of SMEs and Taiwan to build a strong talent pool In addition to the customer experience. at the opening of the new DBS Academy in December 2015 But taking DBS to the next level requires “ We capture our vision for our relationship with more than incremental steps in the same direction. We believe that we must have needs and their real-jobs-to-be-done. we have to be relentlessly focused on DBS is also committed to responsible Employees are encouraged to embrace earning the trust and goodwill of society financing. whether In 2015. Today. success. helping individuals prosper. At the same time. we conduct assessments learning and experimentation. In such an environment. Singapore’s Deputy Prime Minister Tharman Shanmugaratnam. DBS and POSB have had a important asset.” expectations. employees and society at large under is being profoundly impacted by new technologies and changing customer a simple agenda – ‘Making Banking Joyful’. our future success depends on our ability to harness the digital revolution and completely One of the bank’s organisational values is Building a future-ready workforce re-imagine the banking experience. our guest of honour. Our industry. or our corporate philanthropy initiatives. Since the time of their In an industry where people are the most this is a challenge. able to shape the future of banking. Fintech start-ups are beginning to attack various parts of the financial CEO Piyush Gupta services value chain. DBS was formed people to execute on strategy is key to By thinking deeply about customers’ true to finance Singapore’s industrialisation.000 an opportunity to distinguish ourselves. This can only come from playing a companies. we established DBS Academy Being socially and through the provision of inclusive and learning centres in Singapore. social and other material risks. we need relevant. like several others. strong social mandate. we believe it is also establishment. DBS and to be relentless about upskilling our people. customers. we while POSB as the “People’s Bank” had a a work environment that is fun and can make their banking truly simple and mission of promoting the savings habit and empowering. relevant role in people’s real needs – helping on how they address environmental. their banking engagements. When making loans to a digital mindset through experiential at large. companies grow. POSB continue to uphold our responsibility to the communities we operate in. equipping our 22. Indonesia environmentally responsible subsidised banking. DBS was the first bank to incorporate hackathons into our talent development 10 DBS Annual Report 2015 .

being its 50th year of independence. the bank is running over to the National Gallery Singapore. DBS’ story has mirrored Singapore’s.programme. four-market partnership covering Singapore. and we will have to stay first the development of key industries focused and nimble. we are guided by our belief that we 1. DBS and Manulife officially launching a 15-year. It can again set itself apart in the next 50 Peter Seah Lim Huat Making Banking Joyful years by being the world’s first truly digital Chairman We capture our vision for our relationship city. After Going forward all. Global growth is nation’s growth from early on. and later on. The Board has proposed a final dividend Piyush Gupta Commemorating of 30 cents per share for approval at the CEO forthcoming annual general meeting. 1. financing likely to be slower. Leading bank in Asia DBS has been named Best Asia Commercial Bank.000 experiments. and the bank is committed Banking would traditionally be seen as a to doing so. giving our people the exposure they need so we can innovate Fifty years ago. Asian Bank of the Year and Safest Bank in Asia. DBS and POSB spared no effort in giving back. In all. In particular. China and Indonesia Letter from the Chairman and CEO 11 . so that they problems. Singapore differentiated as a bank. and develops the social enterprise sector in of massive change. Nevertheless. This Singapore’s Jubilee will bring the full-year dividend to 60 cents DBS Group Holdings per share compared to 58 cents per share 2015 was a significant year for Singapore. The foundation actively nurtures a bank operating in an industry at the cusp Experiments and prototypes To inculcate a digital mindset and spur innovation. We recognise that Joyful Smart Nation. but we are convinced that the holistic embrace of this mission can Dividends produce path-breaking results. Bank less”. integrated into customers’ lives. Hong Kong. This enables them to gain Singapore also has a rich heritage in the can “Live more. and we have played a key role in the 2016 will not be easy. a year ago. and to make this more accessible methodology and other digital working to the public. demonstrated time and again an ability to navigate an uncertain environment. itself by creating a first-world infrastructure (both hard and soft) in a third-world region. As Singapore’s largest bank. employees and society at large under a simple agenda – “Making facilitate Singapore’s development into a Banking Joyful”. DBS will push forward to employees work with start-ups to create a multitude of ways. including through the make banking simpler and more seamlessly prototype mobile apps to address business provision of loans. the regionalisation of Singapore Inc. the bank is running over 1. At these hackathons. we have post-independence. In all things. contradiction in terms.000 We established the SGD 50 million DBS can create an impact beyond banking and Foundation in conjunction with the nation’s change lives for the better. grants and mentoring. exposure to the fintech culture. among our many accolades.000 experiments. as Jubilee. we gifted SGD 25 million concepts. agile arts. DBS is well-placed to promote and DBS Group Holdings with customers.

By harnessing the power of technology and the prevalence of smart Our strategy of building a regional mobile devices. we have made efforts to completely digitise the bank – such as using SOA One area where we would have liked to do (Service-Oriented Architecture) and an more is our growth in the big geographies – API (Application Programme Interface) China. front. with progress without ever having to make a branch visit. You his thoughts on some can read about our existing business model a few digital apps in front of our clients. however. governance principles. instant fulfilment. when compared with our traditional This is instrumental to our goal of making competitors but perhaps not when banking joyful for our customers. a USD 11 trillion economy. our operating incumbents from true transformation. and we decades have been unrivalled in history – need to be able to respond. value proposition. the “The good news is that harnessing the digital opportunity can not only help us protect our position in our core markets of Singapore and Hong Kong. and what our stakeholders are telling us. It requires a deep rethink about our basic in detail on page 14. It is the challenge of culture review where we are at. environment. we can reach customers commercial bank with deep customer anywhere and anytime. a shift in our culture and a comprehensive re-architecture of our While our strategy is sound. CEO reflections On business model and Hong Kong. taking into account and legacy technology that prevents most emerging mega-trends. pertinent matters. They can open reach and broad product diversity has accounts and conduct banking transactions been delivering good results. this is a lot more than adding architecture have proven to be robust. workforce that is consumed with re- imagining the customer experience – Another area where we have done well one that is simple. in areas such as wealth management. management model and risk management Piyush Gupta shares However. we are making due to regulations. These are material matters that can impact our ability to create value We have spent the past three years deeply and you can read more about them on immersed in this agenda. Fintechs are beginning to unravel the China’s achievements over the past three financial services value chain. However. This means we can reach out to a broader transaction services. it can also be a game changer to help extend our reach into the larger geographies. seamless and complete. compared to our new competitive landscape is the embrace of innovation On China and the digitalisation of our business. we periodically technology. lifting 500 million people out of poverty. India and Indonesia. We are already beginning the SME and consumer businesses have to see income and expense benefits from been challenged by distribution limitations this. Our large framework to eliminate paper and provide corporate franchise has done well. it can also be a game changer to help extend our reach into the and strategy larger geographies. On the culture front. debt capital markets customer base in our growth markets and Singapore retail banking. thereby resulting in good headway in creating a “fintech-like” longer payback periods. the Asian Way).” 12 DBS Annual Report 2015 . The model The good news is that harnessing the digital of centrally-planned growth with twin opportunity can not only help us protect our engines of exports and investments has position in our core markets of Singapore served it well. Our basis without the need for an extensive physical of competitive differentiation (Banking branch network. more recently. On the technology page 19.

ourselves well to benefit from China’s trade )NSOMEWAYS. our responsibility to shareholders must be “Over the past five years. we have positioned balanced by responsibility to society at large.

account opening. liberalisation of its capital account.THEREISNOCONTRADICTION/UR licence to operate comes from civil society. we are focused ANDLONG TERMSHAREHOLDERSINTERESTS on seizing opportunities that emerge from China’s depend on the currency of that licence. Going forward.” !T$"3.

WEHAVEWORKEDHARDATCLARIFYING OURPURPOSE2OOTEDINOUR$. 2OADv.!ISAROLE BEYONDSHORT TERMPROlTMAXIMISATION planned model resulted in a significant the biggest opportunities in financial services 7HATMAKESUSDIFFERENTISOURFUNDAMENTAL misallocation of resources with substantial OVERTHENEXTDECADEh4HE/NE"ELT/NE belief that at the heart of it all. we must overcapacity in the manufacturing sector.


IKEWISE. while This was compounded by a credit binge in internationalisation paths may be choppy.AND2-" do real things for real people. but building out suitable positions in these . ENSURINGTHAT$"3ISAJOYTODEALWITH the aftermath of the Global Financial Crisis.

BELIEVEINSOCIALREFORMS. China has three imperatives: areas will have long term payoffs.OURDESIRETOSUPPORTTHOSEWHO Going forward.



Given this. The socio-political dimensions aside.NOTABLYADDRESSING China has powered growth in Asia for entrepreneurship path – our corporate social overcapacity in the short term and the past decade and will continue to responsibility platform.” if successful. while ensuring that DBS intended to achieve these outcomes and. we must do real 4HEREFORMMEASURESBEINGUNDERTAKENARE things for real people. is a joy to deal with. s)NTEGRATINGINTOGLOBALCAPITALMARKETS with a strong currency to be able to “What makes us different is our fundamental REDUCERELIANCEONTHE53$ belief that at the heart of it all. will have enormous benefits for China and the world. at FORAREGIONALBANKLIKE$"3TOCONTINUE We are also a firm believer that to uphold a macroeconomic level. it is important value on page 44. China has the capitalising on opportunities arising from THETRUSTSTAKEHOLDERSHAVEINUS. Find out more efficiency in the state-owned enterprise play a crucial role in the future growth about our approach to creating social 3/% COMPLEXINTHEMEDIUMTERM of the region. s3HIFTINGTOMARKET DRIVENPRICINGFOR resource allocation to prevent future occurrence of inefficiency.


we are focused on seizing the letter of the law. there are positioned ourselves well to benefit from within the organisation.WEHAVE to embed a culture of doing the right thing without an implosion. However. the Chinese transparency of our corporate disclosures have relied on policy measures that are On our role in society YEARAFTERYEAR7ITHTHAT. our commitment to enhancing the to subdue the volatility. but embracing the s2APIDlNANCIALLIBERALISATIONHASCOME OPPORTUNITIESTHATEMERGEFROM#HINAS principles behind them. Tied to this is a TWOKEYRISKSINTHESHORTTERM #HINASTRADEACCOUNTOPENING'OING mindset of not simply following rules or forward. This belief underpins WITHLARGEMARKETVOLATILITY)NANEFFORT liberalisation of its capital account.

Find out more about our approach s4HESUPPLYSIDERESTRUCTURINGAND3/% resource that is infinitely more dear – trust. but the erosion of a business.WEHAVETAKEN sometimes misguided and often unclear. managing our business appropriately. )FWEARETORETAINOURPOSITIONASA 7EAREMINDFULOFTHERISKSANDARE legitimate part of the macroeconomy. of capital or liquidity. WENEEDTOGOBACKTOOURCOREPURPOSEAND revalidate our role in the larger society. We (AVINGSAIDTHAT. TOBANKINGRESPONSIBLYONPAGE reform will result in heightened levels of "ANKSANDBANKERSHAVEBEENLOOKEDATWITH COUNTERPARTYRISKANDHIGHERCORPORATE suspicion and our role in society and the DEFAULT)TISIMPERATIVETOKNOWWHOTO macroeconomy questioned. deal with. steps to present a more comprehensive 4HISRISKSALOSSOFMARKETCONlDENCE)TIS 4HEGLOBALlNANCIALCRISISBIGGESTDAMAGE and transparent view of how our business therefore quite easy to be caught on the to our industry was not through the erosion model and strategies inform the way we do wrong side of economic turbulence.

ITISALSOLIKELYTHATTHE will have to recognise that not all returns lNANCIALMARKETSCAPITALREFORMWILLCREATE can be found in financial statements and CEO reflections 13 .

of Asia’s cultural nuances. drive behaviours. and the rapid adoption of technology that is fuelling new innovations. Easy to deal with and Dependable. including the rising middle class. with making process leverages our group-wide The scorecard is divided competitive advantage given our resources. making us a compelling and markets products. Asian relationships: We strive to embody two-thirds of whom are former bankers and the remainder industry leaders. The Board is well-informed and fully engaged. Our Our business model seeks to investment flows as well as support capital financing to specialised relationships have swings and roundabouts. The strategy is markets and advisory solutions. country heads ensures that the decision- do. implementation of the Group’s strategy. growing intra-regional In Institutional Banking. urbanisation. capital We stay by our clients through down cycles. we serve large corporates. treasury needs to be profitable in its own right. Our balanced scorecard We use a balanced scorecard approach to create value trade. Business Our strategy Our businesses Differentiating ourselves Governing ourselves Measuring our performance model – how we Our strategy is predicated on Asia’s megatrends. the businesses that we will do and will not four points: Read more about our Institutional on the RED motto: being Respectful. with joint ownership between regional remuneration of Our strategy is clear and simple. s7EAREAN!SIAN FOCUSEDBANK. performance and organisational measure performance key markets. It defines encapsulated in the following Asian service: Our service ethos is built business/support unit heads and local our people. We are a regional services such as cash management recognising that not every transaction objectives. synergies. bank with sufficiently-deep roots in and trade finance. Senior management is responsible for strategy and is used to set create value for stakeholders long-term ascendancy. and driving business in a sustainable way. from helping Banking the Asian Way We marry the professionalism expected of a best-in-class bank with an understanding Competent leadership Competent leadership starts at the top. scorecard is based on our wealth creation to capitalise on Asia’s lending. them finance their business activities to managing their financial risks. measure how successfully we are serving multiple stakeholders and driving We offer a full range of credit the elements of what relationships and provides direction to management the execution of our We seek to intermediate trade and facilities from short-term working are about in Asia. setting strategy. We recognise that by reviewing and overseeing the long-term strategy. A matrix reporting structure and determine the Asian bank of choice. We also provide transaction and look at relationships holistically. SMEs and institutional investors. We have a strong nine-member board. We have clarity around our sources of Banking business on page 30.

s)N3INGAPORE. we have s7EINTERMEDIATETRADEANDINVESTMENT affluent. s"ETWEENlNANCIAL a balanced scorecard to measure our flows across Greater China. the humility to serve and the confidence strengths and takes into account local into two parts of equal We have put in place a governance seeking to make banking joyful In Consumer Banking. South Asia lives: from saving at a young age provide unique Asian insights and create and non-financial performance and align compensation and Southeast Asia to buying a home as they start bespoke Asian products. we serve to lead. Further. at every stage of their Asian insights: We know Asia better. market conditions. we Read about our leaders from pages 4 to 7. weighting and is balanced framework to ensure effective execution for our customers individuals. from mass market to in the following ways: and risk management. Our customer Effective internal controls performance indicators.

operations. to investing conversations are underpinned by award. Our framework for internal controls spans almost one-third of the to desired behaviours. serving all customer segments for retirement.WEAREAUNIVERSALBANK their own families. compliance and total weighting is s)NOTHERMARKETS. We offer a diverse winning research that offers insights into finance.

cohesively as one team. support units and stakeholders investors. interest rate. which allows us Our organisational values. loans. as research agencies and cloud-service better solutions. The first comprises compliance metrics our resources” on page 16. new ways of banking that are appropriate risks by businesses.WEHAVETRADITIONALLY range of banking products and markets and industries in Asia. we Asian connectivity: We work in a regular internal audits. information technology. Technology and infrastructure the goals of every business. Purpose-driven scorecard to determine This enables us to be nimble with faster We strive to be a long-term Asian partner. including deposits. The third is in the form of In Treasury and Markets. more intuitive and oversight exercised by control functions targets and long-term extend our reach to individuals Banking business on page 33. small and medium cards. providers to develop innovative solutions for our stakeholders. and transforming Asia for Read about our balanced and fortified our defences against cyber the better. Performance is assessed platform which allows us to scale up against the balanced our business with lower marginal costs. investment and Asian innovation: We constantly innovate the identification and management of s!CROSSMULTIPLE enterprises (SMEs) and institutional insurance products. intrusions. more interactive. allowing us to work We build long-lasting relationships and remuneration policy seamlessly with technology partners such strong teams. and is built on focused on control and Read more about “How we use focused on affluent individuals. PRIDE!. cascaded throughout the debt. Our investments have committed to making banking joyful and strengthened the resilience of our network trustworthy. three lines of defence. large corporates. Going forward. We are of a “goldilocks” size. services. Finance and strategic outcomes Compliance). across Asia. We have fun and celebrate together! 14 DBS Annual Report 2015 Business model – how we create value 15 . (such as Risk Management. Innovative We embrace change and are not afraid Nimbleness and agility to do things differently. The second is the corporate s"ETWEENCURRENTYEAR leverage digital technologies to Read more about our Consumer banking faster. shape function are aligned to be nimble. Further. organisation. and work together to find on pages 68 to 73. We invest heavily in technology. Relationship-led Read about our breed technologies. Our open platform enables us to integrate and leverage best in. big enough to have meaningful scale and yet nimble Decisive enough to quickly identify and act on Our people are given the freedom opportunities. we are building a culture of innovation and E! – Everything Fun! experimentation. We have a flat organisation to decide. resilient and innovative. credit. speed-to-market. take ownership and make structure and all our key leaders work things happen. which provide an The scorecard is updated structure products for customers collaborative manner across geographies. the way we do business and work with to those of the Group. payments. independent assessment of the adequacy yearly and approved by and are market makers for supporting our customers as they expand and effectiveness of our internal controls. Our systems now operate on a common each other. a crucial Values-led culture country and support business differentiator. equity and other Read about internal controls on page 63. ensuring that structured derivatives. the Board before being foreign exchange. we will to our markets as we strive to make countries. remuneration. scorecard on page 27.

our people engagement score(4) which included establishing the DBS Academy and cultivating a digital mindset in our people. Resources 2014(2) How we manage our resources 2015(2) Brand Brand value(3) USD Our brand value in 2015 reached a record high of USD 4. Adequacy Ratio (CET1 CAR) Funding Customer deposits SGD The Group’s funding strategy is anchored on strengthening our core deposit SGD 317 bn franchise. undertaken during the year that enhanced or made use of the resources.39 We enhanced our human resources through training and development initiatives. We achieve this through rigorous account management > 200. Despite intense competition.4% phased-in Common Equity Tier 1 Capital Refer to “Capital management and planning” on page 109. resulting in an increase in our Basel III fully phased-in capital base Basel III fully 11.4%.000. and enhancing and retaining them for future periods on the other.6% programme also broadens employee skills and exposure.9% CET1 CAR from 11.4 bn Our well-recognised customer satisfaction. We retained SGD 3. maximises value creation Hence.2 bn was driven by impactful branding and marketing activities. engagement and effectiveness of Employee 4.10 Management Value distribution Refer to page 18 16 DBS Annual Report 2015 . Customer engagement scores(5) Refer to “IBG” on page 30 and “CBG” on page 33.36 4. SME 4.000 We grew our workforce by approximately 1. customer base CBG/Wealth >6m >6m Management Our efforts are corroborated by improvements in customer satisfaction scores and by higher cross-selling which indicate deeper relationships. Employees Number of >21.08 4. we provide proxies of the values at discrete points and explain the initiatives in the long term. strong business results and positive analysts’ outlook. knowledge. How we use our resources We have various resources(1) available that we can use to create value for stakeholders.9% to 12. primarily in Institutional Banking >22. name that embodies our values and differentiates us Capital Shareholders’ funds SGD Another year of record earnings created distributable financial value of SGD 38 bn SGD 6. Wholesale funding SGD This enabled us to raise cost-efficient term funding from a new class SGD 32 bn of institutional investors. The increase USD 4.000 training days were delivered. we grew our customer deposits and 320 bn Our diversified achieved a significant improvement in the quality of deposit mix. 12. Our internal mobility Voluntary 13.93 3. funding base DBS became the inaugural issuer of covered bonds in Singapore in 2015.03 billion and in doing so strengthened 40 bn Our strong our financial soundness.97 Wealth 4. 13.03 billion.000 employees (IBG) and Consumer Banking (CBG). resources in a way that We recognise the difficulty in measuring the exact value of many of these resources. We enhance customers’ loyalty by understanding their needs and improving their Relationship IBG > 200.000 experience with us. Customer Number of customers We leverage technology to scale up our customer base in an efficient manner.04 4. to support strategic initiatives and meet The skills. A sustainable business model We seek to strike a balance between using them in the current period on the one requires us to manage our hand.2% attrition rate Refer to “Employees” on page 40. 38 bn Refer to “Liquidity management and funding strategy” on page 96.000 Our loyal and initiatives to improve customer journeys.4 billion. improvements in 4. 129. business needs.13 CBG 3.

focused on the user experience and reduced downtime.000 Our staff contributed 27.000 > 150.000 27. It includes an estimated apportionment of relevant related staff costs (8) DBS IDEALTM is our corporate internet platform. As in previous years. 5 = best) based on Nielsen SME Survey and customer engagement index for CBG and Wealth Management (6) The amount represents the rolling 5-year cumulative amount of capitalised and expensed cost relating to outsourcing and professional fees.500 >2. We also started recycling corporate mobile phones our operations Paper recycled 297 with vendors who either resell.39. silver-haired. salvage reusable parts or otherwise dispose of them 308 (tonnes) through a recycling company.6 bn As we pursue this.7 bn initiatives(7) and automate our deliveries. We are committed to implementing the guidelines issued by The Association of Banks in Singapore on responsible financing.7 m > 2. Wealth Management customers using Refer to “Customers” on page 28. We also offer special subsidised banking packages to these enterprises. in the communities Number of SEs – We also waive fees for ex-offenders to help ease their reintegration into society. we are in constant dialogue with regulators and participate actively in industry and global forums. self-service banking machines. we sold more than 8. we rolled out an SMS queue system across our branches.500 chains. Over the years. our Q12 score would have been 4. reducing touchpoints(9) wait time and eliminating queues. and include those who are less able to afford relationships (SE) Package traditional banking services. Fees are waived for many. Physical Number of >280 We optimised our branch footprint to enhance reach and transformed branches from >280 branches pure service channels to sales outlets. Refer to “Managing our environmental footprint” on page 47.02 million in grants to support the growth of 16 SEs in seven countries in 2015.League Table Report 2015 (4) In 2015. DBS is 16 we operate awarded grants also the key bank to migrant workers in Singapore. In addition. We have a large segment of customers for with stakeholders whom we provide subsidised banking services. we continue to undertake 79 m (kWh) initiatives to reduce our environmental footprint. we transitioned away from Gallup Q12 score to the My Voice employee engagement index. We increased our cash withdrawal points to over 2. Our customer segments range from large and other Social Enterprise corporates to mass market individuals. Value distribution Refer to page 18 (1) Resources are referred to as “Capitals” in the International Integrated Reporting <IR> Framework. software. infrastructure we upgraded existing ATMs.6 bn The IT hardware and rolling 5 years(6) strengthening the core IT infrastructure to building up our digital channels to software that support enhance the customer experience. We have classified our resources differently from the Framework to better reflect how we manage our resources (2) Some amounts are not as at the balance sheet date but are the results of surveys or studies conducted during the year (3) Source: Brand Finance Global 500 . national servicemen and people under public assistance schemes. more people are now able to bank-on-the go. we are committed to being inclusive and providing banking 398 customers under services to everyone in the community. our regional operations Of which relating SGD SGD to specific IT 1. Leveraging design principles and data analytics. hardware and relevant related staff cost for IT. – internet platform > 2. including the (including regulators) young.000 man-hours of volunteer work regionally. via DBS Foundation We choose to support SEs as our primary means of corporate social responsibility. This has dramatically reduced the time to market – from the time an idea is first developed until the technology is in the hands of Number of CBG/ our customers.9 m – mobile platform >1m > 1. Our customer touchpoints In Singapore.1 bn franchise in a resilient manner. our spending has shifted from 4.000 by extending our partnerships with popular retail Number of >2. Refer to “POSB” on page 36 and “Society and environment” on page 44. Amount represents number of inquiries and transactions (annualised) (9) Touchpoints include DBS/POSB branches. Resources 2014(2) How we manage our resources 2015(2) Technology Cumulative SGD Our investments in technology ensure our IT platforms support our growing SGD expenditure in IT – 4.000 customers using DBS IDEALTM(8) Society Number of 281 As a purpose-driven bank. On a comparative basis. AXS terminals and strategic partnerships How we use our resources 17 . It excludes depreciation (7) The amount represents the rolling 5-year cumulative amount of capitalised and expensed cost relating to specific IT initiatives such as digital channels and mobile banking and is a subset of our cumulative expenditure in IT. Volunteer hours 16. As the “People’s Bank”. placing us at the 96th percentile of all companies surveyed globally by Aon Hewitt (5) Customer engagement scores (1 = worst.3 m Number of IBG > 137. Natural Energy consumption 79 m While natural resources are not a material resource for DBS. we are using modern cloud-scaled technology to componentise 1. POSB plays an essential role in Our relationship promoting financial inclusion in Singapore. Refer to “CBG” on page 33.000 decommissioned desktop computers and that we use for notebooks to a recycling vendor. resources The natural resources In 2015. We established the DBS Foundation as the vehicle for carrying this out and awarded SGD 1.

in-kind contributions Employees and associated management costs Discretionary bonus paid to employees through variable cash bonus and long-term incentive share plans We also distribute non-financial value to our stakeholders in the following ways. investing in and implementing environmentally-friendly practices. the distributable stakeholders in several ways. For more information. For more information. Supporting social enterprises. Distributable financial value Shareholders 26% Dividends paid to ordinary and preference shareholders and perpetual capital securities holders SGD 6. that help ensure a sustainable banking industry. For more information. see page 20. Customers Society Delivering suitable products in an innovative. For more information. enhanced learning experiences Active engagement with local and global regulators as well as health and other benefits for and policy makers on new reforms and initiatives our employees. should 14% value benefit all of our stakeholders Society 10% Contributions to society through direct and indirect taxes. We distribute value to our taxes (direct and indirect) and community investments. see page 44. In 2015. and community investments including donations. promoting easily accessible and responsible way. How we distribute value created We define distributable financial value as net profit before discretionary bonus. financial inclusion. Employees Regulators Training.03 billion (2014: SGD 5. over time. financial value amounted to SGD 6.59 billion). see page 40.03 bn 50% Retained earnings Retained for reinvestment in Distributable our resources and businesses for financial growth which. see page 28. Some manifest themselves in financial value while others bring about more intangible benefits. 18 DBS Annual Report 2015 .

This will lower the cost of environment” customer acquisition and free up resources on page 44 for stakeholder value creation. also have greater flexibility for capital and management and liquidity planning. Material matters 19 . Talent Failure to attract and retain talent Talented and engaged employees See “Employees” People management impedes succession planning will enable us to be nimble and agile on page 40 and retention and expansion into new areas in responding to changes in our such as digital. including money By contributing to Singapore’s reputation financial laundering and corruption. planning” on page 109 Digital transformation Digital Technology and mobility are Digital disruption is also an opportunity See “Customers” disruption increasingly shaping consumer if we successfully transform ourselves to on page 28 and changing behaviour. These matters influence how the Board and senior management steer the bank. we see an opportunity to further on page 12 and environment and market volatility. Refer to page 20 for more information on stakeholder engagement. Material What are we What are the risks? Where do we see the opportunities? matters doing about it? Challenging The macroeconomic environment. Prioritise Material matters have the From the list of identified matters. Our material matters identification process Material Identify matters We identify matters that may impact the execution of our strategy. please refer to page 50. falling commodity prices of Asia. Such a reputation can help reputational risks. to create long-term value. As regional and global competitors grapple See “CEO Operating environment macro. characterised by lacklustre global with weaker earnings prospects and pull out reflections” economic growth. behaviour rise to capture market share in niche segments. us attract customers and investors. we crime corrosive effects on society and can uphold our reputation as the safest gives rise to compliance and bank in Asia. and takes into account feedback from stakeholders. requirements. Responsible The public demands that banks We see an opportunity to make a positive financing lend only for appropriate corporate impact to society and the environment activities. operating environment. For more information on Board structure Please refer to page 27 for more information on our balanced scorecard. Failure to do so gives rise through our lending practices. We 78 and “Capital business models. gives rise to expand in the region. Cyber security The prevalent threat of cyber attacks A well-defined cyber security strategy and See “CRO on financial institutions remains one capability gives confidence to customers statement” of our top concerns. on page 78 Combating Financial crime. in turn make us appealing to investors who are increasingly looking to invest in sustainable companies. we prioritise those that most significantly most impact on our ability impact our business and relationships with stakeholders. has as a clean and trusted financial centre. This is a group-wide effort involving inputs from all business and support units. Traditional banks risk capitalise on the shift towards digital and consumer losing their relevance as fintechs leapfrog the competition. and processes. This will to reputational and credit risks. and can differentiate us. material matters are integrated into our balanced scorecard. Responsible banking Fair dealing Failure to observe fair dealing Customers are more likely to do business guidelines gives rise to compliance with us if they believe that we are fair and See “Society and and reputational risks. “CRO statement” business and credit risks. Integrate Where relevant. transparent. we are in a strong position statement” on page landscape which may affect banks’ existing to serve existing and new customers. on page 78 Evolving The Basel Committee continues With capital well above regulatory See “CRO regulatory to calibrate capital requirements.

s#OMMUNICATINGTHEIMPACTOF “CRO statement” on page 78 derivatives and tax reforms in To address the needs of SEs across Asia. We also management. the concept s$ERIVATIVESREGULATORYREFORM a multi-generational workforce. and maintain strong relationships with How did we engage? strategy. we develop who most materially impact our as regular one-on-one or group and via direct conversations with our wide online video webchats where he volunteering activities. The key concerns raised by We received positive feedback on the We received positive feedback on our Responsible banking is a topic of increasing During the year. financial stability. importance of having a sustainable banking s#USTOMERSUITABILITY Shareholders also showed more The customer journeys gave us Areas highlighted by employees included model. These matters During the year. impact on society and the environment. Engagement with stakeholders enable us to pinpoint areas where participation from 4. 16. more than 4. to the community and reached out to supported by their respective heads Our key stakeholders are those our financial performance as well branches. DBS Housewarming. to them. of banking with a purpose also became s#ONDUCTOFBUSINESS more important. see page 40. which generated 730 topics In Singapore. views and questions on the bank’s commercially viable while pursuing to help support them in ensuring targeted annual surveys which strategic priorities. and the inability to attract talent. s#ONTRIBUTINGTOTHEDESIGNOFAGLOBAL For more information. including a lack of funding and commercial expertise. see initiatives. Twitter. our people manage and engage with more responsibly. addition.000 hours of of legal and compliance. priorities and guide our initiatives. improving their engagement results. What our stakeholders are telling us Shareholders Customers Employees Society Regulators and Policy Makers We provide investors with the We interact with customers We communicate with our employees We actively engage the community We strive to be a good corporate relevant information to make to better understand their via multiple channels to ensure they to better understand the role that citizen and a long-term participant in Dialogue and collaboration informed investment decisions requirements so as to propose are aligned with our strategic priorities. we identified the challenges they face. customer engagement was integral employee survey. compliant with the GRI G4 Sustainability ASWELLASRESOLUTIONRECOVERY For more information on our employee Reporting Guidelines for the first time. These comprise our shareholders. provide insights into perspectives on our financial for them.470 employees (over provide us with an understanding we can improve our services. representative voice for Asia in industry and global forums. we undertook more Association to further our outreach help us define our strategic than 100 customer journeys where This year. Through our engagement with SEs. on page 44. There was broad-scale their social objectives. to date with their concerns. SEs also suffer from inadequate public awareness about the work that they do. across our key markets to understand frequent meetings and consultations. We are also active its first week-long collaborative online We work with social enterprises (SEs) public policy agencies. throughout the bank. In addition to conduct roadshows and participate on social media platforms such as brainstorming session.000 staff contributed Led by our country chief executives and detailed quarterly briefings of day-to-day interactions – at our group-wide and departmental townhalls. released by The Association of Banks s3HARINGOFINFORMATIONON$"3 How did we respond? to shareholders. ability to embed ourselves in the customer importance to our societal constituents. key regulatory shareholders in 2015 centred development of new digital solutions. we transitioned to a new to the community. employees. we are also s#ONTINUINGDIALOGUEONCAPITALLIQUIDITY considerations into our business model. DBS ran governments. through our call centres while CEO Piyush Gupta hosts bank. As a result. we seek to be a strong matters of relevance performance and strategy. or are directly impacted by meetings with top management relationship managers and senior answers questions from staff. regulators and other it. our PRIDE! values. as well as on customer satisfaction scores. see page 28. We provided detailed disclosures on We embarked on instilling an Results from My Voice were analysed We are committed to implementing the We participated in the following the asset quality and stress test results “embedding ourselves in our and taskforces were set up to Guidelines on Responsible Financing regulatory initiatives in 2015: of portfolios that were of concern customers’ journey” mindset address specific areas of concern. we seek feedback through ideas. s!NALYSINGRISKSANDOPPORTUNITIES For more information. we can play as a bank to address the our key markets by providing input with our key stakeholders about DBS as well as seek their the right financial solutions Such interactions also allow us to be up needs of society. to and implementing public policies. to enhance this critical resource.600 comments. to measure to the redesign of our processes. customers. in years was one example highlighting the s&INANCIALCRIMEANDCYBERSECURITY and concerns raised? our asset quality in general. and senior business heads. regulators in investor conferences. we partner the Community of the matters they are most and over 1. We engage shareholders through We engage our customers through Senior management holds regular In 2015. which provides further clarity around our arising from financial technology “CEO reflections” on page 12. Facebook and LinkedIn. and “Society and environment” our markets we launched the DBS Foundation in 2014. Development Council and People’s concerned with. our staff engagement level. 20% of staff). foreign exchange markets 20 DBS Annual Report 2015 What our stakeholders are telling us 21 . Each department owns a plan for in Singapore to support sustainable approach to financial crime and change and is held accountable for development across our key markets. enabling us More broadly. issues surrounding the banking on our exposures to China and This was reflected in our increased journey and that employees are embracing The worst haze to blanket Southeast Asia industry included: What were the key topics commodities. In in 2015. time-efficient for our customers. cyber security as well as customer Additionally.000 people through 27. where employees shared their their needs and help them become we provide data and thought leadership and society at large. My Voice. more intuitive and new hires into a growing bank and helping ensuring employees and customers acted financial technology our business practices. we undertook various For more information on our customer implementing the initiatives and suitability initiatives initiatives to embed sustainability initiatives. see “Society approach to conduct of business in and environment” on page 44. It prompted calls among the public s#APITALANDLIQUIDITY interest in how we are embedding feedback on how we can make ensuring that we continue to integrate for banks to play a more influential role in s4HEDISRUPTIVEEFFECTOF sustainability considerations in banking simpler. With this Annual Report.

housing loans by 13% as we gained share Deposits were supplemented by wholesale Despite a tough operating environment in a quiet market by offering customers a funding across a range of tenors. The and earnings growth.32 billion. little changed from challenging economic the previous year. and infrastructure projects. CFO statement currencies had a material influence on our Balance sheet performance. The liquidity coverage to SGD 4. If collateral was and the factors behind it. boosted risk appetite densities in the world at 60%. loan refinancing ratio in the fourth quarter of the year was the SGD 10 billion mark for the first time. We intend to 22 DBS Annual Report 2015 . conditions in the second half. weak commodity prices. in 2019). to assess the impact of regulatory reforms of the year increasingly gave way to contributing 3% points to reported income currently undergoing consultation. Total income crossed for corporate restructuring. We both net interest income and non-interest constant-currency terms during the year. net interest margin rose nine basis points to loans during the year. requirements. some of which Despite having one of the highest risk The results underscored the breadth and were unexpected.2 billion. of 148% was higher than many of CFO Chng Sok Hui explains A convergence and subsequent reversal our peers’. As a result. We took specific allowance charges of 19 basis points of of record earnings despite steps to contain deposit costs. adoption of a modest exchange rate policy by the Monetary Authority of Singapore. Like other banks. We were able to offset the decline and meet contingencies. Central banks’ policy actions in the early months of the year.77%. Return on funding ratio effective 2018. our capital ratios will continue to on our performance the strong first-half growth in non-interest remain comfortably above requirements. we 122%. Our leverage ratio was 7.2%. net profit rose to a record more stable pricing mechanism than most included USD 1 billion of inaugural issuances SGD 4. We also supported of covered bonds with triple-A ratings from net profit rose 12% from the previous year institutional banking customers borrowing Moody’s and Fitch. At the same time. declines in China’s stock markets and an Counterparty Credit Risk” to be unexpected depreciation in August of the implemented in 2017 and the “Fundamental Macroeconomic factors RMB. We will continue various central banks – in the first half during the year benefited our performance. and in 2015. uncertainty emanating from China. The loan-deposit Results demonstrate with a 5% or SGD 11 billion increase ratio was comfortable at 88% even as resilience of our franchise in non-trade loans. We took steps to ensure that the At home. we took effective was unchanged at 0. Asset quality continued to be resilient. We grew Singapore higher-cost deposits were managed out. our fully- resilience of our franchise as we successfully and contributed to especially strong phased in Common Equity Tier-1 ratio captured income opportunities and performances in wealth management of 12. well above the final regulatory growing 12% to SGD 10. reflecting the prudent level the salient aspects of the of offshore and onshore RMB rates – a of cumulative general allowances year’s financial performance consequence of China’s monetary easing and at SGD 3. It accounted for all of resultant movements in interest rates and the year’s reported loan growth of 3%. equity improved from 10.5% at the Non-performing loan formation was offset beginning of the year to 1. currency depreciation – together with falling considered.9%. which was the highest since 2012. the coverage was 303%. Interbank rates increased from 0. Excluding one-time items.8 billion with were able to keep overall loans stable in requirement of 100% effective 2019. commodity prices resulted in an underlying 25% or SGD 13 billion contraction in trade We kept ample liquidity to support growth loans. The non-performing loan ratio We turned in another set 1.4% was well above regulatory managed risks in a year marked by slower and treasury activities in the first half. others created challenges strength maintained that we were able to successfully manage. Our allowance coverage 1. also met the requirement for net stable income reaching new highs.2% while swap by recoveries. After factoring in recently economic growth. we will manage our exposures to contain the impact of risk- weighted asset inflation.7%. way above A favourable operating environment – the minimum requirement of 3% envisaged supported by quantitative easing from The 7% depreciation of SGD against USD by the Basel Committee. While some of their effects were beneficial.45 billion. competitors could.3%. benchmark interest rates used high quality of our balance sheet for pricing SGD loans rose steadily on was maintained in a more challenging expectations of higher US rates and from the operating environment. As a result. As a result. upgrades and write-offs of offer rates rose by a similar magnitude to existing NPLs. income moderated in the second half. Lingering uncertainty over the timing Review of the Trading Book – Revised and pace of US Fed tightening exacerbated Standardised Approach” to be implemented had a material influence the volatility in financial markets.9% to 11. This reversed in the second half as overall announced rule changes by the Basel financial market volatility and heightened confidence became fragile after sharp Committee (the “Standardised Approach – asset quality concerns.

318 +12% 2014 Net Fee Other Expenses SP GP Tax and 2015 net interest income income others net profit income profit CFO statement 23 . liquidity on page 96 and Refer to the GRI Index on page 196.035 3. Read more about our balanced eventually implemented.82. We use a balanced scorecard with key intended departure from the incurred loss which is to pay sustainable dividends while performance indicators to drive alignment provisioning approach prescribed under maintaining capital ratios consistent with of strategy and priorities throughout FRS 39. which is In 2018.066 7. similar to domestic G4 Sustainability Reporting Guidelines peers.321 7. regulatory specifications will determine how agencies. and possible changes to the current regulations and the expectations of rating the organisation. investors and other stakeholders. take impairment (or businesses and regional network to The enhancements we made this year allowance) charges and account for hedges.297 Non-interest 2.100 2. fundamentals are sound and its long-term our management of resources. of MAS Notice 612 where banks maintain.77 1.501 3. models. “stakeholders outreach” and At present.650 3. The region’s economic matters”. It attests sustainability reporting to the resilience of our franchise. a position of strength capital management on page 109. SGD 42 billion at 31 December 2015.2 11. capture the many opportunities that Asia include improved disclosures for “material continues to offer. financial instruments. scorecard on page 27. which fell 19%.779 2.927 9. DBS had a market capitalisation of meeting the proposed requirements by page 108. IFRS 9’s expected credit loss (ECL) model is Our payouts also take into account the long. This new a solid balance sheet and prudent risk the Integrated Reporting framework accounting standard will govern how management.2 1. International Financial Reporting underpinned by multiple business engines. integrated thinking behind our strategy level of general allowances of at least 1% and embedded into our business practices.84 ROE (%) 11.maintain our existing dividend policy. Our 2015 report is fully in line with Standard 9 will take effect.0 10. We will remain vigilant issued by the International Integrated reporting entities classify and measure to risks while staying nimble across our Reporting Council in December 2014.687 8.70 11.359 3.848 4. Any such changes term growth prospects of our businesses.358 3. This is an Financial performance summary Total income Net profit NIM (%) 1.825 5.318 4. the Singapore Exchange for sustainability reporting in 2017. of uncollateralised exposures. The accretion in net our commitment towards sustainability meantime.454 item Positive 3. Singapore banks comply with the provisions growth potential remains undimmed.77 10. These efforts position us well for Disclosure Task Force disclosures on year.318 income 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Excluding one-time items Impact on (SGD m) +12% +6% +21% +13% earnings One- 273 570 time 779 117 115 39 53 4.9 1.848 136 Negative 4.618 3.8 1.2 (SGD m) 10. Our foundations are secure and we Our Integrated Reporting reflects the in addition to specific allowances. Our performance in 2015 was achieved New impairment in the midst of slower economic growth Integrated and methodology and financial market volatility.62 10. a prudent enter 2016 from a position of strength.569 6.748 income Net interest 4. It has been prepared to the systems. are unlikely to result in additional allowance charges for DBS at the point of adoption.064 7.68 1.787 8. leveraging existing credit rating book value was not reflected in the share reporting. Net book value per diluted share increased This report also marks a milestone in The Group has begun preparations in the 7% to SGD 15.631 3. processes and tools.806 2.285 5. Starting 2016 from Read more about asset quality on page 86. for impairment assessment. as bank shares led a sell-down on the issued by the Global Reporting Initiative Read more about ECL in the Enhanced Singapore Exchange in the latter part of the or GRI. price.

Net interest income Net interest income increased 12% to SGD 7.452 2.027 6 contributions as well as lumpy contributions in the previous year.77%.813 1.690 1.78 benchmark rates rose. Trade and transaction services 556 539 3 as well as from the consolidation of a credit Loan-related 442 385 15 card joint venture in Hong Kong. Net trading income 1. Others 46 52 (12) Under accounting rules. reflecting the strength of our 89 +7 +5 120 -11 -16 deposits domestic savings deposit franchise as well as efforts to grow transactional accounts Current with corporate customers and institutional 66 investors. Investment banking Less: fee and commission expense 308 248 24 fees fell 25% due to weaker second-half Total 2.743 1.321 rose progressively during the course of the 1. Savings and current Consumer Fixed accounts grew.69% in the first quarter to 1. Other non-interest income Other non-interest income grew 21% to (SGD m) 2015 2014 % chg SGD 1.68 Gross loans rose by a reported 3% to SGD 287 billion but were little changed in constant-currency terms as a decline in trade loans was offset by higher consumer 2014 2015 1Q 2Q 3Q 4Q and corporate loans. Reported Underlying Reported Underlying Deposits rose by a reported 1% to SGD 320 billion but declined 2% in 287 +8 -2 320 +3 -6 constant-currency terms as fixed deposits were managed out. Wealth management fees increased 18% as Fee income a strong first half more than offset a (SGD m) 2015 2014 % chg slowdown in the second half when market volatility reduced investment appetite.54 billion.543 1. interest income derived from funding swaps is accounted Total 1. 1. We contained deposit 1. from 1.69 transactional accounts. The growth was broad-based. Net interest margin 6. Trade and Others 76 83 (8) transaction service fees grew 3% as growth in cash management was offset by lower Fee and commission income 2.100 1.204 901 34 The remainder was mainly from surplus Net income from investment securities 203 274 (26) Singapore dollar deposits deployed into Net gain on fixed assets 90 43 >100 US dollar assets through funding swaps. Our market share of SGD savings Other account 155 +11 +6 deposits rose almost 1% point to 53%.77 year. 24 DBS Annual Report 2015 . 1.14 billion.854 1.270 21 for under non-interest income. corporate Savings +16 +13 131 account Trade 41 -10 -13 Loans Deposits Non-interest income Net fee income rose 6% to SGD 2. Loan- Cards 434 369 18 related fees increased 15% due to a larger Wealth management 599 507 18 number of sizeable transactions.84 We benefited from higher SGD loan yields as 7. Card Brokerage 180 173 4 fees also rose 18% from higher customer Investment banking 165 219 (25) transactions in Singapore and Hong Kong.144 2.275 8 income from trade. One-third of the increase was due to higher treasury customer flows.84% in the fourth.75 costs by replacing higher-cost deposits with 1. Our market share of Singapore housing loans rose 2% points to 2015 27% as customers refinanced loans from other banks with us due to our more stable (SGD bn) Change Change pricing packages.10 billion as net interest margin for (SGD m) Net interest margin (%) the full year rose nine basis points to 1.

900 20 conditions in the second half. 2012 2013 2014 2015 CFO statement 25 .330 4. 45 45 45 Cost/income (%) 44 Three factors had a one-time impact on our expense (as well as income) growth: the acquisition of Soc-Gen private bank. Income in Rest of Greater China rose 7% as an increase in non-interest income activities more than offset the impact of lower net interest margin and trade loan volumes. and the 7% appreciation of the US dollar and Hong Kong dollar against the Singapore dollar. aims to improve our operating efficiency by streamlining processes.289 1. total income for Consumer Banking / Wealth Management Total income rose 23% to SGD 3.918 4.42 billion as assets under management grew 9% to SGD 146 billion.140 1. By business unit Income from the retail segment rose 20% Consumer Banking/ Wealth Management (CBG) 3. managing sourcing costs and optimising our technology resources.787 9.14 billion as a strong first half Singapore 6. such as digital initiatives. We had SGD 203 million of savings from a group-wide strategic cost management 2012 2013 2014 2015 programme.882 23 to SGD 2.29 billion Treasury 1. gains in Hong Kong were also higher.618 12 margin and a wide range of fee activities.787 9. which represented 4% of our cost base. The programme.13 billion. Treasury income increased 3% By country to SGD 1.967 7 income increased 7% to SGD 5. Institutional Banking Institutional Banking (IBG) 5. (SGD m) the consolidation of a credit joint venture in Hong Kong from 30 June 2014.290 4.019 950 7 South and South-east Asia 557 552 1 By geography.55 billion.614 3.900 have risen 9%. South and South-east Asia income was little changed. Treasury customer activities and trading Read more about our business units’ performance on page 30 and 33 and our income in Singapore and property disposal countries’ performance on page 38.102 3 despite a challenging environment in the Others 810 667 21 second half. Rest of Greater China 1. Wealth Management segment income rose (SGD m) 2015 2014 % chg 29% to SGD 1. Adjusting for these effects.90 billion.618 12 activities and cash management was partially offset by lower trade finance income. The cost-income ratio was stable at 45%. which was initiated in 2012. expenses would Expenses 3.Business unit and geography performance By business unit. Expenses Expenses rose 13% to SGD 4.676 5.547 2. Higher income from lending Total 10. These savings have created the capacity for us to SCM savings 115 193 188 203 invest in new areas. which had been consolidated in October 2014. while keeping the cost-income ratio at reasonable levels.950 12 was offset by less favourable market Hong Kong 2. total income was led by Rest of the World 246 266 (8) double-digit percentage growth in Singapore and Hong Kong from higher net interest Total 10.

8 billion.8 billion. slightly higher than the previous year.618 8. 2010 2011 2012 2013 2014 2015 26 DBS Annual Report 2015 .2 10. Expect specific allowances to average 25 basis points (bp) of loans through the economic cycle.0 11.2% in a challenging operating environment. This amount provides us with a strong cushion to offset 2012 2013 2014 2015 against additional specific allowance charges without impacting our overall capital SP/loans (bp) 10 18 18 19 adequacy ratio. aligned to risk appetite. 2. Key performance indicators Shareholder KPIs Income (SGD m) 1.064 7. Outcome: Return on equity rises to 11. 2010 2011 2012 2013 2014 2015 3. Allowances and asset quality Non-performing assets rose 11% to SGD 2.792 The allowance coverage of NPAs remained 2.996 NPA (SGD m) 2.726 2.927 Target: Deliver consistent income growth. Continue to drive efficiency through strategic cost management efforts. exceeding SGD 10 billion for first time. Savings reinvested in headcount and new capabilities including digital initiatives.9 19 basis points of loans. 2010 2011 2012 2013 2014 2015 2. 7.2 10.513 healthy at 148% and at 303% if collateral 43% 19% Not overdue was considered. when we had write- backs from significant loan resolutions. of which SGD 600 million >90 days overdue 43% 48% 65% 63% are in excess of the amount that can be counted towards Tier-2 capital.2 Target: Return on equity of 12% or better in a normalised interest rate environment. 2010 2011 2012 2013 2014 2015 4.2 accounted for by Singapore and Hong Kong. Improve returns Return on equity (%) 11. 18 18 19 11 10 Outcome: Specific allowances as a percentage of loans maintained at 19 bp. Manage expenses Cost/income (%) 45 44 45 45 Target: Be cost efficient while investing for growth.631 8.2 billion. Manage portfolio risks Specific allowances/average loans (bp) 43 Target: Grow exposures prudently. Most of the increase was 1.8 10.066 Outcome: 12% income growth to SGD 10. cost-income ratio target 43 41 of 45% or better.1 Specific allowances for loans amounted to 0. We stress tested our oil and gas exposures at a price of USD 20 per barrel and Unsecured NPA 183 204 296 303 found potential losses to be manageable. NPL ratio (%) 1. 46% 24% 18% 9% 11% Included in the calculation of allowance <90 days overdue 11% coverage are cumulative general allowances of SGD 3. Outcome: Cost-income ratio in line with target of 45%.9 11.787 9. Cumulative general and specific allowances as % of: We reviewed our commodities and China portfolios and were satisfied with their NPA 142 135 163 148 quality.9 0. Grow income 10.

of risk taken. including control see page 28. employee engagement and the Group’s income growth people development. Strategic priorities Geographies 2EGIONALBUSINESSES %NABLERS s%NTRENCHLEADERSHIP s"UILDALEADING3-%BANKINGBUSINESS s0LACECUSTOMERSATTHEHEART in Singapore s3TRENGTHENWEALTHPROPOSITION OFTHEBANKINGEXPERIENCE s#ONTINUETOEXPAND s"UILDOUTTRANSACTIONBANKING s&OCUSONMANAGEMENTPROCESSES. The second part of the scorecard sets out the initiatives we intend to complete in the current year as part of our long-term journey towards achieving our throughout the organisation. and compliance. Traditional KPIs Shareholders #USTOMERS %MPLOYEES Achieve sustainable growth 0OSITION$"3ASBANKOFCHOICE 0OSITION$"3ASEMPLOYEROFCHOICE Shareholder metrics measure Customer metrics measure the Employee metrics measure both financial outcomes Group’s achievement in increasing the progress made in being achieved for the year as well as customer satisfaction and depth an employer of choice. see page 22. strategic objectives. The first part of the scorecard comprises KPIs and strategic objectives set for on our strategy and is cascaded the current year. including risk-related KPIs to ensure that of customer relationships.Our 2015 priorities To create value for multiple stakeholders. see page 40. the scorecard is divided into two parts of equal Our balanced scorecard is based weighting. For more information. is balanced against the level For more information. For more information.


see page 44. and Indonesia see page 20. 12 and 38. see pages 8. Our 2015 Priorities 27 .)NDIA For more information. For more information.

