CEO Observations
30 Apr 2020

Agenda▪ How we are navigating the COVID-19 Crisis▪ Business Outlook▪ Credit Outlook▪ Dividends

2Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Operational Resilience
1.

Business volumes are strong▪ No loss in productivity

2.

Seamless remote working in all functions▪ ~90% relationship managers, >70% traders, ~99% developers and >50% operations staff working from
home

3.

Our digital capabilities have served us well
▪ Contact tracing▪ Tracking office occupancy

4.

Robust cyber security framework▪ Able to handle exponential 88x increase in VPN usage▪ Additional layered controls to block or mitigate attacks▪ Increased security awareness trainings for employees

3Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Telecommuting At Scale>50 eTownhalls attended by >20k staff>1.2mn virtual meetings in April,>700 staff engaged in 30 virtual>100 training courses conducted online,
benefiting >15k staff

workshops held across the bank regionallya 9x increase4

Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Accelerated roll out of digital customer capabilities
Enhanced Account Services▪ More self-service options
on IDEAL▪ Migrant workers accountopening▪ Online Equity Trading
Account Opening▪ SME Loan Applications

Contact Free Transactions▪ Digitally signed forms enabled▪ Scanned documentation
accepted through secure mail,including for trade and cashtransactions▪ Enabled tele-advisory for
online financial planning

Engagement▪ Guided Conversations via
Chatbot for COVID-19
corporate and retail relief
measures▪ Online applications for COVID19 relief▪ Held webinars for clients on
investments and training on
digital tools

Active IDEAL Usage

Online Equity Trading

Migrant Workers+28% YoY>24,000>35,000of new-to-trading
accounts opened

accounts openedin <2 weeks
5Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Significant uplift in digital activity
Online Equities TradingeFX Dealonline

Fee income(S$’mn)34.8

2.3x
Non-AI/ Selfdirected

14.3

15.0

Advisory-led(complemented
with digital)

Transactions# of Deals (k)

5.6
9.4

20.5

4Q19

1Q20

14.7

2x

1.5x

Total turnover YoY

1Q19

1Q20

PayNow
Outflow Transactions(#‘mn)
16.4

Transactions(#‘mn)

9.4

P2P
P2B

5.1

11.8

6.4

4.3

5.4

1Q19

1Q20

23%

Market share growthfrom 4Q19 to 1Q20

Paylah!

26%

21.7

1.8m
Customers todate in SG

Inflow Transactions
(#‘k)
905

2x
P2P
P2B

8.4

6x

0.2
1Q19

Market sharein registration andtransaction volumes

15.3
153

8.2

#1

1.1

1Q20

Retail PayNow

1Q19

1Q20

Corporate PayNow

6Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

COVID-19 Support measures
Colleagues✓ No retrenchment, hiring
judiciously, internships andgraduate programmes tocontinue✓ Care packages (which
includes masks, handsanitisers & vitamins)
provided to all employees

Consumers✓

Close to 8,000 mortgage
principal and interest
payment applications
deferred, representing
S$4.7bn in loans outstanding✓

Providing loan
moratoriums for >1,800
corporate facilities
representing >S$3.4bn intotal loans outstanding✓

Free insurance protection
against COVID-19 infections
for customers & family
members – close to 1.2mn
customers and families
insured✓Availed S$3.2bn in loan
facilities to SG SMEs under
government relief
programme✓

Prudently supporting ourlarge corporate customers✓ Medical teleconsultation
services & webinars for staff✓ Launched TOGETHER
campaign to boost
employee morale through aseries of programmes aimed
at physical, emotional, mental
and psychological well-being

Corporates✓

Allowing eligible SG
consumers to convert their
credit card and cash line
outstandings to term loans at
a reduced interest rate

Communities✓

DBS Stronger Together
Fund: Donating S$10.5mn
to aid the elderly andunderprivileged
communities with basic
necessities and meals;
donated medical supplies
in Indonesia and India. We
expect to provide 4.5mn
meals across all markets✓

Delivered care packs to
32,000 healthcare
professionals andbeneficiaries

7Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Business outlook
1Q profit before allowances growth of 20% provides head start for year
▪ Full-year profit before allowances to be around 2019 levels after factoring in declines
for rest of year
▪ Provides capacity to absorb expected increase in allowancesInterest rates are main pressure to earnings▪ 1Q NIM does not reflect impact of recent interest rate cut▪ Impact to be felt from 2Q as benchmark rates driving NIM decline