We look at their journey with us from beginning to end. To do this. Customers New digital technologies (mobile. we are focused on how we can create joyful banking experiences for customers. But we are not enamoured with technology for its own sake. and apply human-centred design to develop relevant solutions. We believe that embedding ourselves in the customer journey and embracing digital form a potent combination that will make banking increasingly simple and seamless. 51% SME customers in Singapore who open accounts online over 90% Remittances done digitally Live simple 28 DBS Annual Report 2015 . Instead. big data) are powerful tools available to banks today. social. we place ourselves in their shoes. focus on their needs and ensure we know what the real “customer job to be done” is.

such as the last transacted price. we on-boarding processes to be simple customers. It also links them with us digitally. facilitate cross-border connections and with the process now taking 15 minutes In a first-of-its-kind service. an unsecured loan approval on-the-spot. We are digitalising our customer processing and instant fulfilment for With the DBS HomeConnect app. costs for us. recent initiatives. 16% of With DBS PayLah!. This also results in lower engage customers during their house and intuitive. today. For example. simpler and they have more time to spend on Stronger digital people or things they care about. can track the application in real time and We seek to seamlessly integrate banking into obtain instant notifications on the progress customers’ everyday lives so that banking becomes of their loan application. products with no signatures required. engagement to help customers with their decisions At the start of the Day-to-day payments We seek to seamlessly integrate banking banking relationship and transactions into our customers’ everyday lives so that banking becomes simpler. This service digitally in SME. through their mobile devices. increasingly acquiring new customers across markets while on the go. Even in private banking. which is of remittances are done digitally. with DBS They can also contact a DBS loan specialist The strategy is paying off and we are Remit. customers can instantly send funds via the app. The app connects has been well-received. but we The app contains a loan calculator to help almost instantaneously. over 90% SMEs in Singapore are able to access an banking. hunting process. credit card and unsecured has gained popularity and. Online account instant approval for credit cards or receive We are currently regionalising the app to opening saves them significant time. SME owners are support mass-scale virtual events. 51% of SME customers in easily with a few simple clicks on the phone. the digital option DBS BusinessClass app. our operations to drive straight-though anyplace.000 members and the brightest new wealth customers opened accounts make payments to friends and merchants business minds in Asia. In 2015. wealth and corporate We are investing in capabilities to simplify more time to spend on people or things they customers can open accounts with us day-to-day banking. online business community through our a high-touch business. Account Opening Service. They DBS employees brainstorming on how to make banking simpler for customers SMEs access an online business community through the DBS BusinessClass app Customers 29 . with tech start-ups to facilitate the adoption Singapore did the same through our Online Our digital services allow customers to get of new technologies to enhance productivity. pre. compared to the industry average of one also able to apply for up to 11 types of loan or two hours. retail. starting a bank relationship can be done customers is an ongoing journey. and they have Today. are already seeing success with some of our customers work out the financing required. We are re-designing care about. giving them information populating fields on behalf of customers. anytime. on their phones. by simplifying forms. rentals and automating the entire process so that Simplifying day-to-day banking for and the nearest amenities. customers are able to them to 15.

The performance is SGD 558 million as higher specific extensive capabilities to assist clients to testament to the strength and allowances were partially offset by lower issue bonds in the most efficient market resilience of the franchise as IBG general allowances. such as card payments.5 billion.8 billion. across the region. In a survey of ChipPAC in the USD. the number of made an impressive leap and were ranked institutional clients and investors with large corporates in Asia using DBS as a core fourth compared to 10th in 2014. largely from Singapore the Singapore Exchange in 2015. such as Huawei. Treasury league tables for arrangers in Southeast Asia (IBG) performed well in 2015. we widened our lead sustainable annuity business to supplement in the SGD bond market as our share grew our core lending business and have Building a leading SME banking franchise from 35% to 41%. IBG’s non-loan and Singapore. Institutional Banking was offset by declines in trade and to USD 74. fund raising. management and loan-related activities 30 DBS Annual Report 2015 . are able which successfully completed a 10-year cross-border expertise. where we supported strong cash management performance. 1. Growth in fees from cash our involvement in 123 deals amounting model to assess creditworthiness. We reaped the fruits of investments successfully worked with several first-time in product capabilities.531 market allowed us to secure roles as the quality deposits. Income + 9% REIT to be listed offshore. to minimise their funding costs. DBS also topped the Institutional Banking Group investment banking income. Our relationship teams. a global networking with customers. We played a Financial performance 9% to a record SGD 1. which are often unable to access financing because a lack of audited accounts We had another fruitful year working with or personal income statements prevents 2010 2011 2012 2013 2014 2015 our regional clients to raise new capital banks from carrying out credit assessments. successfully listed BHG Retail REIT. Income from SME banking grew position in the league tables. resulted in 1. and telecommunications solutions provider. Bank of China and Stats and relationships with clients. 41 2010 2011 2012 2013 2014 2015 At the other end of the spectrum. It is the and Hong Kong customers for investments SME Banking income (SGD m) first Chinese enterprise-sponsored retail and corporate restructurings. knowledge. coupled with cash 1.041 1. Despite volatile market conditions. industry IBG continued to deepen our wallet share issuers. Our insights into the region have sized deals for leading regional companies also helped us foster deeper conversations such as Lenovo. the only Income from loans grew 14% to initial public offering on the mainboard of SGD 2. we employed our of the year. In Asia ex-Japan bonds. we of all we do. we strengthened our position 50 50 50 and more than doubled our participation in 48 47 Singapore transactions from 33% to 72%. collectively accounting for to total income ratio declined to 47%. with them against a payment and collection 1. from trade finance declined 14% due to the slowdown in China and depressed Our expertise and knowledge of the commodities pricing. 36% of Asia (ex-Japan) volumes.3 impact of lower treasury customer flows.408 sole financial advisor and/or underwriter in mandates won in the year. We also led benchmark- risks better. and are committed to help market intelligence provider.8 billion. Our focus on building 1. Despite their financial needs. which was for its merger with billion as net interest income grew We also acquired 17% more SME customers Cityspring Infrastructure Trust. an innovative short term working capital loan for small Providing access to capital businesses. customer income rose 4%.370 1.092 Singapore-listed entities’ equity fund raising for cross-border acquisitions and other IBG non-loan income ratio (%) expansion plans. We We use their electronically verifiable cash remained among the top three arrangers for flows. retaining our pole in 2015. We aim to build a bank rose from 20% in 2014 to 25%. continued to drive initiatives to add by leveraging digital innovation to drive value to our customers.53 billion as growth key role in milestone transactions such as in transaction deposits and fees offset the Keppel Infrastructure Trust’s maiden equity IBG’s total income rose 7% to SGD 5.229 multiple transactions. networks and organised by industry segments. we launched DBS mLoan. a bond markets. client acquisition and deepen existing We continued to be the leading equity and relationships continued to be a focus area REIT house in Singapore. SGD and offshore RMB We place the customer at the centre more than 500 companies by Greenwich. despite the macroeconomic headwinds in the second half Allowances rose SGD 18 million to In debt capital markets. to understand our customers’ business and USD 1 billion issue. and measure Non-interest income grew 3% to SGD syndicated loans across Asia (ex-Japan). intense competition. for investments and refinancing. We also 9% from improved net interest margin.

enables us to connect made it easy for clients. and helped to mitigate the market driven manage investments denominated in decline seen in trade finance volumes. We asset acquisitions and project financing. Our IDEAL digital platform by customers as more of them transacted United States. their suppliers and online or on the go. global transaction banking income the second half. benchmarks. connectivity Corporate treasurers seeking to improve the liquidity of their balance sheets tapped Making banking easier Our extensive network in Asia.000 new corporates with opportunities in Asia. United Kingdom and 24% in 2015. worked on close to 40 mandates in 2015. buyers to integrate and take advantage of accounts to our corporate banking mobile In 2015. DealOnline is our full-fledged border transactions such as Bank of China’s advisory services to help clients improve electronic foreign exchange online platform. the infrastructure and capability to offer instant notifications on the progress of their Within trade. DBS has track the application in real time and obtain offsetting a decline in documentary trade. app IDEAL. supply chain diagnostics Institutional Banking 31 . enabling clients loan application. In the 11 types of loan products online. in conjunction with funding costs. apply for loans via a mobile app and receive was little changed at SGD 1. swaps. In cash management. Our working capital management The number of corporate subscribers to programme integrates our expertise in cash DealOnline increased almost 30% from the We have completed several landmark cross- management and trade finance.55 billion bond. providing previous year. to facilitate Australia-Asia business and investment flows. the shift towards open a wide range of products. We added 16. They can all delivered strong double digit growth. they They can use it for working capital. forwards and China’s One Belt One Road initiative. Helping customers are also the only bank in Singapore to offer minimising dilution to their equity base. securities and fidicuary We helped clients structure treasury Singapore. United receivable purchasing solutions.DBS Chairman Peter Seah. SMEs can apply for up to services and open account trade businesses products to hedge their risks. offshore RMB market particularly. virtual account opening for customers to manage financial risks complete the account opening process via Enabling cash a simple voice or video call without having Treasury customer sales income from IBG to step into a branch. services provide clients with industry non-deliverable forward contracts. first of its kind working capital management and minimise which offers auto pricing and dealing in USD3. Korea. account trade resulted in higher margins to minimise foreign exchange risk. as well into our supply chain financing and account as our presence in Japan. online in just 15 minutes.6 billion. which grew Our digital initiatives were well received Arab Emirates. Our working capital advisory foreign exchange. despite the drop in RMB-related activities in SME customers in Hong Kong are able to In 2015. we opened an office in Sydney these facilities. Singapore’s High Commissioner to Australia Burhan Gafoor and DBS CEO Piyush Gupta at a client luncheon in Sydney to officially launch DBS’ new Australia branch. We Kong can now apply for a business account at the growth stage of their life cycle. multi-market. fixed can open an account within the day. while in India. multi-currency. Our in-principle approval within an hour. RMB and gain access to a broad range Facilitating regional of financing solutions. We are one of the first banks to offer a and solutions to achieve best-in-class SME customers in Singapore and Hong venture debt solution for tech start-ups working capital management practices. flow optimisation customers increased 4% to SGD 829 million.

and the merger of million bridge loan and USD 1. we redesigned our ANDPEOPLECAPABILITIES4HIS As companies seek to grow in new markets transaction banking organisational structure INCLUDESDEEPENINGOURINDUSTRY or diversify their revenue sources. at the heart of the FOCUS AREAS banking experience Unlocking We redesigned more than 30 customer shareholder value experiences based on human-centred design s)NVESTINENHANCINGOURPRODUCT principles. they with inputs from customers. We also provided a comprehensive largest infrastructure trust in Singapore. which created the Vietnam. Others included Formosa Group’s USD 510 SingBridge and Surbana. For example.8 billion acquisition of Singapore-based STATS ChipPac by Jiangsu Changjiang Placing customers 2016 Electronics Technology. In addition to helping them Through the DBS BusinessClass programme. COVERAGEANDSCALINGUPOUR look for domestic or cross-border M&A BUSINESSWITHINSTITUTIONAL opportunities.5 billion Cityspring Infrastructure Trust with Keppel syndicated term loan to fund investments in Infrastructure Trust. INVESTORS. financing solution to support the USD 1.

DBS also facilitated more than 400 conversations and SHEETS.WHOVALUEBANKS structure comprehensive financing solutions an online social network for SMEs. we have LIKE$"3WITHSTRONGBALANCE to support their acquisitions.


000 SMEs. These include the acquisition of linked SMEs with tech start-ups to facilitate REGIONALMARKETCONDITIONS Keppel Land by Keppel Corporation. ACQUIRENEWCUSTOMERS. The network also TAILORPRODUCTSTOCAPITALISEON value. the the adoption of new technologies to s#ONTINUETOUSETECHNOLOGYTO acquisition of Biosensors International enhance productivity.!SIAN served as financial advisor in several M&A 20 networking events among the member INSIGHTSANDTHEABILITYTO transactions that have unlocked shareholder base of 15.















!SIA 32 DBS Annual Report 2015 .

Consumer Banking Financial performance 7EALSOCONTINUEDTOMAKEGOODPROGRESS The performance of our ACROSSGROWTHMARKETS.

538 !STHEPACEOFDIGITALADOPTIONINCREASES.882 2.4% Accelerating speaking to the resilience 3.DELIVERINGSTRONG consumer banking franchise DOUBLE DIGITINCOMEGROWTHIN)NDONESIA AND4AIWAN was strong despite a challenging CBG total income (SGD m) business environment in the second half of the year.547 digital innovation of the franchise. 2. + 11.
































sBest User Experience (Gold),
Southeast Asia

Consumer Banking 33

To meet the higher demand for new notes
during the Lunar New Year season, we were
the first bank to introduce pop-up ATMs.
DBS placed 29 specially-configured pop-up
ATMs at 10 community clubs islandwide to
dispense new notes. The initiative was well-
received by our customers, who took the
opportunity to withdraw new notes outside
branch operating hours.

Fulfilling customers’
retirement and
insurance needs
We officially announced our 15-year
regional bancassurance partnership with
The launch of DBS Omni in Hong Kong offers our customers an innovative, yet simple and
intuitive digital solution, enabling them to perform credit card transactions on the go, with
Manulife Financial Asia at the beginning
the convenience of their mobile devices. of 2016, making Manulife DBS’ key provider
of bancassurance solutions. Under the
agreement, there will be a payment by
Manulife to DBS of SGD 1.6 billion that will
Transacting with us made easier introduced by a bank in Singapore and
be accrued over the life of the partnership.
We continued to enhance our P2P payment more crucially, to help food and beverage
capabilities through our mobile wallet DBS businesses tackle many of their current
Through this partnership, DBS’ customers
PayLah!, where we have a growing base of challenges. DBS FasTrack provides a
will gain access to Manulife’s best-in-class
over 300,000 users. We were the first bank seamless ordering and payments solution
suite of life and health solutions. DBS and
in Singapore to enable verification using for businesses while eliminating or drastically
Manulife have also agreed to co-invest
thumbprint technology and brought the shortening customers’ wait time. Businesses
up to SGD 100 million over the next 15
app to Apple Watch, making us the first in turn can use the app to help enhance
years in digital technology and innovation
wearable bank. productivity and reduce manpower costs.
enhancements. This joint fund will enable
us to focus on developing innovative
We revamped international remittances over In Hong Kong, we launched the first-of-
solutions to serve Asia’s fast-growing
the past few years. Our digital remittance its-kind credit card app, DBS Omni. This
consumer base, and help customers fulfil
services not only lead the market for revolutionary app has several market leading
their retirement and insurance needs.
convenience and speed, they also offer the innovations, from budgeting, analysis of
most competitive pricing. Our focus on the spends, to real-time reward redemption.
end-to-end customer digital experience has
led this business to grow from 320,000 Focus on delivering
annual transactions three years ago, to an exceptional
almost 2.1 million overseas remittance
customer experience
transactions in 2015.

We also continue to push our digital
While we innovate on our digital offerings,
we understand our customers’ need to
capabilities in our growth markets. We
continue to access our physical locations
offer customers both mobile and internet
and have provided new and innovative
banking capabilities in China, India and
ways for them to do so. We were the first
Taiwan, making it easier for them to transact
bank in Singapore to roll out an SMS queue s#ONTINUETOMAKESIGNIlCANT
on our platforms. We are continuing to see
management system across our branches. IMPROVEMENTINCUSTOMER
good digital traction among our Treasures Customers simply request for a queue
customers and increased usage of our digital EXPERIENCEACROSSALLOUR
number via SMS prior to visiting branches
capabilities for forex transactions and unit MARKETSANDCUSTOMERSEGMENTS
and receive notifications when their turn
comes up. This gives them better flexibility

to use the time they would otherwise have
spent waiting in line. We also removed
While we are seeing good traction and NEEDS BASEDSOLUTIONS
traditional queues and provided seats for
feedback on our digital capabilities, we are ANDCONVERSATIONS
our customers, making branch visits more
not standing still. We revamped iBanking s!CCELERATEPACEOFDIGITISATIONn
and improved mBanking to provide relevant DELIVERINGREALPROGRESSIN
and customised offerings to our customers. ACQUISITION



ANALYTICS. we partnered popular retail Our Online Recommendation Engine allows chains in Singapore such as Cold Storage. During the year.


s0ROVIDESUPERIORADVICEAND profiles. Complex increase our cash withdrawal points in OPERATINGLEVERAGE rules and data points such as customer addition to previously formed partnerships. preferences and transaction Together with our ATM network. Jasons and Giant stores to CUSTOMERENGAGEMENTAND to provide more relevant offers. us to target customer needs more accurately Market Place. this PLANNINGTOOURCUSTOMERSIN patterns are used to improve relevance brings our cash withdrawal touchpoints WEALTHPLANNING.


s2EMAINVIGILANTANDBE In September 2015.000 – the most ANDRETIREMENTNEEDS for any bank. we piloted DBS NIMBLETOMARKETCHANGES FasTrack. a first-of-its-kind app to be 34 DBS Annual Report 2015 . and productivity. in Singapore to close to 2.

and new s"EST0RIVATE"ANKFOR capabilities such as real-time multi- )NNOVATION. which growth of emerging Asian caters to high net worth individuals with business now constitutes 40% of our new wealth and also by our consumer bank and 13% of the Group investible assets of SGD 1. fuelled by the organic continues at a healthy pace with income growing 29% to SGD 1. iWealth. These include eAppointment and Live Chat functionalities. With the 1. where we upgrade is the fastest growing wealth segment. Wealth Management income (SGD m) We are committed to delivering a next- generation client experience both in our advisory services and through the + 22. with total wealth customer Focus on digital to enhance assets under management (AUM) at the customer experience SGD 146 billion. by 10%.8% enhancement of our best-in-class digital 1. exponential growth of more than 40% and continuum.416 wealth platform. we 924 were able to acquire more than 10. and segment our clients as they We expanded our affluent client base grow their wealth.42 billion. management business The development of our wealth continuum continues.5 – 5 million.099 enhancement of our digital platforms.000 Key 2015 awards 787 new clients online. saw successful execution of a wealth by income. Our 2015 digital strategy was focused on enhancing the wealth customer experience.Wealth Management Financial performance to our clients. This was reflected in a strong The growth of our wealth showing in our private banking segment which grew 30%. The Our Treasures Private Client business. 620 506 We deployed many new features on iWealth.

wealth customers. We are committed to growing our through iWealth doubled during the wealth business and as the safest bank in year. Significant growth in high net worth client segment We completed the acquisition of Societe Generale’s Asian private banking business s-OST)NNOVATIVE"USINESS -ODEL. We received global recognition by MyPrivateBanking Research for having the We are the only Asian bank among the top best mobile app strategy and portfolio for eight leading wealth managers in Asia by the third year in a row. we are in a prime position to further contributor to the growth of new-to-bank "ANKINTHE7ORLD capture market share.'LOBAL 2010 2011 2012 2013 2014 2015 currency transactions and Online Equity Trading. Online acquisitions AUM. with the platform now a significant s-OST)NNOVATIVE0RIVATE Asia.

With access to new clients and strong. the acquisition brought our business to greater heights and enabled us to access products and capabilities beyond Asia. 2016 FOCUS AREAS experienced teams. DEEPENINGOFWALLETSHARE Combined with DBS’ robust investment s3TAYAHEADOFTHECURVE advisory platform. s0ROVIDECUSTOMERSWITH INDUSTRY LEADINGDIGITAL s"EST!SIAN0RIVATE"ANK We enhanced the international dimension CAPABILITIES of our wealth business by including s&OCUSONCLIENTACQUISITIONAND Societe Generale’s expertise in structured products and strength in European research. we deliver a unique proposition s"EST7EALTH-ANAGER.'LOBAL and select parts of its trust business in Singapore and Hong Kong in late 2014. full suite of banking INACHANGINGREGULATORY facilities and deep insights into the Asian ENVIRONMENT markets.

!SIA Wealth Management 35 .

POSB takes For children and families Development Council to teach seniors about social media and email. them perform basic ATM transactions achieve their aspirations. on their Child POSB and the People’s Association (PA) with the support of the National Library We continue to bring value to Singaporeans Both the POSB Everyday Card and PAssion are easy to use while taking into Development Accounts. by offering them products and services to POSB Debit Card are the most popular account the diverse needs of our introduced a joint POSBkids account. The book contains In July 2015.000 submissions. growth of Singapore. The original campaign. Over 126. we hired over 80 active agers was introduced in 1969 and ran through as part of the POSB Active Neighbours Today. unlimited free MRT. This families. POSB and PA. These seniors are employed to its mission of being the “People’s fondly by many customers. we marked their strong partnership with the Board and the Ministry of Culture. POSB continues to stay true the 1970s and 80s. POSB partnered EZ-Link Card leads the way in partnering well. In addition. we achieved 100% participation celebrated its 50th birthday in 2015. The deposits on a part-time basis to assist their peers Bank”. launched a book – help them stretch their dollar. as well as pride in serving generations how to use self-service banking and SMS of Singaporeans from all banking services among others. A total of SGD 1. in Singapore. Kids. commitment was also made to enhance These stories were collected through the every Friday till the end of the year. Within months of the of Singapore. One example was the North East Eldersurf Intergen Bootcamp. our purpose goes POSB For seniors beyond profits and this is embodied in the spirit of treating our customers as Neighbours first. bringing Singapore’s Children”. from all primary schools in Singapore and we rolled out a series of initiatives received positive feedback. automatic top-up facility service to grocery stores and libraries. It also gives our senior hires a sense of purpose as they are able to pick We designed the new campaign to be POSB is deeply woven into the fabric up new skills.1 million was raised “Our Homeland in 2065: Musings from cards issued in total. “Neighbours First. retail and the total amount raised to date to stories written by children aged six to and Transit Link to launch the “Fare Free known brands to bring exciting and ATMs across our network enabled us dining merchants. To help parents plan for their children’s We also aim to build a more inclusive future. The PAssion POSB Debit to provide braille instructions and also received a limited edition “POSB have benefitted. the youth. helping programmes to help children in Singapore “POSB PAssion KidsWrite Campaign” Commuters simply had to link EZ-Link’s lifestyle benefits at community clubs. while cultivating the use of self-service banking services. as seventh edition of POSB PAssion Run For Community & Youth.a. seniors and the community values of saving and thrift among programme has been well-received by our at large. cards in Singapore. customers. we Card or PAssion POSB Debit Card. with over a million customers. bringing value to all segments generated then helped fund the economic with banking transactions and encourage of the population – the young. LRT and bus rides Card is the first community debit card audio guidance to aid our visually Smiley Gift Bag” from the bank. 36 DBS Annual Report 2015 POSB 37 . which received over 5.78 million. and as our nation work and bring value to the community launch. in addition to independently. The POSB Everyday initiative was the “POSB Talking ATM” which allow them to enjoy discounts and for the POSB PAssion Kids Fund. offering commuters relevant offers. As the “People’s Bank”. to engage our customers and members For the community of the community to celebrate SG50. which elderly. we offered them an attractive society by ensuring that our services interest rate of 2% p. POSB launched a financial literacy programme with community clubs to teach seniors bankers second basic financial management skills and how to access our digital banking services. in Singapore that offers community and impaired and elderly customers. Bankers Second”. they live in. Enhancements to 86 privileges at various online. have also added new functionalities such as having additional language options and larger font sizes for easier reading. is remembered Programme. interact with customers at fun and interactive. where we partnered the Infocomm Development Authority of As Singapore’s oldest and Singapore and the North East Community most loved bank. School Savings Campaign in conjunction To facilitate banking at POSB by the with SG50. We brought back the iconic POSB National walks of life. to upgrade our ATM user interfaces. A recently launched well as a POSB Baby Bonus NETS Card.000 children 13 to mark their aspirations. hopes and Friday” campaign. A deeper joint dreams for the nation in the next 50 years. All babies born in 2015 SGD 4. As part of our initiative their all-in-one POSB Everyday Credit payment functionalities.

giving debt offerings. We also gained were expanded and included the use of share in the bancassurance. performance. We Despite intense competition. Our Singapore franchise turned in a strong us the most number of cash withdrawal Taiwan.7 bn segments and products. our online banking customers. remotely without stepping into a branch. Singapore awards We focused on delivering an exceptional As a gateway to Asia. We were also the first resulted from a relentless focus on customer to offer SME and retail customers the option experience and from efforts to expand our of completing their account opening process physical channels and digital offerings. Hong Kong s"EST2ETAIL"ANK Income Continue to expand the Hong Kong franchise SGD 2015 Priority: Focus on profitability. Helped by higher interest points in Singapore. which also encompasses our growth markets of China. Singapore and Hong Kong reflecting the strength of our franchise anchor our regional network. housing loans. credit cards. leverage 2. large corporate capabilities of our mobile wallet DBS Paylah! banking and capital markets. build digital capabilities and introduce innovative products and services to create a differentiated and seamless customer experience Asia’s financial centres of Outcome: Achieved record income and net profit. We have also put to use our expanded our partnerships with retailers leadership in capital markets to enable s"EST"ANK to increase cash withdrawal points to them to raise funds through equity and supplement our ATM network. We were the first bank to roll and banks. Countries Singapore Income Entrench leadership in Singapore SGD 2015 Priority: Maintain leadership across customer 6. our core domestic franchise achieved new highs in total income and net profit. We also region. We enhanced our digital presence. we maintained utilised data to provide relevant offers to our lead in saving accounts. India and Indonesia. The payment auto loans. unsecured thumbprint technology for user verification loans and SME segment.3 bn innovation and digital technologies to grow our MARKETPOSITIONACROSSLARGECORPORATE. These gains for mobile devices. Singapore is the customer experience that is simple and regional headquarters of leading companies relevant. We have dedicated country out an SMS queue management system desks to support Asian and western across branches so that our customers need multinationals as they expand into the not spend time waiting in line. rates.


resilience amid challenging conditions and volatile markets. and China-related flows in the corporate. We were able to mitigate the decline in trade loans with growth in other We further redefined the customer s"EST2ETAIL"ANK businesses. demonstrating its insurance products. market conditions in the first half. to retail customers. including cash management.INTERMEDIATE'REATER#HINAmOWS s"EST#ORPORATE$IGITAL"ANK Outcome:$OUBLE DIGITINCOMEANDNETPROlT growth to record highs amid a challenging operating environment Hong Kong awards Our Hong Kong franchise achieved another syndicated finance. experience to distinguish ourselves in a 38 DBS Annual Report 2015 . which included a Wealth management income grew 30% depreciation of the RMB and a slowdown during the year. While treasury sales to corporates opportunities in the domestic market were affected by RMB depreciation. Wealth s"ESTE "ANK customers grew in double-digit percentage Our nimbleness enabled us to capture terms. boosted by favourable in RMB trade activities. and investment and year of strong growth. the decline was offset by higher sales SME and wealth management businesses.

highly competitive market. SME customers can save significant China. We were the first operations. a credit card app that allows customers We leveraged our network. We deepened relationships with time by opening accounts and accessing Chinese enterprises that have cross-border financial solutions online. enabling us to achieve double-digit to work with start-ups to introduce income growth from this segment. capital market and treasury accelerator programme and have continued solutions. We launched innovative solutions to the market. product to track their personal finances in a timely range and research to capitalise on manner via mobile phones and instantly the Chinese government’s initiatives to redeem cash rebates at selected merchants encourage companies to expand outside s"EST3-%"ANK globally. Growth markets s"EST#ONSUMER"ANK&OREIGN . offering credit facilities as well as Other market awards bank in Hong Kong to launch a fintech strategic advisory.

#HINA Income Rebalance geographic mix of our business SGD 2015 Priority: "UILDOUTOURFRANCHISESINGROWTH MARKETSOF#HINA.






Our position as the foreign bank the Group’s income.MADESOME LARGE SIZEDCORPORATES HEADWAYIN4AIWANANDSTARTEDTOSEEATURNAROUND INOUR)NDIAFRANCHISE Our growth markets of China. and CBG/Wealth Management and Indonesia. which accounted for 14% of businesses. India SME. Taiwan. helped by our extensive treasury and cash -ANAGEMENT"ANK. grew a combined 4% with the largest SME franchise has been s"EST/VERALL4REASURY#ASH in challenging macroeconomic conditions.

)NDIA management capabilities. s"EST7EALTH-ANAGER.

trade and investment flows between Australia and Asia. we scaled up our London business. affected many corporates in Indonesia. Singapore Other markets Hong Kong During the year.)NDONESIA China India China’s growth slowed as it continued with efforts to transform the economy and India’s macroeconomic turnaround took liberalise the financial sector. We also set up a branch in Australia to intermediate and Indonesia business. in the country. total income was little changed. While trade loans and net franchise. our prudent client selection process has ensured that our loan book The end of the commodity super cycle has 3% remained healthy. we are now well geography relationships with leading corporates while positioned for growth. Countries 39 . we grew income by 13% We are now the fifth largest foreign bank as we continued to expand our corporate. India MNCs and the private banking segments. Our franchises in South Rest of the world Korea and Japan continued to grow on the back of increased business activities. Even though total income from our China franchise was we have taken steps to grow our customer little changed. cash management and wealth our management and franchise capability management activities. a little longer than expected. Nevertheless. western China. It contributed to a decline in total income 14% Taiwan and an increase in allowances during the 62% year. focusing on institutional investors. interest margin fell. cash and wealth businesses. we compensated for Having addressed credit weaknesses in our this with growth in non-interest income portfolio and taken steps to strengthen Income by from treasury. As a result. our Indonesia franchise Taiwan’s economy was affected by falling remained resilient and we made headway domestic demand and exports. Despite in the trade. We deepened over the past two years. 21% the slowdown. Taiwan. While we set aside more allowances during Indonesia the year. pacing the growth of our SME business.

Building a future ready workforce s. more diverse and future-ready workforce that will boost our ability to spearhead the transformation of banking in a fast-changing business environment. Employees We are committed to building a healthier.



a strong culture


Creating an inclusive
and supportive





40 DBS Annual Report 2015

including a growing number of with research and analytics experts from digital courses. where they work We also grew headcount to support our with start-ups to develop solutions to digital initiatives. a few employees jumped 26% and Taiwan set a new benchmark for on the opportunity to go on paid 23% innovative learning spaces and approaches sabbatical to work on their prototypes. Chairman Peter Seah Building a future ready workforce employees. computational thinking and new media literacy. 26% of positions were filled via internal transfers. leadership and future skills building. governance and risk working concepts through human-centred management has also grown to meet design workshops and hackathons held Internal mobility the requirements of the evolving across the region. More than 450 customised learning roadmaps were built to cater DBS women leaders sharing their career growth experiences with our colleagues to the different learning needs of our in a panel discussion conducted in our new amphitheatre. This covers functional. Singapore employees ranked up to Senior Associates are given SGD500 DBS SkillsFlex Credit annually. and Singapore In Singapore. In 2015. a digital mindset in them. Since the launch posed by fintechs. With the increasing threats the opportunities available in DBS to help businesses and markets. In 2015. We hired a more diverse business challenges.DBS is committed to creating a collaborative “We hope to equip our employees with the work environment and equipping employees with the latest tools and technology. at DBS Academy Employees 41 . Over and above the 2014 2015 helped to fast track the adoption of analytics government’s SkillsFuture programme across the bank. it is necessary for us to them to accelerate their careers. in the region. Positions filled internally a three-month programme to help The newly established DBS Academy digital start-ups grow their concepts into learning centres in Singapore. a government science and technology research agency. This continues to be a priority We grew our workforce by approximately We encourage employees to embrace a for us as we strongly believe in creating 1. Employees can also personalise We also have a well-established internal their own learning roadmaps. 6. As a start. The courses cover topics that are relevant to the rapidly changing landscape including social intelligence. employees also get to work year.000 employees will experiential learning. the industry. we also work with the Management University to develop government on future-proofing our innovative products and services. In 2015. of the programme in 2010. In 2015. assess their mobility programme that enables our Continued investment in our people is a key individual career progression and utilise employees to broaden their exposure across priority for us. a leading training provider. to promote life-long learning. to support strategic and experimentation through programmes opportunities for career development. the number of training days undertaken by DBS employees rose to 129. initiatives and meet business needs. Indonesia prototypes. such as DBS Hackathons. A*STAR. It relevant knowledge and skill sets that will better is imperative to have highly engaged employees who feel valued and take pride prepare them to innovate and lead change in in the growth of the business. which was 27% more than 102. participation future-proof our employees and inculcate employees underwent an average of has been steadily increasing. They can use this to attend 10. when the bank regulatory landscape. primarily in Institutional Banking digital mindset through experiential learning more well-rounded bankers and providing and Consumer Banking. more than group of people including user experience 2. The Curve. This has employees. We want them to embrace a digital The overall well-being and continual mindset through greater experimentation and development of our 22. The DBS Academy conducts close to 15.000 courses organised through the government’s SkillsFuture programme as well as 50 external courses that DBS has specially designed with NTUC LearningHub. agile methodology and other digital pool in compliance.000.000 employees gained exposure to digital Employee KPIs designers and data analysts.4 days of training. launched the DBS HotSpot Pre-accelerator.000 days.000 days in 2013.000 training sessions each Beyond this.” help DBS to fulfill our aspiration to make banking with us a joy. Our talent culture.

part of the DBS Academy. Since 2011. and a majority signed “Shield Companion Plan” – a medical plan up as change leaders to help champion that complements our employees’ portable our PRIDE! values. DBS was also one of the first 800 senior leaders attended the PRIDE! organisations in Singapore to pioneer the Leaders Programme. treatments or vacations. the bank also pays a certain All these efforts have resulted in a strong sum into employees’ MediSave accounts engagement outcome for DBS. we are challenge to increase the number of steps a strong culture ahead of peer commercial banks. Additionally. as part of the DBS Cares have in place a robust succession planning The survey also shows that 84% of our programme.31 4. about concerns early. Families are important to us and viewed all employees play a part in making banking as part of the extended DBS family. we launched an integrated strategy to identify future leaders at all employees are purpose-driven and believe health management portal. higher than the APAC FSI (Financial 4. 42 DBS Annual Report 2015 . Our Leadership Creating an inclusive and with mobile devices and wearables to Institute. 57% of they take each day. Decisive and E!verything Fun.39 4. In August.39 on a comparative basis. The bank different stages of leadership development also launched a workout challenge. 2010 2011 2012 2013 2014 2015 Our employees embracing healthy living and participating actively in iHealth programmes. our Q12 grand mean score would have been 4. One-third of Our people are our best ambassadors and management positions are held by women.00 4. we achieved an employee engagement score of 79%. goals and priorities. our CEO Arrangement programme to balance their a fun and engaging environment for all and senior management actively engage professional and personal needs. with their family or friends. As this is the first year we transitioned away from Gallup Q12 score to the My Voice employee engagement index. This shared We believe in being there for our people organise annual events such as DBS Kids purpose is bolstered by our PRIDE! and supporting them with flexible benefits at Work and Family Day so that their loved values – Purpose-driven. Innovative learning facilities at the DBS Academy in Singapore – our employees having fun learning with crossword puzzles Employee KPIs on a digital interactive screen. We continue to innovate employees through various platforms across iFlex@DBS. for wellness activities including dental our employees. Relationship-led. iStep We are committed to providing an inclusive from aspiring to management leadership. This enables the exchange helped us discover even more staff to identify and address emerging health ways to live our values. We joyful for our customers. employees also receive a and implement new ideas and concepts the year including staff briefings. More recently we refocused our recognition helping to shape the future of banking. This placed us at the 96th percentile of all companies surveyed globally by Aon Hewitt. Challenge. We believe effective communications is core for health and providing more choice which they can use to spend more time to aligning our employees to organisation to employees. interactive fixed sum of money every year to use to strengthen our engagement with blogs and webcasts. to get our employees to embrace work environment where every employee healthy living in a fun way. The portal connects seamlessly collaborative network. Under this scheme. The insights garnered from screenings for all employees. to promote holistic wellness among our opportunities and help them build a strong employees. customer experience bank has provided free annual health and innovation.11 Services Industry) score. offers provide our employees with greater insights a series of programmes for employees at supportive environment into their overall well-being. Employee Engagement Score DBS Q12 grand mean score This year. that meet their present and future needs. enhanced MediShield Plan. Around 6.36 4. This year. over 4.31 4. 79% of our to subsidise the premium for their employees are engaged based on the 2015 portable medical plans. Establishing employees formed teams and took up the When it comes to gender diversity.400 employees across the region participated in a week-long online We also believe that a healthier workforce exchange where they engaged in over 730 is a more effective one. the topics around digital. and rewards programmes towards insuring Employees also receive birthday leave. levels. we My Voice Survey conducted by Aon Hewitt. To groom the next generation of leaders. ones can better appreciate how they are Innovative. our workforce are women. Through of us at work. We provide them with development what they do makes a difference. iHealth@DBS. To ensure that our employees embrace the PRIDE! values and Employees can leverage the Flexi Work These initiatives go a long way in creating understand our business priorities.000 can develop professionally and personally.
















We are conscious about managing our direct environmental footprint and seek to influence our supply Live chain towards sustainable practices. We adopt fair dealing practices and are committed to advancing responsible financing as part of our role in promoting sustainable development. This social enterprise received a grant from the DBS Foundation in 2015. real businesses and real lives. and have zero tolerance for financial crime. training and agribusiness solutions to smallholder farmers in Indonesia. Responsible banking We are committed to conducting business honestly and ethically. responsible Picture on the left: Vasham Kosa Sejahtera offers loans. 44 DBS Annual Report 2015 . This ties in with our corporate value of being purpose-driven and creating impact beyond banking that touches real people. Creating social value We seek to address the needs of society by staying true to our mission of being the “People’s Bank”. Society and We believe in contributing to society by generating profits responsibly and creating environment social value. we seek to give back to society through our volunteerism movement “People of Purpose”. Responsible citizenship As a good corporate citizen. and championing social entrepreneurship in Asia.

such as expanding customer fact-finding. This resonates with our heritage as a ARETRAINEDTODEALWITH the ABS guidelines by 2017. which ensures better alignment between the interests of our staff and customers. as well as provide higher growing Asia. provide adequate disclosures and conduct the advisory and sales process professionally. the guidelines underscore the sector’s commitment to advancing Championing social responsible financing in a more structured entrepreneurship We are committed to: and transparent manner. financing of those with disabilities or other difficulties. development bank. A significant portion of staff remuneration depends on our staff’s ability to understand 1. implementation of responsible financing. page 36.OCALFORUMS. inclusion initiatives. we assess how our Creating social value customers address material risks. They also social innovation success on a undergo product knowledge and skills tests 3OCIAL6ENTURE and incubation greater scale regularly. Grow & customers’ needs. In accordance We do not tolerate the use of DBS’ products We seek to provide access to financial with corporate policy. product risk disclosures and customer product suitability checks. s#OMMUNICATINGWITHOUR CUSTOMERSINACLEARAND TRANSPARENTMANNER DBS Foundation’s three-pronged approach to supporting SEs Our customers are central to our business. including their exposure to environmental and Combating financial crime Being the “People’s Bank” social risks where relevant. recommend suitable engage incubate scale products. The DBS Foundation was THATARESUITABLEFORTHEM levels of transparency and accountability. environmental and/or social risks require terrorism. Fair dealing including DBS. see “CRO of Banks in Singapore (ABS) released a statement” on page 80 and set of industry guidelines to enhance the For more information on our financial “Compliance risk” on page 100. Staff remuneration is predicated on a balanced scorecard approach.Responsible banking When making loans. in addition for SEs needs through and enable to training on our product suite. through enhancing sustainable development. services to all of our customers. We believe in empowering the community additional due diligence. see “POSB” on Developed in consultation with banks. It is important that they trust the products and services we provide. Stakeholders can be assured that DBS to make sound financial decisions to engages in even-handed dealings. As part of the industry’s push towards improve their lives. and we can add value by CUSTOMERSFAIRLY leveraging our expertise serving SMEs. companies with or services in furtherance of financial crime. The Association their financial literacy. Spark Nurture Scale We undertook key initiatives to strengthen our sales process. Reach & 2. launched in 2014 to help grow SEs across the s%NSURINGOURSALESSTAFF DBS is committed to fully implementing region. We place great emphasis on the #HALLENGE!SIA oversight of our sales staff and hold their . Build awareness Keep up with Develop high All our employees receive annual training and advocacy changing social potential SEs on compliance and fair dealing. Innovate & 3. fraud and bribery/corruption. For more information. The guidelines will Social enterprises (SEs) offer innovative and s"EINGRESPONSIVETOOUR help achieve systematic environmental and sustainable solutions to address the myriad CUSTOMERSNEEDSANDREQUESTS social criteria integration into banks’ lending social challenges associated with a rapidly s3ELLINGPRODUCTSANDSERVICES decision-making. including business activities assessed to have material such as money laundering.

AWARDSAND PROGRAMMES PROGRAMMES monitoring and supervision. Society and environment 45 . )NCUBATION !CCELERATOR supervisors accountable for their coaching. WORKSHOPS ANDBOOTCAMPS -ARKETACCESS !SIA&OR'OODCOM 4OOLKITSAND ANDADVISORY To improve our products and services. Responsible Financing We recognise that our lending practices have Prototype Organisational Scale up a huge impact on society. and are committed grant grant grants to promoting sustainable development and shaping the expectations and behaviours of our employees and customers. we CASESTUDIES #USTOMISED avail various channels to customers through 3KILLEDVOLUNTEERING lNANCIALTOOLS which they can provide valuable feedback.

Besides boot camps and workshops and provide grants to support their growth. 16 SEs across seven countries participants. sensitive to business realities and evolving “People of Purpose” – social needs. Through the DBS Foundation SE Grant their beneficiaries. we developed the “Portraits of We leverage our corporate resources and Purpose” video series. helps latch-key children of migrant workers and low income families in China. we conducted a more targeted approach. We help promising SEs by where volunteers lead We seek to inform the public and engage providing them with both financial and This year. Integrating SEs into DBS’ culture and operations We demonstrate commitment to SEs by providing banking solutions tailored to their needs and engaging them for our events and activities.5 million views brainstorming sessions on strategic business grocery shopping. Apart from free transactions. They Our staff volunteer teams in Singapore informed choices about the way they live helping the elderly who are living alone and buy. Shanghai Bai Te Education.02 million. encourages socially conscious the bank made a positive difference to SEs behaviour and empowers people to make by offering consultation and mentorship for their operations and strategies. we adopted outreach activities such as the DBS-NUS network across the region. and SGD connects more than 300 skilled volunteers across people to SEs. instead of “one size fits all” aspiring SEs across our key markets through non-financial support. 46 DBS Annual Report 2015 . Further. and plan activities directly relevant to web/mobile. We empowered Social Venture Challenge Asia. we incubation programmes as well as provided our staff to adopt social causes they were received over 680 entries from 30 countries. First launched in Singapore in 2008. To help improve the visibility of SE Grow and scale businesses. healthcare and environment. stage SEs in 2015.000 to develop their business programme. India and services to support high potential SEs. and documenting recipes. our consumer-facing enhancing their impact.000 unique visitors. and to develop solutions offering solutions in areas such as education. we identify innovative SEs models. our digital platforms also joined DBS scalathons – intensive with their day-to-day chores. showcasing social expertise to provide executive advisory entrepreneurs from Singapore. In 2015. Through our partner volunteer programmes. that reached out to close to 10. In 2015. the package also offers SEs unsecured business loans pegged at half the regular commercial rate. local forums were also held were awarded grants amounting to to create positive perceptions of SEs. such as weekly earned a cumulative 2. digital platform AsiaForGood. a DBS Foundation grantee. SGD 1. the SE Banking Package allows SEs to open corporate accounts with no minimum deposit or balance. we had 398 Buy Directly from Farmers is an e-commerce platform that connects farmers with consumers. During the year.000 In 2015. As at 31 December 2015. Winners walked away with total seed money of SGD 150. Reach and engage Innovate and incubate Responsible citizenship Awareness and advocacy of the sector is SEs with ongoing operations continue to be vital to getting early-stage SEs started. Taiwan who made genuine impact with thereby accelerating their growth and their work. customers under the SE Banking Package This Taiwanese social enterprise received a grant from DBS Foundation in 2015.74 million of unsecured SE business loans outstanding. training and mentorship to over 65 mid- interested in. challenges faced by SEs. cooking traditional dishes from 350.

more than of them through a recycling company.717 environmental management systems among 64 67 tenants. IT waste management remains Singapore Rest of Greater China(3) our priority. supply chain. All new suppliers who engage consumption. we ensure our (tonnes of CO2 ) (1) offices incorporate sustainable designs and practices. technologies and good 19. We continued to support the with DBS are required to sign up to the SSP fight against climate change by observing with effect from 1 October 2015 under a “Earth Hour”. carbon footprint.000 lives in 27. safety and health.247 11. predominantly in on the community. Approximately 4. sales and marketing. key 2015 initiatives included We conducted a one-time exercise to notify replacing lightings with LEDs which all our existing suppliers in Singapore of the have longer life spans and lower energy SSP via mail. DBS procures products and services from creating sustainable and long-term impact salvage reusable parts or otherwise dispose more than 6. we are the first foreign bank to achieve the ISO 50001 certification for energy management. Welfare Foundation. Regionally.or five-year refresh cycle. We target to achieve the Green Mark Certification for 20 retail branches by 2016.000 decommissioned desktops and notebooks to a recycling vendor at the end of their four. Hence.Over 100 volunteer leaders forged We also started recycling corporate mobile Sustainable sourcing partnerships with community organisations.509 19. Managing our environmental footprint Our most direct environmental impact is the Carbon emissions from Weight of paper carbon emissions from our office buildings purchased electricity recycled (tonnes) (2) and branches.000 80% of our expenditure are for professional.000 suppliers. All paper waste is disposed either to ethical improvements within our directly or indirectly to recycling companies. As part of our strategic cost Hong Kong South and Southeast Asia(4) management programme.human e-red packets through DBS PayLah! to rights. E-storage solutions and recycling bins The SSP set out minimum standards of are readily available across all our office behaviour and seek to drive commitment locations. we developed the DBS also implemented paperless forms at our Sustainable Sourcing Principles (SSP). In 2015.000 staff touched 16. (1) Based on relevant grid emission factor conversion for each country (2) Based on weight of paper at recycling points (3) Rest of Greater China includes branch and subsidiary operations in Mainland China and Taiwan (4) South and Southeast Asia includes branch and subsidiary operations in India and Indonesia Society and environment 47 . we sold more than 8. phones with vendors who either resell. hours of volunteering activities. electronic bank account statements instead of paper statements. key markets in 2016.369 196 195 9. which seeks to encourage the adoption of energy- efficient designs. 2014 2015 2014 2015 While we embrace innovation and technology. These principles outline our values and We introduced good-as-new notes and expectations in four key areas . We also rolled out meat-free revised supplier registration process.714 6. Singapore and Hong Kong.422 For our branch network. We have In 2015.735 (BCA) Greenmark certification and the 34 36 WasteWi$e Certificate – Excellence Level for all of our Singapore and Hong Kong office 11.384 buildings respectively. The DBS Taiwan staff bonding and spending meals in our staff canteens in Singapore to new suppliers SSP sign-up rate is more quality outdoor time with the physically challenged beneficiaries of Eden Social encourage staff to go meatless to reduce than 95% as at 31 December 2015. IT to actively encourage customers to adopt outsourcing and corporate services. branches using iPads and e-forms tablets. 297 308 46. environment reduce the need for more new notes to be sustainability and business integrity printed during the Lunar New Year. and promoted the use of We plan to roll out the SSP to all our recyclable cups in our social hubs in Taiwan. and ethics. In Taiwan.205 3 10 We attained the Building and Construction 6. we are the first bank in Singapore to be on board the BCA Green Mark Portfolio Programme. DBS is one of the first banks in Singapore real estate. 9.892 47.

but it should always be there to Governance Awards 2015 support and guide. 63 Controls "OARDSCOMMENTARYONADEQUACYANDEFFECTIVENESSOFINTERNALCONTROLS 66 Culture 7HISTLE BLOWINGPOLICY$"33PEAK5P %LECTRONICPOLLVOTINGPROCESS 68 Remuneration report 74 Summary of disclosures Securities Investors Association (Singapore) (SIAS) Investors’ Choice Awards 2015 s#ORPORATE'OVERNANCE!WARD s"OARD$IVERSITY!WARD “ The Board owes a duty to shareholders to s-OST4RANSPARENT#OMPANY provide oversight and to guide management n&INANCECATEGORY n'OLDEN#IRCLE!WARD in developing strategies of the business s)NTERNAL!UDIT%XCELLENCE and the implementation of the strategy. The Board Awards 2015 and management must always have mutual s"EST)NVESTOR2ELATIONS respect for each other.” s4OP!SEAN#OMPANIES Chairman. Peter Seah Note: Please refer to our website shares his thoughts on corporate governance. Corporate governance Pushing ahead 49 Governance highlights in our corporate 'OVERNANCEFRAMEWORK governance journey +EYFEATURESOFOURBOARD 50 Leadership We believe in strong and "OARDSTRUCTUREANDPROCESSES effective governance to "OARDCOMMITTEES help create value for our +EYINFORMATIONONEACH$IRECTOR stakeholders. and the principles and values for a summary disclosure on our which carry the most importance in his role in leading the Board compliance with the Asean Corporate Governance Scorecard 48 DBS Annual Report 2015 . n(ALLOF&AME Board members must be encouraged to fully Singapore Corporate express their views and opinions. The Board should n'OLD!WARD always be reminded to allow management Asean Corporate to manage.

We have leadership. operational. controls Key features of our Board s2EMUNERATIONOF. culture is anchored on (a) competent and have been recognised for it.Compliance and approval For the financial year ended 31 December Reinsurers and Captive Insurers which are institutions. and complied in all Corporate Governance 2012 (Code) and material aspects with the principles laid supplementary guidelines and policies added The disclosures in this report have been down by the Guidelines on Corporate by the Monetary Authority of Singapore approved by the Board. Governance for Financial Holding (MAS) (Guidelines) to cater to the diverse Companies. as well We have a clearly defined governance as risk management policies and systems. (b) effective internal controls and won SIAS’ Corporate Governance Award Effective Values-led (c) a set of common values. Our corporate highest standards of corporate governance. and complex risks undertaken by financial Governance highlights Competent leadership Governance framework compliance. Banks. We are committed to the Governance governance principles should be embedded Framework in our corporate culture. which comprises the Code of pages 74 to 77 of this Annual Report. framework that promotes transparency. Direct Insurers.ON %XECUTIVE$IRECTORS s3EPARATIONOFTHEROLEOF#HAIRMAN (including the Chairman) does not include and Chief Executive Officer (CEO) any variable component s/THERTHANTHE#%/. We work closely with our regulators to ensure that our internal governance DBS The Board believes that corporate standards meet their increasing Corporate expectations. fairness and accountability. Our internal in the Big Cap category three years in internal culture controls cover financial. technology controls. a row (2013 to 2015). (Banking Regulations). We provide a summary disclosure 2015. we have complied with the Banking incorporated in Singapore issued on 3 on our compliance with the Guidelines on (Corporate Governance) Regulations 2005 April 2013.


Chairman) meeting attendance and Non- remuneration details 78% Independent & Non. the Group) Directors’ training sessions s#HAIRPERSONSOFTHE"OARDANDALL"OARD committees are Independent Directors Where to find key information on each Director? Independence Gender diversity In this Annual Report: Independent Male s Pages 61 to 62 – 11% Non-Executive Directors Directors 22% Female Directors’ independence (including 11% Directors Director’s length of service Age group of our Directors s Director’s biodata 3 3 2 2 2 2 2 1 1 4Y 5Y 6Y 7Y 50-54 55-59 60-64 65-69 70 > No. 78% s Pages 180 to 184 – Executive Director’s length of Director directorship.dbs. academic and Executive professional qualifications and Director/CEO present and past directorships At our website (www. of years (Y) Age Corporate governance 49 .EXTERNAL Directors is a former or current employee experts are regularly invited to the annual of the Company or its subsidiaries Board strategy offsite and to conduct (collectively. appointment dates.

skills and knowledge. The make-up of our Board reflects diversity Director’s independence is assessed. The proportion of Independent Please refer to pages 54 to 55 of this of experience and deep industry expertise. of gender. Non-Executive Directors on the Board (seven Annual Report on the ‘Annual Review The Board’s solid bench strength is one of out of nine) is high. Leadership Board structure and processes perspectives. Board composition size and geographic footprint of the Group’s Our Board members have a broad range operations. The size and composition of Award at the SIAS Investors’ Choice Awards the Board is appropriate given the current in 2014 and 2015. nationality. The tenure of our Directors demonstrates a Our commitment to diversity has garnered good balance between continuity and fresh recognition. of Directors’ Independence’ for more the key drivers of DBS’ high performance in details on how each individual recent years. DBS won the Board Diversity s%NSURESTHATCORPORATERESPONSIBILITY Directs the Group in ANDETHICALSTANDARDSUNDERPINTHE conduct of its affairs CONDUCTOFTHE'ROUPSBUSINESS s3ETSTHESTRATEGICVISION.

DIRECTION Role of Provides sound leadership ANDLONG TERMGOALSOFTHE'ROUP the Board to CEO and management s%NSURESTHATADEQUATERESOURCESARE AVAILABLETOMEETTHESEOBJECTIVES s'OVERNANCE Bears ultimate responsibility s3TRATEGY for the Group’s: s2ISKMANAGEMENT s&INANCIALPERFORMANCE Board’s key areas of focus Who are on our Board s2EVIEW'ROUPSSTRATEGICAND BUSINESSPLANS Non-Executive Non-Executive and s-ONITORTHERESPONSIBILITIES 1 and Independent 1 Non-Independent DELEGATEDTOTHE"OARD COMMITTEESTOENSUREPROPER Chairman Director ANDEFFECTIVEOVERSIGHTAND Mr Peter Seah Lim Huat Mrs Ow Foong Pheng CONTROLOFTHE'ROUPSACTIVITIES s%STABLISHAFRAMEWORKFORRISKS Non-Executive Note: Although Mrs Ow is TOBEASSESSEDANDMANAGED 6 and Independent considered a Non-Independent Director by virtue of s2EVIEWMANAGEMENT Directors substantial shareholder PERFORMANCE Dr Bart Joseph Broadman relationship. she does not have s$ETERMINETHE'ROUPSVALUES Ms Euleen Goh Yiu Kiang any business or management ANDSTANDARDSINCLUDINGETHICAL Mr Ho Tian Yee relationship with DBS STANDARDS ANDENSURINGTHAT Mr Nihal Vijaya Devadas OBLIGATIONSTOITSSTAKEHOLDERS Executive Director/ AREUNDERSTOODANDMET Kaviratne CBE Mr Andre Sekulic 1 CEO s$EVELOPSUCCESSIONPLANSFOR THE"OARDAND#%/ Mr Danny Teoh Leong Kay Mr Piyush Gupta s#ONSIDERSUSTAINABILITYISSUES INCLUDINGENVIRONMENTALAND SOCIALFACTORS ASPARTOFTHE 'ROUPSSTRATEGY 50 DBS Annual Report 2015 .

The Group’s leadership the view that the strong leadership of Mr model clearly delineates their respective Peter Seah is a key contributing factor to the Time commitment of the Chairman’s role responsibilities. and enhancing the Group’s standards advises the CEO and senior management. Chairman (Mr Peter Seah) and CEO RESPECTTOTHE'ROUPSLONG TERMGROWTH and acts as a sounding board on strategic (Mr Piyush Gupta) are very positive and and strategy. The Chairman oversees. This ensures an appropriate effectiveness of the Board.ON %XECUTIVE Committee (BRMC) member and Independent Directors Corporate governance 51 . Mr Peter ANDENHANCEDINDEPENDENCEINDECISION As the Chairman sits on all the Board Seah performs a key role as an ambassador making. constructive. namely the AC Participate -R$ANNY4EOH ANDTHE"2-# -S%ULEEN'OH RESPECTIVELY sChairpersons of the AC and Board Risk Management "2-#ARE. The Board members are of and operational matters. also sets aside time to attend the Group’s The Chairman is responsible for leading the internal events upon the invitation Board in discharging its duties effectively. Mr Peter Seah’s role in our board committees Board Executive Committee Chairman Compensation and Management Lead Development Committee Chairman Nominating Committee Chairman sThere are separate chairpersons for the Board committees.Role of the Chairman and the CEO of corporate governance. The CEO heads the Group Executive committees. The Chairman ensures that the Mr Peter Seah regularly represents DBS MANAGINGTHEDAY TO DAYOPERATIONS Board operates effectively as a team and in in official external engagements. The Chairman The Chairman maintains open lines of The working dynamics between our provides clear leadership to the Board with communication with senior management. The role of the Chairman of DBSH requires balance of power. he plays an important role in for the Group in our dealings with various Committee and the Group Management managing the business of the Board and stakeholders as well as ensuring effective Committee. Audit Committee (AC) member which oversee the internal controls and risk management functions. the Group’s strategy and is responsible for committees. He oversees the execution of participating in the activities of the Board communication with our shareholders. guides and of management. increased accountability significant time commitment. and he its decision making processes.


market and competitive landscape review 30% 15% Financial performance and significant financial updates Directors’ training Board networking and engagement 15% 20% Before meeting At every meeting Frequent & effective engagement s4OFACILITATEMEANINGFULPARTICIPATION. Governance GOVERNANCEANDOPERATIONALISSUES Business and operations updates.




















IHAL+AVIRATNE s-R$ANNY4EOH Compensation s&OURMEMBERS!LL).%$SINCLUDING s-S%ULEEN'OH#HAIRPERSON Management BRMC Chairperson s-R0ETER3EAH Committee s$R"ART"ROADMAN (BRMC) s-R(O4IAN9EE s-R. Any change to the terms of reference for any Board committee requires Board approval.# s-S%ULEEN'OH (NC) #HAIRPERSONARE.IHAL+AVIRATNE s-RS/W&OONG0HENG s-R!NDRE3EKULIC Board Risk s3IXMEMBERS!LL).%$S s-R$ANNY4EOH#HAIRPERSON Committee s&OUROUTOFlVEMEMBERSINCLUDING s-R0ETER3EAH (AC) !##HAIRPERSONARE).%$ s-R0ETER3EAH#HAIRPERSON Committee s&OUROUTOFlVEMEMBERSINCLUDING.%$S s-R.ON %XECUTIVE$IRECTORS.%$S s-S%ULEEN'OH (EXCO) Audit s&IVEMEMBERS!LL. sConstituted in accordance with Banking Regulations sComprises Directors only 5 Board committees Terms of reference sResponsibilities of the sVoting requirements Sets out the: Board committee sQualifications for Board sConduct of meetings committee membership including quorum Board committee Composition Members Nominating s&IVEMEMBERS!LL. the Board has delegated authority to various Board committees to enable them to oversee certain specific responsibilities based on clearly defined terms of reference.ON %XECUTIVEAND s-R(O4IAN9EE )NDEPENDENT$IRECTORS).%$ s-RS/W&OONG0HENG s-R$ANNY4EOH Board s4HREEMEMBERS s-R0ETER3EAH#HAIRPERSON Executive s4WOOUTOFTHREEMEMBERSINCLUDING s-R0IYUSH'UPTA Committee %8#/#HAIRPERSONARE).Board committees Delegation by the Board to the Board committees To discharge its stewardship and fiduciary obligations more effectively.%$SINCLUDING s-R0ETER3EAH#HAIRPERSON & Management CMDC Chairperson s$R"ART"ROADMAN Development s-S%ULEEN'OH Committee s-R!NDRE3EKULIC (CMDC) Corporate governance 53 .

#MEMBERWHOISNOTAN comprises Ms Euleen Goh.#ISCHAIREDBY-R0ETER3EAHAND sIn accordance with the s4HEONLY. requirements of the Guidelines ). Nominating Committee (NC) 4HE. Mr Ho Tian Yee.%$IS-RS/W&OONG0HENG.

ON %XECUTIVE$IRECTOR-RS/W majority (four out of five members is considered non-independent by !LL.#UTILISESASKILLSMATRIX.# virtue of a substantial shareholder independence assessment as prescribed by #HAIRPERSON ARE. but she does not the Guidelines and the Banking Regulations.%$  have any business or management The assessment takes into account the relationship with DBS.#MEMBERSBUSINESSRELATIONSHIPSWITH the Group. . relationships with the Company’s substantial shareholder as well as taking into consideration multiple board COMMITTEES4HE. relationships with members of management.#MEMBERSARESUBJECTTOANANNUAL OFTHE.WHO Mrs Ow Foong Pheng and Mr Danny Teoh. )NDEPENDENT$IRECTORS). a ISA.ON %XECUTIVEAND relationship.#INCLUDINGTHE. and Banking Regulations.

suitable s Identify.#MEMBERSLENGTHOFSERVICE representations and other principal which takes into account each Director’s commitments skills and experience. to identify the staffing Key responsibilities of the NC s Review the Board’s succession plans for needs of each Board committee. THE. the Chairman Board and Board committees and the CEO Before a new Director is appointed. in particular. s Review regularly the composition of the Directors. review and recommend Board s Review key staff appointments including candidates are identified from various appointments for approval by the Board. the CFO and the Chief Risk Officer SOURCES4HEREAFTER.

and and existing Directors. the Board committees and Selection criteria and nomination age. of the Board. Upon the appointment of performance. ASSESSMENTTO expertise. attributes. skills. experience. and assess if each and transparent process for the appointment proposed and/or existing Director is a fit ANDRE APPOINTMENTOF$IRECTORSTOTHE"OARD (ii) ascertain whether the candidate and proper person and is qualified for the is independent from any substantial office of Director 4HE. gender and s Review and recommend to the Board nationalities in building an effective and 4HE.#THENINTERVIEWSTHESHORTLISTED THERE APPOINTMENTOFANY.THE. past experience) to determine whether the Directors on an annual basis process for Directors the candidate is fit and proper in accordance s Determine independence of proposed 4HE. programme for Board members professional qualifications. capabilities.#CONDUCTSAN taking into account the experience. knowledge and skills of the (IGHLIGHTSOFTHE. skills.#OVERSEESARIGOROUSPROCESSFOR ANEW$IRECTOR.#SACTIVITIES candidate and the needs of the Board AREASFOLLOWS (i) review the candidate (including s Conduct an evaluation of the performance qualifications.#RECOGNISESTHEIMPORTANCEOF shareholder of the Group and/or from s Exercise oversight of the induction having an appropriate balance of industry management and business relationships programme and continuous development knowledge. background. commitment and ability to 4HE.ON cohesive Board. candidates and makes its recommendations Executive Director having regard to their to the Board.#LEADSANDHASPUTINPLACEAFORMAL with the MAS’ fit and proper guidelines. with the Group.

the composition of the Board and Board Board performance evaluator aids the Board by providing an The Board discussed the findings of the 4HE. helps improve Board effectiveness and Each Director was asked to complete the identifies areas for improvement. discharge his or her responsibilities.#REGULARLYREVIEWS of each Board committee. Independence is assessed in which includes an annual evaluation and decided to use the same evaluation compliance with the stringent standards of Board performance and appraisal of questionnaire for 2015.#USESA"OARDEVALUATIONFRAMEWORK 4HE. required of financial institutions prescribed Directors. Board committees are performing effectively Board’s performance against peer boards and identifies steps for improvement.#CONDUCTSAREVIEWANDDETERMINES 4HE.#WILLRECOMMEND contribute to the Board as well as his or the appointment of Directors.#CONSIDEREDTHERESULTSANDACTION annually whether each Director is to track and analyse Board performance. It also helps benchmark the certain items. and shares best practices. Annual review of Directors’ independence Board evaluation process Annual Board evaluation in 2015 4HE. items from the 2014 Board evaluation independent.#MAKESANASSESSMENTATLEASTONCE independent perspective on the Board’s EVALUATIONANDAGREEDTOFOLLOW UPON a year to determine whether the Board and performance. Directors to the Board his or her appointment to HERSKILL SET ARESELECTEDNOTJUSTFORTHEIREXPERIENCE the appropriate Board committee(s) after s Make an annual assessment of whether and competencies but also for their fit MATCHINGTHE$IRECTORSSKILL SETTOTHENEEDS each Director has sufficient time to WITHTHE'ROUP4HE. The Board evaluation process under the Banking Regulations.THE. A well questionnaire and submit it directly to the )NMAKINGITSDETERMINATION.

Ms Euleen Goh.# sINDEPENDENTFROMMANAGEMENT each individual Director to perform to their 4HE. Mr Ho Tian Yee. and The Board engages an independent external Each Director participated actively. The composition. maximum capability. Board committees and ANDPRODUCEDASUMMARYREPORTFORTHE. 54 DBS Annual Report 2015 . Broadman. giving sINDEPENDENTBASEDONLENGTHOFSERVICE evaluator to facilitate the Board evaluation honest feedback on issues such as Board approximately once every three years.# conducted Board evaluation is vital in Group Secretary who collated the responses CONSIDERSWHETHERA$IRECTORIS helping the Board.THE. sindependent from any substantial shareholder. its findings to the Board. succession planning and the The Independent Directors are Dr Bart Board believes that an independent external quality of information provided to the Board.#ANALYSEDTHEREPORTANDSUBMITTED and business relationships.



Singapore. who is a Permanent Mr Andre Sekulic and Mr Danny Teoh. relationships as the revenues arising Mrs Ow Foong Pheng. is considered not -S%ULEEN'OH. from such relationships are not material. Secretary for the Ministry of Trade and and (ii) independent of Temasek as their Industry.


and is required under Section 153 of the The Group has a standing policy that a Companies Act (which was then in force) Induction for new Directors .#ANDASAPPROVED a letter of appointment and a guidebook considers this tenure to be appropriate for BYTHE"OARD. However.ON %XECUTIVE$IRECTORMAYSERVEUPTOA to step down at the 2016 AGM. At the Upon appointment.IHAL+AVIRATNEISABOVEYEARSOFAGE programme for all Directors. the Company’s substantial shareholder.-R.#CONSIDERS do not take instructions from Temasek in these Directors (i) independent of business acting as director. Directors’ training Terms of appointment of Directors THEYWILLBESEEKINGRE ELECTIONAS$IRECTOR 4HE. of Directors including induction for new "OARDTHETENUREOFEACH.ON %XECUTIVE Directors and continuous development Director. Mr Peter Seah and Mr Danny PORTFOLIOCOMPANIESARENON EXECUTIVEIN government is its ultimate owner. none of these Directors sits on any of the Temasek Holdings (Private) Limited (Temasek) boards of the Temasek portfolio companies has investments (collectively.#EXERCISESOVERSIGHTONTHETRAINING 4HE. In addition.IHAL appointments on the boards of Temasek independent of Temasek as the Singapore Kaviratne. and DAY TO DAYCONDUCTOFTHEBUSINESSESOFTHE independent of management and business are also directors of companies in which Temasek portfolio companies. -R. Temasek as a representative of Temasek and they PORTFOLIOCOMPANIES 4HE. a new Director receives MAXIMUMOFTHREE YEARTERMS4HE'ROUP RECOMMENDATIONOFTHE.#REVIEWSANDRECOMMENDSTOTHE at the 2016 AGM. Teoh are on the boards of companies that nature and they are not involved in the Mrs Ow Foong Pheng is considered have a banking relationship with DBS. relationships with the Company.

The new Director "OARD0RIORTOTHEENDOFEACHTHREE YEAR Directors’ time commitment goes through a comprehensive induction TERM.-R+AVIRATNEWILLBESEEKINGRE on Director’s duties. disclosure obligations as a Director of a Group and contribute effectively to the financial institution. and members to gain an understanding of the appointment as a Director at the 2016 AGM. responsibilities.

board representations a Director may hold. It monitors SUBMITHIMSELFORHERSELFFORRE ELECTIONBY set a maximum number of listed company the frequency and quality of the training shareholders at least once every three years. Where an incumbent Director is required commitment required as a Director of DBSH.THE. briefed on the Group’s activities (business.#REVIEWSANDRECOMMENDSTOTHE guidelines consider the number of other ENCOURAGESlRST TIME$IRECTORSTOATTEND "OARDTHEROTATIONANDRE ELECTIONOF board and committee memberships the Singapore Institute of Directors’ ‘Listed Directors at the AGM. Additionally.#CONDUCTSAREVIEWOFTHETIME programme.#SELECTSTOPICSWHICHARERELEVANTTO TORETIREFROMOFlCE.#OVERSEESTHECONTINUOUS rotation process. The new Director is introduced APPOINTTHE.#CONSIDERSWHETHERTORE 4HE. a Director holds. The duties and statutory obligations.# ongoing basis. The Group 4HE. Based on this assessment of his/her time commitments 4HE. each Continuous development programme serving are required to retire from office $IRECTORISREQUIREDTOCOMPLETEASELF for all Directors every year at the AGM.ON %XECUTIVE$IRECTORFORAN commitment of each Director on an to the Group’s senior management and ADDITIONALTERM%ACHMEMBEROFTHE. HISHERRE APPOINTMENT 4HE. While the Board has not development programme. The new Director also a process to assess each Director’s ability receives briefings on his/her key disclosure Rotation and re-election of Directors to commit time to the Group’s affairs. as well as size and Companies Directorships’ programme. which are conducted either by all Directors appreciate the high level of external professionals or management. complexity of the companies in which /NE THIRDOF$IRECTORSWHOARELONGEST s/he is a board member. each Director is required to on annual basis.#HASIMPLEMENTEDGUIDELINESAND among others). recuses him/herself from deliberations on operations and governance practices. sessions. 4HE.

the Companies Act. Board members also composition of the Board and decides UNDERTHE.#REVIEWSTHE All Directors have met the requirements the Group’s activities. (ii) a talk on disruption contribution and competing time and the impact to organisations (including commitments. participation. and (iii) Gupta and Mr Danny Teoh will be retiring by Directors as well as their list of directorships a training session on risk benchmarking.#SGUIDELINES4HE"OARDIS contribute by highlighting areas of interests whether to recommend that Director for satisfied that each Director has committed and possible topics. In rotation at the AGM to be held on 28 April are fully disclosed in our Annual Report. contributed meaningfully to the Group. addition.#ANDASAPPROVEDBYTHE"OARD. At the recommendation relevant SGX Listing Manual Amendments OFTHE. there were 3 RE ELECTIONTAKINGINTOACCOUNTFACTORSSUCH sufficient time to the Company and has TRAININGSESSIONSI ABRIElNGONCHANGESTO as the Director’s attendance.THE. Directors received key updates on 2016 (2016 AGM). Ms Euleen Goh. Mr Piyush The meetings attendance records of all Fintechs and the financial industry). In 2015.

which came into effect in 2015. Corporate governance 55 .

investments. capital In 2015. Key responsibilities of the EXCO credit transactions. and matters matters that would require Board approval.ON %XECUTIVEAND)NDEPENDENT$IRECTORS Mr Piyush Gupta. business strategies AREASFOLLOWS this included the winding down of the . It also reviewed . a majority (two out of three members of the EXCO including and comprises Ms Euleen Goh and THE%8#/#HAIRPERSON ARE. In 2015. Board Executive Committee (EXCO) sIn accordance with the requirements of the Guidelines and Banking The EXCO is chaired by Mr Peter Seah Regulations. the EXCO reviewed proposed sReview and provide recommendations on expenditure and expenses that exceed the divestments and investments. limits that can be authorised by the CEO related to capital planning and expenditure INCLUDING as well as corporate actions. capital )SLAMIC"ANKOF!SIA.strategic matters such as country and Highlights of the EXCO’s activities weak credit cases every plans. annual budget.

DELEGATEDBYTHE"OARDSUCHASNON DECISION MAKINGPROCESSOFTHE'ROUP strategic investments and divestments. The EXCO THE YEARREGIONALLIFEBANCASSURANCE .IHAL+AVIRATNE.strategic investments or divestments The EXCO assists the Board to enhance the and 5 other Chinese corporates to set up DELEGATIONOFAUTHORITYSTIPULATEDBYTHE business strategies and strengthen core a consumer finance company in China. Audit Committee (AC) The AC is chaired by Mr Danny Teoh and COMPRISES-R.THEJOINTVENTUREWITH structure and dividend policy Key matters reviewed by EXCO in 2015 the Postal Savings Bank of China (PSBC) .weak credit cases meets frequently (16 meetings in 2015) and partnership with Manulife and the acquisition sApprove certain matters specifically is able to offer greater responsiveness in the of a 30% stake in DBS China Square. Group Approving Authority competencies of the Group.

%$  Mr Teoh possesses an accounting s4HEONLY!#MEMBERWHOISNOTAN). Mrs Ow Foong Pheng and Mr Regulations.%$IS-RS/W&OONG0HENG.-R0ETER sIn accordance with the requirements of the Guidelines and Banking Seah.ON %XECUTIVEAND)NDEPENDENT$IRECTORS). a majority (four out of five members of the AC including Andre Sekulic. THE!##HAIRPERSON ARE.

Singapore.ON %XECUTIVE$IRECTORS. but she does not have any business or OFTHE!#ARE. All members a substantial shareholder relationship.WHOISA qualification and was formerly the managing .ON %XECUTIVE$IRECTOR-RS/WISCONSIDEREDNON INDEPENDENTBYVIRTUEOF partner of KPMG.

to ensure that arrangements are also OBJECTIVITYOFTHEEXTERNALAUDITOR. have recent and relevant accounting or related financial management expertise or experience.AND management relationship with DBS.

resignation. and the the integrity of the consolidated financial sReview Group Audit’s plans.AND in place for such concerns to be raised ensuring that the external auditor promptly Key responsibilities of the AC and independently investigated and for communicates to the AC any information APPROPRIATEFOLLOW UPACTIONTOBETAKEN regarding internal control weaknesses or Financial reporting sApprove changes to the Group deficiencies. compliance and information auditor. and effectiveness of s%NSURETHATTHECONSOLIDATEDlNANCIAL Group Audit Highlights of the AC’s activities statements of the Group are prepared sApprove the hiring. The CEO and CFO provided the technology controls. and that significant findings s Monitor the financial reporting process Disclosure Policy and observations regarding weaknesses and ensuring the integrity of the Group’s are promptly rectified consolidated financial statements Internal audit sReview the assistance given by s2EVIEWTHE'ROUPSCONSOLIDATEDlNANCIAL sReview the adequacy and effectiveness of management to the external auditor statements and any announcements the Group’s internal audit function (Group relating to the Group’s financial Audit) and processes. the scope findings and conclusions from its review statements of the Group and results of audits. such as financial. Making recommendations to the approval. transactions (including interested person s2EVIEWTHESIGNIlCANTlNANCIALREPORTING including approving its budget transactions) and keeping the Board ISSUESANDJUDGEMENTSSOASTOENSURE sOversee Group Audit informed of such transactions. removal. as well as ensuring Related party transactions performance prior to submission that Group Audit is adequately resourced sReview all material related party to the Board and set up to carry out its functions. consolidated financial statements and of internal controls. as well as accounting Board on the proposals to shareholders AC and the external auditor with a letter of policies and systems ONTHEAPPOINTMENT. monitoring and assessing the external made recommendations to the Board for operational. AREASFOLLOWS in accordance with Singapore Financial evaluation and compensation of Head of Reporting Standards Group Audit Oversight of financial reporting and other key matters Internal controls External auditor The AC performed quarterly reviews of sReview the adequacy and effectiveness sDetermine the criteria for selecting.

which DBS staff and any other persons approving the remuneration and terms of may.RE APPOINTMENTAND representation attesting to the integrity of sReview the policy and arrangements by removal of the external auditor of DBS and the quarterly financial statements. 56 DBS Annual Report 2015 . raise concerns about engagement of the external auditor The AC reviewed the Group’s audited possible improprieties in matters of sReview the scope and results of the consolidated financial statements with financial reporting or other matters and external audits and the independence and management and the external auditor. in confidence.

of Group Audit was facilitated by an Standards in all material aspects. current work. objectivity of external auditor auditor. separate PricewaterhouseCoopers LLP (PwC). Key risks concerning legal Please refer to the section on ‘Internal session annually for the Head of Group or compliance matters. Reviewing independence and The AC has unfettered access to the external fees due to the Group’s external auditor. and actions taken Controls’ for details on Group Audit’s key Audit to meet the AC. Risk Consulting. for The AC makes recommendations to the Board sessions were held for the AC to meet with the financial year ended 31 December 2015. which updates the Board discuss its plan. key findings as necessary. are tabled responsibilities and processes. and has aligned its work to review these risks. KPMG Services Pte The AC has the authority to investigate Ltd.The AC is of the view that the Group’s The AC reviewed the Group’s progress on The AC assessed the effectiveness of Group consolidated financial statements for 2015 the implementation of the Fair Dealing Audit in compliance with Paragraph 12. Group Legal The AC has direct oversight of Group Audit. independent assessor. and has full access to and cooperation by understands the risks that the Group faces and approved necessary changes. in line with the of the Code. FORTHEAPPOINTMENT. management. There is at least one scheduled private and Compliance. It and the legal and compliance plans. The 2015 annual assessment relevant Singapore Financial Reporting principles issued by MAS. that Group Audit has performed well. meets the Head of Group Audit regularly to to the AC. The AC performed quarterly reviews of Oversight of Group Audit reports from Group Audit.4(c) are fairly presented in conformity with Outcomes across the Group. The chair of the AC (including policy and training). During the financial year. and other significant matters. The AC is of the view The AC reviewed the annual audit plan any matter within its terms of reference.

OUTASFOLLOWS 5PON"OARDAPPROVAL. matters that might have to be raised privately.RE APPOINTMENTAND the external auditor without the presence of and the breakdown of the fees for audit dismissal of the external auditor including management at each AC meeting to discuss ANDNON AUDITSERVICESRESPECTIVELYARESET the remuneration and terms of engagement.

%$SEXCEEDSTHE and comprises Dr Bart Broadman. At the recommendation of the The AC members are regularly kept updated financial year and the associated fees. the on changes to accounting standards and AC is satisfied that the independence and RE APPOINTMENTOFTHEEXTERNALAUDITORIS issues related to financial reporting through OBJECTIVITYOFTHEEXTERNALAUDITORHASNOT SUBJECTTOTHESHAREHOLDERSAPPROVALAT quarterly meetings with Group Finance. The total Fees relating to PWC services for 2015 SGD million &OR!UDITAND!UDIT 2ELATED3ERVICES 7.2 Total 9.9 4HE!#REVIEWEDTHENON AUDITSERVICES a confirmation of their independence to Keeping updated on relevant information provided by the external auditor during the the AC.7 &OR. and Rule 715 of the SGX Listing Rules in relation to its external auditor. been impaired by the provision of those the 2016 AGM. Mr Ho requirements of the Guidelines and Banking Regulations.THERE APPOINTMENTOF THEEXTERNALAUDITORISSUBJECTTOSHAREHOLDER The Group has complied with Rule 712 approval at the AGM.ON !UDIT3ERVICES 2. services.%$ 4HENUMBEROF).ON %XECUTIVE The BRMC is chaired by Ms Euleen Goh AND)NDEPENDENT$IRECTORS). The AC and as approved by the Board. The external auditor has provided Board Risk Management Committee (BRMC) s!LL"2-#MEMBERSINCLUDINGTHE"2-##HAIRPERSON ARE. 4IAN9EE. and internal audit bulletins. Group Audit.



SUCHAS qualified to discharge their responsibilities. against risk limits and risk strategy in MACRO ECONOMIC.



and have the relevant technical financial accordance with approved risk appetite country risk and stress tests related expertise in risk disciplines or businesses. and/or guidelines to these developments s2EVIEWTHERISKDASHBOARDTOKEEPTRACKOF s!PPROVETHE'ROUPSOVERALLANDSPECIlC Key responsibilities of the BRMC MAJORRISKPOSITIONSANDRISKDEVELOPMENTS risk governance frameworks s'UIDETHEDEVELOPMENTOFANDRECOMMEND s-ONITORTHEQUARTERLYPORTFOLIOREVIEWSOF s(AVEDIRECTOVERSIGHTOFTHE#HIEF for Board approval the risk appetite for total exposures as well as large exposures Risk Officer various types of risk and exercise oversight and asset quality s2EVIEWINPARALLELWITHTHE!# THE on how this is operationalised into individual s$ISCUSSLARGERISKEVENTSANDSUBSEQUENT adequacy and effectiveness of the Group’s risk appetite limits remedial action plans internal control framework Corporate governance 57 .

Through the course of 2015. political landscape. s%XERCISEOVERSIGHTOFTHE)NTERNAL#APITAL impact DBS’ strategy and portfolios in Adequacy Assessment Process (ICAAP) these countries. the BRMC required by the regulators and under ICAAP. The BRMC considered Group. liquidity BRMC was advised on the bank’s approach s/VERSEEANINDEPENDENT'ROUP WIDERISK tightening. all of which could with the treasury activities. s!PPROVERISKMODELSWHICHAREUSED also provided guidance. the approved models outlook. In its review of key operational risk the performance of previously vulnerabilities such as the global economic profiles and among other updates. The scenario analyses are in addition to including approval of stress scenarios the review of various stress testing results and commensurate results for capital. where appropriate. risk of rising interest rates and in dealing with various sanctions regimes as management system and adequacy of currency volatility as well as the outlook well as the conduct of business associated resources to monitor risks on commodity prices. RISK WEIGHTEDASSETS. books and the liquidity risk profile of the for capital computation and monitoring to management.

with particular focus on attraction and cases where total remuneration exceeds a Dr Bart Broadman. The BRMC also reviewed and papers from the Financial Stability risk development. It was kept informed of ‘Risk Management’ in this Annual material consequences for the key Asian the utilisation of market risk limits for the Report for more information on countries where DBS operates. allocation to the various units and across AREASFOLLOWS the impact of government policy changes the different types of risk. BRMC monitored the global economic of sustained low oil and other commodity environment and. During discussions. Basel III INFORMS$"3OFALLMAJORRISKPOSITIONSAND (SME) sectors. s!PPROVETHE"USINESS#ONTINUITY conducted on certain countries and specific The BRMC received regular updates on risk Management attestation and SECTORSSUCHASTHEDOWNWARDADJUSTMENT appetite and economic capital utilisation. Ms Euleen requirements of the Guidelines and Banking Regulations. The CMDC has direct access to senior s%NSUREALIGNMENTBETWEENREWARDAND and control functions in line with the management and works closely with the the Group Talent Management initiatives FSB’s guidelines. paid close prices on the Group’s portfolios across Please refer to the section on attention to developments which could have the key countries. Ms Euleen Goh and Mr retention of talent including current and PRE DElNEDTHRESHOLD. The BRMC and increase of interest rates in Singapore was apprised of regulatory feedback and Reviewing the risk landscape and their effect on sectors such as property developments such as approaches for risk The risk dashboard (introduced in 2011) and small and medium size enterprises models and capital computation. Goh and Mr Andre Sekulic. the management’s assessment of the impact Board (FSB).ON %XECUTIVE The CMDC is chaired by Mr Peter Seah and AND)NDEPENDENT$IRECTORS).%$SEXCEEDSTHE comprises Dr Bart Broadman. spent some time during 2015 to deliberate possibility of US interest rate hike and the on the calibration of economic capital Highlights of the BRMC’s activities contagion effect on emerging markets. It 'ROUP WIDE2ECOVERY0LAN in global growth and in particular.PROlTANDLOSS discussed the findings and the impact arising The BRMC also approved and monitored and liquidity from scenario analyses and portfolio reviews the performance of various risk models. in particular. Compensation and Management Development Committee (CMDC) s!LL#-$#MEMBERSINCLUDINGTHE#-$##HAIRPERSON ARE.%$ 4HENUMBEROF). The CMDC also reviews BRMC and the AC when performing its role. China. The BRMC commercial banking as well as the trading the BRMC’s activities.

ORWHEREADEFERRAL Peter Seah are also members of the BRMC future leaders of the Group mechanism is implemented as a risk while Mr Peter Seah and Mr Andre Sekulic s/VERSEEMANAGEMENTDEVELOPMENTAND control process. s/VERSEEPLANSTODEEPENCORECOMPETENCIES. are members of the AC. As a result of their sucession planning for management membership in other Board committees.

Remuneration of Non-Executive Directors the members of the CMDC are able to bench strength and leadership capabilities make strategic remuneration decisions in an of management Please refer to pages 61 to 62 of informed and holistic manner. has executives. AREASFOLLOWS implementation and ongoing review) The CMDC reviews and recommends a and the annual bonus pool (Board Group remuneration policy and annual framework to the Board for determining endorsement also required) in accordance variable pay pool THEREMUNERATIONOF.ON %XECUTIVE with the corporate governance practices Directors. including the Chairman. as stipulated under the Guidelines and the Please refer to the section on Banking Regulations ‘Remuneration Report’ for details on 4HEREMUNERATIONOF. including the Chairman. including reviewing and DBS Group remuneration strategy. been benchmarked against global and approving the remuneration of the LOCALlNANCIALINSTITUTIONS. remuneration policy (including design. s/VERSEETALENTDEVELOPMENTANDTALENT this Annual Report for details of pipeline remuneration of each Non-Executive Key responsibilities of the CMDC Director (including the Chairman) s/VERSEETHEGOVERNANCEOFTHE'ROUPS Highlights of the CMDC’s activities for 2015.ON %XECUTIVE Executive Director/CEO The CMDC reviews and approves the Directors will receive 70% of their fees s/VERSEETHE'ROUPSPRINCIPLESAND Group’s remuneration policy and the annual in cash and the remaining 30% in share framework of compensation to ensure variable pay pool which are also endorsed AWARDS4HESHAREAWARDSARENOTSUBJECT ALIGNMENTWITHPRUDENTRISK TAKING at the Board level. TOAVESTINGPERIOD.ON %XECUTIVE s/VERSEETHEREMUNERATIONOFSENIOR remuneration of the CEO and on the Directors.

senior executives equivalent of one year’s basic retainer fees 58 DBS Annual Report 2015 .BUTARESUBJECTTOA principles (deferral mechanism is adequate SELLINGMORATORIUMWHEREBYEACH.ON as a risk management process) in order to The CMDC provides oversight of the Executive Director is required to hold the build a sustainable business in the long term remuneration of the CEO.

ON %XECUTIVE$IRECTORS one year after the date he or she steps AWARDS. Other than these share REMUNERATIONOF.for his or her tenure as a Director and for will be paid in cash.

The fair value of share grants to the receive and are not entitled to receive any The table below sets out the proposed .ON %XECUTIVE$IRECTORSDIDNOT does not include any variable component.000 Executive Committee 75.000 Board Risk Management Committee 45. AGM. Corporate governance 59 .ON %XECUTIVE$IRECTORSSHALLBEBASEDON other share incentives or securities pursuant ANNUALFEESTRUCTUREFORTHE. who is an immediate family member (daughter) of a Director.000 Executive Committee 45. Ms Lesley Teoh’s remuneration for 2015 falls within the band of SGD 50.000 Audit Committee 75. none of the Group’s employees was an immediate family member of a Director in 2015.ON 10 trading days immediately following the Executive Directors at the 2016 AGM.000 Board Risk Management Committee 75.OMINATING#OMMITTEE 20.000 Compensation and Management Development Committee 65.ON %XECUTIVE THEVOLUME WEIGHTEDAVERAGEPRICEOFTHE to any of the Company’s share plans during Directors for 2015.000 In 2015 there was one employee of DBS Bank Ltd. Mr Teoh is not involved in the determination of his family member’s remuneration.000 Compensation and Management Development Committee 35.000 .THE. Mr Danny Teoh.OMINATING#OMMITTEE 35.000 to 100. Annual fee structure for 2015 SGD Basic annual retainer fees Board 80. TOVOTEONTHEREMUNERATIONOF.000 Additional Chairman fees for: Board 1. and any residual balance fee structure in 2014. Apart from Ms Lesley Teoh.000. down.350.000 Additional committee member fees for: Audit Committee 45. Ms Lesley Teoh. As per previous years. The actual number of ordinary shares There is no change to the annual fee to be awarded will be rounded down to structure for the Board for 2015 from the the nearest share.000 . Shareholders are entitled ordinary shares of the Company over the the financial year.

and does not override any specific Chairman and the CEO. or the DBSH for the Board’s approval. Articles of Association. financial or operations. financial statements sStrategic investments and divestments Scope of delegation of authority in the GAA sGroup’s annual budget sCapital expenditures and expenses exceeding certain material limits s#APITAL RELATEDMATTERSINCLUDING Board CAPITALADEQUACYOBJECTIVES. sGroup’s annual and interim reputational implications or consequences. the only. specific matters that have been reserved exchange listing requirements. these and activities of the Group’s business and include matters with strategic. as well as the provisions arising from statutory. The GAA covers internal authority the Board to Board committees. It is applied Specific matters 'ROUP WIDE The Board’s responsibilities are well defined that require Board INTHE'!!4HE"OARDISTHEDECISION The GAA is regularly reviewed and updated approval under the making body for matters with significant to accommodate changes in the scope GAA include: impact to the Group as a whole. regulatory. Group Approving Authority The Board approves the GAA and any An integral part of our corporate change to it. The GAA ensures that governance framework is the Group APPROPRIATECONTROLSANDDECISION MAKING Approving Authority (GAA) which clearly are consistently applied throughout the sets out the delegations of authority by Group.

capital issuance and redemption sDividend policy Board sRisk strategy and risk appetite Chairman CEO committees Annual Board strategy offsite %ACHYEAR. capital structure.


ONG TERMSTRATEGYINCLUDINGPROGRESSREVIEW.THE"OARDSTRATEGY offsite was held in London. Main objectives of our 2015 Strategic discussions annual Board strategy offsite s/PPORTUNITYFORTHE"OARDTOFOCUSONTHE'ROUPSLONG s.

as well as validation against s$YNAMICANDIN DEPTHSTRATEGICDISCUSSIONTOPROMOTE risk appetite and capital availability deeper understanding of our business environment s$IGITALISATIONOFTHEBANK and our operations. term strategy apart from the regular agenda at the RElNEMENTSBASEDONEXTERNALDEVELOPMENTSAND quarterly Board meetings competitive analysis. and refine our strategy s3TRATEGYFOROUR3-%BUSINESS.

#SPACE s/UTLOOKANDINSIGHTSON%UROPE. – Regulators.ONDONAND5NITED3TATES offices and how these are helping USINTHEWESTERN-. customers and media China and Indonesia – CEOs and CFOs of over 80 corporate and s3TRATEGYFOROURINSTITUTIONALINVESTORBUSINESS high net worth customers from Europe and review of the progress we have made – Staff in local franchise on this front s3TRATEGYFOROUR.PARTICULARLY s%NGAGEMENTSWITHOURSTAKEHOLDERSINHOSTCOUNTRY with respect to the 2.0 strategies in India.

INCLUDING political and economic developments 60 DBS Annual Report 2015 .

ASTRE ELECTEDON 29 Apr 13 Mr Ho Tian Yee.550 – 28 Apr 14 Mr Nihal Kaviratne.600 545.400 52.ASTRE ELECTEDON!PR Dr Bart Broadman.500 Non-Executive and Independent Director 5 4 – 5 4 – 1 1 s Board member since 1 Oct 10 206. 69 Non-Executive and Total: 1.ASTRE ELECTEDON 23 Apr 15 Mr Danny Teoh.000 Independent Director 5 – – 5 – 3 1 1 s Board member since 26 Apr 12 185.150 – s . of meetings held in 2015 (SGD) (SGD) (SGD) 5 4 16 5 4 4 1 1 Mr Peter Seah.500 – s .350 108.500 Non-Executive and Independent Director 5 – – 5 4 – 1 1 s Board member since 29 Apr 11 175.263 Independent Chairman 5 4 16 5 4 4 1 1 s Chairman since 1 May 10 s Board member since . 65 Non-Executive and Total: 265.300 65. 63 Non-Executive and Total: 208. 60 Non-Executive and Total: 366.ASTRE ELECTEDON!PR Corporate governance 61 .150 5.OV 1.700 – s .263 s .650 – s .350 75.850 88.ASTRE ELECTEDON 145.500 79.500 Independent Director 5 4 – – 4 – 1 1 s Board member since 29 Apr 11 s .ASTRE APPOINTMENTON 23 Apr 15 Mr Andre Sekulic.272.278 Independent Director 5 4 16 – 4 4 1 1 s Board member since 01 Dec 08 252. 54 Non-Executive and Total: 219.ASTRE ELECTEDON 28 Apr 14 Ms Euleen Goh.Key information on each Director Director Meetings attendance record Total Directors’ independence status (1 January to 31 December 2015) remuneration for 2015 (SGD) BOD (1) NC (2) EXCO (3) AC (4) BRMC (5) CMDC (6) AGM EGM Directors’ Share-based Others (c) fees (a) remuneration (b) No.870.778 s .000 Independent Director 5 – – – 3 3 1 1 s Board member since 17 Dec 08 153.950 62. 71 Total: 250. 60 Total: 295.

500 (d) Non-Executive and Non-Independent Director 5 4 – 5 – – 1 1 s Board member since 26 Apr 12 s . and (ii) for Ms Euleen Goh: carpark charges (d) Director’s remuneration payable to Mrs Ow Foong Pheng will be paid fully in cash to a government agency. 56 Executive Director/CEO Please refer to the Remuneration 5 1# 16 5# 4# 4# 1 1 Report on page 73 of this Annual Report s "OARDMEMBERSINCE. as well as for attending the AGM and the annual Board offsite) 62 DBS Annual Report 2015 . 52 Total: 213. in 2016. Director Meetings attendance record Total Directors’ independence status (1 January to 31 December 2015) remuneration for 2015 (SGD) BOD (1) NC (2) EXCO (3) AC (4) BRMC (5) CMDC (6) AGM EGM Directors’ Share-based Others (c) fees (a) remuneration (b) No. and any residual balance will be paid in cash.OV for details on the CEO’s compensation s . the Directorship & Consultancy Appointments Council (Note: Directors are also paid attendance fees for Board and Board committee meetings. of meetings held in 2015 (SGD) (SGD) (SGD) 5 4 16 5 4 4 1 1 Mrs Ow Foong Pheng.500 (d) – – Mr Piyush Gupta.ASTRE ELECTEDON!PR s A ppointment Dates # Mr Gupta attended these meetings at the invitation of the respective committees (1) Board of Directors (BOD) (2) Nominating Committee (NC) (3) Board Executive Committee (EXCO) (4) Audit Committee (AC) (5) Board Risk Management Committee (BRMC) (6) Compensation and Management Development Committee (CMDC) (a) Fees payable in cash. This is subject to shareholder approval at the 2016 AGM (c) Represents non-cash component and comprises (i) for Mr Peter Seah: car and driver.ASTRE ELECTEDON!PR 213. The actual number of the Company’s ordinary shares to be awarded will be rounded down to the nearest share. This is 70% of each Director’s total remuneration and is subject to shareholder approval at the 2016 AGM (b) This is 30% of each Director’s total remuneration and shall be granted in the form of the Company’s ordinary shares. for being a Director in 2015.

The Board has received assurance from the #%/AND#&/THAT.Controls Board’s commentary on compliance and information technology compliance and information technology adequacy and effectiveness risks which the Group considers relevant risks which the Group considers relevant of internal controls and material to its operations. and material to its operations.

assurance properly maintained. and assurances received from the CEO and CFO. but not absolute. the Board also notes that (b) the Group’s risk management and is of the opinion that the Group’s internal no system can provide absolute assurance internal control systems were adequate and controls and risk management systems were against the occurrence of material errors. with the concurrence of the AC. work and risk management systems provide (a) the Group’s financial records have been performed by the internal and external reasonable. ITSTRIVESTOACHIEVEITSBUSINESSOBJECTIVES the Board. In this regard. and the financial auditors.ASAT$ECEMBER Based on the internal controls established The Board notes that the internal controls and maintained by the Group. adequate and effective as at 31 December POORJUDGEMENTINDECISION MAKING. effective to address financial. reviews performed by management that the Group will not be affected by any statements give a true and fair view of the and various Board committees and event that could be reasonably foreseen as Group’s operations and finances. operational.

error. information technology controls. adequacy and effectiveness of the Group’s risk Group Compliance. compliance and oversees the Group’s system of internal defence has a clear responsibility. comes to risk taking where each line of financial. all units of the Group business units are our first line of defence that they are within approved limits. the CEO and CFO provide an annual Corporate oversight and control functions It provides an independent assessment attestation to the AC relating to adequacy such as Risk Management Group (RMG). and the quarterly and annual attestations. operational. and annual attestations businesses/countries and ensuring that we potential developments. and are required to submit quarterly attestations for risk. individual and portfolio risk. Group Audit forms the third line of defence. RMG is responsible for identifying yearly Control Self Assessment (CSA) to reviewed by the AC and BRMC. and are governance framework and processes. as well as controls and risk management.HUMAN 2015 to address financial. Senior monitoring Corporate oversight risk oversight of defence and control functions Management and reporting Provides oversight of the 3 lines of defence Independent challenge and review Third line Independent assurance Group audit of adequacy and of defence effectiveness of processes and controls Working closely with the support units. In THATREQUIRESALLUNITSTOPERFORMAHALF Group’s internal controls framework is addition. Responsibility Function Key activities Business units. Group Legal and and effectiveness of our system of internal management and internal control systems. Identification and First line Strategy. DBS has three lines of defence when it Our internal controls framework covers The Board. reviews to provide assurance on the responsible for design and maintenance of adequacy and effectiveness of the Group’s the internal control frameworks covering Assessing the effectiveness of internal controls on risk management. performance countries and management of risk of defence and risk management support units in the businesses Board CEO Second line Policy and Framework. operational. This includes identification and monitoring and reporting on the portfolio. and evaluated on their compliance with the overall internal remain within approved boundaries of our through stress testing. operational. and assurance on the reliability. on their controls relating to the financial management of risks inherent in their These are done in view of current and future reporting process. risk management procedures. fraud or other irregularities. financial. compliance and internal controls control and governance processes. Based on the CSA risk appetite and policies. In addition. Group Technology & Operations form controls. approving assess the effectiveness of their internal Corporate governance 63 . supported by the AC and BRMC. The information technology controls as well as The Group has a risk management process overall adequacy and effectiveness of the risk management policies and systems. Internal controls framework risk management policies and systems. our transactions and trades and ensuring controls. controls framework. Group Audit performs regular independent the second line of defence.

Group audit PRODUCTS!UDITPROJECTSAREPLANNEDBASED Quality assurance and key developments on the results of the assessment. Group Audit Key responsibilities and processes given to auditing higher risk areas and as has a quality assurance and improvement Group Audit is independent of the activities required by regulators. programme (QAIP) that covers all aspects ITAUDITS)TSOBJECTIVES. with priority In line with leading practices.

The Award from the Institute of established policies. Group Audit achieved several accurate recording of transactions and MILESTONESA 'ROUP!UDITWASINDUCTED proper safeguarding of assets.SCOPEOFAUTHORITY of its audit activity and conforms to the and responsibilities are defined in the Audit Group Audit has unfettered access to International Standards for the Professional Charter. the 2014 and 2015. (iv) Reviewing whether management is Audit reports containing identified issues taking appropriate steps to address and corrective action plans are reported to Group Audit continues to leverage on control deficiencies the AC and senior management. Practice of Internal Auditing. In each of the Group Audit’s quarterly internal QARs in and effectiveness of the Group’s risk five key locations outside Singapore. The assessment also covers risks matters. assessment framework through which Group Audit collaborates with A*Star (I2R) the inherent risk and control effectiveness Group Audit apprises the regulators and in developing predictive models to anticipate of each auditable entity in the Group is external auditors of all relevant audit emerging risks. It works closely with the external arising from new lines of business or new auditor to coordinate audit efforts. assessed. techniques for Continuous Auditing. the Board and management. Group Audit adheres to the Code of into the SIAS Hall of Fame for Internal Audit Conduct and the Code of Ethics established %XCELLENCE4HISREmECTSTHERECOGNITION II 0ROVIDINGANOBJECTIVEANDINDEPENDENT by the Institute of Internal Auditors (IIA). Group Audit’s effectiveness is measured on Branch Risk Profiling – in collaboration (iii) Reviewing whether the Group complies with reference to the IIA’s new set of Ten with A*Star Institute of Infocomm Research with laws and regulations and adheres to Core Principles for the professional practice (I2R). organisational and strategic alignment to at least once every five years by qualified the Group. As part of Group Audit reports functionally to the as well as the right to seek information our QAIP programme. external quality Chairman of the AC and administratively and explanation. The head of Group Audit has a professionals from an external organisation. which is approved by the AC. Group Audit has an assessment reviews (QAR) are carried out to the CEO. (b) Group quality. adequacy strategic planning forums. The most recent assessment was conducted and attends all the business reviews and in 2013 by KPMG. It is by the industry for exemplary corporate assessment of the Group’s credit portfolio also guided by the Mission Statement in the governance and transparency. Progress of technology and automation in providing the corrective action plans is monitored and greater insights and timely warnings on 'ROUP!UDITADOPTSARISK BASEDAPPROACHIN past due action plans are included in regular emerging risks. the execution of approved credit Audit Charter and has aligned its practices Audit won the “IES Prestigious Engineering portfolio strategies and control standards with the latest International Professional Achievement Award 2015 – Technology relating to credit management processes. An annual audit plan is reports to the senior management and THEUSEOFCOMPUTER ASSISTEDAUDITING developed using a structured risk and control the AC. 64 DBS Annual Report 2015 . KPMG also conducts (i) Evaluating the reliability. In 2015. management and internal controls systems. 'ROUP!UDITSRESPONSIBILITIESINCLUDE seat in the Group Management Committee. country head of audit also sits in the country including whether there is prompt and management team. and of internal auditing. the AC. Engineering Singapore (IES) is the first ever to be won by a financial institution. Besides industrialising its auditing activities. Practices Framework released in July 2015 by )NNOVATIONvFORAPREDICTIVEAUDITINGPROJECT IIA.

Significant incident protocol The Code of Conduct encourages and Code of Conduct employees of the Group to report their The Group has a significant incident protocol concerns to the Group’s dedicated. Alternatively. There are also ORPOTENTIALCONmICTOFINTERESTORFEAROF WELL DElNEDPROCEDURESFORTHEESCALATION. in case of actual can take action accordingly. In 'ROUP#OMPLIANCEWHICHHANDLESWHISTLE this way. appropriate levels of management blowing cases according to a well defined are made aware of such incidents and protocol. that sets out processes and procedures for independent investigation team within incidents according to the level of severity.

retribution. employees of the Group may investigation and follow up of any reported write in confidence to Human Resources. WRONG DOINGBYA$"3EMPLOYEE.


including those Checks are conducted before the Group covered in the Code of Conduct in the Banking Act. as well as write in via an standards of behaviour that electronic feedback form on the website. of Conduct read and acknowledge the Code of Conduct (“Code of Conduct”): on an annual basis. sSets out the principles and Group’s website. are expected of employees of THE'ROUPINCLUDINGPART TIME and temporary employees) Related party transactions continually monitored. SGX Listing Rules. employees of the Group have the option of using the ‘DBS Speak The DBS Code All employees of the Group are required to Up’ service. and colleagues. The principles related party transactions. Group Audit. The Group has robust when dealing with customers. MAS directives and the enters into credit or other transactions with include professional integrity. or even the CEO or Chairman. Members of the public Please refer to ‘Whistle-blowing policy’ may access the Code of Conduct on the on page 66 of this Annual Report. The Group has embedded procedures PROCEDURESTOMANAGEPOTENTIALCONmICTOF business associates. vendor or third party. regulators to comply with all regulations governing interest between a Director and the Group. In addition. The Banking Act and MAS related parties to ensure compliance CONlDENTIALITY.

while the SGX Listing Rules cover As required under the SGX Listing Rules. sDefines the procedures for interested person transactions in general. the following are details of interested person employees of the Group to transactions in 2015. CARRYINGOUTDAY TO DAYOPERATIONSSUCHAS these disclosures existing credit facilities to related parties are leasing of premises. These interested report incidents and provides All new Directors are briefed on all relevant person transactions are for the purpose of protection for those staff for provisions that affect them. telecommunication/ ADJUSTEDPRIORTOA$IRECTORSAPPOINTMENT. fair dealings with by the Group to certain related entities and CUSTOMERSANDWHISTLE BLOWING persons. interests.CONmICTSOF directives impose limits on credit exposures with regulations. If necessary.

)NCONFORMANCEWITHTHEhBLACK OUTv and subsidiaries engaging in proprietary no material contracts involving the interest of policies prescribed under SGX Listing Rules.000 SATS Ltd Group 387.000) Aetos Holdings Pte Ltd Group 2.040.%4 the release of the first. SAVEASDISCLOSEDVIA3'8.128 SMRT Corporation Ltd Group 1.938 Total Interested Person Transactions (SGD) 281.941.620 Mapletree Investments Pte Ltd Group 3.343 CapitaLand Limited Group 155.260 Singapore Technologies Telemedia Pte Ltd Group 164.087. business units Since the end of the previous financial year.000 Singapore Telecommunications Limited Group 57.049 Certis CISCO Security Pte Ltd Group 30.910.586 !SCENDAS 3INGBRIDGE0TE. and all credit facilities to related parties are logistics as well as security services.517. Group Secretariat informs all any of its subsidiary companies. and no such securities one month before the release of $IRECTORSANDEMPLOYEESOFEACHBLACK OUT contract subsisted as at 31 December 2015. IT systems and related services.362.656 StarHub Ltd Group 7. Aggregate value of all interested person transactions in 2015 Name of interested person (excluding transactions less than SGD 100.857 MediaCorp Pte Ltd Group 5.410.437 Material contracts Dealings in securities quarter results. data services.TD'ROUP 12. trading are restricted from trading in any Director or controlling shareholder of the the Group’s Directors and employees are THE'ROUPSSECURITIESDURINGTHEBLACK Group has been entered into by the Group or prohibited from trading in the Group’s out period.558.198.384.858. In addition. second and third Corporate governance 65 . THEFULL YEARRESULTSANDTWOWEEKSBEFORE period ahead of time.000 Singapore Power Limited Group 4.

periods (15 market days immediately times his annual base salary as shareholding and may only trade through the Group’s FOLLOWINGTHEEXPIRYOFEACHBLACK OUT over time. In addition. Directors and officers are stockbroking subsidiaries and bank channels PERIOD SUBJECTTOPRE CLEARANCE'ROUP prohibited at all times from trading in the for securities listed in Singapore and Hong Management Committee members are Group’s securities if they are in possession of Kong. Group Management Committee the principles of share ownership by senior sensitive information. The personal investment policy ALSOREQUIREDTOOBTAINPRE APPROVALFROM MATERIALNON PUBLICINFORMATION4HE'ROUP discourages employees from engaging in the CEO before any sale of the Group’s has put in place a personal investment SHORT TERMSPECULATIVETRADING. Such employees are members are only allowed to trade in the management. the CEO is expected to build ALSOREQUIREDTOSEEKPRE CLEARANCEBEFORE Group’s securities within specific window up and hold at least the equivalent of three making any personal trades in securities.