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Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Business outlook
Business volume holding up▪ Loan growth resilient- Healthy non-trade corporate loan pipeline from top-end customers- Trade loans affected by lower global trade volumes- Housing and consumer loans expected to be little changed▪ Record deposit inflows from flight to safety, expected to continue▪ Fee income likely lower but mitigated by diversified fee income streams▪ Other non-interest income provides upside

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Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Business outlook
Expenses to be tightened▪ No retrenchments or pay cuts, but hiring judiciously▪ Discretionary non-staff costs (e.g. travel) reduced▪ Investments to be prioritised▪ Bonuses will be aligned to earnings

10Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Loan composition

SME
$39bn
(10%)

Consumer$114bn(30%)

Corporate$221bn(59%)

Impacted industries $46bn,
of which Singapore Inc $5bn

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Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Credit costs to rise
Credit costs to rise to between $3bn-5bn (80-130bp) cumulatively over two years▪ Two scenarios used to derive estimates• Base scenario- Lockdowns in major economies until mid-2020- Gradual recovery in 2H20, muted growth in 2021
- Financial market correction of 20% in 2020
• Stress scenario- Lockdowns in major economies until end-3Q20- Gradual recovery from end-2020, economic activity in 2021 still materially below
2019 levels- Financial market correction of 50% in 2020
▪ Results comparable to 2002-03 recession and 2008-09 GFC
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Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Consumer
Housing▪ Loan size of $75bn▪ Minimal losses expected, as in past crises▪ Prudent regulations on LTV limits and debt servicing ratios▪ Average LTV of 55% in Singapore and 32% in Hong Kong

▪ Loans principally for owner-occupation
Unsecured credit▪ Loan size of $11bn, 3% of group loans▪ In Singapore, borrowing limits have been progressively tightened since 201513

Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

SME▪ Loan size of $39 billion▪ Almost 90% of SME exposure in Singapore and Hong Kong
▪ Predominantly secured against property▪ Lending criteria tightened over past two years▪ 10% to highly impacted industries such as hotels, food and beverage, and retailers▪ Hong Kong portfolio already been through prolonged stress14

Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Large corporates▪ Identified eight industries more directly impacted by slowdown – Oil and gas, Aviation,
Hotels, Gaming/cruise ships, Tourism, Retail, Food and beverage and Shipping▪ Total loans of $46bn, of which oil and gas is biggest sector with $23bn▪ Carried out review using name-by-name review based on stress test assumptions
according to industry▪ Identified about 20% for close monitoring15

Navigating
COVID-19

Business Outlook

Traders5

Support services
4

Credit Outlook

Dividends

Oil and gas▪ Total loans of $23bn($bn)
March 2020

Producers
7

Processors
7

Total
23

Producers▪ Principally to oil majors and state-owned companies
Processors▪ Majority of loans are to midstream (transport and storage), which are benefiting fromstrong storage demand▪ Downstream (refining) loans are mainly to oil majors, leading refiners, or integrated
operators with diversified income16Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Oil and gas
Traders▪ Of total $5bn loans, 50% are backed by bank letters of credit▪ One loan recognised as NPA during quarter▪ Balance of loans are to global traders or state-owned companies, or are tightly structured andsecured loans
Support services▪ Conservative stance taken in 3Q17 to recognise NPA, mark down collateral▪ Out of $4bn loans, $3bn recognised as NPA▪ Further SP expected to be taken

17Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Aviation▪ Total loans $6bn
- 15% to Singapore Inc- 35% national airlines backed by aircraft- 35% bank-related and international leasing companies- 15% to aircraft/engine manufacturers

18Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

Entering slowdown with strong balance sheet
Strong capital

CET-1: 13.9%

Above management operating range
and regulatory requirements

Strong generalallowance reserves

GP: $3.2bn

GP reserves include management
overlays of around $1bn

Strong liquidity

LCR: 133%
NSFR: 112%
LDR: 83%

Regulatory ratios well above
requirements, ample liquidity tosupport business operations instressed funding conditions

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Navigating
COVID-19

Business Outlook

Credit Outlook

Dividends

1Q dividend maintained at 33 cents per share▪ Earnings generation currently expected to be sufficient for maintaining quarterly DPS
at 33 cents▪ Barring significant macroeconomic worsening, CET-1 envisaged not to dip significantly
below target operating range of 12.5-13.5%▪ Will continue to assess prospective impact of COVID-19 crisis on financial
performance, credit costs and capital ratios, and adjust dividend policy as appropriate

20Thank You

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