As part of the course of their duties from trading in our commitment to good governance and SECURITIESINWHICHTHEYPOSSESSSUCHPRICE Culture We believe that effective safeguards against Whistle-blowing policy Focus on our shareholders undesired business conduct have to go BEYONDAhTICK THE BOXvMENTALITY)N$"3. the CEO is required to policy which prohibits employees with that investment decisions should be geared SEEKPRE APPROVALFROMTHE#HAIRMANBEFORE ACCESSTOPRICE SENSITIVEINFORMATIONIN TOWARDSLONG TERMINVESTMENT any sale of the Group’s securities. Similarly.ANDSTATES securities.

We ensure that control functions are well bank may attend and vote at the AGM. vendor or third party. among others. In addition to having in place These rights include. SHAREHOLDERSENJOYSPECIlCRIGHTSUNDER the Singapore Companies’ Act and the s4ONEFROMTHETOP4HETONESETBYTHE Company’s Articles of Association. we conduct a right to participate in profit distributions ROBUSTSELF ASSESSMENTONTHE'ROUPS and the right to attend and vote at general risk culture DBS Speak Up service meetings. it shareholders are treated fairly and equitably. All Board and senior management is vital. All strong risk and governance culture. Pursuant to the introduction of RUNBYANINDEPENDENTEXTERNAL section “Our 2015 Priorities” on page 27 the new multiple proxies regime under the party that gives employees of of this Annual Report for more information Singapore Companies (Amendment) Act the Group the opportunity to s2ESPECTINGVOICEOFCONTROLFUNCTIONS 2014. custodian bank or through a CPF agent customer. Ordinary shareholders are entitled s!LIGNINGSTRATEGIESANDINCENTIVESVIA to attend and vote at the AGM by person $"33PEAK5PISAHOTLINESERVICE BALANCEDSCORECARD0LEASEREFERTOTHE or proxy. indirect investors who hold DBSH speak up on misconduct and/or We believe that respect for the voice of shares through a nominee company or wrong-doing by a DBS employee. we also advocate the following culture and awareness promote fair and organisational safeguards to maintain a equitable treatment of all shareholders. Shareholder rights other than relying on published codes of The Group’s robust corporate governance conduct. is equivalent to the moral compass of the organisation. the comprehensive policies. the control functions is a key safeguard. integrated into our organisational structure $"33PEAK5PSERVICEINCLUDES so that they can properly discharge their The Group respects the equal information s!DEDICATEDHOTLINENUMBER.

responsibilities rights of all shareholders and is committed WEBSITE.


transparent and timely number and postal address for this Annual Report for details on our three DISCLOSURE!LLPRICE SENSITIVEINFORMATIONIS reporting of suspected incidents lines of defence publicly released prior to any sessions with of misconduct and wrongdoing s(AVINGESTABLISHEDESCALATIONPROTOCOLS individual investors or analysts. s3PECIALISTCALLCENTREOPERATORS We designed a notification protocol that with knowledge of individual makes it mandatory for staff to report organisations significant incidents. This means that the s%XPERTFORENSICINVESTIGATORS organisation is prepared to receive bad to analyse reports news and take necessary remedial actions s4IMELYREPORTINGOFINCIDENTS without shooting the messengers to dedicated representatives s%NCOURAGINGCONSTRUCTIVECHALLENGESATALL within an organisation LEVELS-OREFUNDAMENTALLY.FAX s2ISKOWNERSHIP0LEASEREFERTOPAGEOF to the practice of fair.

WEINCULCATE s2ECOMMENDATIONSON a culture that encourages constructive corrective action challenges and debate. where all views AREEVALUATEDFORDECISION MAKING7E also operate a culture where we actively engage the Board for their views early s2EINFORCINGCULTURALALIGNMENT&INALLY.

we conscientiously reinforce our cultural norms by rewarding right behaviours and censuring wrong ones 66 DBS Annual Report 2015 .

In presenting these complete and accurate. that all material disclosures are appropriate. The Group encourages resolutions at general meetings ONTHEDEVICE5PONVOTESUBMISSION. complete and disclosure continued to be recognised at the released. including the chairpersons When shareholders register their of the Board committees and certain attendance at the meeting. explain the Group’s strategy and financial Prix for Best Overall Investor Relations (large performance. management met investors selective or inadvertent disclosure of shareholders a balanced assessment ATMORETHANONE ON ONEANDGROUP material information is avoided. the Group won for disclosure of material corporate provide a forum for management to the second consecutive year both the Grand developments to shareholders. for promote regular. the Chairman plays a When the Chairman opens the poll pivotal role in fostering constructive dialogue To enhance shareholder on a resolution. Management participated in performance and position. where financial statements are published on our information should be managed to prevent it won the Golden Circle Award for the Most website and the SGX website. The shareholder is able to view his or At the AGM. reports. The Group also won The Group’s investor relations activities solicit their perceptions of the Group. Our Group Disclosure Transparent Company. All press statements and quarterly accurate. Board members participation. voting process At general meetings. POLICY4HE'$#SOBJECTIVESARETOA The Group’s website provides contact details periodically review the Group’s disclosure The Board provides shareholders for investors to submit their feedback and policy and update it as needed. the Best Sustainability Practice award and. The they are handed the mobile device Group’s external auditor is available to with details of their shareholding answer shareholders’ queries. The nine local and foreign investor conferences At the IR Magazine Awards and Conference Board also ensures timely and full ANDNON DEALROADSHOWS4HESEMEETINGS South East Asia 2015. the Board aims to give During the year. and (c) ensure statements. registered to the device. effective and fair the fifth consecutive year. members of senior management. investor relations team supports the CEO Committee (GDC) assists the CEO and CFO Conduct of shareholder meetings The AGM provides shareholders with the opportunity to share their views and to meet the Board. the Group’s financial her name and shareholding details performance for the preceding year is which are clearly displayed on presented to shareholders. Electronic poll the device. Management also uses cap) and the Best Investor Relations by a meetings with investors and analysts to Singaporean company. the Best Investor communication with shareholders. the shareholder between shareholders.Communication with shareholders and the CFO in maintaining a close and in implementing the Group’s disclosure active dialogue with institutional investors. A dedicated selective disclosure. of the Group’s financial meetings. The Group’s efforts to improve conducted when quarterly results are information are timely. (b) ensure with quarterly and annual financial raise any questions. The policy sets out how material 2015 SIAS Investors’ Choice Awards. Briefing The Group has a disclosure policy to Relations in the Financial (excluding Real sessions for the media and analysts are ensure that all disclosures of material Estate) Sector. the Group puts all presses the relevant voting button and management.

and values shareholder participation at its to vote by electronic poll and the shareholder will receive a vote general meetings. The results of the electronic poll resolutions requiring shareholder approval voting are announced immediately are tabled separately for adoption at the The Group appoints an independent after each resolution has been put to Company’s general meetings unless they are EXTERNALPARTYASSCRUTINEERSFOR a vote. announces the results by showing response acknowledgment on the the number of votes cast for and device. Prior to the commencement of the percentage are displayed in real- !'-%'-. In accordance with the recommendations against each resolution and the contained in the Code and the Guidelines. and the number of votes cast closely related and are more appropriately the electronic poll voting process. respective percentage. for and against and the respective tabled together.

the minutes of our REVIEWTHEPROXIESANDTHEPROXY maintains an audit trail of all votes AGM and EGM may be accessed via our PROCESS4HE'ROUPALSOHASAPROXY CASTATTHE!'-%'-4HEOUTCOME website. We have disclosed the names verification process which has been OFTHE!'-%'-INCLUDINGDETAILED of the Directors and senior executives agreed upon with the scrutineers. results of the poll vote for each who attended the 2015 AGM and resolution) is promptly disclosed on EGM as well as detailed records of the !TTHE$"3!'-%'-.THESCRUTINEERSWOULD TIMEATTHE!'-%'-4HE'ROUP Starting from 2015.


SAMEDAYOFTHE!'-%'- raised by the meeting attendees.ONTHE proceedings including the questions devices are used for poll voting. Corporate governance 67 .

seeks to ensure that we are able to attract. When formulating our remuneration strategy. 1 Objectives of DBS Group remuneration strategy DBS’ remuneration policy. we believe that our long-term success depends in large measure on the contributions of our employees. There has been no significant change made to our remuneration policy in 2015. which is applicable to DBS Bank and all our subsidiaries and overseas offices. motivate and retain employees to deliver long-term shareholder returns taking into consideration risk management principles and standards set out by the Financial Stability Board (FSB) and the Code. Our Report remuneration framework is designed to be consistent with market best practices while supporting our aim of driving business strategy and creating long-term shareholder value. Remuneration policies and practices as set out in the following report are governed by a set of sound principles which are in compliance with various regulatory requirements. Remuneration At DBS. consideration was given to align our remuneration approach with DBS PRIDE! values in order to drive desired behaviours and achieve the objectives set out in our balanced scorecard. The following shows the three main thrusts of our remuneration strategy and how they are implemented within DBS: Main thrusts How Pay for performance s)NSTILLANDDRIVEAPAY FOR PERFORMANCECULTURE measured against the s%NSURECLOSELINKAGEBETWEENTOTALCOMPENSATIONANDOURANNUALAND balanced scorecard LONG TERMBUSINESSOBJECTIVESASMEASUREDTHROUGHTHEBALANCEDSCORECARD s#ALIBRATEMIXOFlXEDANDVARIABLEPAYTODRIVESUSTAINABLEPERFORMANCE ANDALIGNMENTTO$"302)$%VALUES.


ASWELLASEMPHASISONLONG TERM SUSTAINABLEOUTCOMES s$ESIGNPAYOUTSTRUCTURETOALIGNINCENTIVEPAYMENTSWITHTHELONG TERM PERFORMANCEOFTHECOMPANYTHROUGHDEFERRALANDCLAWBACKARRANGEMENTS 2 Summary of current total compensation elements An employee’s total compensation is made up of the following elements: Fixed pay Variable pay Variable pay Total compensation Salary + Cash bonus + Long-term incentive 68 DBS Annual Report 2015 .

risks and compliance objectives sDistribution of earnings between s%VALUATEDBY#-$#. responsibilities. pool Returns on Risk-Adjusted Capital (RoRAC) shareholders.The table below provides a breakdown of total compensation elements. their purpose and link to our compensation strategy. ISCOMPETITIVEVIS A VIS competencies and performance of the employee comparable institutions s0AIDINCASHMONTHLY s4YPICALLYREVIEWEDANNUALLY Variable pay Cash bonus sProvide a portion of total sBased on overall Group. Elements What Why and linkages to strategy How Fixed pay Salary sAttract and retain talent sSet at an appropriate level taking into account by ensuring our fixed pay market dynamics. business or support unit & long-term compensation that is and individual performance incentive PERFORMANCE LINKED sMeasured against a balanced scorecard which sFocus employees on the is agreed to at the start of the year ACHIEVEMENTOFOBJECTIVES s!WARDSINEXCESSOFACERTAINTHRESHOLDARESUBJECTTO which are aligned to value a tiered deferral rate that ranges from 20% to 60% creation for our shareholders sDeferred remuneration is paid in restricted shares and and multiple stakeholders COMPRISESTWOELEMENTSTHEMAINAWARDANDTHE sAlign to time horizon of risk retention award (constituting 20% of the shares given in the main award and designed to retain talent and compensate staff for the time value of deferral) sDeferred awards vest over four years s5NVESTEDDEFERREDSHAREAWARDSARESUBJECTTOCLAWBACK 3 Determination of variable pay pool 4HEVARIABLEPAYPOOLISDERIVEDFROMACOMBINATIONOFABOTTOM UPANDTOP DOWNAPPROACH)TISUNDERPINNEDBYOURAIMTODRIVE APAY FOR PERFORMANCECULTUREWHICHISALIGNEDTOOURRISKFRAMEWORK !FUNCTIONOFNETPROlTBEFORETAX -ODULATEDBYOURPERFORMANCEAGAINST benchmarked against market and balanced scorecard Determining calibrated against the following prisms: sComprises financial and non-financial total variable sRisk adjustment through review of metrics encompassing employees. customers. and the policy governing their execution. skills. experience.

Country heads are also consulted in the allocation process business units scorecard and evaluated by the CEO Individual variable pay determined based Determining 5NITHEADSCASCADETHEIRALLOCATEDPOOL on individual performance to their teams and individuals individual sPerformance measurement s.INKEDTOACHIEVEMENTOFQUANTITATIVEAS award well as qualitative objectives as set out in through balanced scorecard individual’s key performance indicators (KPIs) Remuneration Report 69 .WITHPOOLSUBSEQUENTLY employees and shareholders endorsed by the Board Allocating Pool allocation takes into account the Inputs from control functions such as Audit. relative performance of each unit pool to s-EASUREDTHROUGHEACHUNITSBALANCED Compliance and Risk are sought.





but may present a material risk collectively. The following charts show the mix of fixed and variable pay for senior management and material risk takers in respect of performance year 2015. Oliver Wyman. During the year. This is in line with the FSB principle of ensuring that employee incentives remain focused on prudent risk-taking and effective control.5 Summary of 2015 remuneration outcomes Senior management and material risk takers The balance between fixed and variable elements of total compensation changes according to performance. We define this group of staff based on their roles. DBS is also increasingly lauded for our innovation efforts and improved customer satisfaction. It is aimed at incentivising employees whose decisions can have a material impact on DBS to adopt appropriate risk behaviours. the total amount of payments for SM and MRTs have been aggregated for reporting Remuneration Report 71 . Net interest margin was at a multi-year high. These employees include senior management. in order to make banking simpler and more seamless for customers. Oliver Wyman and its consultants are independent and not related to us or any of our Directors. quantum of their variable remuneration and the ratio of their variable to fixed pay. In 2015. employees who may not pose a risk to DBS’ financial soundness on an individual basis. Senior management Material risk takers 20% 20% 39% 45% 35% 41% Note: Fixed pay We do not provide any other forms of fixed and variable Variable pay-cash remuneration aside from those disclosed in this section Variable pay-deferred shares (including retention shares) Senior Management (SM) is defined as the CEO and members Material risk takers (MRTs) are defined as employees whose duties of the Group Management Committee who have the authority require them to take on material risk on our behalf in the course of and responsibility for the Group’s overall direction and executing their work. depending on the employee’s role. we managed to grow the DBS franchise. The bank’s solid performance is underpinned by strong financial discipline and risk management. Against a backdrop of slow global growth and significant market volatility.991* during the Financial Year (SGD ’000) * Due to data confidentiality. key personnel at business units and senior control staff. rank and function. These can be either individual employees or a group of to strategy. Table 1: Guaranteed bonuses. we recorded strong performance against the balanced scorecard. was engaged to provide an independent review of the Group’s compensation system and processes to ensure compliance with the FSB Principles for Sound Compensation Practices. an external management consulting firm. sign-on bonuses and severance payments Category SM MRTs Number of guaranteed bonuses 0 0 Number of sign-on bonuses 2 9 Number of severance payments 0 0 Total amounts of above payments made 4. We also continued to make headway in creating a differentiated culture around embracing digital. while fee income grew 6% from a year ago.

clawbacks or similar reversal or downward revaluations of awards. Other Provisions We do not allow accelerated payment of deferred remuneration except in cases such as death in service or where legally required. of unvested DBSH ordinary shares as at 31 Dec 15 x share price as at 31 Dec 15] / [No. of unvested DBSH ordinary shares as at 31 Dec 14 x share price as at 31 Dec 14] (3) The reduction is mainly due to the difference in share prices as at 31 Dec 2015 and 31 Dec 2014 (4) Figures in parentheses show the change in deferred remuneration awarded if the same population of staff that fulfils the definition of SM and MRTs for both performance year 2015 and 2014 is used Examples of explicit ex-post adjustments include malus. Table 2: Breakdown of long-term remuneration awards Category SM MRTs Change in deferred remuneration awarded in current financial year(1) 5 (3) (4)% 11 (6) (4)% Change in amount of outstanding deferred remuneration  (3)  (4)%  (3)  (4)% from previous financial year(2) Outstanding deferred remuneration (breakdown): Cash 0 0 3HARESSHARE LINKEDINSTRUMENTS 100% 100% Other forms of remuneration 0 0 Total 100% 100% Outstanding deferred remuneration (performance adjustments): /FWHICHEXPOSEDTOEX POSTADJUSTMENTS 100% 100% 2EDUCTIONSINCURRENTYEARDUETOEX POSTADJUSTMENTSEXPLICIT – – 2EDUCTIONSINCURRENTYEARDUETOEX POSTADJUSTMENTSIMPLICIT (2) 16(3) (17)(4)% 18(3) (18)(4)% Outstanding retained remuneration (performance adjustments): /FWHICHEXPOSEDTOEX POSTADJUSTMENTS – – 2EDUCTIONSINCURRENTYEARDUETOEX POSTADJUSTMENTSEXPLICIT – – 2EDUCTIONSINCURRENTYEARDUE TOEX POSTADJUSTMENTSIMPLICIT – – Headcount 20 288 (1) Value of DBSH ordinary shares (including retention shares) granted in respect of performance year 2015 vs. Examples of implicit ex-post adjustments include fluctuations in the value of DBSH ordinary shares or performance units. value of DBSH ordinary shares (including retention shares) granted in respect of performance year 2014. There are no provisions for: s3PECIALEXECUTIVERETIREMENTPLANS s'OLDENPARACHUTESORSPECIALEXECUTIVESEVERANCEPACKAGESANDOR s'UARANTEEDBONUSESBEYONDONEYEAR 72 DBS Annual Report 2015 . Share price taken at date of grant (2) [No.



DBS’ 2015 earnings have more than doubled to SGD BILLIONFROM)NCOMEGREWFROMAYEARAGOTO3'$BILLION.ANDTHEBANKIS today firmly entrenched as a leading Asian bank and the largest bank in Southeast Asia.




in order to make banking simpler and more seamless for customers. DBS also continued to make headway in creating a differentiated culture around embracing digital. During the year. our employees are encouraged to embrace a digital mindset through experiential learning and experimentation through programmes such as $"3(ACKATHONS. We are also increasingly lauded for our innovation efforts and improved customer satisfaction.WEHAVEBUILTA BROAD BASEDANDSUSTAINABLEREGIONALFRANCHISEWITHMULTIPLEBUSINESSENGINES4HEBANKSSOLIDPERFORMANCEISALSOUNDERPINNEDBYSTRONG lNANCIALDISCIPLINEANDRISKMANAGEMENT7ELL DElNEDMANAGEMENTPROCESSESALLOWFORFOCUSEDANDDISCIPLINEDEXECUTIONOFPRIORITIESACROSS all businesses and countries.

This is further considered TAKINGINTOACCOUNTCOMPETITIVENESSOFTHE#%/SCOMPENSATIONPACKAGEANDOURCOMMITMENTTOCREATINGLONG TERMVALUEFORALLOFOUR STAKEHOLDERS. we achieved an employee engagement score of 79%. our employee turnover is among the lowest in the markets we operate in as people choose to grow with DBS.WHERETHEYWORKWITHSTART UPSTODEVELOPSOLUTIONSTOBUSINESSCHALLENGES On the employee front. the CMDC with the Board’s endorsement has decided on the remuneration for the CEO. On the back of these achievements. As a result. With the establishment of the DBS Foundation. the bank also supports social enterprises. the DBS workforce remains one of the most engaged. and gives back to the community. In 2015. higher than the APAC FSI (Financial Services Industry) score. taking into account our strong and sustained performance despite slower global growth and significant market volatility.

200.000 55. this figure excludes the estimated value of retention shares amounting to SGD 1.WHILEDELIVERINGRISK ADJUSTEDRETURNSWHICHCONTRIBUTETOWARDSSUSTAINABLESHAREHOLDERVALUECREATION Breakdown of remuneration for performance year 2015 (1 January – 31 December) Salary Cash Share remuneration bonus (1) Plan (3) Others (2) Total (4) SGD SGD SGD SGD SGD Mr Piyush Gupta 1. cash bonus received in following year and DBSH ordinary shares granted in following year Other key executives Although the Code and the Guidelines recommend that at least the top five key executives’ remuneration be disclosed within bands of SGD 250.600.117.ONETHELESS. which serve as a retention tool and compensate staff for the time value of deferral.439 10.439 (1) The amount has been accrued in 2015 financial statements (2) Represents non-cash component and comprises club.563.000 and in aggregate.112. given the HIGHLYCOMPETITIVECONDITIONSINTHEBANKINGINDUSTRYWHEREPOACHINGOFEXECUTIVESISCOMMONPLACE. This is also similar in nature to practices in those companies which provide accrual of dividends for deferred awards (4) Refers to current year performance remuneration – includes fixed pay in current year. the Board believes that such disclosure would be disadvantageous to our business interests. dividends on unvested shares do not accrue to employees.000 4.000 5. car and driver (3) At DBS. For better comparability with other listed companies.935.

9 million.THEAGGREGATEDTOTAL remuneration for our Senior Management (excluding the CEO) in 2015 amounts to SGD 55. Remuneration Report 73 .

16 Page 55 !NASSESSMENTOFHOWTHESEPROGRAMMESMEETTHEREQUIREMENTSASSETOUTBYTHE. and elaborate with numerical data where appropriate (c) Steps that the Board has taken to achieve the balance and diversity necessary to maximise its effectiveness Guideline 2. as well as the attendance of every Board member at these meetings Guideline 1. disclosures Reinsurers and Captive Insurers which are incorporated in Singapore (which comprises the Code of Corporate Governance 2012). who has served on the Board for more than nine years from the date of his first appointment.AMESOFTHEMEMBERSOFTHE%8#/ANDTHEKEYTERMSOFREFERENCEOFTHE%8#/. Where the Board considers a Director to be independent in spite of the existence of a relationship as stated in the Code that would otherwise deem a Director not to be independent.1 Pages 54 to 55 Compliance with the guideline on proportion of independent Directors on the Board Guideline 2. Summary of Express disclosure requirements in the Guidelines on Corporate Governance for Financial Holding Companies.3 Pages 53 to 59 Delegation of authority.6 Page 55 The induction. to be independent. 50 and 54 (a) The Board’s policy with regard to diversity in identifying Director nominees (b) Whether current composition of the Board provides diversity on skills.# to equip the Board and the respective Board committees with relevant knowledge and skills in order to perform their roles effectively Guideline 2. and the applicable disclosures pursuant to the Corporate Governance Disclosure Guide issued by the Singapore Exchange on 29 January 2015.6 Pages 49.5 Page 60 The type of material transactions that require Board approval under guidelines Guideline 1. the nature of the Director’s relationship and the reasons for considering him as independent should be disclosed Guideline 2.13 Page 56 .3 Pages 54 to 55 The Board should identify in the Company’s Annual Report each Director it considers to be independent. orientation and training provided to new and existing Directors Guideline 1. by the Board to any Board committee. experience.4 . Page reference in Principle and guidelines DBS Annual Report 2015 Guideline 1. the reasons for considering him as independent should be disclosed Guideline 2. Direct Insurers.OTAPPLICABLE Where the Board considers an independent Director.4 Pages 61 to 62 The number of meetings of the Board and Board committees held in the year. to make decisions on certain Board matters Guideline 1. gender and knowledge of the Company. Banks.

1 . explaining its role and the authority delegated to it by the Board Guideline 3.OTAPPLICABLE Relationship between the Chairman and the CEO where they are immediate family members 74 DBS Annual Report 2015 .

#ANDTHEKEYTERMSOFREFERENCEOFTHE. Page reference in Principle and guidelines DBS Annual Report 2015 Guideline 4.1 Page 54 .AMESOFTHEMEMBERSOFTHE.#.

explaining its role and the authority delegated to it by the Board Guideline 4.4 Page 55 (a) The maximum number of listed company Board representations which Directors may hold should be disclosed (b) Reasons for not determining maximum number of listed company Board representations (c) Specific considerations in deciding on the capacity of Directors Guideline 4.6 Page 54 0ROCESSFORTHESELECTION.

the Board should disclose in the Company’s Annual Report whether the external facilitator has any other connection with the Company or any of its Directors.14 Page 55 Deviation and explanation for the deviation from the internal guidelines on time commitment referred to in Guidelines 4. 54.3 Page 71 . 55. Guideline 7.13 . This assessment process should be disclosed in the Company’s Annual Report Guideline 6. including a statement on whether the remuneration consultants have any relationships with the Company Principle 9 Pages 68 to 71 Clear disclosure of remuneration policies. level and mix of remuneration.4 and 4. and procedure for setting remuneration Summary of disclosures 75 . If an external facilitator has been used.#TOBEINDEPENDENT Guideline 4. NON EXECUTIVEORCONSIDEREDBYTHE.OTAPPLICABLE Resignation or dismissal of key appointment holders Guideline 4. 61 and 62 Key information regarding Directors.1 Page 58 . including the search and nomination process Guideline 4.AMESOFTHEMEMBERSOFTHE2EMUNERATION#OMMITTEE2# ANDTHEKEYTERMSOF reference of the RC. explaining its role and the authority delegated to it by the Board Guideline 7.1 Page 54 The Board should state in the Company’s Annual Report how assessment of the Board. 58 and 63 Types of information which the Company provides to independent Directors to enable them to understand its business. its Board committees and each Director has been conducted.7 Pages 50. including which Directors are executive. and how frequent is such information provided. the business and financial environment as well as the risks faced by the Company.10 Guideline 5.APPOINTMENTANDRE APPOINTMENTOFNEW$IRECTORS to the Board.1 Pages 52.AMESANDlRMSOFTHEREMUNERATIONCONSULTANTSIFANY SHOULDBEDISCLOSED in the annual remuneration report.

The annual remuneration For the Company’s other Directors: REPORTSHOULDINCLUDETHEAGGREGATEAMOUNTOFANYTERMINATION. the CEO and at least the top five key management personnel Page 72 (who are not also Directors or the CEO) of the Company. Page reference in Principle and guidelines DBS Annual Report 2015 Guideline 9.1 For the CEO and management: Remuneration of Directors.

There will be a breakdown (in percentage or dollar terms) of each Director’s For the Company’s other Directors: ANDTHE#%/SREMUNERATIONEARNEDTHROUGHBASElXEDSALARY.RETIREMENTANDPOST Pages 61 to 62 employment benefits that may be granted to Directors.2 For the CEO: Fully disclose the remuneration of each individual Director and the CEO on a named Page 73 basis. the CEO and the top five key management personnel (who are not Directors or the CEO) Guideline 9.





ANDOTHERLONG TERMINCENTIVES Guideline 9.AMEANDDISCLOSETHEREMUNERATIONOFATLEASTTHETOPlVEKEYMANAGEMENTPERSONNEL (who are not Directors or the CEO) in bands of SGD 250.000.3 Page 73 . There will be a breakdown (in percentage or dollar terms) of each key management personnel’s remuneration earned THROUGHBASElXEDSALARY.





companies are also encouraged to fully disclose the remuneration of the said top five key management personnel Guideline 9.000 Guideline 9. Disclosure of remuneration should be in incremental bands of SGD 50. This will be done on a named basis with clear indication of the employee’s relationship with the relevant Director or the CEO.4 Page 59 Details of the remuneration of employees who are immediate family members of a Director or the CEO.5 Pages 70.6 Pages 68 to 71 and 73 For greater transparency. 174 and 175 Details and important terms of employee share schemes Guideline 9. the Company should disclose in aggregate the total remuneration paid to the top five key management personnel (who are not Directors or the CEO). In addition. companies should disclose more information on the link between remuneration paid to the executive Directors and key management personnel.000 during the year.ANDOTHERLONG TERM incentives. As best practice. and whose remuneration exceeds SGD 50. The annual remuneration report should set out a description of performance CONDITIONSTOWHICHENTITLEMENTTOSHORT TERMANDLONG TERMINCENTIVESCHEMESARESUBJECT. and performance.

The commentary should include information needed by stakeholders to make an informed assessment of the Company’s internal control and risk management systems. operational. and (b) regarding the effectiveness of the Company’s risk management and internal control systems Guideline 11. and risk management systems. including financial. an explanation on why such performance conditions were chosen. explaining its role and the authority delegated to it by the Board 76 DBS Annual Report 2015 . compliance and information technology controls.14 Pages 57 to 58 .3 Page 63 The Board should comment on the adequacy and effectiveness of the internal controls. and a statement of whether such performance conditions are met Guideline 11.AMESOFTHEMEMBERSOFTHE"OARDRISKCOMMITTEEANDTHEKEYTERMSOFREFERENCEOF the Board risk committee. The Board should also comment on whether it has RECEIVEDASSURANCEFROMTHE#%/ANDTHE#&/A THATTHElNANCIALRECORDSHAVEBEEN properly maintained and the financial statements give true and fair view of the Company’s operations and finances.

Page reference in Principle and guidelines DBS Annual Report 2015 Guideline 12.AMESOFTHEMEMBERSOFTHE!#ANDTHEKEYTERMSOFREFERENCEOFTHE!#.1 Pages 56 to 57 .

ANDBREAKDOWNOFFEESPAIDINTOTALFORAUDITANDNON AUDITSERVICESRESPECTIVELY. explaining its role and the authority delegated to it by the Board Guideline 12.6 Page 57 Aggregate amount of fees paid to the external auditors for that financial year.

investor roadshows or Investors’ Day briefings Guideline 15. companies should disclose their reasons Guideline 17.4 Page 65 Material related party transactions Summary of disclosures 77 . through analyst briefings.5 . or an appropriate negative statement Guideline 12.8 Pages 56 to 57 Summary of the AC’s activities and measures taken to keep abreast of changes to accounting standards and issues which have a direct impact on financial statements Guideline 13.7 Page 66 4HEEXISTENCEOFAWHISTLE BLOWINGPOLICYSHOULDBEDISCLOSEDINTHE Company’s Annual Report Guideline 12.OTAPPLICABLE Where dividends are not paid.4 Pages 66 to 67 The steps the Board has taken to solicit and understand the views of the shareholders e.g.1 Pages 57 and 64 Whether the Company has an internal audit function Guideline 15.

Trade loans accounted for were encouraged by the improving pace It is further supplemented by These included enhanced industry focus transportation. in underwriting new loans. We see some for several customers. greater consistency shipyard segment accounted for about generally comfortable with our exposure. are provided to the relevant in credit approvals across locations. We worked with such our strategic priorities. Our exposure to commodities other than manageable and within budget. but we do not expect the therefore should not have had significant activities. we proactively identify as it incurs the highest usage of capital. (QIS). the RMB weakened in August 2015. targeted top local and international names. we areas of underwriting and risk monitoring. Our exposure to SMEs was small but remained subdued as property prices enhancements in portfolio oversight offshore marine transportation companies. We remain vigilant to early signs of is used as a client screening tool to guide pressure since 2014. This portfolio was Our exposure to China fell from SGD 48 certain sectors slowed the pace of recovery outlook for the banking industry. As a global reforms interact with a local policy and to ensure that we remain on top of trends participate in Quantitative Impact Studies is financial market conduct. This has been market participant. Risk and control construct – risk events. CRO statement Top and emerging risks Credit risk As part of our risk management Credit risk remains our most material risk marine transportation. This and mergers of SOE might result in credit the customers’ business requirements and material impact on our business environment. Risk Acceptance Criteria (RAC) Commodity prices have been under declining fleet utilisation. may give rise to country controls may be imposed by authorities borrower. Transfer risk is non-residents. DBS always seeks to align economic agenda. exposure to each country. as the work of global bodies such as the countries.5 billion and mainly to the depreciation created cashflow problems our ability to deliver against continually monitor the environment to companies. Cyber security and arising from political and economic the risk that capital and foreign exchange lead to a default of an otherwise solvent situations where transfer risk and credit to macroeconomic outlook and country digital banking developments. In China. attention were the steel and coal exposures. identification of problem accounts via the investment grade-equivalent range. trader and segment. of which High debt levels and continued stresses in areas of focus and the risk standardise our credit process. We paid trade loans fell. Our assess whether our positions remain in line national oil companies and investment with loan repayment schedules. and The remaining exposure was to the healthy. We continue to track parties and. we have been working with was under SGD 1. oil field services and close attention to the structure and collateral three-fifths of the exposure or SGD 21 of reforms. Meanwhile. approval process. This risk is mitigated by that would prevent or materially impede evaluated against the tenor and type of are adversely correlated). usually for hedging payables denominated in RMB. (1) We use Target Market (TM) to define we further tightened lending criteria owing declined and low transaction volumes across countries and industries. Of the remaining SGD 16 billion warning monitoring. posing risks and challenges to and disseminated to the respective action of the regulatory reforms. of individual trades. risk from cross-border transactions capital management the banking industry. billion at end 2014 to SGD 37 billion as of our India portfolio. amounts to be large. Regulatory compliance Our operations are concentrated in a few and convertibility risk (“transfer risk”) foreign currency and/or transfer of funds to are deemed less risky. persisted. Nevertheless. Some customers in Greater China took positions against RMB appreciation. Data management international and domestic developments into our processes and systems. financial results and of the countries we operate in. large corporates risk committees. work into enhancing our approach to and 78 DBS Annual Report 2015 CRO statement 79 . Our exposure to the weakness and continue to exercise prudence 2015 FOCUS AREAS whole oil and gas complex – comprising not only producers and traders but also processors and support services in offshore We conducted stress tests of our oil and gas portfolios at varying Brent crude prices. remain largely unchanged. down to USD 20 per barrel to credit extension and how much risk is acceptable or tolerable. accounted for the majority and remained The residential housing market in Singapore objective and subjective criteria. Instability in these markets. led by Basel Committee on Banking influenced by enforcement actions in the with best practices as consensus develops. A transfer risk could therefore account transfer wrong-way risk (in stay within DBS’ risk appetite in response 3. segment comprising offshore marine term and trade-related facilities. We stress tested our portfolio rates. In late 2013. Our exposure to coal detrimental effects. to assess the impact United States and European markets as well For a bank with operations in multiple 9. The vulnerable names We see some stress in steel because of the These positions began incurring losses since process. and local practices 5. We to global trading houses. we grade-equivalent borrowers. While and monitor top and emerging Changes in our credit risk profile are which SGD 17 billion was loans. borrowers to better match their cash flows the larger established players. with a discussion among senior set up a dedicated team of practitioners was also typically in short-term and trade. The exposure producers but the expected credit losses are impact of their exposures. made significant improvements across the Our exposure to the support service spread over 400 clients and largely in short. shorter tenors and trade loans offshore funding of local currency assets. Large programme initiatives The global regulatory landscape continues New requirements are promptly analysed Supervision (BCBS). international oil Where needed. Outsourcing Regulatory trends management – Data 8. the economic situation processor segments amounted to SGD 13 portfolio is largely collateralised with impairments. and the billion and was healthy – the majority was average loan-to-value in the 60% range. state-owned enterprises (SOE). management about our key and project managers to strengthen and related facilities. Our from the offshore marine transportation led reforms involving capacity reductions the size of these hedges generally matched risks. Such risks can have a largely determined by the global economic exposure to the producer. resilient. the speed and extent of reputation as well as affect concentration risks of our portfolio. management risk committees. we continued to discussions with the board and with more developed nuances. It also takes into The limits and exposures are adjusted to and engagement countries. Risk appetite and to develop. our lending business rigorously to ensure it continued to be segments. We One continually evolving international trend Exchange Working Group. embedded Bank of International Settlements Foreign is to be expected as global regulatory 10. Credit risk and portfolio management Country risk 2. clearer shipyards amounted to SGD 9 billion. Liquidity management 7. earlier 60% of our exposure and were mainly in The only segments that warranted some of non-trade exposure. shortened charter periods and and identify acceptable business/industry In the property sector. as well as an important consideration in the credit Cross border transactions setting limits for the maximum transfer the conversion of local currency into exposure. primarily chronic oversupply. We have SGD 10 billion was loans. The risk of each country is also exposure in forward and currency swaps transfer risk. 1. Technology risk – Onshoring of data centre and disaster recovery planning 6. Target Market and Risk Acceptance The borrowers in oil field services and several portfolio reviews and remained of credit issued by systematically-important tighten our TMRAC and strengthen our early Periodic updates on action plans Criteria (TMRAC)(1). stress in a few smaller Indonesian coal customers to explore options to mitigate the identification process starts with our risk appetite. institutions. We also conducted billion and were mostly backed by letters conduct stress tests and portfolio reviews. and shipyards – was SGD 22 billion. In addition. where applicable. oil field services identify weak credits. oil and gas was SGD 12 billion. government. They have been faced with falling charter industry and geographical target markets to the increasing number of delinquencies. country risk is 4. of identified in the earlier stress tests. We have put substantial and changes impacting our business.

We recognise the importance of a matter of policy.) CONTROLSOFCROSS BORDERTRANSACTIONS matters. INDUSTRY. to investigate each such licences to operate in multiple countries. Regulatory trends (cont. all significant incidents These vary considerably in scale and maintaining consistency in the adoption are escalated to senior management severity and are not uncommon in this and rollout of policies across the Group. incident and to ensure that it is duly and WEMAYFROMTIMETOTIMEBESUBJECTTO appropriately managed and resolved. regulatory requirements. to cooperate with all relevant As a regulated financial institution with to ensure that we are in line with authorities. As various actions by country regulators. to the Board. and where appropriate.

including sensitive intelligence to support prevention. refreshed compliance with the laws and regulations We have in place robust processes to on a quarterly basis and reviewed of any country in which we operate. cyber security has been seen against our customers. Throughout 2015 we continued to to respond to the changing threat there is an expectation from regulators focus on cyber security. platforms in overseas locations and continue on our continued enhancement of our digital journey. During the year. Our financial crime risk mitigation processes and capability to manage controls include policy framework.REmECTINGTHEGROWINGINTENSITY We have put in place a set of governance This ensures that all such incidents are of regulatory scrutiny over time. The focus in 2015 focus on improving policies. Financial crime Financial crime risk is a focus area for many banks. To further improve our that the Board and senior management working with the government. programme is continuously reviewed With respect to financial institutions. Heightened penalties and to chart a holistic plan to address are imposed by regulators for issues evolving risks. escalate and report on suspicious annually. to understand and respond to threats Traditionally. Fraud ranks highly a benchmarking exercise to assess our Our top focus areas in on financial crime risk mitigation systems capabilities. money laundering. readiness for cyber events. systems and operations to address 2015 changes in the regulatory framework 2016 FOCUS AREAS this to continue. and they detection and response to cyber events. and by the design of appropriate controls and risk management. identify. We will continue to agendas globally. This included environment. business and support functions to are expected to play a proactive role in This information is used in our 24/7 understand cyber security risk. We enhanced our policies. to ensure we remain up to date. Officer (CISO). agenda of governments and regulators and management accountability of the scenarios to ensure incident response globally with the growth of cyber attacks security agenda. and are benchmarked approach. However. and continue to evolve. regulators governance of cyber security. current and future risk. This has been a trend for a number of years and we expect testing. Our against public and private infrastructure. The CISO supports our information of its customers. systems and 2016 are similar to 2015 was on trade finance and wealth OPERATIONSIN+EYPROJECTSINCLUDE with heightened focus management. regulatory risk management is presented PENALTYINFORABREACHORNON to the Board Audit Committee. particularly around tax THEUPGRADEOFANTI MONEYLAUNDERING on digitalisation as we evasion risk. than technology and the focus at DBS awareness programme to support the is to ensure our collective business understanding of cyber security risk. We also conducted a in sanctions. We have a structured staff or material reputational damage. products and We are not aware of any material data as a technology issue with the focus of services. Cyber security and data governance Cyber security continues to dominate the teams understand their risk ownership We have. our business and technology teams processes to manage that risk. and operational standards in our overseas SUBJECTEDTOAPPROPRIATEGOVERNANCE locations and will continue to maintain and reporting. please refer to ANTI BRIBERYCORRUPTIONMATTERS. we recently are responsible for the protection of the and industry to uplift sharing of threat appointed a Chief Information Security bank’s critical assets. we continued privacy enforcement action or significant protecting our systems and the various to strengthen our online transaction data loss incidents in 2015 which has information held within. These will ensure For more details on our principal SUBJECTMATTERADVISORYCAPABILITIESON that we are closely tracking regulatory risks and risk management ANTI MONEYLAUNDERINGSANCTIONSAND developments. tax specific review of our sanctions risk and evasion and bribery. the authorisation controls and security for our resulted or could result in material loss threat to our information is broader ATM network. Our overall approach to We have not incurred any material oversight in this area. and in ensuring effective cyber security Security Operations Centre.


pages 81 to 108. transaction screening and periodic 80 DBS Annual Report 2015 . well against international standards.

Risk We have implemented most of the Enhanced Disclosure Task Force (EDTF) recommendations for improved bank risk disclosures(1) in management 2015.5 Total assets by residual management at DBS profile of assets contractual maturity 7.2 Reputational risk 102 in 2015 (1) See ‘Enhancing the Risk Disclosure of Banks’ published by the Financial Stability Board in October 2012 (2) The additional considerations under the existing EDTF recommendations fall into the following three categories: s0ERMANENT$ISCLOSURESMADEINTHEPRE TRANSITIONPERIOD.4 Credit risk by 161 geography and industry geography and 7.2 Stress testing 86 Credit risk 5.2 Loans and advances 157 4.1 Credit risk assessed using management at DBS liabilities subject to internal ratings-based 5. please refer to Appendix on page 103. For an overview of the recommendations and where we have incorporated the relevant disclosures.3 Credit quality 161 related exposures of government 5 Equity exposures securities and under IRBA treasury bills and 6 Securitisation exposures bank and corporate 7.4 Movements in specific and general allowances Market risk 6.1 Reputational risk 102 risk management at DBS 9.1 Operational risk 100 risk management at DBS 8.2 Credit risk mitigants 89 netting agreement approach 5.4 Regulatory 99 requirements Operational 8.3 Credit risk mitigation to customers 4.3 Loans and advances to industry customers (by performing/ non-performing) 7.1 Maximum exposure 156 4.6 Interest rate risk in the management at DBS banking book 6.2 Credit risk assessed using risk models to credit risk standardised approach 5. The table below gives an overview of the locations of our risk disclosures.1 Credit exposures debt securities 7. We have also implemented the temporary and permanent disclosure recommendations(2) of the EDTF’s November 2015 report “Impact of expected credit loss (ECL) approaches on bank risk disclosures” insofar as they are applicable to DBS.4 Credit risk in 2015 91 Note 40.1 Risk constraining 85 Remuneration report 68 thresholds and use of economic capital 4. Other locations Pillar 3 quantitative Risk management section in Annual Report disclosures (3) Risk 1 Risk overview 82 Capital management 109 1 Introduction overview 2 Risk-taking and our 82 and planning 2 Capital adequacy business segments 3 Exposures and risk- weighted assets (RWA) Risk 3 Risk governance 83 Corporate governance report 48 governance 84 Risk Appetite 4.1 Market risk 94 7.3 Liquid assets 99 7.1 Credit risk 86 Note 14 Financial assets and 131 4.3 Internal credit 89 Note 40.4 Counterparty credit risk- Note 40.2 Liquidity risk in 2015 98 and liabilities 7.2 Operational risk 101 in 2015 Reputational 9.2 Major credit exposures by Note 40.1 Contractual maturity 163 7.1 Liquidity risk 96 Note 41.2 Market risk in 2015 95 7.7 Equity exposures in the banking book Liquidity risk 7.



196 91. Reputational risk is typically an outcome of failure to manage the other risk types.278 60. In addition. on the part of its stakeholders.868 160. operational risk. DBS’ long term objectives. people or systems. foreign exchange rates. Reputational risk (page 102) Is the current or prospective risk to our shareholder value (including Market risk (page 94) earnings and capital) arising from adverse perception of DBS’ image Arises from adverse changes in interest rates. The chart below provides a high level overview of the risks arising we use specialist knowledge of regional markets and industry from our business segments. while the risk-weighted assets (RWA) is the regulatory measure As a commercial bank. The sections marked by a grey line in the left margin form part of the Group’s audited financial statements 1 Risk overview Business and strategic risk Liquidity risk (page 96) Is an over arching risk arising from changes in the business Arises from the inability of DBS to meet obligations when they environment and from adverse decisions that can materially impact become due. as well as their relationships or services. credit spreads and commodity prices. a higher allocation of economic capital is of the risks incurred with respect to each business segment.613 274. It affects DBS’ ability to establish new equity prices. we also take a business other risks such as country risk.257 46. Arises from the failure of borrowers or counterparties to meet their debt or contractual obligations. the contribution of the business segments to the balance sheet. risk in the region. reputational risk segment view.579 452. This risk is managed separately under other governance processes. given to our Institutional Banking and Consumer Banking businesses compared to the Treasury business. We also maintain a buffer for 0LEASEREFERTO.270 20. and have continued access to sources of funding. continue servicing existing relationships. The asset size gives an indication of segments to assess risk against a range of criteria. 2 Risk taking and our business segments In addition to the above risk dimensions. correlations and implied volatilities.717 Risk-weighted assets 32.OTETOTHE&INANCIALSTATEMENTSONPAGE 166 for more information on DBS’ business segments. Consumer Banking/ Institutional Wealth Management Banking Treasury Others(a) Total SGD million Assets (b) 90. It includes legal risk. See page 19 for a discussion of our Operational risk (page 100) material matters. Arises from inadequate or failed internal processes. but excludes Credit risk (page 86) strategic and reputational risk.029 % of RWA Credit risk 86% 94% 37% 72% 79% Market risk 59% 23% 15% Operational risk 14% 6% 4% 5% 6% A % NCOMPASSESASSETS27!FROMCAPITALANDBALANCESHEETMANAGEMENT. We manage our risks through industry diversification and concentration management of individual exposures. Our focus on Asia naturally exposes us to concentration and model risk.685 224. or from external events.


$"36ICKERS'ROUPAND4HE)SLAMIC"ANK OF!SIA.IMITED (b) Before goodwill and intangibles 82 DBS Annual Report 2015 .

oversees the establishment of robust enterprise-wide risk management policies and processes. and sets risk limits to guide risk-taking within DBS. Under our risk management frameworks. the Board. The Board has delegated authority to various Board committees to enable them to oversee specific responsibilities based on clearly defined terms of reference. sets our risk appetite.3 Risk governance The Board directs the conduct of our affairs and provides sound leadership to the CEO and management.OTE4HELINESREmECTPOSSIBLEESCALATIONPROTOCOLSANDARENOTREPORTINGLINESPERSE Risk management 83 . Group Board Group Management Location Board and Management Board of Directors Board Executive Committee Board of Directors Board Audit Committee Group Executive Committee Nominating Committee Group Management Committee Location Board/Board Committees Compensation and Management Group Asset and Liability Committee Location Management Committees Development Committee Board Risk Management Committee Group Capital Committee Location Risk Committees Group Disclosure Committee Business Control Committees Risk Executive Committee Product Approval Committee Group Credit Risk Models Committee Group Credit Policy Committee Group Scenario and Stress Testing Committee Group Credit Risk Committee Group Market and Liquidity Risk Committee Group Operational Risk Committee . through the Board Risk Management Committee (BRMC).

liquidity. including frameworks. standards. decision criteria. authorities. Group Scenario and Stress Testing Committee (GSSTC)* Key responsibilities: s!SSESSANDAPPROVERISK TAKINGACTIVITIES Group Credit Risk Committee (GCRC) s-AINTAINOVERSIGHTOFTHEEFFECTIVENESSOF$"3RISKMANAGEMENT infrastructure. The BRMC provides oversight of the overall approaches for identification. operational and reputational risks. Group Market and Liquidity Risk Committee (GMLRC) people. monitoring. policies. management and reporting of credit. To facilitate the BRMC’s risk oversight. the following risk management committees have been established. processes. Risk management committees Risk Executive Committee (Risk ExCo) The Risk ExCo provides group-wide oversight and direction relating to the management of all risk types and is the overall executive body mandated by the BRMC on risk matters. is broadly mandated to serve as an executive forum for discussion and decisions on different Group Credit Policy Committee (GCPC)* aspects of risk and its management. information and systems s!PPROVERISKPOLICIESINCLUDINGMODELGOVERNANCESTANDARDS. Product Approval Committee (PAC)* The PAC provides group-wide oversight and direction relating to new product approvals – an important risk mitigation element within DBS. Group Credit Risk Models Committee (GCRMC)* Each committee. market. reporting to the Risk ExCo.

Working closely with the risk and business committees. The CRO is independent of business lines and is actively involved in key decision-making processes. measure. the CRO is responsible for the following: sManagement of the risks in DBS. including developing and maintaining systems and processes to identify. approve. The Chief Risk Officer (CRO) – member of the Group Executive Committee who reports to the Chairman of the BRMC and the CEO – oversees the risk management function. The local risk committees provide oversight of local risk positions across all businesses and support units and ensure compliance with limits set by the group risk committees. He also engages regulators on a regular basis to discuss risk matters. control and report risks sEngagement of senior management on material matters relating to the various types of risks sDevelopment of risk controls and mitigation processes sEnsuring the effectiveness of risk management and adherence to the Risk Appetite established by the Board 84 DBS Annual Report 2015 . They also approve location-specific risk policies and ensure compliance with local regulatory risk limits and requirements. endorse risk models and assess performance of the risk models s)DENTIFYSPECIlCCONCENTRATIONSOFRISK s2ECOMMENDSCENARIOSANDRESULTINGMACRO ECONOMICVARIABLE projections used for enterprise-wide stress tests The members in these committees comprise representatives from Risk Management Group (RMG) as well as key business and support units.STRESS Group Operational Risk Committee (GORC) testing scenarios. monitor. The above committees (excluding those marked with asterisks) are supported by local risk committees in all major locations.

EC is also deployed as a core component in our Internal Capital Adequacy Assessment Process (ICAAP). counterbalancing frameworks. through the use of limits policies and capacity to meet policies and triggers and limits standards the liquidity risk standards exposure Expected Shortfall limits(a) Obligor economic s4OTAL capital triggers s"USINESSGROUP s#ORPORATE s"USINESSUNIT s"ANKS s%NTITY s$ESK )NDUSTRYECONOMIC capital triggers s&INANCIAL institutions s. A strong organisational risk culture.ON STRATEGIC A %XPECTED3HORTFALL%3 WASPREVIOUSLYKNOWNAS4AIL6ALUE AT 2ISK Risk management 85 . processes and controls. we have adopted economic capital (EC) as our primary risk metric. helps to further embed our Risk Appetite.1 Risk constraining thresholds and use of economic capital Our Risk Appetite considers the various risk types and is operationalised via thresholds. Please refer to Sections 5 to 9 for more information on each risk type. The following chart provides a broad overview of how we cascade Risk Appetite throughout DBS. including an appropriate incentive framework (please refer to Remuneration Report section on page 68). Risk Appetite Capital allocation Credit risk Market risk Operational risk Liquidity risk Reputational risk s/BLIGOR s4RADINGBOOK s#URRENCY s)NDUSTRY (product desk) s. The inclusion of threshold structures into the risk frameworks is integral in driving Risk Appetite into our businesses. policies. Effective thresholds are essential in managing aggregate risks within acceptable levels.4 Risk Appetite Our Risk Appetite is defined by the Risk Appetite Statement set by the Board and is governed by the Risk Appetite Framework. The framework also serves to reinforce our risk culture through ‘tone from the top’ articulation of risks that we are willing to accept.EGALENTITY s#OUNTRY s"ANKINGBOOK (transfer risk) (business segment) Manage Manage market risk Manage through Maintain Manage through concentration risk through the use of frameworks. Other significant risk aspects are guided by qualitative expression of principles.ON lNANCIAL institutions Country (transfer risk) limits s3TRATEGIC s. 4. Portfolio risk limits for the quantifiable risk types are cascaded through a top-down approach and operationalised through formal frameworks. In order to ensure that the thresholds emanating from the Risk Appetite are fully risk sensitive to individual risk drivers as well as portfolio effects.

Pre-settlement credit risk on derivatives arising from a counterparty’s potential default is quantified by its current mark-to-market plus an appropriate add-on factor for potential future exposure. and includes both sensitivity analysis and scenario analysis. carry the same credit risk as loans even though they are contingent Limits and “rules for the business” are driven by DBS’ Risk Appetite in nature. 5 Credit risk Credit risk arises from our daily activities in various businesses – The operational policies are established to provide greater details on lending to retail. Risk methodologies Lending exposures are typically represented by the notional value Credit risk is managed by thoroughly understanding our customers – or principal amount of on-balance sheet financial instruments. Senior which may be materially and adversely affected by market risk management sets the overall direction and policy for managing events are identified. Settlement risk is the risk of loss due to Retail exposures are typically managed on a portfolio basis and the counterparty’s failure to perform its obligation after DBS has assessed based on credit scoring models. DBS uses an array of rating models for its corporate and retail customer that is unable to meet its obligations to third parties. reporting and controlling to guide the handling of specific wrong-way risk transactions and credit risk across DBS. and are adapted to reflect different credit environments and portfolio and settlement of transactions. internal and externally available customers’ behaviour records. measurable risk faced by DBS. which represent This is facilitated through the use of credit ratings and lending the undertaking that DBS will make payments on behalf of a limits. risks. Risk systems and Issuer default risk that may arise from derivatives and securities are methodologies reports generally measured based on jump-to-default computations. Policies 0LEASEREFERTO3ECTIONONPAGEFORFURTHERDISCUSSION on our internal credit risk models. demand in respect of credit risk and market risk is a function of balance sheet assumptions and the confidence interval implied by the target credit rating specified in the Risk Appetite Statement. For portfolios within DBS’ approach to credit risk management comprises the following the SME segment. securities transactions are measured taking into account collateral and netting arrangements. 0LEASEREFERTO. They are further supplemented by Risk Acceptance Criteria. This policy. Processes. Specific wrong-way (CCRP) sets forth the principles by which DBS conducts its credit risk risk arises when the exposure to a particular counterparty is positively management and control activities. supplemented by a correlated with the probability of default of the counterparty due to number of operational policies. DBS has a policy assessing. Credit risk is the most significant risk profiles.OTETOTHE&INANCIALSTATEMENTSON page 156 for details on DBS’ maximum exposure to credit risk. DBS actively monitors and manages its exposure to counterparties in Policies over-the-counter (OTC) derivative trades to protect its balance sheet The dimensions of credit risk and the scope of its application are in the event of a counterparty default. The Group Core Credit Risk Policy highlighted to the appropriate risk committees. Wholesale borrowers are assessed on an individual basis. It enables us to assess capital adequacy. DBS also uses a programme-based approach for building blocks: a balanced management of risks and rewards. credit bureau records. associated with such transactions.1 Credit risk management at DBS consideration the relevant credit risk factors. The Group CCRP is considered and approved by GCPC. Pre-settlement credit exposures (PCE) for trading and Statement and TMRAC respectively. Most models are built internally using DBS’ own loss data. and the economies in which they operate. This methodology is used to calculate DBS’ regulatory capital under the Current Exposure Method (CEM) and is included under DBS’ overall credit limits to counterparties for internal risk management. portfolios. reviewed and acted upon by management and credit risk at the enterprise level. Counterparty risk exposures defined in the Group Credit Risk Management Framework. and provides guidance in the formulation of its risk measurement metric takes into account the higher risks business-specific and/or location-specific credit risk policies. Projected capital adverse event. while also taking into account the business strategies determined by senior management. It alerts All stress tests are documented. Additional stress tests Stress testing is an integral part of our risk management process are carried out in response to micro and macro economic conditions. the businesses they are in. 4. Financial guarantees and standby letters of credit. The capital planning process under ICAAP seeks to align our expected identify potentially risky portfolio segments and inherent systematic business trajectory under a range of scenarios and our Risk Appetite. senior management to our potential vulnerability to exceptional but plausible adverse events. 86 DBS Annual Report 2015 . derivatives and debt securities. trading the implementation of the credit principles within the Group CCRP activities such as foreign exchange. reviewed and analysed by experienced credit risk managers taking into 5. corporate and institutional customers. This in turn allows us to define appropriate contingency plans. measuring. ensures consistency in identifying. underwriting. the nature of transactions with the counterparty. This is performed by comparing the projected demand for capital exit strategies and mitigating actions before the onset of an and projected supply of capital in stress scenarios.2 Stress testing Stress testing is minimally conducted annually. performed its obligation under an exchange of cash or securities. Credit extensions are proposed by the business unit and are approved by the credit risk function based on independent credit assessment.

risk limits are set in accordance to DBS’ Risk Appetite Framework. these thresholds and appropriate actions are taken if thresholds are Credit stress tests are performed at a portfolio or sub-portfolio level breached. we use EC as the measurement loss versus the Risk Appetite. since it combines the individual risk factors of Probability of senior management and credit management in right-sizing transfer Default (PD). country risk is managed as part of in the GCRC. Limits for strategic countries are set based on country- level of risk diversification is maintained across the Group in line with specific strategic business considerations and acceptable potential our Risk Appetite.Concentration risk management Limits for non-strategic countries are set using a model-based DBS’ risk management processes aim to ensure that an acceptable approach. and portfolio information an internal transfer risk and sovereign risk rating system where the with the specific purpose of driving model and expert oriented stress assessments are made independent of business decisions. conditions on asset quality. We set granular also whether such exposures are in line with our strategic intent. the Risk ExCo and the BRMC. We continually monitor and assess the need to enhance and are generally meant to assess the impact of changing economic the scope of thresholds. In addition. There are active discussions among the tool. These thresholds are regularly monitored in respect of major industry groups and single counterparty exposures. execution of the stress testing process and effective analysis of Country risk is embedded in the Group Credit Risk Management programme results. concentration risk management under the Risk Appetite Framework. This includes view of the macroeconomics. DBS generally performs the following types of credit stress testing at a minimum and others as necessary: $"3CONDUCTS0ILLARCREDITSTRESSTESTINGREGULARLYASREQUIREDBYREGULATORS5NDER0ILLARCREDIT STRESSTESTING. Governance processes We perform various types of credit stress tests which are directed by exist to ensure that exposures are regularly monitored against the regulators or driven by internal requirements and management. The stress testing programme is comprehensive in nature spanning The principles and approach in the management of transfer risk are all major functions and areas of business. exchange rate. Loss Given Default (LGD) and Exposure at Default risk exposures to take into account not only risks and rewards. All EC thresholds to ensure that the allocated EC stays within the Risk country limits are subject to approval by the BRMC. In addition. Transfer testing results. earnings performance. Stress test results are reported and discussed Framework and CCRP. Stress testing we set notional limits for country exposures. It brings together an expert set out in DBS’ Country Risk Management Standard. For credit risk. market. economic. sovereign and transfer risks. Appetite. but (EAD) as well as portfolio concentration factors. capital adequacy and liquidity. Country risk Country risk is the risk of loss which is specifically attributed to A credit stress test working group is responsible for developing events in a specific country (or a group of countries). It includes and maintaining a robust stress testing programme to include the political.





ON Pillar 2 credit ASSETQUALITY.










portfolio performance Our credit facilities are classified as ‘Performing assets’ or ‘Non- and the external environment that may have an impact on credit performing assets’ (NPA) in accordance with the MAS Notice to risk profiles is key to DBS’ philosophy of effective credit risk Banks No. A breakdown of collateral held for NPA schedule. key stakeholders. operations unit and other and regulators. Loss Indicates that the amount of recovery is assessed to be insignificant. These credit facilities may be non-defaulting. Doubtful Indicates that the borrower exhibits severe weaknesses such that the prospect of full recovery of the outstanding credit facilities is questionable and the prospect of a loss is high. Credit facilities are classified as restructured assets when we grant When required. specific allowances are recognised for defaulting on any credit obligation to DBS credit exposures rated sub-standard and below. may adversely affect future repayments and warrant close attention by DBS. These guidelines require credit portfolios to be categorised into industry analysis. we will take possession of collateral and dispose non-commercial concessions to a borrower because of deterioration them as soon as practicable. These functions ensure reporting for our Institutional Banking and Consumer Banking proper activation of approved limits and appropriate endorsement businesses. if not corrected in a timely manner. systems and reports Credit control functions ensure that credit risks taken comply with We continue to invest in systems to support risk monitoring and group-wide credit policies and guidelines. cash flow or financial position that may jeopardise repayment on existing terms. appropriate non-performing grade based on the assessment of the Repossessed collateral is classified in the balance sheet as other financial condition of the borrower and the ability of the borrower assets. Grading and Provisioning” (MAS Notice management. 88 DBS Annual Report 2015 . Realised proceeds are used to reduce in its financial position or its inability to meet the original repayment outstanding indebtedness. Classification grade Description Performing assets Pass Indicates that the timely repayment of the outstanding credit facilities is not in doubt.3 on page 90. we do not grant concessions to borrowers ratings is shown in Section 5. distressed debts). Processes. borrower when either or both of the following events have taken place: In addition. The amounts of such other assets for 2015 and 2014 to repay based on the restructured terms. and key strategies and a borrower’s ability to repay a credit facility from its normal sources action plans are formulated and tracked.10 to the Financial statements on page 123 for realising security (if held) our accounting policies on specific and general allowances for credit s4ECHNICALDEFAULT"ORROWERISMORETHANDAYSPASTDUE losses. without DBS taking actions such as Please refer to Note 2. which may include 612). early warning alerts and key weak credits. of income. Such credit facilities are were not material. 612 “Credit Files. Special mention Indicates that the borrower exhibits potential weaknesses that. it is not within DBS’ business model to acquire debts that have been restructured at inception (e. Classified or NPA Sub-standard Indicates that the borrower exhibits definable weaknesses in its business. Any restructuring of credit facilities are reviewed on a case by case basis and conducted only on A default is considered to have occurred with regard to a particular commercial terms.2 to the Financial Notice to Banks No. The end-to-end credit process is constantly subject of credit excesses and policy exceptions. in the normal course of business. be found in the same note. Non-performing assets Day-to-day monitoring of credit exposures. The breakdown of our NPA by loan grading and industry and the related amounts This is consistent with the guidance provided under the MAS’ of specific allowances can be found in Note 40. Risk reporting on credit trends. The linkage between the above MAS categories and DBS’ internal Other than the above.2 to the Financial statements on page 160. A restructured credit facility is classified into the is shown in Note 40. In general. RMG. 637 “Notice on Risk Based Capital Adequacy statements on page 159. s3UBJECTIVEDEFAULT"ORROWERISCONSIDEREDTOBEUNLIKELYTOPAY its credit obligations in full. not returned to the performing status until there are reasonable grounds to conclude that the borrower will be able to service all future principal and interest payments on the credit facility in accordance with the restructured terms. is one of the following five categories according to our assessment of provided to the various credit committees. and monitor compliance to review and improvement through various front-to-back initiatives with credit standards and covenants established by management involving the business units.g. A breakdown of past due loans can also Requirements for Banks incorporated in Singapore” (MAS Notice 637). but the exact amount remains undeterminable.

independent validation and approval of a credit risk model. In addition. Collateral held against derivatives generally consist of cash in major frequency of asset quality and business strategy reviews. arrangements are typically covered under market standard documentation (such as Master Repurchase Agreements and Within each asset class. DBS Bank would have to post additional collateral various credit risk factors such as capital levels and liquidity. corporate and specialised lending exposures. for a three-notch downgrade of its Standard & Poor’s Ratings Services and Moody’s Investors Bank exposures are assessed using a bank rating model covering Services ratings. Internal thresholds appropriately calibrated. internal estimates are used. under the Advanced IRBA: residential mortgages. We have put in place policies to the GCRMC and the BRMC to ensure their ongoing adequacy determine the eligibility of collateral for credit risk mitigation. 5. marketable securities. Business-specific credit risk policies and procedures including underwriting criteria. approving authorities. exposures are managed on a portfolio basis. disposal and recovery below to give a qualitative explanation of the risk benchmarks. the bank may unsecured portfolios are used to update the risk level of each loan be required to accept less highly-rated/liquid government bonds on a monthly basis. the supervisory LGD estimates party guarantees. Internal Ratings-Based Approach (IRBA). The bank takes haircuts against the underlying collateral of these transactions 5. should the need arise. Reverse repo transactions are generally limited to portfolio quality reviews. Loss estimates are based with the counterparties. Credit risk models for secured and domestic capital markets and business conditions. The validation processes are also subject Our collateral are generally diversified and valued periodically. properties. In addition. Where possible. to an independent review by Group Audit. Risk management 89 . This serves to highlight material deterioration include requiring specific collaterals to meet minimum operational in the rating systems for management attention. the credit definition of default is applied at the level of a particular facility. scoring models. qualifying revolving style transactions with financial market counterparties. which models to quantify regulatory capital include PD. Collateral include cash. the ratings from the credit models Collateral received are used as the basis to support the underwriting of credit risk. at a minimum. The risk ratings derived are benchmarked against external credit risk ratings to Other risk mitigants ensure that the internal rating systems are well aligned and DBS also uses guarantees as credit risk mitigants. reflecting the broad usage of risk models in and currencies. processes are in place for disposal of collateral held by DBS.5. bank.3. earnings. We also maintain a panel of agents and solicitors for the expeditious disposal Sovereign exposures are risk rated using internal risk rating models and of non-liquid assets and specialised equipment. However.3 Internal credit risk models in the risk assessment process include the counterparty’s financial DBS adopts rating systems for the different asset classes under the standing and specific non-quantitative factors such as industry risk. market standing and management strength. business strategies. social risk and liquidity risk Collateral posted are reviewed objectively in the sovereign rating models to assess the DBS is required to post additional collateral in the event of a rating sovereign credit risk in a disciplined and systematic approach. Each account is assigned to a risk pool. LGD and EAD. The counterparty The key risk measures generated by the internal credit risk rating risk rating process is reinforced by the facility risk rating system. repurchase agreement (repo) and other repo. political risk. reviewed on an annual basis unless credit conditions require more frequent assessment. Exceptions may arise in certain countries. processes and techniques to monitor portfolio performance bonds. is allowed to offset what we owe to a counterparty against what is due from that counterparty in a netting-eligible jurisdiction. As at 31 December 2015.1 Retail exposure models Retail portfolios are categorised into the following asset classes For derivatives. where due to against benchmarks are in place. A description of the rating grades is provided in the table liabilities. IRBA portfolios are. In the event of a default. downgrade. For retail portfolios under the Advanced IRBA. large institutions with reasonably good credit standing. management and market sensitivity. The risk ratings for the wholesale exposures (other than securitisation In times of difficulty. risk exposure is reduced by master netting arrangements where DBS rather than at the level of the obligor. International Swaps and Derivatives Association (ISDA) Agreements). such as collateral and third portfolios under the Foundation IRBA. an requirements in order to be considered as effective risk mitigants. considering factors such as Collateral received is marked to market on a frequency mutually agreed borrower characteristics and collateral type. DBS takes collateral as a secondary recourse to the monitor the performance of the portfolios and determine borrower. trade receivables. The models are placed through a rigorous review The counterparty risk rating assigned to SMEs is primarily based on the process prior to endorsement by the GCRMC and the Risk ExCo and counterparty’s financial position and strength. quality. guidelines in line with the IRBA portfolios. Credit ratings under the have to be approved by the BRMC before use. independent risk unit conducts formal validations annually for the respective rating systems. For considers other exposure risk mitigants. collateral retail exposures and other retail exposures. Factors relevant to country- specific macroeconomic risk. The respect to the eligibility of collateral. for considering guarantors to be eligible for credit risk mitigation are in place. We may also take fixed and floating charges The performance of the rating systems is monitored regularly by on the assets of borrowers. include sovereign.2 Wholesale exposure models that commensurate with collateral quality to ensure credit risks are Wholesale exposures are assessed under the Foundation IRBA and adequately mitigated.2 Credit risk mitigants are applied. Large corporate credits are assessed using approved models and reviewed by designated credit approvers. process for the development. Credit factors considered 5. as well as currencies and highly rated government or quasi government systems. we will review customers’ specific facts and exposures) have been mapped to corresponding external rating circumstances to assist them in restructuring their repayment equivalents. These are governed by internal guidelines with on historical default and realised losses within a defined period. inventory and equipment and other physical and financial collateral. There is a robust governance access to funding.3. These and robustness. asset amounting to SGD 57 million. Properties constitute the largest percentage whilst marketable securities and cash are immaterial.

geopolitical A+. capacity to meet its financial commitment is excellent. AA+. AA. social AAA Pass Performing or geopolitical conditions. capacity to meet its financial assets commitment is exceptional. financial. Pass social or geopolitical conditions. social or BBB+/BBB Pass geopolitical conditions or changing circumstances. PD Grade 9 Vulnerable to non-payment and is dependent upon favourable CCC-C Sub. PD Grade 7A/7B Marginal capacity to meet its financial commitment but capacity BB. social. B+ Pass Adverse business. financial. financial. PD Grade 3 More susceptible to adverse economic. More likely to lead to a weakened capacity of the borrower to meet its financial commitment. or economic conditions will likely impair the borrower’s capacity or willingness to meet its financial commitment. Adverse B/B. social or geopolitical conditions and changing circumstances. economic. financial. Pass conditions and other circumstances. PD Grade 8A Sub-marginal capacity to meet its financial commitment. social or geopolitical conditions and changing circumstances. PD Grade Low capacity to meet its financial commitment. economic. AA. financial. PD Grade 5 Relatively worse off than a borrower rated “4B” but exhibits BBB. Capacity to meet its financial commitment is strong. standard and below (defaulting) A & ORCOMPANIESSCOREDBYTHE(+3-%3CORING-ODEL. A description of the internal ratings used and corresponding external ratings and MAS classification for the various portfolios is as follows: Equivalent Grade (ACRR) Description of rating grade external rating MAS classification PD Grade 1 Taking into account the impact of relevant economic. Pass adequate protection parameters. defaulting) PD Grade 10 A borrower rated ’10’ and above is in default (as defined under D Sub- and above MAS Notice 637). PD Grade 2 Taking into account the impact of the relevant economic. assets to meet its financial commitment under adverse conditions. PD Grade 4A/4B Adequate protection against adverse economic. A. Non- business. Pass may become inadequate or uncertain due to adverse business. PD Grade 6A/6B Satisfactory capacity to meet its financial commitment but BB+/BB Pass capacity may become inadequate due to adverse business. and economic conditions for the borrower standard performing to meet its financial commitment. Special 8B/8C(a) business. or economic conditions will likely impair mention the borrower’s capacity or willingness to meet its financial commitment. A. Likely to have little capacity (non.




Our overall exposure was well distributed and fairly stable across 5. and we only accept ratings from Standard & Poor’s. Building and construction and communications Financial institutions. no 200 securitisation exposures are assumed as a direct consequence of arranging the transactions. we do not securitise our own assets. 300 10% 9% 5. in 2015. For transactions that are not underwritten. These portfolios include: 150 21% 19% s)2"! TRANSITIONINGRETAILANDWHOLESALEEXPOSURES 100 s)2"! EXEMPTRETAILEXPOSURES 19% 17% s)2"! EXEMPTWHOLESALEEXPOSURES 50 11% 12% The identified transitioning retail and wholesale exposures are expected to transit to the Advanced IRBA and Foundation IRBA 2015 2014 respectively. Moody’s and Fitch in such cases. Manufacturing Transportation. This was reflective of the changing estate. Any decision to invest in any such 18% 18% 150 arranged transaction is subject to independent risk assessment. working based on country of incorporation capital facility provider or swap counterparty. Such exposures require the approval of the independent risk function and are subject to Industry Concentration (SGD billion) regular risk review thereafter. Hong Kong Rest of the World Rest of Greater China We invest in clients’ securitisation transactions from time to time. In addition. and the finance. Our geographic distribution of customer loans remained stable for the past year. credit risk transfer or other strategic considerations. 161 for DBS’ breakdown of concentration of credit risk. As a result. 50 we do not provide implicit support for any transactions we structure or in which we have invested. We may also act as a liquidity facility provider. object finance.4 Credit risk in 2015 to SGD 2. weights to calculate the credit risk-weighted exposures. any securitisation 100 exposure arising will be held in the trading book to be traded or sold 47% 46% down in accordance with internal policy and risk limits. These adopt the supervisory slotting criteria specified under proactive management of the risk by tightening the credit lending Annex 7v of MAS Notice 637 which are used to determine the risk to SME customers. These 250 9% 9% transactions do not involve special purpose entities that are 16% 18% controlled by us. In the meantime. based on MAS Industry Code We use external ratings for credit exposures under the SA.4 to the Financial statements on page relevant. which was impacted by the economic slowdown in China Concentration risk and RMB devaluation. 2015 2014 We have processes in place to monitor the credit risk of our Singapore South and Southeast Asia securitisation exposures. hotel finance and commodities business environment in China as trade volumes dropped. We continue to (excluding housing loans) monitor the size and risk profile of these portfolios and will look to Others enhance risk measurement processes should these risk exposures Above refers to gross loans and advances to customers become material.9% market of Singapore accounting for 47% of the portfolio. our NPL ratio remained stable at 0.3. Non-performing assets Total NPA.3.4 Securitisation exposures various industries with Building and construction and General DBS is not active in securitisation activities that are motivated by commerce as the largest contributors in the wholesale portfolio. storage the SA has been applied.5 Credit exposures falling outside of internal 250 8% 9% 5% 6% credit risk models 9% 8% DBS applies the Standardised Approach (SA) for portfolios that are 200 individually immaterial in terms of both size and risk profile as well 17% 20% as for identified transitioning portfolios. Where DBS provides an underwriting commitment. These may include securitisation transactions arranged by us or Above refers to gross loans and advances to customers other parties. nor do we acquire assets with Geographical Concentration (SGD billion) a view to securitising them.792 million in 2015 due to higher NPA on our Greater China portfolio. where Please refer to Note 40. 300 10% 9% We arrange securitisation transactions for clients for fees. This was the result of early identification and proactive Our exposure to customers in Singapore and Rest of the World management of problem accounts coupled with write-offs made during the year. project finance. We follow the process prescribed in MAS Notice 637 to map the ratings to the relevant risk weights. subject to certification by MAS.5.3 Specialised lending exposures grew while our exposure to customers in Greater China excluding Specialised lending IRBA portfolios include income-producing real Hong Kong declined in 2015. investment Housing loans and holding companies The portfolios under the SA are subjected to our overall governance General commerce Professionals and private individuals framework and credit risk management practices. Risk management 91 .3. increased by 11% from the previous year 5. Our exposure continued to be predominantly in our home Despite the increase in NPA. in absolute terms.

0% 45.9 1. The increases in loans in Singapore and Rest of Greater China with LTV between 81% and 100% were contributed by the downward adjustments of property prices in Singapore and Taiwan respectively.9% 44.2% 96. NPA (SGD million) NPL Ratio (%) 5000 6 4.2% 0.2% 3.7% 81% to 100% 5. Property valuations are determined by using a combination of professional appraisals and housing price indices.6% 0.3% 38.213 2. Percentage of residential mortgage loans Breakdown by LTV band and geography As at 31 December 2015 LTV band Singapore Hong Kong Rest of Greater China South and Southeast Asia Up to 50% 25.513 2500 3 1.726 2.1% 96.3% 92 DBS Annual Report 2015 .7% 3.2% 51% to 80% 60.996 4 2.904 2.1 2 0.9 2.8% 35.5% As at 31 December 2014 LTV band Singapore Hong Kong Rest of Greater China South and Southeast Asia Up to 50% 29.9 0. More than 85% of our residential mortgage loans resides in Singapore.9 1250 1 2009 2010 2011 2012 2013 2014 2015 Collateral received The tables below provide breakdowns by loan-to-value (LTV) bands for the borrowings secured by properties of the various market segments.3 1.6% 44.8% 81% to 100% 14. Residential mortgages loans The LTV ratio is calculated using mortgage loans including undrawn commitments divided by the collateral value.7% 64.792 2.0% 51% to 80% 65.1% 16. New loans in Singapore are capped at LTV limits of up to 80% since 2010.0% 10.2 1.219 5 3750 3.

and monitoring the credit quality of the bank counterparties. Our property loans were mainly concentrated in Singapore and Hong Kong.2% 54.4% 20.7% 0.053 OTC derivatives settled bilaterally 1.5% 81% to 100% 5.0% 81% to 100% 5.5% 0.8% 8.1% 15.5% 52. 86% of the loans were fully collateralised. The LTV ratio is calculated as loans and advances divided by the combined value of property and other tangible collaterals.7% 47.7% collateralised As at 31 December 2014 LTV band Singapore Hong Kong Rest of South and Rest of the World Greater China Southeast Asia Up to 50% 55.7% 47.6% 27.6% 10.8% 51% to 80% 35. The latter include cash.069. vessels and aircrafts.0% Partially 7.2% 1.5% 56.0% collateralised Loans and advances to banks In line with market convention.9% 7.0% Partially 4.4% 10.0% 51% to 80% 31.7% 11.3% 6.553 Exchange-traded derivatives 30. loans and advances to banks are typically unsecured.7% 17.500 Total OTC derivatives 2. the collateral value is pro-rated. Percentage of loans and advances to corporates secured by property Breakdown by LTV band and geography As at 31 December 2015 LTV band Singapore Hong Kong Rest of South and Rest of the World Greater China Southeast Asia Up to 50% 53.1% 31.9% 15. SGD million As at 31 Dec 2015 OTC derivatives cleared through a central counterparty 479.6% 7.041 Total derivatives (only with external parties) 2.6% 27.7% 56.Loans and advances to corporates secured by property These loans are extended for the purpose of acquisition and/or development of real estate as well as for general working capital.1% 20.039. We manage the risk of such exposures by keeping a tight control on the exposure tenor. A breakdown of our derivatives counterparty credit risk by markets (OTC versus exchange-traded) and settlement methods (cleared through a central counterparty versus settled bilaterally) can be found below.0% 42. of which more than 90% had LTV of less than 80%.3% 50.594 0LEASEREFERTO.5% 19. accounting for 86% of the total portfolio.8% 42.3% 26. marketable securities and bank guarantees.0% 47. Derivatives counterparty credit risk by markets and settlement methods We continue to manage our derivatives counterparty risk exposures with netting and collateral arrangements to protect our balance sheet in the event of counterparty default.560.7% 15.8% 2.OTETOTHE&INANCIALSTATEMENTSONPAGEFORABREAKDOWNOFTHEDERIVATIVESPOSITIONSHELDBY$"3 Risk management 93 . Notional OTC & exchange-traded products In notional terms. Where collateral assets are shared by multiple loans and advances.

We manage banking book interest rate risk arising from mismatches in the interest rate profile of assets. from market opportunities. regular reviews of these control processes and systems criteria for determining the positions to be included in the trading are conducted. The backtesting P&L excludes fees and commissions. To monitor our vulnerability to unexpected but plausible extreme market risk related events. More than 90% of the gross Core Market Risk Policy (CMRP) establishes the base standards for notional value of our credit derivative positions as at 31 December market risk management within DBS. past changes in market risk factors may not provide DBS’ approach to market risk management comprises the following accurate predictions of the future market movements. previously known as Tail and reporting teams. As an exception. We adopt to manage the interest rate risk of our Institutional and Consumer the standardised approach to compute market risk regulatory capital Banking assets and liabilities. Risk methodologies Value-at-Risk (VaR) is a method that computes the potential losses The day-to-day market risk monitoring. Processes. liabilities and capital instruments (and associated hedges). backtesting does not impact our regulatory capital for market risk. including basis risk arising from different interest rate benchmarks. VaR of investments held for yield and/or long-term capital gains. systems and reports reporting of market risk in a consistent manner. yield curve risk and embedded optionality. The Policy Implementation 2015 was to 18 established names with which we maintain Guidance and Requirements (PIGR) complement the CMRP with collateral agreements. controls governing market risk stress testing across the Group. The market risk economic capital that is allocated by the BRMC is linked to ES by a multiplier. 94 DBS Annual Report 2015 . (ii) equity investments comprising under MAS Notice 637 for the trading book positions. control. we enhanced our credit spread risk modelling by deriving an implied spread from the bond prices and removing the use of proxies. production period. For backtesting. (ii) client-facilitation and (iii) benefiting actually arise on those positions on the following business day. We actively monitor our counterparty credit The Market Risk Framework sets out the overall approach while the risk in credit derivative contracts. Backtesting compares VaR calculated for positions at the Trading portfolios: Arising from positions taken for close of each business day with the profit and loss (P&L) which (i) market-making. In the third quarter of 2015. risk analytics. 6. VaR models have limitations. and revenues from intra-day trading. The Market Risk Robust internal control processes and systems are designed and Stress Test Framework sets out the overall approach. VaR at the 99% level of Non-trading portfolios: Arising from (i) positions taken confidence and over a one-day holding period is used. With effect from 2 November 2015. ES is the key risk metric used to manage our assets and liabilities. credit spread risk under loans and receivables is managed under the credit risk management framework. We use Expected Shortfall (ES). standards and implemented to support our approach for market risk management. reports Credit derivatives are used in the trading book with single name or index underlyings to support business strategy in building a regional Policies fixed income franchise.1 Market risk management at DBS for example. control and analysis on risk positions as a result of movements in market rates and prices. more details for specific subject matters. ES is supplemented by risk control metrics such as sensitivities to risk factors and loss triggers for management action. Both CMRP and PIGR facilitate the identification. we implemented a stress testing policy for market risk. of the aggregate portfolio market risk potential loss due to a range of market risk factors and instruments. Behavioural assumptions are applied in managing the interest rate Risk systems and risk of banking book deposits with indeterminate maturities. This group comprises risk control. interest rate re-pricing risk. Regular and multiple stress tests are run covering trading and non-trading portfolios through a combination of historical and Policies hypothetical scenarios depicting risk factors movement. objective and timely assessments of the control processes and systems’ appropriateness and effectiveness. These reviews provide senior management with book are stipulated in the Trading Book Policy Statement.5% level of confidence. is managed by the RMG Market and Liquidity Risk unit – an over a specified time horizon and to a given level of confidence. VaR. to monitor and limit market risk exposures. monitoring and Processes. The Additionally. (iii) strategic stakes in entities and (iv) structural foreign exchange risk arising mainly from our strategic investments which are VaR models such as historical simulation VaR permit the estimation denominated in currencies other than the SGD. measurement. Our independent market risk management function that reports to the VaR model is based on historical simulation with a one-day holding CRO. We methodologies measure interest rate risk in the banking book on a weekly basis. Previously we used the 95% level of confidence. ES is the average of potential losses beyond the given 97. and the risk building blocks: arising from severe market risk related events may be understated. 6 Market risk Our exposure to market risk is categorised into: We conduct backtesting to verify the predictiveness of the VaR model. As such.

showing the period-end. high and low ES.2 Market risk in 2015 DBS’ ES considers the market risks of both the trading and banking books. average. Our ES (based on the 97.5% level of confidence. 1 Jan 2015 to 31 Dec 2015 SGD million As at 31 Dec 2015 Average High Low Diversified 16 20 32 15 Interest Rates 17 15 21 9 Foreign Exchange 11 8 19 3 Equity 3 3 5 2 Credit Spread 8 16 23 7 Commodity # 1 2 #  !MOUNTUNDER3'$.5% level of confidence) is tabulated below. The average ES for 2015 was higher than 2014 mainly due to more volatile rates scenarios for ES calculation and updates of models for non-maturity deposits. 1 Jan 2015 to 31 Dec 2015 SGD million As at 31 Dec 2015 Average High Low Total 101 117 147 75 1 Jan 2014 to 31 Dec 2014 SGD million As at 31 Dec 2014 Average High Low Total 77 105 159 58 DBS’ major market risk driver is interest rate risk in the trading and banking books.6. The following table shows the period-end. average. The ES reported below are based on the 97. high and low diversified ES and ES by risk class for Treasury’s trading portfolios.

 1 Jan 2014 to 31 Dec 2014 SGD million As at 31 Dec 2014 Average High Low Diversified 19 14 25 9 Interest Rates 11 12 23 7 Foreign Exchange 6 5 10 3 Equity 2 2 3 1 Credit Spread 18 7 18 5 Commodity # 1 3 #  !MOUNTUNDER3'$.

 Risk management 95 .

We seek to manage our liquidity in a manner that ensures that our liquidity obligations would continue to be honoured under normal as well as adverse circumstances.1 Liquidity risk management at DBS Liquidity management and funding strategy DBS strives to develop a diversified funding base with access to funding sources across retail and wholesale channels. Treasury’s trading portfolios experienced three backtesting exceptions in 2015. foreign exchange and credit spreads. The economic value impact of changes in interest rates was simulated under various assumptions for the non-trading risk portfolio. the main risk factors driving Treasury’s trading portfolios in 2015 were interest rates. Deposit quality improved as we rebalanced the mix towards longer tenor and more sticky deposits that are favourable for the liquidity coverage ratio (LCR). The exceptions occurred in January. Customer deposits grew by SGD 3 billion in 2015. Pronounced volatilities in SGD interest rate led to the exceptions in January and December. Similar to 2014. customer deposits continued to be the predominant source of funding at 89% of total funding sources. Treasury’s trading portfolios’ average diversified ES increased by SGD 6 million (43%) and this was driven by the market volatility observed in 2015. The reported figures were based on the worse of an upward or downward parallel shift in the yield curves. 7. In DBS. Funding Sources (SGD billion) Wholesale Funding Breakdown (SGD billion) 40 38 400 Customer 4% Covered 358 349 deposits 35 32 bonds 350 17% Wholesale Other debt 300 funding 30 17% securities 250 25 Commercial papers 200 89% 91% 20 50% 46% Senior medium 150 15 term notes Negotiable 100 10 certificates 26% 34% 5 of deposits 50 11% 9% 3% 3% 2015 2014 2015 2014 96 DBS Annual Report 2015 . SGD million J F M A M J J A S O N D 40 30 20 10 0 -10 -20 -30 -40 Backtesting profit and loss (in S$’m) VaR at 99% confidence interval (in S$’m) The key market risk drivers of our non-trading portfolios are SGD and USD interest rate positions. August and December. The economic value changes were negative SGD 250 million and SGD 425 million (2014: negative SGD 275 million and SGD 489 million) based on parallel shifts to all yield curves of 100 basis points and 200 basis points respectively. 7 Liquidity risk DBS’ liquidity risk arises from our obligations to honour withdrawals of deposits. repayments of borrowed funds at maturity. As at 31 December 2015. Our funding strategy is anchored on strengthening our core deposit franchise as the foundation of the Group’s long-term funding advantage. In August. and commitments to its customers to extend loans. the exception was triggered by the volatile swings in RMB interest rates and foreign exchange.

To complement core deposits. The diagrams below show our asset funding structure as at 31 December 2015. The issue priced favourably with a tight interest rate spread on the back of strong interest across 16 countries. At the end of 2015. This enhanced the visibility of our covered bond programme and the appeal of our issuances to global investors.2 on page 98). market conditions and other factors that may With increasing diversification of funding sources. currency and tenor remains challenging. size. Overseas locations are encouraged but not required to centralise majority of their borrowing and deployment of funds with head office. the mismatch in fund deployment against sources with respect to pricing. we DBS’ approach to liquidity risk management comprises the following make appropriate use of the swap markets for different currencies. wholesale funding as a percentage of total funding sources increased marginally by 2% to 11%. growth in loans and deposits. momentum in business activities. This gave us access to liquidity from a new class of institutional investors at improved cost efficiency. We mitigate this risk by setting triggers on the amount of swaps transacted with the market and making Policies conservative assumptions on the cashflow behaviour of swaps under our cashflow maturity gap analysis (see Section 7. taking into account the relevant regulatory restrictions while maintaining a commensurate level of presence and participation in the local funding markets. other debt securities and covered bonds. market competition. economic outlook. negotiable certificate of deposits. in the conversion and deployment of surplus funds across locations. During our annual budget and planning process. As these swaps typically mature earlier than loans. funding. each overseas location conducts an in-depth review of their projected loan and Policies deposit growth as well as their net funding and liquidity profile for The Group Liquidity Risk Management Policy sets out our overall the next year. Risk management 97 . 2015 also saw DBS taking the lead as the inaugural issuer in the Singapore covered bond market. Intra-group funding transactions Processes. The consolidated Group funding and liquidity profiles approach towards liquidity risk management and describes the are reviewed and revised as necessary by senior management. commercial papers. utilisation of wholesale our assets and liabilities. To this Approach to liquidity risk management end. These overseas location is required to provide justification if head office include maintaining an adequate counterbalancing capacity to funding support is required. where practicable and transferable without loss in value. we are exposed to potential cashflow mismatches arising from the risk that counterparties may not roll over maturing swaps with us to support the continual funding of loans. This gives us greater flexibility and efficiency in liquidity management. Each range of strategies employed by DBS to manage our liquidity. we also worked on broadening our access to wholesale funding through issuances of medium term notes. Risk are priced on an arm’s length basis with reference to prevailing systems and market rates and parameters set within the Group Funds Transfer methodologies reports Pricing policy. This was achieved through actively engaging and growing a diversified global base of high quality investors. building blocks: commensurate with the liquidity of each.1 on page 163 for the contractual maturity profile of composition. Liabilities and equity Assets Total equity 9% 9% Others Other liabilities 8% Loan and advances Subordinated term debts 1% to customers 8% Bank and corporate securities Other debt securities Due from banks Deposits and balances from customers 62% Government securities Due to banks Loan/ and T-bills deposit Cash and balances ratio 88% with central banks 70% 9% 8% 8% 4% 4% Please refer to Note 29 to the Financial statements on page The Group Assets and Liabilities Committee and respective Location 141 for more details of our wholesale funding sources and Assets and Liabilities Committee regularly review balance sheet Note 41. We were also awarded the European Covered Bond Council Covered Bond Label – the first granted to an issuer outside the European Economic Area. optimising affect liquidity in the continual refinement of DBS’ funding strategy. The value of such flexibility was seen in 2015 amid market and rate hike volatility. Commercial papers were stepped- up as a complementary source of cost-efficient short-term liabilities to fund a prudential increase in liquidity buffers.

456) 8. Any occurrences of forecasted shortfalls that cannot be covered by the counterbalancing capacity would be A conservative view is therefore adopted in the behavioural profiling escalated to the relevant committees for deliberation and actions. risk analytics. liabilities and off-balance sheet commitments that have exhibited cashflow patterns that differ significantly from the Stress testing is performed under the cashflow maturity mismatch contractual maturity profile shown under Note 41. wholesale borrowing and swapped funds ratios. This unit comprises risk control.785 A 0OSITIVEINDICATESAPOSITIONOFLIQUIDITYSURPLUS.457 27. It assesses the adequacy of our counterbalancing capacity In forecasting cashflows under the analysis. a normal scenario without incorporating growth projections. the survival period and the minimum of stable funding for commercial banks and consistently exhibited level of liquid assets. cashflows. and reporting teams.982 41. measuring. medium term notes. reporting analysis are managed by the RMG Market and Liquidity Risk unit – and control within DBS.2 Liquidity risk in 2015 The primary measure used to manage liquidity within the tolerance We actively monitor and manage our liquidity profile based on the defined by the Board is the cashflow maturity mismatch analysis. in depth analysis of our liquidity position. measurement. Stress tests assess our vulnerability when liability run-offs increase.899 26. we further enhanced of a potential or actual crisis. such as liquidity-related ratios and mismatch analysis. production consistent application throughout DBS. commercial papers and across locations. and covers adverse scenarios involving shocks that are statements on page 163. Risk methodologies 7.355 17.1 of our Financial analysis. controlling and of managerial interventions that improve liquidity. In the event monitoring liquidity risk across DBS.767 8. analysis is performed on a regular basis under normal and adverse scenarios. In 2015. THELIQUIDITYMISMATCHESMAYNOTBEDIRECTLYCOMPARABLEACROSSPASTBALANCESHEETDATES 98 DBS Annual Report 2015 .825 Net liquidity mismatch Cumulative mismatch 27.EGATIVEINDICATESALIQUIDITYSHORTFALLTHATHASTOBEFUNDED (b) As the behavioural assumptions used to determine the maturity mismatch between assets and liabilities are updated from time to time.404 10.578 30. we have in place a set of liquidity the capabilities of our in-house data platform to improve the contingency and recovery plans to ensure that we maintain timeliness of our cash flow information as well as to perform more adequate liquidity.364 (6. The Policy is supported by Standards which establish the detailed The day-to-day liquidity risk monitoring. are complementary tools to the cashflow reflected higher excess cash and liquid asset holdings.811 22.553) 7. general market and/or name-specific in nature. This cashflow maturity mismatch analysis. ad-hoc stress tests are mismatch between assets and liabilities over a 1-year period under performed as part of our recovery planning and ICAAP exercises. Counterbalancing capacity includes liquid assets and Robust internal control processes and systems underlie our overall the capacity to borrow from the money markets as well as forms approach to identifying. on a group-wide basis. behavioural profiling is to fund or mitigate any cashflow shortfalls that may occur as necessary in cases where a product has indeterminate maturity or forecasted in the cashflow movements across successive time bands. 1 week to 1 to 3 3 to 6 6 months to SGD million (a) Less than 7 days 1 month months months 1 year As at 31 Dec 2015 27. are pre-specified for monitoring and control stability even under historical periods of stress. systems and reports of liquidity. Standards and supporting an independent liquidity risk management function that reports to Guides communicate these baseline requirements to ensure the CRO. Loan growth maturity mismatch analysis and are performed regularly to was supported largely by diversified stable funding sources which obtain deeper insights and finer control over the liquidity profile include deposits. aggregating. The set of Policies.803 Net liquidity mismatch Cumulative mismatch 21. concentration measures on top depositors.364 14.298 2.197 29. asset rollovers increase The table below shows our behavioural net and cumulative maturity and/or liquid asset buffers reduce. address potential cashflow shortfalls and having diversified sources Processes. The liquidity risk control measures also include covered bonds. the contractual maturity does not realistically reflect the expected To ensure that liquidity is managed in line with the Risk Appetite. DBS’ liquidity was observed to remain adequate under the maturity Liquidity risk control measures. of assets. and current account deposits which are generally viewed as a source such as the types of scenarios. control reporting and requirements for liquidity risk identification. In addition. Increase in near-term cumulative cash flows balance sheet analysis. An example would be maturity-indeterminate savings core parameters underpinning the performance of the analysis.022 As at 31 Dec 2014(b) 21.457 (102) (9.

Internally.7. liquid assets are maintained in key locations and currencies to ensure that operating entities in such locations possess a degree of self-sufficiency to support business needs as well as protect against contingencies.130 38.155 10. before they are reflected as available funds under the cashflow maturity mismatch analysis used to manage liquidity risk within the risk tolerance.304 18. taking into account projected stress shortfalls under its cashflow maturity mismatch analysis and other factors.285 Government securities 2. The main portion of our liquid assets is centrally maintained in Singapore to support liquidity needs in smaller overseas subsidiaries and branches. DBS sets a requirement to maintain its pool of liquid assets above a minimum level as a source of contingent funds.797 92.795 25. Liquid assets Others (d) Total Encumbered Unencumbered Total Average (c) SGD million [1] [2] [1] + [2] As at 31 Dec 2015 6.013 24. regulatory.938 26.580 35.501 and treasury bills Banks and corporate 857 25. contractual or other restrictions. The table below shows DBS’ encumbered and unencumbered liquid assets by instrument and counterparty against other assets in the same category under the balance sheet. taking into account asset class.774 17.930 33.688 (a) Unencumbered balances with central banks comprise holdings that are unrestricted and available overnight.073 securities Total 10.650 30. The encumbered portion REPRESENTSTHEMANDATORYBALANCESHELDWITHCENTRALBANKS.633 131. Figures are based on the carrying amount as at the balance sheet date.155 14. Such assets are internally defined under the governance of the relevant oversight committees.525 15. In practice.832 13. issuer type and credit rating.751 10. A further requirement is that these liquid assets are unencumbered by being free of legal.055 86.258 81. In addition to the characteristics of the liquid assets.278 40.689 1. our Treasury function should be able to operationally monetise the pool of liquid assets to meet liquidity shortfalls under times of stress.397 921 34.3 Liquid assets Liquid assets are assets that are readily available and can be easily monetised to meet liquidity shortfalls under times of stress.829 Cash and balances with central banks(a) Due from banks (b) – 14.931 39. among other criteria.




DBS is well-positioned to meet the minimum standards of the Basel III Net Stable Funding Ratio (NSFR). The international timeline targeted for implementation is January 2018. as assessed under regulatory standards and our internal measures. our funding strategy in the normal course of business does not rely on collateralised wholesale funding. 7. As can be observed from the table. Group LCR was maintained well above the minimum LCR requirements under MAS Notice 649. Based on our internal assessment and participation in the Quantitative Impact Studies by the Basel Committee on Banking Supervision. which sets out the implementation of the Basel III LCR in Singapore. as a domestic bank incorporated and headquartered in Singapore. Risk management 99 . 649 “Minimum Liquid Assets (MLA) and Liquidity Coverage Ratio (LCR)” (MAS Notice 649). Instead. the MAS published MAS’ Notice to Banks No.341 million were recognised for liquidity management under stress. is required to comply with the LCR standards under MAS Notice 649 from 1 January 2015. collateral received in reverse repo transactions amounting to SGD 5. For the full year of 2015. DBS.4 Regulatory requirements On 28 November 2014. among other considerations In addition to the above table. liquid assets are maintained as a source of contingent funds to meet potential shortfalls that may arise under times of stress.

taking address cyber security risk. Fraud laundering. tools end management of fraud and related issues within DBS. We have also established policies and standards to manage and Our objective is to keep operational risk at appropriate levels. of the internal controls. including any significant incidents that mitigation programme to manage business disruptions. fraud and bribery/corruption. This is established through the leadership of our Board and senior management and Processes. are required to be reported based on crisis management and business continuity management programme certain established thresholds. and programme. New Product protection of the assets and reputation of DBS and the interests of Approval Policy and Outsourcing Risk Policy. Overall BCP objectives are aimed at minimising the impact risks. governance. the characteristics of the we have appointed a Chief Information Security Officer who businesses as well as the competitive and regulatory environment is responsible for our cyber security risk management strategy we are subject to. and relevant systems and controls. our businesses and activities. including but not limited to the following: of business interruption arising from severe loss scenarios and to provide a reasonable level of service until normal business operations Technology risk are resumed. There are policies. into account the markets we operate in. Countering financial activity. standards. monitoring. fraudulent acts. Variations of existing products control self-assessment is used by each business or support unit to or services and outsourcing initiatives are also subject to a identify key operational risk and assess the degree of effectiveness similar process. Key risk indicators with pre-defined is in place within essential business services during unforeseen escalation triggers are employed to facilitate risk monitoring in a events. 8. unit and geographical level. industry codes or standards of professional conduct applicable to the conduct of business in the financial sector. Such events. Group Compliance Policy. These include corporate operational risk policies and standards Money laundering. mitigate and report on such risks through a combination of policy. We also provide relevant training and execute assurance processes. Risk methodologies New product and outsourcing risks We adopt the standardised approach to compute operational risk Each new product. laws and regulations applicable to the licensing and conduct of banking or other financial businesses. assessment. Planning for business resilience includes identification of forward-looking manner. system and acceptance and is supported by a set of IT policies and failure and natural disasters. sanctions. vendors’ misperformance. These standards aim to provide end-to- systematic and consistent manner. terrorist financing.1 Operational risk management at DBS Compliance risk DBS’ approach to operational risk management comprises the Compliance risk is the risk of impairment to our ability to successfully following building blocks: conduct our business as a result of any failure to comply with laws. financing of terrorism and sanctions risks which are owned by the respective corporate oversight and control There are minimum standards for our business and support units to functions and include key subject-specific policies such as Technology mitigate and manage our actual and/or potential exposure to money Risk Management Framework. regulatory requirements. This is based on the Fraud Management The Group Operational Risk Management (ORM) Policy provides a Programme through which standards are to be implemented on a group-wide approach for managing operational risk in a structured. A robust may impact DBS’ reputation. control processes and risk mitigation programmes. This covers risk declaration and activation of the relevant committees or teams to 100 DBS Annual Report 2015 . We maintain a compliance programme designed to identify. To manage and control operational risk. For control issues identified. Accountabilities have also been established for the the Financing of Terrorism and Sanctions Policy. aims to comply with the letter and spirit of the laws and regulatory Risk systems and standards in the environment in which we operate. measure. financial crime such as anti-money laundering and countering the Policies financing of terrorism. investigate and remediate against Policies fraud and related events. To enhance our management of this risk. we use a risk review and sign-off process where relevant risks are identified various tools including risk and control self-assessment. customers and shareholders. mitigation inappropriate behaviour of staff. The crisis management structure encompasses an Information Technology (IT) risk is managed in accordance with incident management process from the point of incident to crisis a Technology Risk Management Framework. Operational risk events are classified in accordance with Business continuity management plays an integral role in DBS’ risk Basel standards. communication. or other illicit Management Policy and Group Anti-Money Laundering. the units are responsible for developing action plans and tracking the timely Other mitigation programmes resolution. key business processes via Business Impact Analysis as well as the documentation and maintenance of Business Continuity Plan Additional methodologies are in place to address subject-specific (BCP). service or outsourcing initiative is subject to regulatory capital. Operational risk is inherent in most of standards. 8 Operational risk Operational risk includes processing errors. Risk and proposing the product or service. assess. in particular. methodologies reports Fraud risk We have established minimum standards for our business and support units to prevent. This includes. corruption. detect. We also strongly believe in the need to promote a strong compliance culture. operational and assessed by departments independent of the risk-taking unit risk event management and key risk indicators monitoring. and programmes in place to govern ORM practices across the Group.

13%) in 2014. processes.80 100% 13.manage the crisis. (iv) execution. DBS has acquired insurance policies relating to crime and professional indemnity. Nevertheless. Losses were highest in the category of execution. safety-at-risk incidents Units are responsible for the day-to-day management of operational (e.8 interruption.g. property damage and business The total operational risk losses in 2015 decreased to SGD 10. monitoring.54 100% . The losses from external fraud were due largely to credit card fraud. risk and control self-assessment. assess key operational risk issues with the units to determine the impact across DBS. (ii) external fraud. terrorism) and other events leading to significant business risk in their products. varying scenarios to test the BCPs and crisis management protocol.000 and based on the date of detection of the operational Robust internal control processes and systems are integral to risk event). RMG Operational Risk and BRMC on an annual basis including the state of business continuity other corporate oversight and control functions provide oversight readiness. delivery and process operational risk management processes and tools including management.OTE. delivery and process management  55%   External fraud     Clients. Senior management provides an attestation to the with the various frameworks and policies. (iii) clients. from third-party insurers. was mainly categorised into the following four Basel identifying. our credit card fraud losses were lower than the industry benchmark.OLOSSESWEREREPORTEDFORVI EMPLOYMENTPRACTICESANDWORKPLACESAFETYANDVII DAMAGETOPHYSICALASSETS Execution. million (0. DBS purchases group-wide insurance policies. Exercises are conducted annually.2 Operational risk in 2015 directors and officers liability.5 million (0. enterprise-wide impact on essential banking services. delivery and process management and external fraud accounted for 96% of the Group’s operational risks losses in 2015.10% of DBS’ total operating income). and (v) business disruption and system failure. Insurance Programme. tracking of issues or action plans and operational Scenarios include incidents such as technology incidents having risk reporting. under the Group recommendations on appropriate risk mitigation strategies. managing and reporting operational risk. The loss profile (net loss greater than Processes. risk event categories: (i) internal fraud. key risk indicators. natural disasters with wide geographical area impact. general liability and terrorism. compared to SGD 13. systems and activities in accordance disruption. Risk management 101 . delivery and process management which arose from a few isolated incidents and mitigating actions have been taken accordingly. systems and reports SGD 10. 8. We have implemented a web-based system that supports multiple products and business practices. of residual risks. simulating operational risk event reporting. products and business practices     )NTERNALFRAUD     "USINESSDISRUPTIONANDSYSTEMFAILURE     Total 10. 2015 2014 Basel risk event types SGD million % SGD million % Execution. report and/or escalate key operational risks To mitigate losses from specific unexpected and significant event to relevant senior management and board-level committees with risks. extent of alignment to regulatory guidelines and disclosure and monitor the effectiveness of operational risk management.

Inherent risk (operational and business/strategic risks) as the periodic risk and control self-assessment process. For more information on how we engage our stakeholders. Policies are in place to protect the consistency of the DBS brand and to safeguard our corporate identity and reputation. general public. Financial risk (credit. trade unions. there are policies relating to media communications. There are also escalation following building blocks: and response mechanisms in place for managing reputational risk.2 Reputational risk in 2015 and respond to reputational risk events. see page 20. Board and senior management. As reputational risk is DBS’ priority is to prevent the occurrence of a reputational risk event a consequence from the failure to manage other risk types. These are reinforced by sound corporate the DBS franchise in 2015. government agencies and regulators. values that embed ethical behaviours and practices throughout DBS. investors. Policies We adopt a four-step approach i. There definitions and principles for managing such risks are articulated in were no significant reputational risk incidents which could endanger the respective risk policies. While the respective risk policies address the individual risk types. These risks include: mechanisms for ongoing risk monitoring. rating agencies. Processes. reports assess and respond to reputational risk. Processes. alerts from external parties/ 9.e. 9 Reputational risk We view reputational risk as an outcome of any failure to manage Risk methodologies risks in our day-to-day activities/decisions as well as from changes Under the various risk policies. the rather than to take mitigating actions when it materialises. In addition. We recognise that creating a sense of shared value through engagement with key stakeholder groups is imperative for our brand and reputation. business alliances. as well b. social media and corporate social DBS’ approach to reputational risk management comprises the responsibility to protect DBS’ reputation. the Reputational Risk Policy focuses specifically on stakeholders’ perception of how well DBS manages its reputational risks. prevent. Events of reputational risk impact are also featured in the reporting of risk profiles to senior management and board-level committees. Policies Stakeholders include customers. vendors. detect. market and liquidity risks) risk limits.1 Reputational risk management at DBS stakeholders also serve as an important source to detect potential risk reputational risk events. Apart from observations from internal sources. and employees. 102 DBS Annual Report 2015 . media. These take the form of a. we have established a number of in the operating environment. key risk indicators and other operating metrics. escalate 9. systems and reports Risk Units are responsible for the day-to-day management of reputational systems and methodologies risk by ensuring that processes and procedures are in place to identify.

4 each new key regulatory ratio. Disclose how the risk management organisation.1. 2 Define the bank’s risk terminology and risk measures and Sections 1. outline plans to meet Section 7. provide such key ratios.1. Disclose the credit loss modelling techniques developed Refer to Note 1 below to implement the ECL approach. Refer to Note 1 below processes and key functions have been organised to run the ECL methodology. liquidity coverage ratio and leverage ratio and.1 present key parameter values used. incorporating Refer to CRO statement relevant information in the bank’s external reports on a timely basis. 3 Describe and discuss top and emerging risks. once the applicable rules are in force. and how Section 4 procedures and strategies are applied to support the culture. processes and key functions. 7. Refer to Corporate Governance section Risk management 103 . the net stable funding Refer to Capital management and planning section ratio. Temporary considerations in respect of impact of expected credit loss approaches: Provide disclosures describing how the concepts applied Refer to Note 1 below and modelling techniques under the current impairment approaches compare with the new ECL approach to highlight factors which may drive changes in ECL that may not have been relevant in current impairment approaches.Appendix Where have we disclosed this? (in Risk General recommendations management section unless otherwise stated) 1 Present all related risk information together in any Refer to the table on page 81 particular report. 5. 6.g. 8. 4 Once the applicable rules are finalised. Risk governance and risk management strategies/business model 5 Summarise prominently the bank’s risk management Section 3 organisation. e. Temporary considerations in respect of impact of expected credit loss approaches: Banks should consider describing the intended Refer to Note 1 below implementation strategy including the current timeline for the implementation.1. 6 Provide a description of the bank’s risk culture. 0ERMANENTCONSIDERATIONSINRESPECTOFIMPACT of expected credit loss approaches: Describe how the bank interprets and applies the key Refer to Note 1 below concepts within an ECL approach.

including capital instruments and regulatory adjustments. including changes in common equity tier 1. and Pillar 3 disclosures published on DBS website cyclical and capital conservation buffers or the minimum internal ratio established by management. 6.1. To the extent regulatory requirements are unclear or not yet fully determined. Temporary considerations in respect of impact of expected credit loss approaches: Banks should consider explaining how ECL requirements are Not applicable anticipated to have an impact on capital planning. the effects of such uncertainty should be discussed. including a description of management’s view of the required or targeted level of capital and how this will be established. A reconciliation of the accounting balance sheet to the regulatory balance sheet should be disclosed. to the extent the impact is material. 11 Present a flow statement of movements since the prior Refer to Capital management and planning section reporting date in regulatory capital. 12 Qualitatively and quantitatively discuss capital planning Refer to Capital management and planning section within a more general discussion of management’s strategic planning. Stress testing disclosures should provide a narrative overview of the bank’s internal stress testing process and governance. (particularly (regulatory requirements have not yet been fully in meeting capital adequacy requirements) including any determined) strategic changes expected by management. 8 Describe the use of stress testing within the bank’s risk Sections 4.2. 13 Provide granular information to explain how risk-weighted Section 2 assets (RWAs) relate to business activities and related risks. 104 DBS Annual Report 2015 . if any.1. 5. tier 1 and tier 2 capital. 2 and 4 models and activities. #APITALADEQUACYANDRISK WEIGHTEDASSETS 9 Provide minimum Pillar 1 capital requirements. 10 Summarise information contained in the composition of Refer to Pillar 3 disclosures published on DBS website capital templates adopted by the Basel Committee to provide an overview of the main components of capital. Where have we disclosed this? (in Risk General recommendations management section unless otherwise stated) 7 Describe the key risks that arise from the bank’s business Sections 1.1 governance and capital frameworks. 7. including Refer to Capital management and planning section capital surcharges for G-SIBs and the application of counter. Temporary considerations in respect of impact of expected credit loss approaches: Describe the relationship. the bank’s Risk Appetite in the context of its business models and how the bank manages such risks. between the stress Not applicable testing programs and the implementation of ECL accounting requirements.

present a table showing the capital requirements for each method used for calculating them. 6. Funding 19 Summarise encumbered and unencumbered assets in Section 7. 17 Provide a narrative putting Basel Pillar 3 back-testing Section 6. Banks should provide a narrative discussion of management’s approach to determining the behavioural characteristics of financial assets and liabilities. including key sources and Section 7.3 a tabular format by balance sheet categories. 20 Tabulate consolidated total assets. Liquidity 18 Describe how the bank manages its potential liquidity needs Sections 7.1 balance sheet date. total RWAs and RWA density for Basel asset classes and major portfolios within the Basel asset classes at a suitable level of granularity based on internal ratings grades. Present separately (i) senior unsecured borrowing (ii) senior secured borrowing (separately for covered bonds and repos) and (iii) subordinated borrowing. for each Basel asset class as well as for major portfolios within those classes. ideally by providing averages as well as period-end balances. including collateral received that can be rehypothecated or otherwise redeployed. including on DBS website counterparty credit risk. liabilities and off-balance Section 7. including how the bank has assessed model performance and validated its models against default and loss. 21 Discuss the bank’s funding strategy.1 any funding concentrations. reliance on wholesale funding. Risk management 105 . 16 Present a flow statement that reconciles movements in RWAs Not implemented for the period for each RWA risk type. Where have we disclosed this? (in Risk General recommendations management section unless otherwise stated) 14 Present a table showing the capital requirements for each Refer to Pillar 3 disclosures published method used for calculating RWAs for credit risk. For market risk and operational risk.2 requirements into context. This is to facilitate an understanding of available and unrestricted assets to support potential funding and collateral needs.1. 7.3 and provide a quantitative analysis of the components of the liquidity reserve held to meet these needs. to enable effective insight into available funding sources.2 sheet commitments by remaining contractual maturity at the Financial statements Note 41. 15 Tabulate credit risk in the banking book showing average Refer to Pillar 3 disclosures published probability of default (PD) and LGD as well as exposure at on DBS website default (EAD).1. any geographical or currency risks and changes in those sources over time.

commodity and equity measures. 24 Provide qualitative and quantitative disclosures that describe Sections 6. such as VaR.4 risk concentrations.4 the bank’s credit risk profile. economic capital. 6. use of proxies. stressed VaR or other alternative approaches. Credit risk 26 Provide information that facilitates users’ understanding of Section 5. The disclosure should discuss how market liquidity horizons are considered and applied within such measures.2 techniques employed by the bank to measure and assess the risk of loss beyond reported risk measures and parameters.1. earnings or economic value scenario results. economic value and earnings scenarios and/or sensitivities. 0ERMANENTCONSIDERATIONSINRESPECTOFIMPACTOF expected credit loss approaches: Where it aids understanding of credit risk exposures. 6.1 of the linkages between line items in the balance sheet and the income statement with positions included in the traded market risk disclosures (using the bank’s primary risk management measures such as Value at Risk (VaR)) and non- traded market risk disclosures such as risk factor sensitivities.1. 25 Provide a description of the primary risk management Sections 6. validation procedures.2 significant market risk measurement model limitations. including any significant credit Financial statements Note 40. through methods such as stress tests. provide users with a quantitative assessment of the potential impact of applying an ECL approach. Once practical and when disclosures would be reliable. scenario analysis. Not applicable provide disclosure of vintage. changes in risk measures and models through time and descriptions of the reasons for back-testing exceptions. assumptions. 6. and how these results are used to enhance the parameters of the model. Temporary considerations in respect of impact of expected credit loss approaches: Banks should consider whether existing segmentation for Not applicable disclosure purposes is sufficiently granular to appropriately (quantitative assessment not yet available) understand credit risk under an ECL approach. foreign exchange. expected shortfall.1. Where have we disclosed this? (in Risk General recommendations management section unless otherwise stated) Market risk 22 Provide information that facilitates users’ understanding Section 6. 106 DBS Annual Report 2015 . 23 Provide further qualitative and quantitative breakdowns of Sections 6.2 significant trading and non-trading market risk factors that may be relevant to the bank’s portfolios beyond interest rates.

Risk management 107 . Where have we disclosed this? (in Risk General recommendations management section unless otherwise stated) 27 Describe the policies for identifying impaired or Section 5. 30 Provide qualitative information on credit risk mitigation.1 non-performing loans.2 the allowance for loan losses. In addition to risks such as operational risk. 5. 29 Provide a quantitative and qualitative analysis of the Section 5.2 including operational. Section 5. 5. regulatory compliance.1. 5. 9 classifications and discuss how each one is identified. Disclosures should include an explanation of the effects of loan acquisitions on ratio trends. fraud risk and legal risk. restructured and returned- to-performing (cured) loans as well as explanations of loan forbearance policies. including how the bank defines impaired or non-performing. reputational risk. the lessons learned and the resulting changes to risk processes already implemented or in progress. governed. 32 Discuss publicly known risk events related to other risks. regulatory compliance and legal risks. Section 8. 8. Such disclosures should concentrate on the effect on the business. where material or potentially material loss events have occurred.1. measured and managed. Other risks 31 Describe ‘other risk’ types based on management’s Section 1.4 of non-performing or impaired loans in the period and Financial statements Note 40. and qualitative and quantitative information about restructured loans. 28 Provide a reconciliation of the opening and closing balances Sections 5.2. technology. it may be relevant to include topical risks such as business continuity.4 bank’s counterparty credit risk that arises from its derivatives transactions.1. and outsourcing.4 including collateral held for all sources of credit risk and quantitative information where meaningful.

interest implemented. s !lNANCIALASSETISCLASSIlEDUNDER3TAGEIFITWASNOT credit-impaired upon origination but has since suffered a significant increase in credit risk. leveraging existing The steering committee is supported by a core working group which credit rating systems. we will continue to provide the requisite disclosures. reasonable and supportable forward-looking expected credit loss (ECL) model (as discussed below) is eventually information. This is an intended IFRS 9 requirements. The assessed ECL is expected to be unchanged from the existing specific allowances taken for such assets. unemployment. which classifies financial assets into three categories or Disclosures stages. models. unlikely to result in rates and property prices. Under this stage. however. “Impact of expected credit loss approaches on bank risk disclosures”. The ECL assessment in each instance under International Accounting Standard 39. Periodic progress IFRS 9 impairment methodology updates will be provided to the Audit Committee. Implementation plan Current impairment approach A steering committee. take impairment for expected credit losses”. such as forecast GDP. for impairment assessment. It is envisaged that adjustments will be made to existing addition to specific allowances. impairment charges will be determined using an ECL model. 108 DBS Annual Report 2015 . the ECL of a financial asset will be determined using the probability of default over the next 12 months. “Guidance on credit risk and accounting entities classify and measure financial instruments. chaired by the CFO. has been established to At present. a prudent level of general allowances credit rating systems. The ECL will be determined using the probability of default over its lifetime. will develop a blueprint to operationalise the applicable governance. Under IFRS 9. inflation. and possible changes will also take into account. credit-impaired upon origination and there has not been a significant increase in its credit risk since. This new accounting standard will govern how reporting December 2015 report. in ECL model. s !lNANCIALASSETWHICHHASBEENCREDIT IMPAIREDWITH objective evidence of default is classified under Stage 3. s ! lNANCIALASSETISCLASSIlEDUNDER3TAGEIFITWASNOT where applicable. processes and tools to accommodate of at least 1% of uncollateralised exposures. each of which is associated with an ECL requirement that is DBS intends to adopt the disclosure recommendations outlined in reflective of the assessed credit risk profile: the EDTF’s November 2015 report. Any such changes are. processes and controls around the ECL model. (or allowance) charges and account for hedges. The Group has begun preparations in the meantime. in particular for point-in-time and lifetime departure from the incurred loss provisioning approach prescribed estimates of credit losses. processes and tools. In the intervening period prior to 2018. including the development of the with the provisions of MAS Notice 612 where banks maintain. through the exercise of management to the current regulatory specifications will determine how IFRS 9’s judgement. Singapore banks comply oversee IFRS 9 implementation. models. Note 1: New impairment methodology In 2018. International Financial Reporting Standard 9 (IFRS 9) will Further guidance was specified by the Basel Committee in its take effect. additional allowance charges for DBS at the point of adoption.

The growth prospects and the need to maintain prudent capital levels in transaction was completed on 8 January 2015. 3. 134. taking into consideration our strategic plans and On 19 November 2014.g.011. Capital allocations by business line are set as part Notes due 2023 Callable in 2018.30% Subordinated Notes due 2022 Callable in 2017 and SGD 491. investors and During the year.60. The Capital While these notes qualify as Tier 2 capital for DBS Bank (China) Committee receives regular updates on our current and projected Limited.30 per The remaining USD 350 million of notes that were not repurchased ordinary share. In order to achieve this. requirements and internal capital targets.246 ordinary shares were issued pursuant to rating agencies. including stress scenarios of On 11 January 2016. This added SGD 163 million to ordinary share capital. each issued pursuant to the of the budget process and monitored during the year. these subsidiaries did not experience any impediments to the distribution of dividends. available for business growth and investment opportunities as well as adverse situations. On 28 April 2015. for Banks Incorporated in Singapore” (MAS Notice 637) and the expectations of various stakeholders. regulatory capital is one of several metrics used to measure business performance. when USD 550 view of forthcoming regulatory changes. e. long-term Subordinated Notes due 2021 Callable with Step-up in 2016.25 million of the SGD 1. 637 “Notice on Risk Based Capital Adequacy Requirements and the opportunity to raise or retire capital. During the course of the year. The Board articulates this objective in the form of the Scrip Dividend Scheme. 3.html) for the in its respective jurisdiction. the Board has recommended a final dividend of SGD 0. Refer to Note 31 to the Financial Statements for details to shareholders and ensuring that adequate capital resources are on the movement of share capital and treasury shares during the year. This added SGD 110 million to ordinary capital targets. it executes its business strategy in line with our strategy. A key tool for capital planning is the annual Internal non-viability loss-absorbency trigger is only with respect to DBS Capital Adequacy Assessment Process (ICAAP) through which we Bank (China) Limited at the determination of the China Banking assess our forecast capital supply and demand relative to regulatory Regulatory Commission.75 Capital capacity is allocated on two dimensions: by business line million of the SGD 1.000 million DBS Bank Ltd. Return on USD 30. The CFO chairs the Capital Committee. Capital management and planning 109 . 32 and 34 to the Financial Statements as distribution of capital resources across entities. to which the Scrip Dividend Scheme is being applied. DBS Bank Ltd.292. Committee.10% Subordinated and by entity. offered to purchase for risk appetite. In line with our dividend million of the notes were purchased and subsequently cancelled.Capital management and planning Objective Capital structure The Board is responsible for setting our capital management We manage our capital structure in line with our capital management objective. DBS Group Holdings Ltd purchased SGD differing scope and severity.000 million Global Medium Term Note Programme. they do not qualify as Tier 2 capital for the Group as their capital position. bringing the total ordinary dividend for the year to SGD 0. customers.000 million DBS Bank Ltd.421 DBS Group Holdings Ltd non- Process voting redeemable convertible preference shares were converted into ordinary shares. all 30. 5. which is to maintain a strong capital position consistent objective and in order to optimise the cost and flexibility offered by with regulatory requirements under the MAS’ Notice to Banks various capital resources. Our dividend policy is to pay sustainable dividends over cash up to USD 550 million of the USD 900 million Floating Rate time. The ICAAP has a three-year horizon and covers various scenarios. taking into account well as the Pillar 3 Main Features of Capital Instruments disclosure the capital adequacy requirements imposed on each subsidiary (http://www.dbs. Capital allocations by entity seek to optimise the Refer to Notes 30. Our capital management objective is implemented via a capital On 17 December 2015. This objective is pursued while delivering returns share capital. policy. we assess the need No. Capital is allocated to ensure that terms of the capital instruments that are included in Eligible each subsidiary is able to comply with regulatory requirements as Total Capital. 31. consistent with our capital management objective. are subject to the original terms and conditions of the notes. DBS Bank (China) Limited issued CNY 2 management and planning process that is overseen by the Capital billion of Fixed Rate Subordinated Notes due 2025 Callable in

703 Conversion of non-voting redeemable convertible preference shares (CPS) 163 Issue of shares pursuant to Scrip Dividend Scheme 110 Issue of shares upon exercise of share options 4 Purchase of treasury shares (258) Profit for the year (attributable to shareholders) 4. The table below analyses the movement in Common Equity Tier 1.068 Tier 2 Capital Opening amount 5.045 Total Capital 42.657 Movements in Tier 2 capital instruments issued by fully-consolidated subsidiaries that (665) meet criteria for inclusion Movement in provisions eligible as Tier 2 capital 54 Others. Statement of changes in regulatory capital for the year ended 31 December 2015 In SGD millions Common Equity Tier 1 (CET1) Capital Opening amount 34.113 110 DBS Annual Report 2015 .542) Cost of share-based payments 103 Movements in other comprehensive income. including available-for-sale revaluation reserves (205) Others. including regulatory adjustments and transitional arrangements (1) Closing Amount 5. Additional Tier 1 and Tier 2 Capital during the year.068 CET1 Capital 37. including regulatory adjustments and transitional arrangements (464) Closing Amount 37.454 Dividends paid (1.068 Additional Tier 1 Capital Opening amount – Conversion of non-voting redeemable CPS (eligible under transitional arrangements) to ordinary shares (130) Movements in Additional Tier 1 capital instruments issued by fully-consolidated subsidiaries that meet (108) criteria for inclusion Others. including regulatory adjustments and transitional arrangements 238 Closing Amount – Tier 1 Capital 37.

regulatory capital recognition of outstanding Tier 1 and Tier 2 capital instruments that no longer meet the minimum criteria is gradually being phased out.3 Basel III fully phased-in Common Equity Tier 1(2) 12.Capital Adequacy Ratios Our consolidated Common Equity Tier 1 Capital Adequacy Ratio (CAR) as at 31 December 2015 was 13.dbs.639 4.360 Risk-Weighted Assets (RWA) Credit RWA 216.0% (inclusive of capital conservation buffer) effective on 1 January 2019. Refer to ‘Five-Year Summary’ for the historical trend of Tier 1 and Total CAR.5 13.703 Provisions eligible as Tier 2 capital 1.068 34. was 12.0 7. Our Basel III fully phased-in CET1 CAR.068 34.269 26.304 Total regulatory adjustments to Tier 2 capital (2) (1) Total capital 42. (2) Calculated by dividing Common Equity Tier 1 capital after all regulatory adjustments applicable from 1 January 2018 by RWA as at each reporting date.179 Total regulatory adjustments to Additional Tier 1 capital (2.354 Tier 2 capital instruments (1) 3.4%.814 Total regulatory adjustments to Common Equity Tier 1 capital (2.5%. which comfortably exceeds the eventual effective minimum CET1 CAR requirement under MAS Notice 637 of 9. To the extent a capital instrument is redeemed or amortised after 1 Jan 2013.408 1.4 15. We are also well-positioned to comply with forthcoming leverage ratio requirements.4 11.423 Market RWA 40.0 Total 10.5 5.703 Additional Tier 1 capital instruments (1) 2.113 Disclosed reserves and others 29.029 respectively.1 Tier 1 13. Our Common Equity Tier 1 CAR. calculated by dividing Common Equity Tier 1 capital after all regulatory adjustments applicable from 1 January 2018 by risk-weighted assets (RWA) as at the reporting date. were all well above the MAS’ minimum requirements of 6.179) Tier 1 capital 37. Capital management and planning 111 .144) Common Equity Tier 1 capital 37.0 Notes: (1) As part of the Basel III transitional arrangements. In SGD millions.950 Total RWA 274.1 Total 15.080) Regulatory adjustments due to insufficient Additional Tier 1 capital (373) (1. The table below sets out our capital resources and capital adequacy ratios.380 206. Refer to http://www. as at 31 December 2015 2014 Share capital 10.113 40.212 41.941) (3.5 Tier 1 8. with this cap decreasing by 10 percentage points in each subsequent year.941 3.5 13. At the end of the year the consolidated leverage ratio stood at 7. 8.5%.0 10. their recognition was capped at 90% in 2013. Tier 1 CAR and Total CAR.html for the Group’s Pillar 3 Quantitative Disclosures which set out details on the Group’s RWA.186 Capital Adequacy Ratio (CAR) (%) Common Equity Tier 1 13.0% and 10.437 15.9 Minimum CAR (%) Common Equity Tier 1 6.813 Operational RWA 17. well above the minimum 3% envisaged by the Basel Committee.219) (1.391 10.3%. Fixing the base at the nominal amount of such instruments outstanding on 1 January 2013. the nominal amount serving as the base is not reduced.

093 14.1% -0. The chart below analyses the drivers of the movement in Common Equity Tier 1 CAR during the year.9 14.3 14.2% -0. The countercyclical buffer is not an ongoing requirement. These buffers will be phased in on 1 January each year from 2016 to 2019.5%. banks incorporated in Singapore were required to comply with a minimum CET1 CAR of 6. and minimum Total CAR of 10%.706 11.3 11. The Basel Committee expects jurisdictions to implement the 112 DBS Annual Report 2015 .5% 0. the higher loss absorbency requirement for locally-incorporated D-SIBs is met by the foregoing minimum ratios being two percentage points higher than those established by the Basel Committee. CAR (%) Total RWA Common Equity As at 31 December 2015 (SGD millions) Tier 1 Tier 1 Total DBS Bank (Hong Kong) Limited 38.1% 12. minimum Tier 1 CAR of 8. The applicable magnitude will be a weighted average of the country-specific countercyclical buffer requirements that are required by national authorities in jurisdictions to which a bank has private sector credit exposures.1% -0.5% and countercyclical buffer of up to 2.0 DBS Bank (China) Limited 16.arrangements voting redeemable CPS Note: (1) Calculated by dividing Common Equity Tier 1 capital after all regulatory adjustments applicable from 1 January 2018 by RWA as at the reporting date.9 17.0%.4 Regulatory change As of 1 January 2013. the MAS has incorporated Basel III provisions into Singapore prudential regulation.4% Dec 2014 Net profit Dividends Scrip Regulatory Other CET1 Credit Market Operational Dec 2015 Basel III Dec 2015 CET1 attributable to paid Dividend adjustments movements RWA RWA RWA CET1 phase-in Basel III fully (Transitional) shareholders Scheme and and (Transitional) phased-in conversion transitional CET1(1) of non. Group Common Equity Tier 1 CAR (%) 1.1% -0. In April 2015.1% 13.5% -1.7% -0. and is only applied as and when specified by the relevant banking supervisors. the MAS designated DBS Bank as a domestic systemically important bank (“D-SIB”). Singapore prudential regulation will require a Capital Conservation Buffer (CCB) of 2.1% 13. Under the MAS’ framework for identifying and supervising D-SIBs.5% that are to be met fully with CET1 capital. The following table sets out the RWA and capital adequacy ratios as at 31 December 2015 of our significant banking subsidiaries calculated in accordance with the regulatory requirements applicable in the country of incorporation. From 1 January 2015. In line with Basel III requirements.6% 0.

625% from 1 January 2016. While we are not a G-SIB. As part of the Basel III transitional arrangements. trading book market risk.5 Maximum Countercyclical Buffer – 0. The table below summarises the minimum capital requirements under MAS Notice 637. Fixing the base at the nominal amount of such instruments outstanding on 1 January 2013. the nominal amount serving as the base is not reduced. inter alia.dbs.5 6.875 10. we are required to disclose the 12 indicators which are published on the Group website (http://www.html). Of the jurisdictions where we have material private sector credit exposures.0 8.5 6. with this cap decreasing by 10 percentage points in each subsequent year.5 6.25 11.countercyclical buffer during periods of excessive credit growth.5 CET1 including CCB (a) + (b) 6.5 CCB (b) – 0.875 2. As stated above.5 7. that Singapore-incorporated banks are well- capitalised and already subject to capital standards that are stricter than Basel III standards.625 1.75 8. their recognition was capped at 90% in 2013. To the extent a capital instrument is redeemed or amortised after 1 January 2013. regulatory capital recognition of outstanding Tier 1 and Tier 2 capital instruments that no longer meet the minimum criteria is gradually being phased out. only Hong Kong has announced the activation of the countercyclical buffer requirement. Our preference shares and subordinated term debts issued prior to 1 January 2013 are ineligible in the first instance as capital instruments under Basel III rules as they lack provisions for conversion to ordinary shares or write-down at the point of non-viability as determined by the MAS.0 10. we continue to maintain our dividend policy which takes into consideration. We are able to absorb this capital buffer requirement within our existing capital resources.625 11. interest rate risk in the banking book and operational risk as well as capital floors are at various degrees of finalisation by regulators and are expected to be effected in the coming years.5 In addition to changes in minimum capital requirements. the uncertain impact of regulatory change. Capital management and planning 113 .com/investor/index.25 1.5 6. the MAS published a consultation paper on proposed enhancements to the resolution regime for financial institutions in Singapore. The Basel Committee has developed an indicator-based methodology for identifying global systemically important banks (G-SIBs) on which higher loss absorbency requirements will be imposed.25 1. In June 2015. The Hong Kong Monetary Authority announced on 27 January 2015 that the applicable jurisdictional countercyclical buffer for Hong Kong will be 0.5 Effective Total including CCB 10. These adjustments are being phased in up to 1 January 2018 and are for items such as goodwill and investments exceeding certain thresholds. Basel III also mandates various adjustments in the calculation of capital resources. This reflects. From 1 January 2015 2016 2017 2018 2019 Minimum CAR % CET1 (a) 6. inter alia.125 7.0 Effective Tier 1 including CCB 8.875 2.25 9.625 9. The proposed enhancements include a statutory bail-in regime that is only applied to unsecured subordinated liabilities issued or contracted after the implementation of the statutory bail-in regime.875 12.375 9. Changes to the rules for the computation of RWA for credit risk.625 1. but are accorded partial recognition under the Basel III transitional arrangements. counterparty credit risk.

Financial statements DBS Group Holdings Ltd Balance Sheet: Liabilities 140 Deposits and Balances from Customers and its Subsidiaries Other Liabilities 141 Other Debt Securities 115 Consolidated Income Statement 142 Subordinated Term Debts 116 Consolidated Statement of Comprehensive Income 117 Balance Sheets Balance Sheet: Share Capital and Reserves 118 Consolidated Statement of Changes in Equity 143 Share Capital 119 Consolidated Cash Flow Statement 144 Other Equity Instruments Other Reserves and Revenue Reserves Notes to the Financial Statements 146 Non-controlling Interests 120 Domicile and Activities Summary of Significant Accounting Policies Off-Balance Sheet Information 126 Critical Accounting Estimates 147 Contingent Liabilities and Commitments Financial Derivatives Income Statement 127 Net Interest Income Additional Information Net Fee and Commission Income 150 Share-based Compensation Plans Net Trading Income 151 Related Party Transactions Net Income from Investment Securities 152 Fair Value of Financial Instruments Other Income 156 Credit Risk Employee Benefits 163 Liquidity Risk 128 Other Expenses 166 Capital Management Allowances for Credit and Other Losses Segment Reporting 129 Income Tax Expense Earnings per Ordinary Share DBS Bank Ltd Balance Sheet: Assets 169 Income Statement 130 Classification of Financial Instruments 170 Statement of Comprehensive Income 133 Cash and Balances with Central Banks 171 Balance Sheet Government Securities and Treasury Bills 172 Notes to the Supplementary Financial Statements Bank and Corporate Securities 134 Loans and Advances to Customers 174 Directors’ Statement 135 Financial Assets Transferred 178 Independent Auditor’s Report Other Assets 136 Deferred Tax Assets/Liabilities Subsidiaries and Consolidated Structured Entities 137 Associates 138 Unconsolidated Structured Entities Properties and Other Fixed Assets 140 Goodwill and Intangibles 114 DBS Annual Report 2015 .

486 Allowances for credit and other losses 11 743 667 Profit after allowances 5.77 1.027 Net trading income 6 1.100 6.898 Income tax expense 12 727 713 Net profit 4.144 2.567 4.644 8.DBS Group Holdings Ltd and its Subsidiaries Consolidated income statement for the year ended 31 December 2015 In $ millions Note 2015 2014 Interest income 9.923 9.023 5.651 2.280 4.77 1.544 2.321 Net fee and commission income 5 2.185 Attributable to: Shareholders 4.819 Share of profits of associates 14 79 Profit before tax 5.823 3.816 Employee benefits 9 2.627 Net interest income 4 7.63 Diluted earnings per ordinary share ($) 13 1.454 4.567 4.495 Total income 10.294 4.900 4.249 2.330 Profit before allowances 6.948 Interest expense 2.294 Other expenses 10 2.046 Non-controlling interests 113 139 4.185 Basic earnings per ordinary share ($) 13 1.036 Total expenses 4.204 901 Net income from investment securities 7 339 274 Other income 8 136 293 Non–interest income 3.61 (The notes on pages 120 to 168 as well as the Risk management section on pages 81 to 108 form part of these financial statements) Financial statements 115 .

when foreign operations or available-for-sale financial assets are disposed of (The notes on pages 120 to 168 as well as the Risk management section on pages 81 to 108 form part of these financial statements) 116 DBS Annual Report 2015 .432 Non-controlling interests 121 144 4.448 4.327 4. DBS Group Holdings Ltd and its Subsidiaries Consolidated statement of comprehensive income for the year ended 31 December 2015 In $ millions 2015 2014 Net profit 4.576 Attributable to: Shareholders 4.567 4. net of tax (119) 391 Total comprehensive income 4.576 (a) Items recorded in ”Other comprehensive income” above will be reclassified subsequently to the income statement when specific conditions are met e.185 Other comprehensive income(a): Foreign currency translation differences for foreign operations 29 96 Share of other comprehensive income of associates 2 7 Available-for-sale financial assets and others Net valuation taken to equity (218) 467 Transferred to income statement 61 (165) Tax on items taken directly to or transferred from equity 7 (14) Other comprehensive income.g.448 4.

517 Government securities and treasury bills 16 34.765 Non-controlling interests 34 2.443 Liabilities Due to banks 18.894 168 152 Revenue reserves 33 22.134 317.580 6.460 1.206 17.708 17.171 10.547 19.374 37.661 Subordinated term debts 30 4.765 (The notes on pages 120 to 168 as well as the Risk management section on pages 81 to 108 form part of these financial statements) Financial statements 117 .289 275.416 Properties and other fixed assets 25 1.665 Total liabilities 415.073 37.796 40.884 1.DBS Group Holdings Ltd and its Subsidiaries Balance sheets as at 31 December 2015 The Group The Company In $ millions Note 2015 2014 2015 2014 Assets Cash and balances with central banks 15 18.694 Due from banks 38.117 Total assets 457.728 24 17 Other debt securities 29 38.995 46 14 Bank and corporate securities 17 40.765 Equity Share capital 31 10.176 Deposits and balances from customers 27 320.078 31.840 6.144 10.194 Other equity instruments 32 803 803 803 803 Other reserves 33 6.422 2.251 16.117 5.752 19.796 40.485 Goodwill and intangibles 26 5.695 17.285 42.963 1.145 18.588 Other assets 20 11.038 400.834 440.829 19.206 17.631 16.404 11.114 10.000 995 Subsidiaries 22 – – 19.603 19.705 6.695 17.562 11.498 Total equity 42.173 Derivatives 36 22.501 29.249 Associates 23 1.755 Other liabilities 28 12.263 10 13 Derivatives 36 23.695 17.026 4.908 1.616 Shareholders’ funds 40.666 19.547 1.678 Net assets 42.763 Loans and advances to customers 18 283.

492 17.453 37.233 3.752 40.327 121 4.468) (1.705 22.262 34.422 42.468) Dividends paid to non-controlling interests – (141) (141) Change in non-controlling interests – (63) (63) Total comprehensive income 386 4.498 40.542) Dividends paid to non-controlling interests – (125) (125) Acquisition of non-controlling interests (78) (78) (72) (150) Total comprehensive income (127) 4.206 (The notes on pages 120 to 168 as well as the Risk management section on pages 81 to 108 form part of these financial statements) 118 DBS Annual Report 2015 .708 2.796 2014 Balance at 1 January 9.171 803 6.374 2.542) (1.840 37.542) (1.840 37.432 144 4.894 19.046 4.448 Balance at 31 December 10.468) (1. DBS Group Holdings Ltd and its Subsidiaries Consolidated statement of changes in equity for the year ended 31 December 2015 Non- Share Other equity Other Revenue controlling Total In $ millions capital instruments reserves reserves Total interests equity 2015 Balance at 1 January 10.894 19.454 4.676 803 6.206 Issue of shares upon exercise of share options 4 4 4 Cost of share-based payments 103 103 103 Reclassification of reserves upon exercise of 1 (1) – – share options Draw-down of reserves upon vesting of 86 (86) – – performance shares Issue of shares pursuant to Scrip Dividend Scheme 110 110 110 Purchase of treasury shares (258) (258) (258) Dividends paid to shareholders (1.686 Issue of shares upon exercise of share options 13 13 13 Cost of share-based payments 88 88 88 Reclassification of reserves upon exercise of 4 (4) – – share options Draw-down of reserves upon vesting of 68 (68) – – performance shares Issue of shares pursuant to Scrip Dividend Scheme 489 489 489 Purchase of treasury shares (79) (79) (79) Redemption of preference shares of a subsidiary – (895) (895) Dividends paid to shareholders (1.114 803 6.708 2.498 40.171 803 6.576 Balance at 31 December 10.

874 3.865) Other assets (5.361 (2.808 Other liabilities 1.911) (3.976 Cash flows from investing activities Proceeds from disposal of interest in associate – 435 Acquisition of interest in associate and joint venture (21) (88) Dividends from associates 32 98 Purchase of properties and other fixed assets (334) (263) Proceeds from disposal of properties and other fixed assets 140 55 Acquisition of non-controlling interests (150) – Acquisition of business – (281) Net cash used in investing activities (2) (333) (44) Cash flows from financing activities Increase in share capital 4 13 Purchase of treasury shares (258) (79) Dividends paid to shareholders of the Company.567 4.554) (3.643 (Increase)/Decrease in: Restricted balances with central banks 960 111 Government securities and treasury bills (4.185 Adjustments for non-cash items: Allowances for credit and other losses 743 667 Depreciation of properties and other fixed assets 251 220 Share of profits of associates (14) (79) Net gain on disposal (net of write-off) of properties and other fixed assets (82) (35) Net income from investment securities (339) (274) Net gain on disposal of associate – (223) Cost of share-based payments 103 88 Income tax expense 727 713 Fair value gain on acquisition of interest in joint venture – (3) Profit before changes in operating assets and liabilities 5.DBS Group Holdings Ltd and its Subsidiaries Consolidated cash flow statement for the year ended 31 December 2015 In $ millions 2015 2014 Cash flows from operating activities Net profit 4.604 Deposits and balances from customers (1. net of scrip dividends (1.350) (1.446) Loans and advances to customers (4.958 8.858 2.851 (The notes on pages 120 to 168 as well as the Risk management section on pages 81 to 108 form part of these financial statements) Financial statements 119 .121) Exchange translation adjustments (4) 240 91 Net change in cash and cash equivalents (1)+(2)+(3)+(4) 227 902 Cash and cash equivalents at 1 January 11.259 Increase/(Decrease) in: Due to banks 1.632 1.851 10.078 11.558) Bank and corporate securities (1.592) 24.167) Tax paid (730) (733) Net cash generated from operating activities (1) 2.306 Other debt securities and borrowings 5.432) (979) Dividends paid to non-controlling interests (125) (141) Payment upon redemption of subordinated term debts – (977) Purchase of subordinated term debts (743) – Redemption of preference shares of a subsidiary – (895) Change in non-controlling interests – (63) Net cash used in financing activities (3) (2.192) (2.949 Cash and cash equivalents at 31 December (Note 15) 12.076) (27.956 5.986) Due from banks 4.

The Group controls an entity when it is exposed to. Reporting Standards (IFRS) and FRS or has rights to. statements. amended standards in preparing these financial statements. Authority of Singapore. It includes revised guidance on the classification and measurement of financial Compliance with Singapore Financial Reporting instruments and introduces a new expected credit loss model for Standards (FRS) impairment of financial assets as well as new requirements for The financial statements of the Company and the consolidated general hedge accounting. Marina Bay Financial Centre Tower Three. and has the ability to affect those returns through its power over there are no significant differences between IFRS and FRS in terms of the entity. which statements of the Group. is wholly owned and engaged in a range of commercial banking and financial services. 2. Critical accounting estimates and 31 December 2015 were authorised for issue by the Directors assumptions used that are significant to the financial statements. the requirements of FRS 39 Financial Instruments: Recognition described further below starting with those relating to the entire and Measurement in respect of loan loss provisioning are modified financial statements followed by those relating to the income by the requirements of Notice to Banks No. 612 “Credit Files. The preparation of financial statements requires management to exercise judgement. The Group has not applied these standards or (the Group) and the Group’s interests in associates. is incorporated and accounting standards domiciled in the Republic of Singapore and has its registered office at 12 Marina Boulevard. the Company’s income statement has not been included in A) General Accounting Policies these financial statements. Although these estimates are based on management’s best knowledge of current events and actions.3 Adoption of new and revised The Company. on 19 February 2016. Early with Singapore Financial Reporting Standards (FRS) and related adoption is permitted. 1 Domicile and Activities 2. Interpretations promulgated by the Accounting Standards Council (ASC). the balance sheet and other specific topics. This does Grading and Provisioning” (MAS Notice 612) issued by the Monetary not reflect the relative importance of these policies to the Group. Subsidiaries Subsidiaries are entities (including structured entities) over which the Differences between International Financial Group has control.1 Basis of preparation Instruments: Recognition and Measurement. treasury and funding vehicle The adoption of these FRS has no significant impact on the financial for the group. variable returns from its involvement with the entity Beyond the above modification to FRS related to MAS Notice 612. As permitted by Section 201(10)(b) of the Act. s )MPROVEMENTSTO&23S The Company is an investment holding. a number of new standards and amendments to standards are effective for annual periods beginning The financial statements relate to the Company and its subsidiaries after 1 January 2015. The standard is effective for annual financial statements of the Group are prepared in accordance reporting periods beginning on or after 1 January 2018. FRS that are issued by the ASC and relevant for the Group: The Company is listed on the Singapore Exchange. are disclosed in Note 3. use estimates and make assumptions in the All intra-group transactions and balances are eliminated application of policies and in reporting the amounts in the financial on consolidation. On 1 January 2015.2 Significant estimates and judgement The acquisition method is used to account for business combinations. 2 Summary of Significant Accounting Policies FRS109: Financial Instruments FRS 109 replaces the existing guidance in FRS 39 Financial 2. to the Group to the date control ceases. None of them is expected to have a significant effect on the financial statements of the Group and the Company other than FRS 109. unless otherwise stated. In addition to the above.4 Group Accounting The financial statements are presented in Singapore dollars and rounded to the nearest million. In accordance with Section 201(18) of the Companies Act (the A summary of the most significant group accounting policies is Act). Its main subsidiary is DBS Bank Ltd (the Bank). DBS Group Holdings Ltd. the Group adopted the following new or revised Singapore 018982. and areas involving a higher degree of judgement and complexity. Refer to Note 2. their application to the Group. actual results may The consolidated financial statements for the year ended differ from these estimates. DBS Group Holdings Ltd and its Subsidiaries Notes to the financial statements for the year ended 31 December 2015 These Notes are integral to the financial statements. principally in Asia.12 for the Group’s accounting policy on goodwill. statement. 120 DBS Annual Report 2015 . The consolidated financial statements and the notes thereon satisfy all necessary disclosures under IFRS Subsidiaries are consolidated from the date control is transferred and FRS. 2.

The Group’s financial statements are presented in Singapore dollars. where Functional and presentation currency appropriate. as well as premiums sheet date. In preparing the segment information. 2. is established. while 26 for an overview of goodwill recorded. such exchange Dividend income differences are recognised in the income statement as part of the Dividend income is recognised when the right to receive payment gain or loss on disposal. When a foreign operation is disposed of. These expenses typically include brokerage fees paid. Such fees include underwriting fees. fee and The results and financial position of subsidiaries and branches whose commission income is recognised over the period during which functional currency is not Singapore dollars (“foreign operations”) the related service is provided or credit risk is undertaken. non-monetary financial assets such as equity investments classified as available-for-sale. This is generally the ex-dividend date for listed equity securities. Dividend income arising from held-for- at the respective dates of acquisition were used. the foreign exchange rates for unlisted equity securities. Please refer to Note 43 for further details on business which is the functional currency of the Company. Fee and commission income is recorded net of expenses directly s )NCOMEANDEXPENSESINTHEINCOMESTATEMENTARETRANSLATEDAT related to it. Interest expense on such Non-monetary assets and liabilities measured at cost in a foreign structured investment deposits is presented together with other currency are translated using the exchange rates at the date of fair value changes in trading income. unrealised foreign exchange differences are Fee and commission income is generally recognised on the recorded in other comprehensive income and accumulated in equity completion of a transaction.7 Income recognition Monetary assets and liabilities denominated in foreign currencies are Interest income and interest expense translated into the functional currency of the entity undertaking the Interest income and interest expense as presented in Note 4 arise transaction at the exchange rates at the balance sheet date. Subsidiaries and branches For a service that is provided over a period of time. and geographical segment reporting. primary economic environment in which the entity operates. comprehensive income and accumulated under capital reserves in equity. Financial statements 121 . Interest income and interest expense are recognised on a time- Non-monetary assets and liabilities measured at fair values in foreign proportionate basis using the effective interest method. which is generally the balance integral to the effective interest rate. and expenses for services delivered over a period (such as service contracts) and other expenses that are not specifically related to s ! LLRESULTINGEXCHANGEDIFFERENCESARERECOGNISEDINOTHER fee and commission income transactions. Such are translated into Singapore dollars in the following manner: fees include the income from issuance of financial guarantees and bancassurance fixed service fees. but no control where the Group generally holds a shareholding Operating segments are reported in a manner consistent with the of between and including 20% and 50% of the voting rights. Foreign currency transactions and balances B) Income Statement Transactions in foreign currencies are measured using the exchange rate at the date of the transaction.6 Segment reporting Associates are entities over which the Group has significant influence. Transactions between segments are recorded within Items in the financial statements are measured using the functional the segment as if they are third party transactions and are currency of each entity in the Group. Please refer to Note trading financial assets is recognised in “Net trading income”. upon which brokerage fees and fees related to completion of corporate they are reclassified to the income statement. Allowances for credit and other losses Please refer to Note 2. approximating the card-related expenses and sales commissions. internal reporting provided to management. but do not include exchange rates at the dates of the transactions. For of products and services provided to its customers. or discounts. exchange rates prevailing at each month-end.Associates 2. this being the currency of the eliminated on consolidation. finance transactions. The currencies are translated using the exchange rates at the date when calculation includes significant fees and transaction costs that are the fair values are determined. Foreign from all interest-bearing financial assets and financial liabilities exchange differences arising from this translation are recognised in regardless of their classification and measurement. and the date when shareholders approve the dividend For acquisitions prior to 1 January 2005.5 Foreign currency treatment segment are shown after the allocation of certain centralised costs. amounts for each business 2. with the the income statement within “Net trading income”. or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate. the transaction. Goodwill and fair value those arising from available-for-sale financial assets is recognised in adjustments arising on the acquisition of a foreign operation on “Net income from investment securities”. s ! SSETSANDLIABILITIESARETRANSLATEDATTHEEXCHANGERATESATTHE balance sheet date. Investments in associates are accounted for using the equity method. funding income and the application of transfer pricing.10 for the accounting policy on impairment of financial assets. until the assets are disposed of or become impaired. Unrealised foreign exchange differences arising from non-monetary Fee and commission income financial assets and liabilities classified as fair value through profit or The Group earns fee and commission income from a diverse range loss are recognised in the income statement as trading income. exception of the Group’s structured investment deposits which are carried at fair value through profit or loss.

When the Group acts as a trustee or in a fiduciary capacity for assets it does not directly control or benefit from. They also include transactions where control the purpose of investment or satisfying regulatory liquidity over the financial asset is retained. are recognised on the which fair values cannot be reliably determined are carried at date that the Group enters into the contractual arrangements with cost. s . These are Singapore Government securities that the Group holds for satisfying The Group enters into certain transactions where it transfers financial regulatory liquidity requirements and are held within the “Others” assets recognised on its balance sheet but retains either all or a segment. Such if the asset is sold in an orderly transaction between market assets include instruments held for the purpose of short-term participants at the measurement date. are not quoted in an active market and are mainly in the Group reclassified certain financial assets between categories as the “Consumer Banking/Wealth Management” and “Institutional a result of a change in its holding intention. except interest income. less impairment (if any). Realised or unrealised gains or losses on such financial assets. credit spreads. as follows: When the purpose for holding a financial asset changes. and initially and subsequently measured at fair value. Loans and receivables are carried at not have a material impact on the income statement and statement amortised cost using the effective interest method. are classified The fair value of financial assets is the price that would be received as financial assets at fair value through profit or loss. in accordance with Note 2. the Where the classification and measurement of financial assets do not assets and the corresponding income belonging to a customer are reflect the management of the financial assets (or financial liabilities). This generally corresponds to the business models in which they are applied and Reclassification how management monitors performance. or designated estimated by discounting the future contractual cash flows at under the fair value option if doing so eliminates or significantly the current market interest rate that is available to the Group for reduces measurement or recognition inconsistencies that would similar financial instruments. In 2008 and 2009.11. Financial assets may be classified out of the longer-term holding and collection of payments are classified as fair value through profit or loss or available-for-sale categories only in loans and receivables. Please refer to Note 19 for disclosures on transferred financial assets. ON DERIVATIVElNANCIALASSETSTHATAREMANAGEDONAFAIRVALUE Determination of fair value basis. Financial assets are initially recognised at fair value. In effective interest method. hedge accounting. or if the financial asset contains an embedded or pricing adjustment is applied to arrive at the fair value. excluded from the financial statements. or when FRS otherwise requires it. or realise the asset and for trading unless they are designated as hedging instruments settle the liability simultaneously. The reclassifications did Banking” segments. even if their classification Unquoted equity investments classified as available-for-sale for and measurement are subsequently changed. In such cases. by a simultaneous requirements. 122 DBS Annual Report 2015 . These assets are classified as available-for-sale which it is exposed to changes in the value of the transferred asset. the transferred financial assets are not derecognised from the balance sheet. Fair value is generally selling and market-making (“held for trading”). Financial assets and liabilities are presented net when there is a Derivatives (including derivatives embedded in other contracts but legally enforceable right to offset the recognised amounts and there separated for accounting purposes) are also categorised as held is an intention to settle them on a net basis. for example. the Group may apply hedge accounting where permissible and relevant to better reflect the management of the financial assets. Purchases and sales of all financial assets.18. Where applicable. The derivative that would otherwise need to be separately recorded determination of fair value is considered a significant accounting (“designated at fair value through profit or loss”). the asset is transferred. Such transactions include repurchase transactions s 4 HE'ROUPALSOHOLDSOTHERNON DERIVATIVElNANCIALASSETSFOR described in Note 2. payments. exchange rates or equity prices.8 Financial assets available-for-sale revaluation reserves. which is generally Please refer to Note 2. the accumulated fair value adjustments in the available-for-sale Initial recognition revaluation reserves are reclassified to the income statement. the Group continues to recognise the asset as well as the liquidity management unit in the “Others” to the extent of its continuing involvement which is the extent to segment. ON DERIVATIVElNANCIALASSETSTHATAREMANAGEDMAINLYFOR reclassified accordingly. such cases. transferred together with substantially all the risks and rewards of ownership. These assets are carried at amortised cost using the portion of the risks and rewards of the transferred financial assets. counterparties. C) Balance Sheet Unrealised gains or losses arising from changes in fair value are recognised in other comprehensive income and accumulated in 2. are taken to “Net trading income” in the Offsetting income statement in the period they arise. Classification and subsequent measurement Please refer to Note 14 for further details on the types of The Group classifies and measures financial assets based on their financial assets classified and measured as above. of comprehensive income for the current year. policy for the Group and further details are disclosed in Note 39. When sold or impaired. Changes in the fair value of derivatives other Financial assets are derecognised when the rights to receive cash than those designated as hedging instruments in cash flow or net flows from the financial assets have expired or when they have been investment hedges are included in “Net trading income”. nature and the purpose for which they are acquired.18 for details on hedging and the transaction price. Derivatives are classified as assets when the fair value is positive and as liabilities when the fair Derecognition value is negative. non-derivative financial assets are s . These assets have fixed or determinable particular circumstances as prescribed by FRS 39. Such assets are held for an indefinite period and may be sold in response to needs for liquidity or changes in transaction (such as options) with the same counterparty to which interest rates. ON DERIVATIVElNANCIALASSETSTHATTHE'ROUPINTENDSTOHOLDTO maturity are classified as held to maturity. which are mainly in the “Treasury” segment. s . a valuation reserve otherwise arise. These are mainly transacted in the “Treasury” Financial assets in this category are held in all business segments segment.

losses inherent in its loan portfolio (including off-balance sheet credit exposures). This is in accordance with the transitional is evidence that a financial asset or a group of financial assets arrangements under MAS Notice 612. a significant or prolonged decline in the fair value of the security below its cost is a factor in The criteria that the Group uses to determine whether there is determining whether the asset is impaired. cash and cash allowances for credit losses.9 Cash and cash equivalents General allowances for credit losses Apart from specific allowances. evidence of an impairment loss include: When there is evidence of an impairment of an available-for-sale s 3 IGNIlCANTlNANCIALDIFlCULTYOFTHEISSUEROROBLIGOR. The Group carries out regular and systematic reviews of all credit facilities extended to customers.10 Impairment of financial assets least 1% of credit exposures arising from both on and off-balance sheet items (against which specific allowances have not been made). (b) Financial assets classified as available-for-sale (a) Financial assets classified as loans and receivables The Group assesses at each balance sheet date whether there is and held to maturity evidence that an available-for-sale financial asset is impaired. The Group maintains a level of equivalents comprise cash on hand and non-restricted balances allowances that is deemed sufficient to absorb the estimated credit with central banks which are readily convertible into cash.2. The Group assesses at each balance sheet date whether there adjusted for collateral held. the Group also recognises general For the purposes of the cash flow statement. The Group maintains general allowances of at 2. In the case of an equity investment. is impaired.

less any impairment loss on that financial asset previously recognised in the s ! BREACHOFCONTRACT. between the acquisition cost and the current fair value. the cumulative loss – measured as the difference breach of covenants and/or financial conditions.INCLUDING financial asset.

SUCHASADEFAULTORDELINQUENCYININTEREST income statement – is reclassified from the revaluation reserve within or principal payments. equity to the income statement as “Allowances for credit and s ' RANTINGOFACONCESSIONTOTHEBORROWER.

conditions or valuations indicate that the Group is lent on the repos and reverse repos are amortised as interest expense not likely to collect the principal and interest due contractually on and interest income respectively using the effective interest method. the claim. Recoveries in full or in part of amounts applicable recoverable amount. less cost to sell and its value-in-use. For an off-balance assets and remain on the balance sheet at amortised cost or fair sheet item such as a commitment. loss is recorded as “provision for loss in respect of off-balance sheet credit exposures” within “Other liabilities”. borrowings. it is written off against the related allowance for loan impairment. a specific allowance for credit value depending on their classification.12 Goodwill of the claim. reasons relating to the borrower’s financial difficulty. For impaired debt instruments that subsequently of the borrower. Financial statements 123 . Reverse repurchase agreements (Reverse repos) are treated as collateralised lending. exceeds the loss has been determined. The recoverable amount of a CGU previously written off are credited to the income statement in or CGU group is the higher of the CGU’s or CGU group’s fair value “Allowances for credit and other losses”. the excess of the acquisition cost over the fair value of identifiable assets acquired and liabilities and contingent liabilities assumed on Overdue unsecured consumer loans which are homogenous in the acquisition date. Such loans are written off after all An impairment loss is recognised when the carrying amount of the recovery procedures have been exhausted and the amount of the a CGU. A “claim” means a loan. of the cash-generating units (CGU) or group of CGUs expected to benefit from the combination’s synergies. or group of CGUs. the impairment losses are reversed through the income statement if there has been an identifiable event that led to Specific allowances for credit losses the recovery. The securities sold under repos are treated as pledged carrying value of a claim on the balance sheet. that the Group would not otherwise consider.FORECONOMICORLEGAL other losses”. or “Loans and advances to customers”. impairment losses are not reversed until they s ( IGHPROBABILITYOFBANKRUPTCYOROTHERlNANCIALREORGANISATION are disposed of. The amount lent is reflected as a financial Specific allowances for credit losses are evaluated either individually asset as “Cash and balances with central banks”. An allowance is reversed only when there has been an identifiable event that has led to an improvement in the collectability 2. An impairment loss on goodwill is recognised in the income statement and cannot be reversed in subsequent periods. including the goodwill. debt security or a commitment such Repurchase agreements (Repos) are treated as collateralised as financial guarantees and letters of credit. are pooled according to their and is tested at least annually for impairment. taking into account the historical loss experience of At the acquisition date. Specific allowance for an individual credit exposure is made when Amounts paid and received in excess of the amounts borrowed and existing facts. delinquency behaviour and evaluated for impairment collectively as a group. Goodwill is stated at cost less impairment losses nature. For equity investments. such as credit card receivables. which may be discounted to reflect the Goodwill arising from business combinations generally represents impact of a forced sale or untimely liquidation. The amount of specific allowance also takes into account the collateral value. “Due from banks” or collectively for a portfolio. any goodwill acquired is allocated to each such loans. The amount borrowed is reflected as a financial liability either as “Due to banks” or “Deposits and balances from A specific allowance for credit losses is recorded as a reduction in the customers”. recover in value. A specific allowance for credit losses is recognised if there is evidence that the Group will be unable to collect all amounts due under a 2. When a loan is uncollectible.11 Repurchase agreements claim according to the original contractual terms or the equivalent value.

s $ ERIVATIVELIABILITIESARETREATEDCONSISTENTLYWITHDERIVATIVEASSETS 2. or if the financial liability contains an embedded derivative that would otherwise need to be separately s T HE'ROUPHASAPRESENTLEGALORCONSTRUCTIVEOBLIGATION recorded. on balance sheet upon acceptance of the underlying documents. 2. value through profit or loss if they are incurred for the purpose of repurchasing in the near term (“held for trading”).14 Financial liabilities Financial guarantees A financial guarantee is initially recognised in the financial Initial recognition. generally classifies and measures its financial liabilities in accordance the fee is recognised over time as income in accordance with the with the purpose for which the financial liabilities are incurred and principles in Note 2. managed.8. Buildings 50 years or over the remaining lease period. “Due to not result in the Group having a contractual obligation to deliver banks” and “Other debt securities”. and for trading and financial liabilities designated under the fair s ARELIABLEESTIMATEOFTHEAMOUNTOFTHEOBLIGATIONCANBEMADE value option. letters of credit and financial guarantees Leasehold land 100 years or over the remaining lease period. s ITISPROBABLETHATANOUTmOWOFRESOURCESEMBODYINGECONOMIC Realised or unrealised gains or losses on financial liabilities held benefits will be required to settle the obligation. the “Treasury” segment. changes in “Net trading income”. This is Financial liabilities are initially recognised at fair value. The Group generally the amount (fee) paid by the counterparty. Accordingly: Off-balance sheet credit exposures are managed for credit risk in the s & INANCIALLIABILITIESARECLASSIlEDASfinancial liabilities at fair same manner as financial assets. Loan commitments Leasehold land where the unexpired Loan commitments are typically not financial instruments and are not lease period is more than 100 years recognised on the balance sheet. the amount of the loan is accounted for under “loans Computer software 3 – 5 years and receivables” as described in Note 2. Subsequently. impairment losses. and Please refer to Note 2. classified as equity s / THERlNANCIALLIABILITIESARECARRIEDATamortised cost using the effective interest method. 2. Office equipment. 124 DBS Annual Report 2015 . 5 – 10 years Letters of credit furniture and fittings Letters of credit are recorded off-balance sheet as contingent liabilities upon issuance. preference shares and other instruments which do the Group’s “Deposits and balances from customers”. are taken to “Net trading income” in the income statement in the period they arise. securities for the purpose of ongoing market-making or trading. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Interest The amount recognised as a provision is the best estimate of the expense on structured investment deposits at fair value through expenditure required to settle the present obligation at the balance profit or loss is also presented together with other fair value sheet date. arising from such instruments are recognised in equity as there is no contractual obligation to pay distributions on these instruments. Financial liabilities in this classification are usually within as a result of past events. whichever is shorter.8 for the accounting policy on derivatives. Derecognition A financial liability is derecognised from the balance sheet when Generally. whichever is shorter. except interest expense. Please refer also to Note 39 for further fair value disclosures.16 Provisions and other liabilities designated by management on initial recognition (“designated at fair value through profit or loss”) if doing so eliminates or Provisions for other liabilities of uncertain timing and amounts significantly reduces measurement or recognition inconsistencies are recognised when: that would otherwise arise. Upon a loan draw-down.13 Properties and other fixed assets Determination of fair value The fair value of financial liabilities is the price that would be paid Properties (including investment properties) and other fixed to transfer the liability in an orderly transaction between market assets are stated at cost less accumulated depreciation and participants at the measurement date. Distributions financial liabilities classified and measured as above. They are disclosed in accordance is not depreciated. These comprise predominantly Ordinary shares. 2.15 Loan commitments. are classified as equity. Financial liabilities at fair value through profit or loss can also be 2. or to exchange financial assets or financial liabilities with the holder under conditions that are potentially Please refer to Note 14 for further details on the types of unfavourable to the Group. the useful lives are as follows: the obligation specified in the contract is discharged.10 on the Group’s accounting policies this may include debt securities issued and short positions in on allowances for credit losses.7. Incremental external costs directly attributable to the issuance of such instruments are accounted for as a deduction from equity. cancelled or expired. classification and subsequent measurement statements at fair value on the date the guarantee is given. and the corresponding payables to the Please refer to Note 25 for the details of properties and other beneficiaries and receivables from the applicants are recognised fixed assets and their movements during the year. cash or another financial asset. with FRS 37 and form part of the disclosures in Note 35.17 Share capital and other instruments Please refer to Note 2.

or when a hedge no longer meets the criteria for hedge accounting.2 for disclosures on hedging derivatives. cash bonuses. and where a mismatch Employee benefits. the hedged risk. where the strict criteria in FRS 39 are met. the hedged exposures are documents its assessment of whether the hedging instrument is designated at fair value through profit or loss. together Once the contributions have been paid. The expense is amortised over hedge reserve in equity. When a hedging instrument expires or is sold. hedge of the Group’s risk management but do not qualify for hedge accounting is applied as set out in subsequent paragraphs. branches Final dividends are recorded during the financial year in which and associates with a functional currency different from that of the the dividends are approved by the shareholders at the Annual Company.18 Hedging and hedge accounting accounted for in a manner similar to cash flow hedges. Net investment hedge For ordinary and preference shares. D) Other Specific Topics Hedges of net investments in the Group’s foreign operations are 2. Such derivatives are item. Financial statements 125 . the cumulative or reissued. in foreign operations which comprise certain subsidiaries. Cash flow hedge accounting is Plan. “Others” segments. Plans). interest method. Such hedges are mainly used in the “Treasury” and as the Central Provident Fund and other staff-related allowances. of the hedged item. Under the Group’s hedging strategy. directly attributable incremental cost is presented as a component within equity. At the accounting under FRS 39. When treasury shares are subsequently sold forecast transaction is no longer expected to occur.When any entity within the Group purchases the Company’s ordinary recognised immediately in the income statement under “Net shares (“treasury shares”). the DBSH Share Plan and the DBSH Employee Share Plan (the principally applied in such cases. which include base pay.20 Share-based compensation Cash flow hedge For transactions with highly probable cash flows. the consideration paid. When a or retained earnings. On disposal of the foreign operations. This amount is reclassified to the income the vesting period of each award. contributions are made to publicly or privately For a qualifying fair value hedge. Monthly contributions to the the income statement. futures and options) that the Group transacts to manage relationship between the hedging instrument and the hedged interest rate. including any trading income”. At inception and on an on-going basis. the Group documents the (e. contribution to defined contribution plans such item exists. share- in the measurement between the hedging derivative and the hedged based compensation. The details of the Scheme and Plans are described in Note 37. hedging derivatives are recorded in the income statement. maturity mismatches or for hedging currency risk arising from currency mismatches and cash flows in foreign currencies. interim dividends are recorded Net investment hedge accounting is applied to hedged investments during the financial year in which they are declared payable. namely the used to hedge against cash flow variability due to exchange rate DBSH Share Ownership Scheme (the Scheme). the cost of the gain or loss existing in the cash flow hedge reserve remains until the treasury shares is deducted against either the share capital account forecast transaction is recognised in the income statement. using the effective employees up to the balance sheet date. realised and unrealised gains and losses are recognised in the hedge. of these investments could be fully hedged. any realised gain or loss on sale or reissue. Please refer to Note 36. the DBSH Share Option movements in certain situations. partially hedged or not hedged at all. the accrue to employees. the changes in the fair value of the administered funds on a mandatory. sold or reissued. transaction. the cumulative gain or loss in the capital The Group uses derivative contracts mainly as part of its risk reserves is reclassified to the income statement as part of the gain or management strategies for hedging interest rate risk arising from loss on disposal. In some cases. net of any gain or loss in the cash flow hedge reserve is reclassified from equity directly attributable incremental transaction costs and related income to the income statement. Economic hedges which do not qualify for hedge accounting Some derivatives may be transacted as economic hedges as part In some cases.e. contractual or voluntary basis. the Group also “Net trading income”. are recognised in the income statement when incurred. The effective portion of changes in the fair value of a derivative Equity instruments granted and ultimately vested under the Plans are designated and qualifying as a cash flow hedge is recognised in recognised in the income statement based on the fair value of the other comprehensive income and accumulated under the cash flow equity instrument at the date of grant. any cumulative When treasury shares are subsequently cancelled. For defined contribution plans. tax. with a corresponding adjustment statement in the periods when the hedged forecast cash flows affect to the share option/plan reserves. thereby achieving highly effective in offsetting changes in the fair value or cash flows some measure of offset in the income statement. and the methods used to assess the effectiveness of i. foreign exchange or other risks. until they are cancelled. Employee entitlement to annual leave is recognised when they If the hedge no longer meets the criteria for hedge accounting. the carrying amount General Meeting. derivatives are Employee benefits also include share-based compensation. Fair value hedge The Group’s fair value hedges consist principally of interest rate 2. A provision is made for the estimated liability adjustment to the carrying amount of a hedged item is amortised to for annual unutilised leave as a result of services rendered by the income statement over its remaining maturity. is recognised in capital reserves. the Group has no further with any changes in the fair value of the hedged item attributable to payment obligations. The ineffective portion of the gain or loss is Scheme are expensed off when incurred. 2.19 Employee benefits swaps used for managing the interest rate gaps that naturally arise from its purchases or issues of debt securities. These include swaps and other derivatives inception of each hedging relationship. the risk management objective for undertaking the hedge treated in the same way as derivatives held for trading purposes.g.

This applies generally when they arise from the same various financial instruments. estimates require management’s judgement in determining the Significant judgement is involved in determining the Group’s appropriate methodology for valuation of assets and liabilities. The Group recognises liabilities for Procedures are in place to ensure that methodologies are reviewed expected tax issues based on reasonable estimates of whether and revised as appropriate.21 Current and deferred taxes 3. 2. 3 Critical Accounting Estimates 3. in arriving at the recoverable amount. cash flows and other factors used in the valuation process. provision for income taxes. discount rates. tax liability to each tax authority for each period. estimates that involve management’s valuation judgement. determination of the value of assets/liabilities relating to carry forward tax losses requires judgement. Please refer to Risk management section for a further description of the Group’s credit risk management. which is presented as a deduction within equity.3 Goodwill rates enacted or substantively enacted by the balance sheet date. in other comprehensive income operations. 3. The Group performs an impairment review to ensure that the The amount of deferred tax assets recognised takes into account carrying amount of a CGU to which goodwill is allocated does not the likelihood the amount that can be used to offset payable taxes exceed the recoverable amount of the CGU. The liability is determined based on the total amount of current tax expected to The fair value of financial instruments without an observable market be paid.e. Note 26 provides details on future profits. is also estimated future cash flows expected to arise from continuing recognised outside profit or loss. For the DBSH Share Plan and the DBSH Employee Share Plan. Group’s tax position including resolution of any related appeals or litigation processes. which are recognised outside profit or loss.10. taking into account all tax uncertainties. Therefore. The employee trust credit environment. and accumulated in the available-for-sale revaluation reserves. Note 21 provides details of the Group’s deferred tax assets/liabilities. through charges against profit. the Group assesses the gap between borrowers’ obligations to the Group and their repayment ability. tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. of goodwill at the reporting date. The Group believes its estimates for additional taxes will be due. The assessment takes into account various factors. using either an price in an active market may be determined using valuation models. data and management’s assessment of the current economic and a trust has been set up for each share plan. Such assessment requires considerable judgement. as well as industry funds are consolidated and the DBSH shares held by the trust funds practices. Another area requiring judgement is the calculation of general allowances. including the economic or business outlook. Deferred tax related to fair value re-measurement of available-for. management exercises judgement in estimating the future cash flows. expected value approach or a single best estimate of the most The choice of model requires significant judgement for complex likely outcome. Certain accounting The Group has exposure to income taxes in numerous jurisdictions. In estimating specific allowances. specific and general allowances in respect of estimated and inherent credit losses in its portfolio as described in Note 2. The amount of deferred measured at fair value.4 Income taxes The Group’s accounting policies and use of estimates are integral to the reported amounts in the financial statements. estimates of future tax reporting group and relate to the same tax authority. the future profitability of the borrowers and the liquidation value of collateral. using tax 3. growth rate and discount rate. are accounted for as “treasury shares”. In general. country and portfolio risks.1 Impairment allowances It is the Group’s policy to recognise. i. which are determined after taking into account historical 126 DBS Annual Report 2015 .2 Fair value of financial instruments Current income tax for current and prior periods is recognised as the amount expected to be paid or recovered from the tax The majority of the Group’s financial instruments reported at fair authorities. Where uncertainty exists around the determining the valuation of its assets and liabilities are appropriate. Deferred income tax is provided on temporary differences arising Please refer to Note 39 for details on fair valuation and between the tax bases of assets and liabilities and their carrying fair value hierarchy of the Group’s financial instruments amounts in the financial statements. Tax assets and liabilities of the same type (current or deferred) are Policies and procedures have been established to facilitate the offset when a legal right of offset exist and settlement in this manner exercise of judgement in determining the risk characteristics of is intended. using the tax rates and tax laws that have been enacted value are based on quoted and observable market prices or on or substantively enacted by the balance sheet date. The recoverable amount represents the present value of the sale investments. appropriate provisions are provided based on The following is a brief description of the Group’s critical accounting technical merits of the positions with the same tax authority. products especially those in the “Treasury” segment. The Group internally developed models that are based on independently considers uncertain tax positions generally at the level of the total sourced market parameters.

which was derived from the provision of trust and other fiduciary services during the year.144 2.758 1. guarantees and deposit-related fees National Gallery Singapore (c) Fees from fiduciary services for 2014 are reclassified from investment banking to trade and transaction services 9 Employee Benefits (d) Card fees are net of interchange fees paid The Group In $ millions 2015 2014 Salaries and bonuses 2. comprising a gain earned from financial assets or liabilities not at fair value through of $223 million for the divestment of remaining stake in the Bank profit or loss was $776 million (2014: $687 million) during the year of the Philippine Islands (BPI) less a sum of $25 million donated to (b) Includes trade & remittances.340) (2.887 Contributions to defined contribution plans 135 111 Share-based expenses 102 85 Others 265 211 Total 2.100 6.027 Others(a) 9 215 Total 136 293 (a) Includes net fee and commission income of $51 million (2014: $35 million).627 (a) Includes dividend income of $23 million (2014: $19 million) Net interest income 7.644 8. Net fee and commission income (a) 2014 includes an amount of $198 million.204 901 Other borrowings 604 541 Total interest expense 2.532 designated at fair value Net gain/(loss) from financial liabilities 80 (12) Total interest income 9.452 2.256 – Interest rates.948 designated at fair value Deposits and balances from customers 1.996 8.086 Total 1. credit.544 2.353 In $ millions 2015 2014 at fair value through profit or loss Debt securities Interest expense from financial liabilities (204) (142) – Available-for-sale 117 122 at fair value through profit or loss – Loans and receivables # 4 Interest expense from financial liabilities (2.294 1. equities and others(a) 224 346 Trade assets 1.583 Net (loss)/gain from financial assets (89) 9 Securities 1.321 7 Net Income from Investment Comprising: Securities Interest income from financial assets at 648 595 fair value through profit or loss The Group Interest income from financial assets not 8.149 1.321 Of which: net gains transferred from 125 212 available-for-sale revaluation reserves 5 Net Fee and Commission Income # Amount under $500.485) Equity securities(a)(b) 222 148 not at fair value through profit or loss Total(c) 339 274 Total 7.940 2.294 Financial statements 127 .100 6.126 5.651 2.000 The Group (a) Includes dividend income of $63 million (2014: $57 million) In $ millions 2015 2014 (b) 2015 includes an amount of $136 million relating to gain from Brokerage 180 173 disposal of a property investment (c) Includes fair value impact of hedges for the investment securities Investment banking(c) 165 219 Trade and transaction services(b)(c) 556 539 Loan-related 442 385 8 Other Income Cards(d) 434 369 Wealth management 599 507 The Group Others 76 83 In $ millions 2015 2014 Fee and commission income 2.275 Rental income 37 35 Less: fee and commission expense 308 248 Net gain on disposal of properties 90 43 and other fixed assets Net fee and commission income(a) 2.4 Net Interest Income 6 Net Trading Income The Group The Group In $ millions 2015 2014 In $ millions 2015 2014 Cash and balances with central banks 466 577 Net trading income and Due from banks – Foreign exchange 989 558 Customer non-trade loans 6.

stationery. 10 Other Expenses 11 Allowances for Credit and Other Losses The Group In $ millions 2015 2014 The Group Computerisation expenses(a) 883 777 In $ millions 2015 2014 Occupancy expenses(b) 398 369 Loans and advances to customers (Note 18) 676 620 Revenue-related expenses 301 240 Investment securities Others(c) 667 650 – Available-for-sale 19 15 Total 2.165 667 (715) 96 4.g.054 121 – 47 3.865 160 – 29 3.054 Total allowances 4.222 Total allowances 4.159 Total general allowances for credit exposures 2.129 478 (687) 63 983 Investment securities 69 15 (8) 4 80 Properties and other fixed assets 48 – – (1) 47 Off-balance sheet credit exposures 1 7 (3) – 5 Others (bank loans and sundry debtors) 53 7 (17) 1 44 Total specific allowances 1.249 2. telecommunications.159 622 (792) 46 1. etc).035 Total general allowances for credit exposures 3. printing.257 2014 Specific allowances Loans and advances to customers (Note 18) 1.300 507 (715) 67 1.213 743 (792) 93 4. and legal and professional fees The Group In $ millions 2015 2014 Depreciation expenses 251 220 Hire and maintenance costs of fixed assets.213 128 DBS Annual Report 2015 . 453 388 including building-related expenses Expenses on investment properties 7 7 Audit fees payable to external auditors(a): – Auditors of the Company 3 3 – Associated firms of Auditors of the Company 4 4 Non-audit fees payable to external auditors(a): – Auditors of the Company 1 1 – Associated firms of Auditors of the Company 1 1 (a) PricewaterhouseCoopers network firms The table below shows the movements in specific and general allowances during the year for the Group: The Group Charge/ Net (Write-back) write-off Exchange Balance at to income during and other Balance at In $ millions 1 January statement the year movements 31 December 2015 Specific allowances Loans and advances to customers (Note 18) 983 551 (748) 35 821 Investment securities 80 19 (12) 5 92 Properties and other fixed assets 47 (14) (8) 2 27 Off-balance sheet credit exposures 5 4 – 1 10 Others (bank loans and sundry debtors) 44 62 (24) 3 85 Total specific allowances 1.036 – Loans and receivables (8) 2 Properties and other fixed assets (14) – Off-balance sheet credit exposures 8 23 (a) Includes hire and maintenance costs of computer hardware and software Others (bank loans and sundry debtors) 62 7 (b) Includes rental expenses of office and branch premises of Total 743 667 $241 million (2014: $220 million) and amounts incurred in the maintenance and service of buildings (c) Includes office administration expenses (e.

12 Income Tax Expense 13 Earnings per Ordinary Share The Group The Group In $ millions 2015 2014 Number of shares (millions) 2015 2014 Current tax expense Weighted average number (a) 2.496 2.280 4.63 differs from the theoretical amount that would arise using the Diluted (b)/(aa) 1.77 1. the weighted average number of ordinary shares in issue is adjusted to take into account the effect of a full conversion of Profit 5.999 Deferred tax credit to income statement (46) (58) and other equity instruments) Earnings per ordinary share ($) The tax on the Group’s profit (before share of profits of associates) Basic (c)/(a) 1. Net income not subject to tax (51) (107) Net income taxed at concessionary rate (79) (117) Others (50) 123 Income tax expense charged 727 713 to income statement Deferred income tax relating to available-for-sale financial assets and others of $7 million was credited directly to equity (2014: $14 million charged to equity). Financial statements 129 .61 Singapore basic tax rate as follows: The Group For the purpose of calculating the diluted earnings per ordinary In $ millions 2015 2014 share. Refer to Note 21 for further information on deferred tax assets/liabilities.77 1.417 4.417 3.487 Total 727 713 ordinary shares in issue (diluted) The deferred tax credit in the income statement comprises the # Amount under $500.000 following temporary differences: The Group The Group In $ millions 2015 2014 In $ millions 2015 2014 Net profit attributable to (b) 4.496 2.457 – Current year 828 756 of ordinary shares in issue – Prior years’ provision (55) 15 Dilutive effect of share options – # Deferred tax expense Full conversion of non-voting – 30 – Prior years’ provision (10) (10) redeemable CPS – Origination of temporary differences (36) (48) Weighted average number of (aa) 2.007 Accelerated tax depreciation 5 12 shareholders (Net profit Allowances for loan losses (49) (67) less dividends on other Other temporary differences (2) (3) equity instruments) Net profit (less dividends on CPS (c) 4.819 non-voting redeemable convertible preference shares (CPS) and the Prima facie tax calculated at a tax rate 898 819 exercise of all outstanding share options granted to employees when of 17% (2014: 17%) such shares would be issued at a price lower than the average share Effect of different tax rates in other countries 9 (5) price during the financial year.

665 – 34.364 4. 14 Classification of Financial Instruments The Group Designated Loans and at fair value receivables/ Held for through amortised Available.285 Derivatives 23.254 318.439 – – – 11.134 Derivatives 21.789 – – – 320.190 – – – – 441 23.678 383.079 of FRS 39(b) Total liabilities 415.224 – – 18.263 – – – 11.269 282.571 753 – – 38.297 – – – 18.325 Other debt securities 4.380 13.825 1.073 Loans and advances to customers – 1.961 – 32.829 Government securities and treasury bills 7.035 77 17.038 130 DBS Annual Report 2015 .871 Other asset items outside the scope 7.026 – – – 4.026 Total financial liabilities 28.834 Liabilities Due to banks 954 – 17.267 1.665 441 449.971 – – – – 174 22.078 Subordinated term debts – – 4.501 Due from banks 4.540 – – – 38.016 2.581 – – 40. Held to Hedging In $ millions trading profit or loss cost for-sale maturity derivatives Total 2015 Assets Cash and balances with central banks 241 – 14.598 43.091 – – 174 413.959 Other liability items outside the scope 1.346 357.289 Other financial assets – – 11.424 32.114 1.631 Bank and corporate securities 9.145 Other financial liabilities 886 – 10.020 – – – 283.251 Deposits and balances from customers 91 1.963 of FRS 39(a) Total assets 457.569 – – 25.996 1.263 Total financial assets 44.

as the legal right to offset the transactions is conditional upon default. and there is intention to settle them on a net basis or to realise the asset and settle the liability simultaneously.127 – 34. be required to place additional cash collateral. The credit risk associated with favourable contracts is reduced by a master netting arrangement to the extent that if an event of default occurs.113 40.173 Derivatives 18. properties and other fixed assets and deferred tax assets (b) Includes current tax liabilities. but has an obligation to return the securities at maturity.494 – – – 10.e.992 – – – 31.173 209 432. the counterparty is typically allowed to sell or re-pledge those non-cash collateral (i.963 Subordinated term debts – – 4.360 – – – 275.370 2.346 13.665 Total financial liabilities 24.189 – 9.992 Total financial assets 41. The Group Designated Loans and at fair value receivables/ Held for through amortised Available. and intends to settle the loans and the deposits simultaneously at maturity or termination dates. “Loans and advances to customers” of $170 million (2014: $2.786 – – – – 209 16. Held to Hedging In $ millions trading profit or loss cost for-sale maturity derivatives Total 2014 Assets Cash and balances with central banks 841 – 14.694 Due from banks 6.763 Loans and advances to customers – 1.924 1.588 Other financial assets – – 10.992 – – – 10. Financial assets and liabilities subject to netting agreement but not offset on the balance sheet The Group enters into master netting arrangements with counterparties where it is appropriate and feasible to do so to mitigate counterparty risk.173 – 29.328 1.691 1.666 Liabilities Due to banks 567 – 15.674 1.176 Deposits and balances from customers 369 742 316.517 Government securities and treasury bills 6. Financial assets and liabilities offset on the balance sheet As at 31 December 2015.039 372.263 Derivatives 16. Master netting arrangements do not result in an offset of financial assets and liabilities on the balance sheet.298 348.755 Other financial liabilities 1.822 – – 184 399. In these agreements.812 Other asset items outside the scope 7.609 – – – 16. in certain circumstances.415 Other liability items outside the scope 1. all amounts with the counterparty are settled on a net basis. In addition. The collateral received and placed under these agreements is generally conducted under terms that are in accordance with normal market practice. If the securities decrease in value.943 – 27 21.631 70 13.571 – – – – 184 18.297 26.551 1.228 274.168 million) were offset against “Deposits and balances from customers” of $170 million (2014: $2.062 – – – 317.212 – – 19. deferred tax liabilities and provision for loss in respect of off-balance sheet credit exposures Financial assets and liabilities are presented net when there is a legally enforceable right to offset the recognised amounts.854 of FRS 39(a) Total assets 440.212 – – 42.716 – – 37. the Group may.460 (a) Includes associates. These agreements include derivative master agreements (including the International Swaps and Derivatives Association (ISDA) Master Agreement).665 – – – 4.683 Other debt securities 3. global master repurchase agreements and global securities lending agreements. securities) lent or transferred. Financial statements 131 . the Group receives cash and other collateral such as marketable securities to reduce its credit exposure. The Group also engages in a variety of counterparty credit mitigation arrangements in addition to netting and collateral arrangements.176 million) because contractually the Group has a legally enforceable right to offset these amounts.045 of FRS 39(b) Total liabilities 400.995 Bank and corporate securities 10.464 4. goodwill and intangibles. and typically the counterparty has recourse only to the securities.

930(d) 1.071 527 2014 Financial Assets Derivatives 16.578 16. Related amounts not offset on balance sheet Financial Gross instruments recognised Cash Carrying not in scope financial collateral Net Types of financial amounts on of offsetting instruments Financial received/ amounts assets/liabilities balance sheet disclosures in scope instruments placed in scope In $ millions (A) (B) (A-B=C+D+E) (C) (D) (E) 2015 Financial Assets Derivatives 23.327 17.884(a) 493 197 Reverse repurchase agreements 4.867 506 Repurchase agreements 1.880 1.025(b) 441 3.755 6.203(a) 12.712(a) 409 307 Reverse repurchase agreements 5.875 5 – Short sale of securities 886(e) 561 325 325 – – Total 25.189(e) 553 636 635 – 1 Securities lendings 4(f) – 4 4 – – Total 21.880 507 (a) Related amounts under “Financial instruments” are prepared on the same basis as netting arrangements recognised for computation of Capital Adequacy Ratio (CAR) as set out under MAS Notice 637 (unaudited).580 – 4 Securities borrowings 78(c) – 78 74 – 4 Total 21.050 1.102 8.845 13.247 2. The disclosures enable the understanding of both the gross and net amounts.538 493 205 Financial Liabilities Derivatives 18. The disclosures set out in the tables below pertain to financial assets and liabilities that are not offset in the Group’s balance sheet but are subject to enforceable master netting arrangement or similar agreement that covers similar financial instruments.686 14.961 10.103 5.328 13 – Short sale of securities 1.341 1.853 409 316 Financial Liabilities Derivatives 22.729(a) 2.653(a) 12.631 11.769 7.905 11.640 11.821(d) 480 1.584 3.862 13.505(a) 13. as well as provide additional information on how such credit risk is mitigated.097 – 6 Securities borrowings 47(c) – 47 44 – 3 Total 28.421(a) 9.047(a) 2. Accordingly.083 10.066 527 Repurchase agreements 2.145 8.227(b) 124 5.098 7. the amounts shown under “Financial instruments not in scope of offsetting disclosures” are those where either no netting agreement exists or where the netting agreement has not been recognised for computation of CAR (b) Reverse repurchase agreements are presented under separate line items on the balance sheet.995 7. namely “Due to banks” and “Deposits and balances from customers” (e) Short sale of securities are presented under “Other liabilities” on the balance sheet (f) Cash collateral received under securities lendings are presented under “Other liabilities” on the balance sheet 132 DBS Annual Report 2015 .696 2.574 8.236 12.428 11. namely “Cash and balances with central banks”. “Due from banks” and “Loans and advances to customers” (c) Cash collateral placed under securities borrowings are presented under “Other assets” on the balance sheet (d) Repurchase agreements are presented under separate line items on the balance sheet. which incorporates a conservative stance on enforceable netting.116 15.

381 – – 1.459 2.665 12.571 million) (See Note 19) 17 Bank and Corporate Securities The Group Designated at fair value Held for through Loans and Available- In $ millions trading profit or loss receivables for-sale Total 2015 Bank and corporate debt securities (a) 7.900 million (2014: $1.631 70 13.681 Less: Impairment allowances – – (157) – (157) Equity securities 780 – – 1.666 Total 18.851 (a) Restricted balances with central banks 6.517 (a) Mandatory balances with central banks 16 Government Securities and Treasury Bills The Group Held for Loans and Available.697 3.694 (a) Includes financial assets transferred of $579 million (2014: $522 million) (See Note 19) (b) Includes financial assets transferred of $1.501 2014 Singapore Government securities and treasury bills(a) 1.078 11.851 70 13.073 2014 Bank and corporate debt securities (a) 9.078 Total 9.936 Non-restricted balances with central banks 9. Held to In $ millions trading receivables for-sale maturity Total 2015 Singapore Government securities and treasury bills(a) 2.569 – 25.915 Cash and cash equivalents 12.980 27 15.751 7.239 Total 10.173 9.078 1.581 40.530 11.070 1.884 37.008 9.000 – 17.665 34.145 Less: Impairment allowances – – (150) – (150) Equity securities 1.257 35.15 Cash and Balances with Central Banks The Group In $ millions 2015 2014 Cash on hand 3.963 – 6.763 (a) Includes financial assets transferred of $787 million (2014: $623 million) (See Note 19) Financial statements 133 .551 1.716 37.493 Other government securities and treasury bills(b) 4.569 – 8.943 27 21.312 Other government securities and treasury bills(b) 5.829 19.189 – 22.503 12.267 1.035 77 17.357 1.173 29.346 13.201 Total 6.380 13.654 77 17.194 – 20.189 Total 7.

The table below shows the movements in specific and general allowances for loans and advances to customers during the year: Charge/ Net (Write-back) write-off Exchange Balance at to income during and other Balance at In $ millions 1 January statement the year movements 31 December 2015 Specific allowances Manufacturing 331 185 (303) 11 224 Building and construction 115 43 (43) 5 120 Housing loans 8 (2) – 1 7 General commerce 140 144 (133) 6 157 Transportation. storage and communications 465 (32) (290) 10 153 Financial institutions.582 2014 Specific allowances Manufacturing 240 151 (80) 20 331 Building and construction 42 156 (91) 8 115 Housing loans 9 1 (2) – 8 General commerce 142 49 (61) 10 140 Transportation.399 Others 26.587 109.583 125 – 53 2.964 50.761 2.362 116.516 20.583 Total allowances 3.154 Refer to Note 40.871 279.386 32.761 Total allowances 3.871 279.569 52.566 134 DBS Annual Report 2015 .866 Trade loans 40.099 20. storage and communications 153 25 (87) 3 94 Financial institutions. investment and holding companies 146 19 (80) 5 90 Professionals and private individuals (excluding housing loans) 48 76 (76) 5 53 Others 37 58 (7) 5 93 Total specific allowances 1.129 478 (687) 63 983 Total general allowances 2. 18 Loans and Advances to Customers The Group In $ millions 2015 2014 Gross 286.583 283.871 279.588 Analysed by product Long-term loans 124.283 96.552 Chinese yuan 19.398 142 – 43 2. investment and holding companies 90 14 (48) 4 60 Professionals and private individuals (excluding housing loans) 53 102 (99) 2 58 Others 93 40 (35) 3 101 Total specific allowances 983 551 (748) 35 821 Total general allowances 2.633 Short-term facilities 62.493 Hong Kong dollar 34.234 Gross total 286.154 Analysed by currency Singapore dollar 117.836 Gross total 286.819 Housing loans 58.4 for breakdown of loans and advances to customers by geography and by industry.154 Less: Specific allowances 821 983 General allowances 2.289 275.527 620 (687) 106 3.976 58.566 676 (748) 88 3.476 US dollar 89.

assigned was $4.249 maturity. the securities transferred are either classified as “fair value through profit or loss” or “available-for-sale”.228) Singapore Government securities 579 522 protection bought and treasury bills Cumulative change in fair value arising (280) (194) Other government securities 1.900 1. Bayfront Covered or rates. As the Group The Group mainly receives other financial assets in exchange.716 Changes in fair value arising from changes in credit risk are determined as the amount of change in fair value that is not Covered bonds attributable to changes in market conditions that give rise to market Pursuant to the Bank’s Global Covered Bond Programme.355 million (2014: $1. foreign exchange rate or index of prices assigned to a bankruptcy-remote structured entity. These changes in market conditions include changes in a pools of residential mortgages originated by the Bank have been benchmark interest rate. If the securities decrease in value.194 financial statements. and additional assets 19 Financial Assets Transferred assigned to facilitate future issuances.957 3. which are recorded under “Due to banks”. The fair value of the associated liabilities approximates the carrying amount of $3. the securities lent are classified as at fair value.258 1. selected risk.Included in loans and advances to customers are loans designated For securities lending transactions.269 1.255 million (2014: $2. for example when it pledges The Group also enters into structured funding transactions where it securities as collateral for repurchase agreements or when it retains the contractual rights to receive cash flows of financial assets undertakes securities lending arrangements. the associated In $ millions 2015 2014 liabilities recorded are not material. Bonds Pte Ltd (see Notes 22. During the year.412 million (2014: Nil). Fair value designated loans and The Group advances and related credit In $ millions 2015 2014 derivatives/enhancements Maximum credit exposure 1. the Group may. The Group transfers financial assets to third parties or structured Other financial assets entities in the course of business. The Group Where the Group retains substantially all the risks and rewards of In $ millions 2015 2014 the transferred assets.415 5. Among them is pledged collateral (mainly cash) for derivative transactions under credit support annexes agreements. Deposits and prepayments 317 268 Clients’ monies receivable from 316 636 Securities securities business Securities transferred under repurchase agreements and securities Sundry debtors and others 6. as follows: “available-for-sale” or “loans and receivables” on the balance sheet. transferred. The Group also pledged assets to secure its short position in securities and to facilitate settlement operations.228 Securities pledged and transferred Credit derivatives/enhancements – (1.2 and 29. the amount of change in the fair value of the loans remains exposed to the risks and rewards associated with them.273 lending arrangements are generally conducted under terms in line Cash collateral placed (a) 2. extended to third parties.266 2. The carrying amounts Transferred assets are derecognised in the Group’s financial and fair values of these financial assets and liabilities both amount to statements when substantially all of their risks and rewards are also $1. The counterparty typically has no further recourse to the Group’s other (a) Mainly relates to cash collateral placed in respect of assets beyond the transferred securities. but assumes a contractual obligation to pay these cash flows under the issued notes. Financial statements 135 .317 million). These assets are described below. the carrying value of the covered bonds in in the fair value of the related credit derivatives/enhancements was issue was $1. the amount of change As at 31 December 2015. “Deposits and balances from customers” and “Other liabilities” on the balance sheet. and the carrying amount approximates the fair value. they continue to be recognised in the Group’s Accrued interest receivable 1.457 million). derivative portfolios For repurchase agreements.571 from changes in credit risk and treasury bills Cumulative change in fair value of related 280 194 Bank and corporate debt securities 787 623 credit derivatives /enhancements Total securities pledged and transferred 3. These residential mortgages continue to be recognised on the Bank’s balance sheet as the Bank During the year. The Group receives cash in exchange and records a financial liability for the cash received.621 with normal market practice. Derecognised assets that were subject to the Group’s partial 20 Other Assets continuing involvement were not material in 2015 and 2014. in certain circumstances. be required to place additional cash collateral. and advances attributable to credit risk was a loss of $86 million (2014: loss of $56 million).562 11. while the carrying value of assets a gain of $86 million (2014: gain of $56 million).4). The difference in values is attributable to an intended over-collateralisation required to maintain the credit ratings of the covered bonds in issue.268 million (2014: Nil). The counterparty is typically allowed to Deferred tax assets (Note 21) 299 257 sell or re-pledge the securities but has an obligation to return them at Total 11.269) (1.

133 4. 21 Deferred Tax Assets/Liabilities Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same tax authority. contractual or regulatory requirements as well as protective rights of non-controlling interests may restrict the ability of the Company to access and transfer assets freely to or from other entities within the Group and to settle liabilities of the Group.090 19. Statutory.1 Main operating subsidiaries The main operating subsidiaries within the Group are listed below: Effective shareholding % Name of subsidiary Country of incorporation 2015 2014 Commercial Banking DBS Bank Ltd Singapore 100 100 DBS Bank (Hong Kong) Limited* Hong Kong 100 100 DBS Bank (China) Limited* China 100 100 DBS Bank (Taiwan) Limited* Taiwan 100 100 PT Bank DBS Indonesia* Indonesia 99 99 Merchant Banking The Islamic Bank of Asia Limited Singapore 50 50 Stockbroking DBS Vickers Securities Holdings Pte Ltd Singapore 100 100 * Audited by PricewaterhouseCoopers network firms outside Singapore The Group’s main subsidiaries are regulated banks and non-bank financial institutions. The Islamic Bank of Asia Limited‘s operations is in progressive wind-down. at cost(a) 17.547 19. following approval from its shareholders on 6 October 2015.416 (a) Includes preference shares and other equity instruments 22. Since the Group did not have any material non-controlling interests as at the balance sheet dates. Deferred tax assets and liabilities comprise the following temporary differences: The Group In $ millions 2015 2014 Deferred income tax assets Allowances for loan losses 310 254 Other temporary differences 146 137 456 391 Amounts offset against deferred tax liabilities (157) (134) Total 299 257 Deferred income tax liabilities Accelerated tax depreciation 111 104 Available-for-sale financial assets and others 13 20 Other temporary differences 66 60 190 184 Amounts offset against deferred tax assets (157) (134) Total 33 50 Net deferred tax assets 266 207 22 Subsidiaries and Consolidated Structured Entities The Company In $ millions 2015 2014 Unquoted equity shares. 136 DBS Annual Report 2015 . Refer to Note 34 for information on non-controlling interests. any protective rights associated with these did not give rise to significant restrictions in 2014 and 2015.326 Due from subsidiaries 2.414 15. The deferred tax assets and liabilities are determined after appropriate offsetting as shown in “Other assets” (Note 20) and “Other liabilities” (Note 28) respectively.

As part of the contractual structures that are integral to this programme.3 33. the Bank acquired the remaining 30% stake it did not own in DBS China Square Limited for a cash consideration of $150 million from CapitaLand Investments Pte Ltd. at cost(a) 71 71 Unquoted equity securities.3 Network for Electronic Transfers (Singapore) Pte Ltd Singapore 33.000 23.3 Changsheng Fund Management Company** China 33.7 27.0 33.2 Consolidated structured entity The structured entity consolidated by the Group is listed below: Name of entity Purpose of consolidated structured entity Country of incorporation Bayfront Covered Bonds Pte Ltd Covered bond guarantor Singapore Bayfront Covered Bonds Pte Ltd is a bankruptcy-remote structured entity established in conjunction with the Bank’s USD10 billion Global Covered Bond Programme (see Note 29.4). 23 Associates The Group In $ millions 2015 2014 Quoted equity securities.700 Share of total liabilities 721 705 Off-balance sheet Share of contingent liabilities and commitments # # # Amount under $500. at cost 800 779 Sub-total 871 850 Share of post acquisition reserves 129 145 Total 1.0 * Audited by PricewaterhouseCoopers network firms outside Singapore ** Audited by other auditors (a) Shareholding includes 4. assets and liabilities and off-balance sheet items of the associates at 31 December are as follows: The Group In $ millions 2015 2014 Income statement Share of income 166 222 Share of expenses (152) (143) Balance sheet Share of total assets 1. the Bank provides funding and hedging facilities to it.3 33.22.000 995 (a) The market value of quoted associates amounted to $51 million (2014: $50 million) The Group’s share of income and expenses.7 Unquoted Central Boulevard Development Pte Ltd** Singapore 33.1 Main associates The main associates of the Group are listed below: Effective shareholding % Name of associate Country of incorporation 2015 2014 Quoted Hwang Capital (Malaysia) Bhd(a)* Malaysia 27. 22. a wholly-owned subsidiary of CapitaLand Limited.1 Acquisition of remaining interest in subsidiary Acquisition of remaining interest in DBS China Square Limited On 22 June 2015.15% held through the Bank Financial statements 137 .721 1.1.

Income. The risks arising from such transactions are subject to the Group’s risk management practices. the carrying amount from transactions with unconsolidated structured entities have been included in the Group’s financial statements. the Group in the normal course of business enters into transactions with a range of counterparties. While the economic exposures may be the same as those to other type of entities. contractual or regulatory requirements restricting dividend payments or to repay loans or advances made. 25 Properties and Other Fixed Assets The Group leases out investment properties under operating leases. and so have not been presented.632 1. was not material. The Group also sponsors third party structured entities. The total assets of the third party structured entities are not considered meaningful for the purposes of understanding the related risks since they are neither representative of the Group’s exposure nor the income earned. in the nature of fees from and assets transferred by all parties to sponsored structured entities. no associate was individually material to the Group. underwriter or book runner for the issuance of securities by clients or by providing nominee services. As of 31 December 2015 and 31 December 2014. 24 Unconsolidated Structured Entities “Unconsolidated structured entities” are those structured entities as defined by FRS 112 and are not controlled by the Group. The minimum lease receivables as at the balance sheet date are as follows: The Group In $ millions 2015 2014 Minimum lease receivable Not later than 1 year 33 32 Later than 1 year but not later than 5 years 34 49 Later than 5 years – # Total 67 81 # Amount under $500.317 968 Loans and advances to customers 109 96 Other assets 1 1 Total assets 1. and may contain an option to renew the lease after that date at which time all terms will be renegotiated. primarily by acting as lead arranger.000 138 DBS Annual Report 2015 . The Group In $ millions 2015 2014 The Group’s maximum exposure Derivatives 2 4 Bank and corporate securities 1. The table below reflects exposures to third party securitisation structures where the Group holds an interest in the normal course of business. As a non-controlling shareholder.271 Derivatives 85 17 Total liabilities 85 17 The table above represents the Group’s maximum exposure to loss which for on-balance sheet assets and liabilities is represented by the carrying amount. or risk-reducing effects of collateral or other credit enhancements. The Group has not provided any specific non-contractual financial support during the year and does not expect to provide non-contractual support to these third party structured entities in the future. some of which would be defined as unconsolidated structured entities. The associates may also be subject to statutory.429 1. As is the case with other types of counterparties. The leases typically run for an initial period of one to five years. The Group’s share of commitments and contingent liabilities of the associates as well as its commitments to finance or otherwise provide resources to them are not material.069 Commitments and guarantees 203 202 Maximum Exposure to Loss 1. FRS 112 specifically requires companies to disclose such exposures arising from transactions with unconsolidated structured entities. To facilitate customer transactions and for specific investment opportunities. the Group’s ability to receive dividends is subject to agreement with other shareholders. and does not reflect mitigating effects from the availability of netting arrangements and financial instruments that the Group may utilise to economically hedge the risks inherent in third party structured entities.

250 1. or using a combination of comparable sales and investment methods.840 2.091 2. The Group Subtotal of Owner.485 Market value at 31 December 913 817 (a) Refers to computer hardware.011 1.111 1.558 Additions – 5 258 263 263 Disposals (17) (3) (105) (108) (125) Transfers (4) 4 – 4 – Exchange differences 2 19 18 37 39 Balance at 31 December 644 538 1.422 Less: Allowances for impairment – 27 – 27 27 Net book value at 31 December 455 363 729 1.735 Less: Accumulated depreciation Balance at 1 January 169 96 796 892 1. As at 31 December 2015. software.895 2.203 Less: Allowances for impairment – 47 – 47 47 Net book value at 31 December 474 371 640 1. Financial statements 139 .091 2.996 Less: Accumulated depreciation Balance at 1 January 170 120 913 1. 25.382 1. furniture and fittings and other fixed assets 25.369 2. office equipment. there were no transfers into or out of Level 3.033 1.092 1.203 Depreciation charge 7 12 232 244 251 Disposals (6) (11) (58) (69) (75) Transfers (1) 1 – 1 – Exchange differences 2 17 24 41 43 Balance at 31 December 172 139 1. owner-occupied Investment occupied Other properties and In $ millions properties properties fixed assets (a) other fixed assets Total (1) (2) (3) (4)=(2+3) (5)=(1+4) 2015 Cost Balance at 1 January 644 538 1.553 2.1 PWC Building is held as an investment property.553 2.061 Depreciation charge 7 13 200 213 220 Disposals (5) (3) (97) (100) (105) Transfers (2) 2 – 2 – Exchange differences 1 12 14 26 27 Balance at 31 December 170 120 913 1. The properties are classified under Level 3 of the fair value hierarchy and the significant unobservable input used for valuation is market yields.2 The market values of investment properties are determined using investment method.033 1. and its fair value was independently appraised at $711 million (2014: $692 million).735 Additions – 6 328 334 334 Disposals (24) (53) (69) (122) (146) Transfers (2) 2 – 2 – Exchange differences 9 36 28 64 73 Balance at 31 December 627 529 1. Its net book value was $386 million as at 31 December 2015 (2014: $392 million).547 Market value at 31 December 868 831 2014 Cost Balance at 1 January 663 513 1.

134 317. a goodwill impairment charge is recognised in the income statement.450 Chinese yuan 14.173 Analysed by product Savings accounts 131.332 US dollar 101.269 130.404 11.463 Others 31. are discounted by its cost of capital to derive their present value.189 Deferred tax liabilities (Note 21) 33 50 Total 12.5% (2014: 4. 27 Deposits and Balances from Customers The Group In $ millions 2015 2014 Analysed by currency Singapore dollar 140.675 7.6 billion receivable from Manulife for the 15-year regional distribution agreement entered on 8 April 2015 140 DBS Annual Report 2015 . The long-term growth rate used does not exceed the historical long-term growth rate of the market the CGU operates in.989 60.728 (a) Mainly relates to cash collateral received in respect of derivative portfolios (b) Includes $800 million of the $1. 26 Goodwill and Intangibles The carrying amounts of the Group’s goodwill and intangibles arising from business acquisitions are as follows: The Group In $ millions 2015 2014 DBS Bank (Hong Kong) Limited 4. Management believes that any reasonably possible change in the key assumptions would not cause the carrying amount of the operating unit to exceed its recoverable amount at 31 December 2015.715 33. taking into account projected regulatory capital requirements.134 317. the goodwill may be further impaired in future periods.631 Others 486 486 Total 5.876 Fixed deposits 120. If a CGU’s carrying amount exceeds its recoverable value. To derive the value beyond the fifth year. if conditions in Hong Kong and the banking industry deteriorate and turn out to be significantly worse than anticipated in the Group’s performance forecast. The recoverable value is the sum of the present value of the five-year cash flows and the terminal value. a long-term growth rate is imputed to the fifth-year cash flow and then discounted by the cost of capital to derive the terminal value.772 138.631 4.117 The carrying amounts of the CGUs are reviewed at least once a year to determine if the goodwill associated with them should be impaired.0% (2014: 9. However.811 5.605 Current tax liabilities 722 673 Short sale of securities 886 1.298 93.849 31.445 Hong Kong dollar 31.753 Current accounts 65.0%) were assumed in the value-in-use calculation for DBS Bank (Hong Kong) Limited.117 5.5%) and discount rate of 9. The CGU’s five-year projected cash flows.500 20.065 119. The recoverable value is determined based on a value-in-use calculation. A growth rate of 4. The process of evaluating goodwill impairment involves management judgement and prudent estimates of various factors including future cash flows as well as the cost of capital and long-term growth rates.640 Total 320.904 Other deposits 2.173 28 Other Liabilities The Group In $ millions 2015 2014 Cash collateral received(a) 981 734 Accrued interest payable 465 585 Provision for loss in respect of off-balance sheet credit exposures 324 322 Clients’ monies payable in respect of securities business 318 570 Sundry creditors and others(b) 8.483 Total 320. The results can be highly sensitive to the assumptions used.

payable quarterly 503 471 HKD 3M HIBOR +0.839 23.963 29. payable on maturity 165 – USD 0.438% to 0.078 31.418 1.2) 9. payable half yearly – 1. payable quarterly 707 661 AUD Floating rate note.4%.412 – Other debt securities (Note 29.857 The senior medium term notes were issued by the Company and the Bank under its USD 30 billion Global Medium Term Note Programme.174 14.963 Due within 1 year 26. payable quarterly 3.078 31.246%. payable quarterly 92 86 CNH 4.331 USD Floating rate note.75% to 10.473 Total 38.79%.074 1.2% to 0.327 USD 2.29 Other Debt Securities The Group In $ millions 2015 2014 Negotiable certificates of deposit (Note 29.2% to 2.3 The zero-coupon commercial papers which are payable on maturity were issued by the Bank under its USD 5 billion Euro Commercial Paper Programme and USD 15 billion US Commercial Paper Programme.2 Senior medium term notes issued and outstanding at 31 December are as follows: In $ millions The Group Currency Interest Rate and Repayment Terms 2015 2014 Issued by the Company USD 2. 29.4) 1.2% to 4.133 USD 1. payable quarterly – 108 GBP Floating rate note.35%. payable on maturity 172 105 Total 1.5) 6.3) 19. The outstanding notes as at 31 December 2015 were issued between 2 July 2015 and 30 December 2015 (2014: 4 February 2014 and 16 December 2014) and mature between 4 January 2016 and 24 May 2016 (2014: 13 January 2015 and 1 July 2015).193 Due after 1 year 11.658 2.200 1.770 Total 38. Financial statements 141 . The outstanding senior medium term notes as at 31 December 2015 were issued between 21 February 2012 and 16 November 2015 (2014: 14 September 2010 and 2 December 2014) and mature between 14 January 2016 and 15 January 2020 (2014: 25 February 2015 and 20 November 2019).375%.000 USD Floating rate note.1 Negotiable certificates of deposit issued and outstanding at 31 December are as follows: In $ millions The Group Currency Interest Rate and Repayment Terms 2015 2014 Issued by the Bank and other subsidiaries HKD 2. payable on maturity 46 122 TWD 0.25% to 4.24%. payable quarterly 46 – HKD 3M HIBOR +0.079 USD 2.072 Senior medium term notes (Note 29.454%.422 5. payable quarterly 103 – Issued by the Bank AUD Floating rate note. payable quarterly 70 66 HKD 1.2%.870 10.072 The outstanding negotiable certificates of deposit as at 31 December 2015 were issued between 22 August 2008 and 15 December 2015 (2014: 22 August 2008 and 30 December 2014) and mature between 5 January 2016 and 16 March 2021 (2014: 16 January 2015 and 16 March 2021). payable yearly 141 132 HKD 2.7%.22%. payable on maturity 42 66 IDR 9.857 Commercial papers (Note 29.604 4.25%.51%. payable yearly 156 242 AUD 2. payable yearly 73 – Total 9.65%.870 10.2%. payable quarterly 2. 29.1) 1. payable half yearly 1.200 1.561 Covered bonds (Note 29.239 8. payable half yearly 1.

30 Subordinated Term Debts Subordinated term debts issued by a subsidiary of the Group are classified as liabilities in accordance with FRS 32.914 Interest linked notes 1.085% if not called Total 4.026 4.413 3.422 5.3 21 Mar 2012 21 Sep 2022 Mar/Sep 1.4 14 Aug 2012 14 Feb 2023 Feb/Aug 976 983 Interest rate resets to 5-year Singapore Dollar Swap Offer Rate plus 2.625% Subordinated Notes Callable in 2017 30.229% if not called S$1.189 Callable with Step-up in 2016 Jul/Oct Interest rate equal to 3-month LIBOR plus 0.61% thereafter if not called S$500m 4.603 1. but are accorded partial eligibility as Tier 2 capital for calculating capital adequacy ratios under the Basel III transitional arrangements for capital instruments issued prior to 1 January 2013.064 994 Interest rate resets to 5-year US Dollar Swap Offer Rate plus 2. 29.413 Foreign exchange linked notes 63 264 Fixed rate bonds 881 501 Total 6.381 Credit linked notes 2.000m 3.1 16 Jun 2006 15 Jul 2021 Jan/Apr/ 495 1. These instruments are in the first instance ineligible as capital instruments under Basel III rules as they lack provisions for conversion to ordinary shares or write- down at the point of non-viability as determined by the Monetary Authority of Singapore.473 The outstanding securities as at 31 December 2015 were issued between 31 March 2006 and 31 December 2015 (2014: 31 March 2006 and 31 December 2014) and mature between 4 January 2016 and 13 November 2045 (2014: 2 January 2015 and 30 September 2044). Bayfront Covered Bonds Pte Ltd has provided an unconditional and irrevocable guarantee.665 142 DBS Annual Report 2015 . 29.2 21 Feb 2012 21 Feb 2022 Feb/Aug 991 999 Interest rate resets to 5-year Singapore Dollar Swap Offer Rate plus 2.665 Due within 1 year 613 726 Due after 1 year 3.61% until call date Interest rate resets to 3-month LIBOR plus 1.47% Subordinated Notes 11 Jul 2006 15 Jul 2021 Jan/Jul 500 500 Callable with Step-up in 2016 Interest rate resets to 6-month Singapore Dollar Swap Offer Rate plus 1. the Bank established a USD10 billion Global Covered Bond Programme on 16 June 2015.10% Subordinated Notes Callable in 2018 30.147% if not called US$750m 3.58% if not called S$1.000m 3. which is secured over the cover pool. to the covered bond holders. These are long-term debt instruments that have a junior or lower priority claim on the issuing entity’s assets in the event of a default or liquidation.5 Other debt securities issued and outstanding at 31 December are as follows: In $ millions The Group Type 2015 2014 Issued by the Bank and other subsidiaries Equity linked notes 1. The Group In $ millions Maturity Interest 2015 2014 Instrument Note Issue Date Date Payment Issued by the Bank US$900m Floating Rate Subordinated Notes 30.30% Subordinated Notes Callable in 2017 30. Bayfront Covered Bonds Pte Ltd.026 4.939 Total 4. A covered bond is a senior obligation of the Bank backed by a cover pool comprising assets that have been ring-fenced via contractual structures in a bankruptcy-remote structured entity.4 To augment its sources of wholesale funding.817 1. The outstanding covered bonds as at 31 December 2015 were issued on 6 August 2015 and mature on 6 August 2018.058 1.

The CPS did not carry voting rights. fully paid in cash upon the exercise of the options granted. The remaining US$350 million of notes that were not repurchased are subject to the original terms and conditions of the notes. where any relevant dividend due was not paid up in full or where a resolution was proposed varying the rights of the preference shares.21% via interest rate swaps. As at 31 December 2015.292. For more information on each instrument.350.874) (6.724 10.194 at 31 December Financial statements 143 .462 81 63 Balance at 31 December (14.011 – 163 – 30.27%) of the total number of issued shares excluding treasury – (163) – Balance at 31 December – 30.762) (277) (105) (13. dbs.134).113 Treasury shares Balance at 1 January (6.421 ordinary shares upon the conversion of the outstanding 30. the Company issued 350.109) (247) (82) Convertible preference shares Balance at 1 January 30.126 10. the non-voting redeemable CPS enjoyed the same dividend rate paid on ordinary shares except that the dividend payable was subject to a maximum of $0. each CPS was convertible into one fully paid ordinary share at the option of the holder.3 The fixed rate funding has been converted to floating rate at three-month LIBOR + 2.391 10.479.171 10.961) ordinary shares to eligible shareholders who elected to participate in the Scrip Dividend Scheme. pursuant to the DBSH Share Option Plan.1 On 8 January 2015.449. the Company purchased $491.293 28.873.109 4.2 The fixed rate funding has been converted to floating rate at six-month Singapore Dollar Swap Offer Rate + 2.479.4 The fixed rate funding has been converted to floating rate at six-month Singapore Dollar Swap Offer Rate + 2.781 2. The US$550 million notes were subsequently cancelled.727) (105) (94) (5.051 4 13 351 1.011. the Company issued 30. for cash.html) (unaudited).011 30. please refer to the “Capital Disclosures” section at the Group’s website (http://www.351 110 489 to Scrip Dividend Scheme Issue of shares upon exercise 351 1. The Company also issued 5.927) (258) (79) (13. The Company could also redeem the non-voting redeemable CPS in accordance with the Articles of Association.391 10. Movements in the number of shares and carrying amount of share capital are as follows: The Group The Company Shares (’000) In $ millions Shares (’000) In $ millions 2015 2014 2015 2014 2015 2014 2015 2014 Ordinary shares Balance at 1 January 2. the number of treasury shares held by the Group is 14.114 10.113 9.514.449.927) (246) (79) Draw-down of reserves upon 5.011 – 163 Issued share capital 10.421 non-voting redeemable CPS.22% via interest rate swaps.644) (82) (66) Purchase of treasury shares (13.479.25 million of the notes.293 28. 31 Share Capital During the financial year.144 10.011 30.011 163 163 Conversion to ordinary shares (30.126 10.762) (6.30 per annum (non-cumulative).126 2.113 2.456) ordinary shares.051. 30.762. the Bank purchased.109) (4. Subject to the terms set out in the Company’s Articles of Association.011 – 163 – 30. Prior to conversion.604 4. 30.011.75 million of the notes. the Company purchased $134.781 2. On 28 April 2015. The newly issued shares rank pari passu in all respects with the previously issued shares.623 (2014: 1.g.246 (2014: 28.000) (5.769 (2014: 6.011) – (163) – (30.607 Issue of shares pursuant 5.113 9.051 4 13 of share options Reclassification of reserves upon – – 1 4 – – 1 4 exercise of share options Conversion from non-voting 30.16% via interest rate swaps.126 2. 30. On 11 January 2016.607 2.351 110 489 5.59% (2014: 0.724 10.479.30.000) (4. On 11 January 2016.011 163 163 30. which is 0.514.892 86 68 – – – – vesting of performance shares Transfer of treasury shares – – – – 5. except in certain instances e.011 – 163 – redeemable CPS Balance at 31 December 2.716) (4. US$550 million of its US$900 million Floating Rate Subordinated Notes due 2021 Callable with Step-up in 2016.

If not called.061% per annum. Their terms include a write- down feature that is triggered if and when MAS notifies the Company that without the write-off of the principal. They are first callable at the option of the Company on 3 June 2019.html) (unaudited). They do not have any voting rights. please refer to the “Capital Disclosures” section at the Group’s website (http://www. 3 June 2019.1 Other reserves The Group The Company In $ millions 2015 2014 2015 2014 Available-for-sale revaluation reserves 96 284 – – Cash flow hedge reserves 8 (33) – – General reserves 2. The Capital Securities yield 4.705 6. Distributions are paid semi-annually in June and December. In addition to the first call in June 2019. dbs. it considers that the Company or the Group would become non-viable.70% Non-Cumulative Non-Convertible Perpetual Capital 803 803 803 803 Securities First Callable in 2019 Total 803 803 803 803 The Capital Securities are non-cumulative non-convertible perpetual capital securities and qualify as Additional Tier 1 Capital under the Monetary Authority of Singapore (MAS) Notice on Risk Based Capital Adequacy Requirements for Banks Incorporated in Singapore (MAS Notice 637) on the basis that the Company is subject to the application of MAS Notice 637.894 168 152 144 DBS Annual Report 2015 . The Capital Securities are subordinated to all liabilities of the Company and senior only to shareholders of the Company. the terms permit redemption for a change in qualification event and for taxation reasons.70% per annum up to the first call date. 32 Other Equity Instruments The Group The Company In $ millions 2015 2014 2015 2014 S$805m 4. subject to regulatory approval. As long as any distribution on the Capital Securities has not been made. 33 Other Reserves and Revenue Reserves 33. certain restrictions are placed on the distributions and redemptions that may be made by the Group on parity obligations and junior obligations as defined in the terms governing the Capital Securities.453 2.453 – – Capital reserves (213) (233) – – Share option and share plan reserves 168 152 168 152 Others 4.193 The non-cumulative distributions may only be paid out of distributable reserves and may be cancelled at the option of the Company. or a public sector injection of capital (or equivalent support). partially or in full. For more information on each instrument. the distribution rate resets every 5 years to the then applicable five-year Swap Offer Rate plus 3.271 – – Total 6.

271 6.1) Available-for-sale financial assets and others: – net valuation taken to equity (74) (144) – – – – (218) – transferred to income statement (125) 186 – – – – 61 – tax on items taken directly to 11 (4) – – – – 7 or transferred from equity Balance at 31 December 96 8 2.453 (233) 152 4. Under the Banking (Reserve Fund) (Transitional Provision) regulations 2007.193 6.Movements in other reserves during the year are as follows: The Group Available.271 6. the Bank may distribute or utilise its statutory reserves provided that the amount distributed or utilised for each financial year does not exceed 20% of the reserves as at 30 March 2007 (b) Capital reserves include net exchange translation adjustments arising from translation differences on net investments in foreign subsidiaries.894 Net exchange translation 1 1 – 19 – – 21 adjustments Share of associates’ reserves (1) 2 – 1 – – 2 Cost of share-based payments – – – – 103 – 103 Reclassification of reserves upon – – – – (1) – (1) exercise of share options Draw-down of reserves upon – – – – (86) – (86) vesting of performance shares Acquisition of non-controlling – – – – – (78) (78) interest (Note 22.453 (233) 152 4. which came into effect on 11 June 2007.705 2014 Balance at 1 January (30) (14) 2.453 (324) 136 4. and the related foreign currency financial instruments designated as a hedge (c) Other reserves mainly relate to share premium of the Bank prior to the restructuring of the Bank under the Company pursuant to a scheme of arrangement under Section 210 of the Singapore Companies Act on 26 June 1999 The Company Share option and share plan reserves In $ millions 2015 2014 Balance at 1 January 152 136 Cost of share-based payments 103 88 Reclassification of reserves upon exercise of share options (1) (4) Draw-down of reserves upon vesting of performance shares (86) (68) Balance at 31 December 168 152 Financial statements 145 .1.453 (213) 168 4.894 (a) General reserves are maintained in accordance with the provisions of applicable laws and regulations. Share for-sale Cash flow option and revaluation hedge General Capital share plan Other In $ millions reserves reserves reserves (a) reserves (b) reserves reserves (c) Total 2015 Balance at 1 January 284 (33) 2. associates and branches.492 Net exchange translation – – – 91 – – 91 adjustments Share of associates’ reserves 7 – – – – – 7 Cost of share-based payments – – – – 88 – 88 Reclassification of reserves upon – – – – (4) – (4) exercise of share options Draw-down of reserves upon – – – – (68) – (68) vesting of performance shares Available-for-sale financial assets and others: – net valuation taken to equity 534 (67) – – – – 467 – transferred to income statement (212) 47 – – – – (165) – tax on items taken directly to (15) 1 – – – – (14) or transferred from equity Balance at 31 December 284 (33) 2. These reserves are non distributable unless otherwise approved by the relevant authorities.271 6.

2 Dividends are payable if declared by the Board of Directors of DBS Capital Funding II Corporation. dividends will be payable quarterly in arrears on 15 March.294 21.3 Proposed dividends Proposed final one-tier tax-exempt dividends on ordinary shares of $0. 34.2 27 May $250.046 Amount available for distribution 24.2 Revenue reserves The Group In $ millions 2015 2014 Balance at 1 January 19.262 Net profit attributable to shareholders 4.30 (one-tier tax-exempt) paid 751 734 for the previous financial year (2014: $0. Non-Convertible.html) (unaudited). 15 September and 15 December at a floating rate of the three-month Singapore Dollar Swap Offer Rate plus a stepped-up spread of 34 Non-controlling Interests The following preference shares issued by subsidiaries of the Group are classified as non-controlling interests.498 34. and 15 December at a fixed rate of 5.422 2.1 22 Nov $100 May/ Nov 800 800 Non-Voting Preference Shares Callable in 2020 2010 Issued by DBS Capital Funding II Corporation S$1.500m 5.500 1. but are accorded partial eligibility as Tier 1 capital for calculating capital adequacy ratios under the Basel III transitional arrangements for capital instruments issued prior to 1 January 2013.28 one-tier tax-exempt) Interim dividends on non-voting redeemable CPS of $Nil (one-tier tax-exempt) – 8 paid for the current financial year (2014: $0.28 one-tier tax-exempt) Dividends on other equity instruments 38 38 Balance at 31 December 22. dbs.30 (one-tier tax-exempt) 753 688 paid for the current financial year (2014: $0.70% Non-Cumulative.752 19. 34.000 33.000 Jun/ Dec 1. 33.500 Non-Voting. These instruments have a deeply subordinated claim on the issuing entity’s assets in the event of a default or liquidation. Guaranteed Preference Shares Callable 2008 with Step-up in 2018 Non-controlling interests in subsidiaries (Note 22.1) 122 198 Total 2. 146 DBS Annual Report 2015 . The Group In $ millions Issuance Liquidation Dividend 2015 2014 Instrument Note Date Preference Payment Issued by the Bank S$800m 4.1 Dividends are payable if declared by the Board of Directors of the Bank. For more information on each instrument. Non-Convertible.454 4.308 Less: Final dividends on ordinary shares of $0.75% per annum up to 15 June 2018.30 per share have not been accounted for in the financial statements for the year ended 31 December 2015.1.840 17. These instruments are in the first instance ineligible as capital instruments under Basel III rules as they lack provisions for conversion to ordinary shares or write-down at the point of non-viability as determined by the Monetary Authority of Singapore. 34.75% Non-Cumulative. This is to be approved at the Annual General Meeting on 28 April 2016. They are payable semi-annually on 15 June.840 # Amount under $500.30 one-tier tax-exempt) Final dividends on non-voting redeemable CPS of $Nil (one-tier tax-exempt) – # paid for the previous financial year (2014: $0.02 one-tier tax-exempt) Interim dividends on ordinary shares of $0. If these are not redeemed at the tenth year. 15 June.415% per annum. please refer to the “Capital Disclosures” section at the Group’s website (http://www.

559 are derived from the underlying assets.203 10.854 million) termination of the swap. Guarantees and performance bonds are generally written by the Group to support the performance of a customer to third parties. Cross currency swaps are agreements to exchange. or from interest and exchange on account of customers rates or indices.683 209. As 35.392 210. for a specified period and commencing on a specified future date. commitments in securities Sub-total 239.239 9.125 million.550 43.732 20. Manufacturing 38. The leases have varying terms. These include lease commitments for which the payments will be determined in the future based on the prevailing Endorsements are residual liabilities of the Group in respect of bills market rates in accordance with the lease agreements. swaps.2) Forward rate agreements give the buyer the ability to determine Capital commitments 48 22 the underlying rate of interest for a specified period commencing on Total 240. Financial statements 147 . Rest of Greater China 18. instead the writer pays to the buyer the amount lease and capital commitments)(b) by which the market rate exceeds or is less than the cap rate or the Singapore 101.2 The Group has existing significant operating lease the Group will only be required to meet these obligations in the event commitments including the leasing of office premises in Changi of the customer’s default. which have been paid and subsequently rediscounted. Transportation.153 and communications Interest rate futures are exchange-traded agreements to buy or Financial institutions. on payment of a premium. the right but not the obligation. There is no exchange of principal and settlement is effected on the settlement date.413 South and Southeast Asia 22. These include forwards.35 Contingent Liabilities 35.073 14. The majority of these facilities are are stipulated in the agreements and are determined based on the offset by corresponding obligations of third parties.672 Financial derivatives are financial instruments whose characteristics Endorsements and other obligations 6.458 a specified future date (the settlement date).188 34.296 6. of which the of exchange.980 with a counterparty for a specified period without exchanging the General commerce 52. Cross currency swaps may involve the exchange or borrower of interest payments in one specified currency for interest payments in another specified currency for a specified period. the cash requirements of these instruments Business Park and Marina Bay Financial Centre in Singapore. Island East in Hong Kong.642 Building and construction 17.362 (excluding housing loans) Interest rate options give the buyer on payment of a premium the Others 20. There are various termination clauses in the agreements that could require the Group to pay termination fees on The Group issues guarantees. Currency options give the buyer.428 rate caps and floors.683 209.707 Forward foreign exchange contracts are agreements to buy or sell fixed amounts of currency at agreed rates of exchange on a specified future date. investment 22. but not the obligation. The Group Interest rate caps and floors give the buyer the ability to fix the In $ millions 2015 2014 maximum or minimum rate of interest. re-exchange principal amounts denominated (b) Based on the country of incorporation of the counterparty in different currencies.622 floor rate respectively.707 Interest rate derivatives Operating lease commitments 661 729 (Note 35.959 Total 239.807 40.423 The following sections outline the nature and terms of the most Undisbursed and underwriting 9 53 common types of derivatives used by the Group. The termination fees in the ordinary course of business. escalation clauses and renewal rights.191 underlying (or notional) principal.140 53.695 46. There is no facility to deposit Analysed by geography (excluding operating or draw down funds.081 sell a standard amount of a specified fixed income security or time and holding companies deposit at an agreed interest rate on a standard future date. which are known as interest rate collars. The Analysed by industry (excluding operating settlement amount is the difference between the contracted rate and lease and capital commitments) the market rate prevailing on the settlement date. storage 13. to buy or sell specified amounts of currency at agreed rates of exchange on or before a specified future date.707 deposit or loan.594 Interest rate swaps involve the exchange of interest obligations Housing loans 9.285 Foreign exchange derivatives Rest of the World 48.001 19. This category includes combinations of interest Hong Kong 48.521 90.704 right. Undrawn credit commitments(a) 219.007 18.210 17. and on 2014: $151.605 15.773 187. Professionals and private individuals 67.1 The Group has existing outsourcing agreements for the provision of information technology and related support to the and Commitments Group’s operations. performance bonds and indemnities early termination of the contract or part thereof. The Group In $ millions 2015 2014 36 Financial Derivatives Guarantees on account of customers 13. futures and options. and One are expected to be considerably below their nominal amount. related amounts have not been included. (a) Include commitments that are unconditionally cancellable at any time by the Group (2015: $183. year when the agreements or part thereof are terminated. to fix the rate of interest on a future Total 239.683 209.

180 Commodity options give the buyer the right.391 2. Market-making involves quoting bid and offer prices to other market participants with the intention of generating revenues based on spread and volume. currency swaps have maturity dates that coincide within the expected occurrence of these transactions. either to purchase or sell a specified forecast transactions expected to occur at various future dates stock or stock index at a specified price or level on or before a against variability in exchange rates. The ineffectiveness undertaking by the seller to make a payment to the buyer upon the arising from hedging of investments was insignificant. one of these payments is based on an equity-linked return while the and are expected to affect income statement in the same period other is typically based on an interest reference rate. The protection The Group hedges part of the currency translation risk of investments buyer makes one or more payments to the seller in exchange for an through financial derivatives and borrowings. Equity derivatives Cash flow hedges The Group’s cash flow hedges consist principally of currency Equity options provide the buyer. The total loss on hedged items attributable to the hedged risk amounted to $12 million (2014: $27 million). US dollar 934 943 (9) Others 6. Fair value hedges The Group’s fair value hedges consist principally of interest rate swaps used for managing interest rate gaps. transfer. Credit default swaps involve the transfer of credit risk of a reference Net investment hedges asset from the protection buyer to the protection seller.723 11. The forecast transactions Equity swaps involve the exchange of a set of payments whereby are expected to occur within five years from the balance sheet date. Total 13. on payment of a premium. the gain on hedging instruments was $12 million (2014: $27 million). modify or reduce current (a) Refer to net tangible assets of subsidiaries. Trading activities are entered into principally for overseas operations dealer’s margin or for the purpose of generating a profit from short- term fluctuations in price. Total 15.703 3.158 7. Commodity derivatives Financial Net instruments Remaining Commodity contracts are agreements between two parties to investments which hedge unhedged exchange cash flows which are dependent on the price of the in foreign the net currency underlying physical assets. Trading includes mainly market-making and warehousing to facilitate customer orders. these cash flows occur. 148 DBS Annual Report 2015 . 36. associates and or expected risks.150 8 36. but not the obligation. Warehousing involves holding on to positions in order to liquidate in an orderly fashion with timing of unwinding determined by market conditions and traders’ views of markets as they evolve.392 6 future date. 2014 Hong Kong dollar 7. regularly reviews its hedging strategy and rebalance based on long- term outlook of the currency fundamentals.2 Hedging derivatives The accounting treatment of the hedge derivative transactions varies according to the nature of the hedge and whether the hedge meets the specified criteria to qualify for hedge accounting.974 Sales activities include the structuring and marketing of derivatives to customers to enable them to take. the forwards and currency swaps transacted to hedge highly probable right but not the obligation. The Group occurrence of a predefined credit event.791 3.1 Trading derivatives US dollar 939 938 1 Others 5.668 1.211 4.177 to buy or sell a specific amount of commodity at an agreed contract price on or before a specified date.398 8.546 4. The currency forwards and specified date. In $ millions operations (a) investments exposures Commodity futures are exchange-traded agreements to buy or sell 2015 a standard amount of a commodity at an agreed price on a standard Hong Kong dollar 8. Derivatives transacted as economic hedges but do not qualify for hedge accounting are treated in the same way as derivative instruments held for trading purposes. Credit derivatives The ineffectiveness arising from these hedges was insignificant.765 9.965 Most of the Group’s derivatives relate to sales and trading activities. For the year ended 31 December 2015.

327 6.729) for computation of Capital Adequacy Ratio (CAR) (unaudited) 12.846 7.971 1.237 5.472 47 4 Currency swaps held for fair value hedge 1.877.269 5.047) (11.994 98 151 Interest rate swaps held for cash flow hedge 100 – # – – – FX contracts held for cash flow hedge 5.745 6.506 421 339 7.390 6. Financial statements 149 .409 5.755 100 8 1.391 721.142 16.137 4.047) (8.The following table summarises the contractual or underlying principal amounts of derivative financial instruments held or issued for trading and hedging purposes outstanding at balance sheet date.093 12 16 FX contracts held for hedge of net investment 2.803 Foreign exchange (FX) derivatives FX contracts 579.301 2 – Total derivatives held for hedging 23.924 120 13 1.931 641.015 209 184 Total derivatives 2.046.655 66 83 Interest rate caps/floors 20.062 70 173 3.978 98 133 9.155 6. a legal right of offset exists.145 1.025.838 5.584 11.619 Currency options 198.772 4.338 441 174 17. the Group maintains collateral agreements and enters into master netting agreements with most of these counterparties.629 227.075 Interest rate futures 25.269 1.026 The contractual or underlying principal amounts of derivative financial instruments of bank and non-bank counterparties amounted to $1.441 # # 2.098 8.440 1.078 335 154 2.274 79 107 Commodity options 366 16 12 1.774 1. There was no offset of derivative assets and liabilities in 2015 and 2014.482 6.571 Derivatives held for hedging Interest rate swaps held for fair value hedge 10. Derivative assets and liabilities arising from different transactions are only offset if the transactions are done with the same counterparty.889 1.978 4.701 50 105 3.321 11.346 1.786 18. trading derivative financial instruments are revalued on a gross position basis and the unrealised gains or losses are reflected as derivative assets or derivative liabilities.266 10.329 169.225 Sub-total 965.240 4 8 8. These positions are mainly booked in Singapore.132 284 389 52.270 85 120 6.458 31 142 Equity swaps 903 7 25 706 9 10 Sub-total 3.879 277 644 Sub-total 1. and the parties intend to settle the cash flows on a net basis.755 Impact of netting arrangements recognised (11.091 417 354 Total derivatives held for trading 2.583 5.662 275 730 21.801 35 44 Sub-total 5. In the financial statements.729) (8.190 10.288 425 608 Sub-total 46.798 43 80 2.201 44 4 1.016 303 203 Commodity futures 3.594 23.590 15.039.860.606 3 1 Interest rate options 8.132 284 389 52.157 16. They do not represent amounts at risk.190 21.069. For those arrangements that comply with the regulatory requirements as set out in MAS Notice 637.425 5. 2015 2014 Underlying Underlying In $ millions notional Assets Liabilities notional Assets Liabilities Derivatives held for trading Interest rate derivatives Interest rate swaps 971.198 billion) and $988 billion (2014: $679 billion) respectively.288 425 608 Commodity derivatives Commodity contracts 2.810 Currency swaps 187.164 40 152 Credit derivatives Credit default swaps and others 46.256 23.995 18.654 Equity derivatives Equity options 2.082 billion (2014: $1. the Group recognises the netting arrangements in the computation of its Capital Adequacy Ratios.249 758.589 13.631 22.576 7. For purpose of managing its credit exposures.532 34 6 Currency swaps held for cash flow hedge 939 79 16 623 16 7 Currency swaps held for hedge of net investment 1.

the Group provides various share-based compensation plans to foster a culture that aligns employees’ interests with shareholders. s 0ARTICIPANTSAREAWARDEDSHARESOFTHE#OMPANYOR. enable employees to share in the bank’s performance and enhance talent retention.1 s 4HE3HARE0LANISGRANTEDTO'ROUPEXECUTIVESASDETERMINEDBYTHE#OMMITTEEAPPOINTEDTOADMINISTER the Share Plan from time to time. Main Scheme/Plan Note DBSH Share Plan (Share Plan) 37. 37 Share-based Compensation Plans As part of the Group’s remuneration policy.



393) (4.216.391) (196.1 DBSH Share Plan and DBSH Employee Share Plan The following table sets out the movements of the awards during the year. 2015 2014 Number of shares Share Plan ESP Share Plan ESP Balance at 1 January 17.527 1.3 s 4HE/PTION0LANEXPIREDON*UNE!NYOUTSTANDINGUNEXERCISEDOPTIONSASOF-ARCH 2015 had lapsed following the expiry of all options granted under the plan. DBSH Share Option Plan (Option Plan) 37.2 s !LL3INGAPORE BASEDEMPLOYEESWITHATLEASTONEYEAROFSERVICEWHOHOLDTHERANKOF!SSISTANT Vice President and below are eligible.008. for the three consecutive trading days immediately preceding the date of the grant.154.074) (471.185) (143.718.665 815. s 4HEEXERCISEPRICEISEQUALTOTHEAVERAGEOFTHELASTDEALTPRICESFORTHE#OMPANYSSHAREASDETERMINED by reference to the daily official list published by the Singapore Exchange Securities Trading Ltd.51 $16.998. the retention award which constitutes 20% of the shares given in the main award will be granted.777. DBSH Share Ownership Scheme 37. s 4HEOPTIONSVESTOVERAPERIODINACCORDANCETOVESTINGSCHEDULEANDAREEXERCISABLEAFTERTHElRST anniversary of the date of the grant up to the date of expiration of the options.431 1.496. s 0ARTICIPANTSCONTRIBUTEUPTOOFMONTHLYSALARYANDTHE'ROUPWILLMATCHUPTOOFMONTHLY base salary to buy units of the Company’s ordinary shares.193 Weighted average fair value of the shares granted during the year $19. s 4HEFAIRVALUEOFOPTIONSGRANTEDISDETERMINEDUSINGTHE"INOMIALMODEL 37.370) Forfeited (412.216.781 17.848.850) (395.748 Vested (5.166 5.368.65 150 DBS Annual Report 2015 .193 16.441 Granted 5.488 1.626) Balance at 31 December 17.431 1.911) (177.66 $16.INSPECIlCCASESWHERETHEAWARDFORMSPARTOFANEMPLOYEESANNUALPERFORMANCE remuneration.534.777. The shares in the retention award will vest 4 years after the date of grant.50 $19. s 4HE/PTION0LANISGRANTEDTOELIGIBLE'ROUPEXECUTIVESWHOHOLDTHERANKOF6ICE0RESIDENT (or equivalent) and above and selected employees below the rank of Vice President (or equivalent).522 889.

58 – Forfeited/Expired (4.254) 12.434.81 (1.875 12. which are related parties In $ millions 2015 2014 of the Company. (a) Includes Company Directors and members of the Management Committee who have authority and responsibility in planning the In addition.623) 12. the Group had banking Total 72 67 transactions with related parties.3 DBSH Share Option Plan The following table sets out movements of the unissued ordinary shares of the Company under outstanding options. 2015 2014 Unissued number Weighted Unissued number Weighted of ordinary average of ordinary average shares under exercise shares under exercise outstanding options price ($) outstanding options price ($) Balance at 1 January 354. year to year (b) Includes cash bonus based on amount accrued during the year. These remuneration and fees transactions were made in the ordinary course of business and carried out at arms-length commercial terms. The composition and number services rendered during the financial year.006 136 114 Balance at 31 December 7.542) 12.16 years of options outstanding at 31 December Exercise price of options outstanding – $12. to be paid in the following year (c) Share-based payments are expensed over the vesting period in accordance with FRS 102 Financial statements 151 .282.81 (28.37.623 options (2014: 1.456) 12.051. key management personnel received remuneration for activities and direction of the Group.81 at 31 December In 2015. Non-cash benefits including of Directors and Management Committee members may differ from performance shares were also granted.593.2 During the financial year.283 122 136 37. the corresponding weighted average market price of the Company’s shares was $19.3 Total compensation and fees to key management personnel(a) are as follows: 38.63 (2014: $16.877 12. have been eliminated on consolidation and are not disclosed in this Note.593.740 6. These included the taking of Of which: Company Directors’ 15 14 deposits and extension of credit card and other loan facilities. Short-term benefits(b) 46 44 Share-based payments(c) 26 23 38.71).1 Transactions between the Company and its subsidiaries.877 12. consisting of associates and key management personnel of the Group.64 Movements during the year: – Exercised (350. and were not material. The Group including consolidated structured entities.2 DBSH Share Ownership Scheme The outstanding shares held under DBSH Share Ownership Scheme are as follows: Ordinary shares Market value Number (in $ millions) 2015 2014 2015 2014 Balance at 1 January 6.81 Weighted average remaining contractual life – 0.283 6.456) were exercised at their contractual exercise prices.658. During the year. 38 Related Party Transactions 38.051.81 1. 350.56 Balance at 31 December – – 354.

instruments are generally classified as Level 2. and liabilities are marked directly using reliable and independent market prices or by using reliable and independent market parameters Credit valuation adjustments (as model inputs) in conjunction with a valuation model. The IPV process entails independent The Group often holds. where market data such as prices or rates for an valuation is required. Liquidity Risk Committee respectively. at varying points in time. listed equities the financial instruments are classified as Level 3 in the fair value and corporate debt securities which are actively traded. the unamortised Day 1 P&L was not material. If unobservable inputs are deemed significant. and the maturity of the foreign exchange rates. This assurance process covers the review of the adjustment to fair value that a market participant would make in underlying methodology including its logic and conceptual soundness incorporating funding costs and benefits that arise in relation to together with the model inputs and outputs. instrument are no longer observable after an extended period of time. Valuation adjustments or reserve classified as Level 1 of the valuation hierarchy. conducted prior to implementation and subject to regular review or when there are significant changes arising from market or portfolio Day 1 Profit or Loss (P&L) reserve changes. exchange prices. independent of the model Funding valuation adjustments represent an estimate of the developers. the input with the lowest level that is significant to the entire measurement. Derivatives hierarchy and valuation adjustments or reserves are taken to provide contracts which are traded in an active exchange market are also for any uncertainty in valuations. The policy and standards apply to financial assets and liabilities where mark-to-market or model For example. both long or short checks to compare traders’ marks to independent sources such as positions in financial instruments which are valued using mid-market broker/dealer sources or market consensus providers. The Group uses various market accepted benchmark interest rates the financial instrument will be categorised as Level 3. Bid-offer adjustments are then made to account for close- the IPV are reviewed by independent control functions on a out costs. adjustments may be necessary to take the Board Risk Management Committee and the Group Market and these factors into account. fair value measurement of each financial instrument is categorised Reliance will be placed on the model assurance process established in accordance with the same level of the fair value hierarchy as by RMG for assurance of valuation models as fit for purpose. A market parameter is defined as being significant Valuations are determined using generally accepted models (for when its impact on the Day 1 P&L is greater than an internally example discounted cash flows. In cases where quoted 152 DBS Annual Report 2015 . Models are fair value is established using a valuation model based on significant approved by the Group Market and Liquidity Risk Committee. such Policy and supporting Standards. which are approved by process. spreads. A process of independent price verification (IPV) is in place to establish the accuracy of the market parameters used when the marking is Bid-offer adjustments performed by the Front Office. monthly basis. aside as reserves.1 Valuation Process Valuation uncertainties may occur during fair value measurement either due to uncertainties in the required input parameters or The valuation processes within the Group are governed by the uncertainties in the modelling methods used in the valuation Valuation Policy and supporting Standards. dividend yields. credit of the current or potential exposure on the underlying transactions. the inputs assets or liabilities and the lowest level to unobservable inputs.2 Fair Value Hierarchy the Group will value these products using an approved valuation model. Where necessary. In such situations. The must be checked against multiple sources for reliability and accuracy. underlying transactions. situations. interpolation determined threshold. such as LIBOR and Swap Offer Rates to determine the fair value of the financial instruments. The results of levels. Where possible. unobservable market parameters. Products Credit valuation adjustments are taken to reflect the impact on fair with a liquid market or those traded via an exchange will fall under value of counterparty credit risk. For illiquid financial instruments where mark-to-market is not possible. Prices and parameters used as inputs to the model or to any The fair value hierarchy accords the highest level to observable inputs intermediate technique involving a transformation process must be such as unadjusted quoted prices in active markets for identical derived using approved market sources. Financial instruments that are valued using quoted prices in active markets are classified as Level 1 within the fair value hierarchy. Such methodologies are approved by the Group Where fair value is determined using quoted market prices in less Market and Liquidity Risk Committee and governed by the Valuation active markets or quoted prices for similar assets and liabilities. would include government and sovereign securities. 39. In such of all financial assets and liabilities that are measured at fair value. Financial assets uncertainty arising from the use of stale market data inputs. These Where significant unobservable inputs are used in these models. methodologies are also used to substantiate the significance of unobservable inputs. adjustments may be necessary to address the pricing covering both market prices as well as model inputs. Credit valuation adjustments are the former while most over-the-counter (OTC) products will form based upon the creditworthiness of the counterparties. Model assurances are uncollateralised derivatives positions. The Day 1 P&L reserve is released to the techniques) based on quoted market prices for similar instruments income statement when the parameters become observable or when or underlyings or market parameters. Black-Scholes model. the Day 1 P&L arising from the difference in transacted price and end-of-day model valuation is set The majority of OTC derivatives are traded in active markets. magnitude the latter. Market parameters include interest rate yield curves. the Group also imposes model reserves In situations where the market for an instrument is not active and its and other adjustments in determining fair value. Valuation models go through an assurance process carried out by Funding valuation adjustments the Risk Management Group (RMG). these inputs used to value the financial instruments may The Valuation Policy and supporting Standards govern the revaluation no longer be relevant in the current market conditions. At year end. 39 Fair Value of Financial Instruments The main valuation adjustments and reserves are described below: Model and parameter uncertainty adjustments 39. option volatilities and netting and collateral arrangements. the transaction is closed out or amortised over the duration of the transaction.

016 1. These would include corporate debt securities.902 11 16.424 – 5.963 – – 1.185 Derivatives 181 21. for example asset correlations or certain volatilities as well as unquoted equity securities.257 1.257 – Equity securities(a) 1.471 Available-for-sale financial assets – Singapore Government securities and treasury bills 8.011 2 110 1.521 17 5.980 – Bank and corporate debt securities 5.554 692 9.995 Liabilities Financial liabilities at fair value through profit or loss – Other debt securities – 4. The Group classifies financial instruments as Level 3 when there is reliance on unobservable inputs to the valuation model attributing to a significant contribution to the instrument value.471 – 6.194 – Bank and corporate debt securities 10.145 2014 Assets Financial assets at fair value through profit or loss – Singapore Government securities and treasury bills 1.064 3.924 – 4. classified by level within the fair value hierarchy: The Group In $ millions Level 1 Level 2 Level 3 Total 2015 Assets Financial assets at fair value through profit or loss – Singapore Government securities and treasury bills 2. bonds valued using credit default swap spreads).200 – Other financial assets – 5.921 – Equity securities 769 11 – 780 – Other financial assets – 8.352 6 23 1.755 (a) Excludes unquoted equities stated at cost of $574 million (2014: $259 million) Financial statements 153 .078 – – 8.678 – 2. volatilities and foreign exchange rates.977 Derivatives 76 23.672 – 5.381 – Other financial assets – 6. Level 3 inputs also include all quoted security prices that have not been updated for more than 3 months.226 73 3.485 46 11.569 – – 2. quoted proxies in active markets for non-similar asset classes (e.000 – Bank and corporate debt securities 3.g.173 – 17. the Group will determine the fair value based on valuation techniques that use market parameters as inputs including but not limited to yield curves.196 Available-for-sale financial assets – Singapore Government securities and treasury bills 6.123 – Other financial assets – 4.538 – Other financial liabilities 886 2.631 Liabilities Financial liabilities at fair value through profit or loss – Other debt securities – 5.971 – Other financial liabilities 1.357 – Other government securities and treasury bills 14.353 2.189 1.078 – Other government securities and treasury bills 16. repurchase. The majority of valuation techniques employ only observable market data so that reliability of the fair value measurement is high.328 2.357 – – 6.424 Derivatives 82 16.510 135 18.196 – 8.522 672 – 15.963 – Other government securities and treasury bills 3. The following table presents assets and liabilities measured at fair value.675 3. These would include all input parameters which are derived from historical data.963 8 4.841 123 22.731 – Equity securities 1. as well as prices/ valuations that are obtained from counterparties.056 1.189 – Bank and corporate debt securities 9.884 – Equity securities(a) 1.569 – Other government securities and treasury bills 2.867 Derivatives 110 18.081 2 117 1. The fair value of unquoted equity securities is measured based on the net asset value of the investments.977 – 4.prices are generally not available.973 27 12.852 815 7. Valuation reserves or pricing adjustments where applicable are used to converge to fair value.535 20 23. reverse repurchase agreements and most of the Group’s OTC derivatives.

e.e. Level 1 and/or Level 2).014 Liabilities Financial liabilities at fair value through profit or loss – Other debt securities 8 1 – – 4 (9) 14 (1) 17 – Other financial liabilities – – – – 48 – 49 (24) 73 Derivatives 135 2 – – – (2) 2 (14) 123 Total 143 3 – – 52 (11) 65 (39) 213 2014 Assets Financial assets at fair value through profit or loss – Bank and corporate 539 80 – 148 – (101) 26 – 692 debt securities Available-for-sale financial assets – Bank and corporate 26 – 1 – – – – – 27 debt securities – Equity securities 131 20 (18) – – (16) – – 117 Derivatives 21 1 – – – – 10 (21) 11 Total 717 101 (17) 148 – (117) 36 (21) 847 Liabilities Financial liabilities at fair value through profit or loss – Other debt securities 21 – – – – (13) – – 8 Derivatives 51 56 – 17 – – 11 – 135 Total 72 56 – 17 – (13) 11 – 143 Economic hedges entered into for Level 2 exposures may be classified within a different category (i. 154 DBS Annual Report 2015 . hedges entered for Level 3 exposures may also be classified within a different category (i. The effects are presented gross in the table. The following table presents the changes in Level 3 instruments for the financial year ended: Balance at Transfers Transfers Balance at In $ millions 1 January Fair value gains or losses Purchases Issues Settlements in out 31 December Other Income comprehensive statement income 2015 Assets Financial assets at fair value through profit or loss – Bank and corporate 692 14 – 8 – (19) 120 – 815 debt securities – Equity securities – (1) – – – – 24 – 23 Available-for-sale financial assets – Bank and corporate 27 – 1 – – – 21 (3) 46 debt securities – Equity securities 117 10 – 1 – (18) – – 110 Derivatives 11 15 – – – (2) 4 (8) 20 Total 847 38 1 9 – (39) 169 (11) 1. During the year. Level 1) and similarly. the Group transferred financial assets and liabilities from Level 1 to Level 2 due to reduced market activity and from Level 2 to Level 1 arising from increased market activity.

Gains and losses on Level 3 financial assets and liabilities measured at fair value Net income from In $ millions Net trading income investment securities Total 2015 Total gain for the period included in income statement 25 10 35 Of which: Change in unrealised gain/(loss) for assets and liabilities held at the end of the reporting period 25 – 25 2014 Total gain for the period included in income statement 25 20 45 Of which: Change in unrealised gain/(loss) for assets and liabilities held at the end of the reporting period 16 – 16 Fair value gains or losses taken to other comprehensive income are reported in the Statement of Comprehensive Income as “Net valuation taken to equity”. Effect of changes in significant unobservable inputs to reflect reasonably possible alternatives As at 31 December 2015. In estimating significance. The movement in fair value arising from reasonably possible changes to the significant unobservable inputs is assessed as not significant. interest rate and credit derivatives and financial liabilities from structured product issuances. financial instruments measured with valuation techniques using significant unobservable inputs (Level 3) included equity investments. In $ millions 2015 2014 Classification Valuation technique Unobservable input Assets Bank and corporate debt securities 815 692 FVPL(a) Discounted cash flows Credit spreads Bank and corporate debt securities 46 27 AFS(b) Discounted cash flows Credit spreads Equity securities 23 – FVPL(a) Equity pricing model Prices (b) Equity securities (Unquoted) 110 117 AFS Net asset value Net asset value of securities Derivatives 20 11 FVPL(a) Discounted cash flows/ Credit spreads/ CDS models/Option & Correlations interest rate pricing model Total 1. The methodologies used can be statistical or based on other relevant approved techniques. the Group performed sensitivity analysis based on methodologies applied for fair value adjustments.g. There are limited inter-relationships between unobservable inputs as the financial instruments are usually categorised as Level 3 because of a single unobservable input. based on stress testing methodologies on the unobservable input).014 847 Liabilities Other debt securities 17 8 FVPL(a) Discounted cash flows/ Credit spreads/ Option pricing model Correlations Other financial liabilities 73 – FVPL(a) CDS models/Option & Credit spreads/ interest rate pricing model Correlations Derivatives 123 135 FVPL(a) Discounted cash flows/ Credit spreads/ CDS models/Option & Correlations interest rate pricing model Total 213 143 (a) FVPL denotes financial instruments classified as fair value through profit or loss (b) AFS denotes financial instruments classified as available-for-sale Financial statements 155 . These adjustments reflect the values which the Group estimates to be appropriate to reflect uncertainties in the inputs used (e. bank and corporate debt securities.

due from banks. 156 DBS Annual Report 2015 . Please refer to Note 36 for the impact of netting arrangements recognised for the computation of Capital Adequacy Ratio (CAR). Where market prices are not available.995 35. Unquoted equities of $574 million as at 31 December 2015 (2014: $259 million) were stated at cost less accumulated impairment losses because the fair value cannot be reliably estimated using valuation techniques supported by observable market data. which is a sub-set of the Specialised Lending exposure. which include both on-balance sheet and off-balance sheet financial instruments.631 16. fair values have been estimated by referencing to the net tangible asset backing of the investee. For on-balance sheet financial assets. The Group intends to dispose of such instruments through public listing or trade sale. 39. the maximum credit exposure is the carrying amounts. loans and advances to customers.694 Due from banks 38. For unquoted equities not carried at fair value. in the case of off-balance sheet instruments. before taking into account any collateral held.406 638. the amount guaranteed. fair values are determined based on independent market quotes. In particular. contingent liabilities and commitments are typically collateralised to a substantial extent. other credit enhancements and netting arrangements.263 10.3 Financial assets & liabilities not carried at fair value For financial assets and liabilities not carried at fair value in the financial statements. due from banks and bank and corporate debt securities Collateral is generally not sought for these assets. committed. measured using the expected gross credit exposures that will arise upon a default of the end obligor are as shown in the Group’s Basel II Pillar 3 Disclosures. These exposures. Analysis of collateral Whilst the Group’s maximum exposure to credit risk is the carrying amount of the assets or. For cash and balances with central banks. is fully secured by the underlying assets financed. the likely exposure may be lower due to offsetting collateral.723 428. government securities and treasury bills.588 Other assets (excluding deferred tax assets) 11.285 42. fair values are estimated using discounted cash flow method.992 Credit exposure 443. the Group has ascertained that their fair values were not materially different from their carrying amounts at year-end.344 The Group’s exposures to credit risk. The fair value of variable interest-bearing as well as short-term financial instruments accounted for at amortised cost is assumed to be approximated by their carrying amounts. Income-producing real estate.524 Loans and advances to customers 283. contingent liabilities and commitments Certain loans and advances to customers.683 209. The description of collateral for each class of financial asset is set out below: Balances with central banks.501 29.707 Total credit exposure 683. where available.581 Government securities and treasury bills 34. 40 Credit Risk 40. Derivatives The Group maintains collateral agreements and enters into master netting agreements with most of the counterparties for derivative transactions.1 Maximum exposure to credit risk The following table shows the exposure to credit risk of on-balance sheet and off-balance sheet financial instruments. are shown without taking into account any collateral held or netting arrangements. as well as due to banks and deposits and balances from customers. For undrawn facilities. the basis of arriving at fair values is by discounting cash flows using the relevant market interest rates for the respective currencies.759 17. The Group In $ millions 2015 2014 Cash and balances with central banks (excluding cash on hand) 15. the maximum exposure to credit risk is the amount the Group would have to pay if the instrument is called upon. credit guarantees and other actions taken to mitigate the Group’s exposure.637 Contingent liabilities and commitments (excluding operating lease and capital commitments) 239. residential mortgage exposures are generally fully secured by residential properties.995 Bank and corporate debt securities 36.263 Derivatives 23. For investment debt securities and subordinated term debts issued. For contingent liabilities. the maximum exposure to credit risk is the full amount of the undrawn credit facilities granted to customers. accepted or endorsed. Loans and advances to customers.289 275.

241 1.541 451 25.244 Housing loans 52.393 – 52.034 282.The extent to which credit exposures are covered by Basel II-eligible collateral.646 530 55. The additional criteria resulted in a reclassification of $1.154 (i) Loans and advances neither past due nor impaired.358 4.686 56.023 General commerce 46.061 Professionals and private individuals (excluding housing loans) 23.505 Others 28.612 2. after the application of the requisite regulatory hair-cuts.313 1.419 Total gross loans (Note 18) 286.409 791 30. The amounts are a sub-set of the actual collateral arrangements entered by the Group as Basel II imposes strict legal and operational standards before collateral can be admitted as credit risk mitigants. investment and holding companies 16.912 3.871 279.350 Transportation.247 Financial institutions.650 594 48.176 Housing loans 58.992 Financial institutions. investment and holding companies 13.358 1.866 381 23.436 (a) For companies scored by HK SME scoring model.946 275.200 Building and construction 54. Certain collateral types which are not permitted as credit risk mitigants for credit exposures under the Standardised Approach are also excluded. storage and communications 25. certain collateral arrangements which do not meet its criteria will not be included.602 18 13.078 275.061 – 16.393 General commerce 54.080 Total 279.740 340 29. As a result.931 Total 271.266 Others 23.459 891 47. in addition to the ACRR. besides real estate. is shown in the Group’s Basel II Pillar 3 Disclosures. storage and communications 22.299 Non-performing Loans – Impaired (iii) 2.436 – Past due but not impaired (ii) 1.492 13 23.023 – 58. 40.2 Loans and advances to customers The Group In $ millions 2015 2014 Loans and advances to customers Performing Loans – Neither past due nor impaired (i) 282.552 379 23.237 29 23. a further test was introduced in 2015 which evaluates whether the borrower meets the definition of Special Mention.946 2014 Manufacturing 31.6 billion Special Mention loans to the Pass category Financial statements 157 .044 Transportation.620 Professionals and private individuals (excluding housing loans) 23. analysed by loan grading and industry The credit quality of the portfolio of loans and advances that are neither past due nor impaired can be assessed by reference to the loan gradings in MAS Notice 612: The Group In $ millions Pass Special Mention (a) Total 2015 Manufacturing 29.250 Building and construction 47.009 32.

398 1. (ii) Loans and advances past due but not impaired.313 2014 Manufacturing 51 26 37 114 Building and construction 106 4 1 111 Housing loans 300 39 21 360 General commerce 153 11 16 180 Transportation. investment and holding companies 5 – – 5 Professionals and private individuals (excluding housing loans) 328 59 10 397 Others 30 5 12 47 Total 1. storage and communications 52 4 2 58 Financial institutions. investment and holding companies 1 – – 1 Professionals and private individuals (excluding housing loans) 351 52 14 417 Others 27 3 21 51 Total 1.513 2. storage and communications 36 28 1 65 Financial institutions.299 (iii) Non-performing assets (NPAs) The Group In $ millions 2015 2014 Balance at 1 January 2. recoveries and translations (293) (873) Write-offs (826) (766) Balance at 31 December 2.037 161 115 1.513 158 DBS Annual Report 2015 .996 New NPAs 1. analysed by past due period and industry The Group Less than 30 30 to 59 days 60 to 90 days In $ millions days past due past due days past due Total 2015 Manufacturing 55 18 41 114 Building and construction 63 4 7 74 Housing loans 346 55 23 424 General commerce 158 16 20 194 Transportation.025 163 111 1.156 Upgrades.792 2.

030 Of which: restructured loans 317 120 25 462 32 111 25 168 Financial statements 159 . storage 223 25 59 307 10 25 59 94 and communications Financial institutions.592 652 269 2.924 594 274 2. 2 5 7 General commerce 497 165 43 705 14 100 43 157 Transportation.836 524 252 2.513 212 549 269 1. – 83 23 106 – 67 23 90 investment and holding companies Professional and private 139 14 13 166 26 14 13 53 individuals (excluding housing loans) Others 167 53 25 245 29 39 25 93 Total customer loans 1. 36 50 14 100 10 36 14 60 investment and holding companies Professional and private 176 19 8 203 34 16 8 58 individuals (excluding housing loans) Others 206 52 23 281 40 38 23 101 Total customer loans 1. storage 182 113 43 338 3 107 43 153 and communications Financial institutions.419 200 536 247 983 Debt securities 5 1 1 7 2 – 1 3 Contingent liabilities 50 16 21 87 10 13 21 44 and others Total 1.Non-performing assets by loan grading and industry The Group NPAs Specific allowances Sub. Sub- In $ millions standard Doubtful Loss Total standard Doubtful Loss Total 2015 Customer loans Manufacturing 367 121 72 560 53 99 72 224 Building and construction 219 87 28 334 19 73 28 120 Housing loans 112 5 5 122 .612 180 389 252 821 Debt securities 4 – 1 5 2 . 1 3 Contingent liabilities 84 70 21 175 24 46 21 91 and others Total 1.792 206 435 274 915 Of which: restructured loans 236 142 8 386 30 82 8 120 2014 Customer loans Manufacturing 366 203 91 660 60 180 91 331 Building and construction 289 47 21 357 57 37 21 115 Housing loans 101 6 6 113 – 2 6 8 General commerce 293 116 25 434 25 90 25 140 Transportation.537 635 247 2.

contingent 129 54 Rest of the World 503 194 liabilities and others Total 2.481 Total past due assets 2.513 Debt securities.792 915 Professional and private individuals 158 123 2014 (excluding housing loans) Singapore 432 147 Others 249 177 Hong Kong 269 107 Sub-total 2.143 1.862 Rest of Greater China 361 137 South and Southeast Asia 948 445 Debt securities.143 1.030 Total 2.135 160 DBS Annual Report 2015 .272 1.916 (a) Based on the country of incorporation of the borrower Past due non-performing assets by region(a) The Group Non-performing assets by past due period In $ millions 2015 2014 The Group In $ millions