Completing the regional and wealth management platform July 23, 2001 First Half 2001 Results Briefing

2 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

3 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

4 Net interest margin2.07%1.97%1.78% Cost-to-income ratio39.9%45.4%49.0% Return on assets1.31%1.25%1.08% Return on equity13.1%12.7%11.4% Net interest income1, (8.1)(3.1) Fees & commissions (3.7)0.8 Dividend & rental income427340(3.7)(45.2) Other income Income before operating expenses1,4881,4431, Staff costs Other operating expenses Operating expenses Operating profit (12.9)(1.5) Specific provisions General provisions(17)(40)(64) Net profit attributable to shareholders (10.6)(8.2) (S$ million) 1H002H001H01 1H01 / 1H00 (%) 1H01 / 2H00 (%) Net revenue increased by 2.7%, net profit down 10.6%

5 (S$ million) Modest decline in net interest income despite sharp fall in net interest margins Net interest income Net interest margin (gross basis) 2.00% 2.04% 989 1, % 1.97% 993 1H99 2H99 1H00 2H00 1H %

6 Excess liquidity dampens margins, but strengthens ability to fund lending growth H01 (%) Net Interbank Placement / Asset H01 (%) Loan / Deposit

7 (S$ million) Change in Gross Loans 10.7% 30.4% 4,373 13, % 2, % (2,966) -3.8% (2,219) -3.7% (2,053) 3.5% 1,917 Jun 98 Dec 98Jun 99Dec 99Jun 00Dec 00Jun 01 Dao Heng Jun 98 Dec 98Jun 99Dec 99Jun 00Dec 00Jun 01 Outstanding Gross Loans 72,503 Loan growth has turned around

8 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

9 Strong fee income despite stockbroking liberalisation and weak markets (S$ million) Investment banking425639(7.1)(30.2) Stockbroking473124(48.9)(22.6) Trade-related Fund management372535(5.4)40.0 Deposit-related Loan-related Others493642(14.3)16.3 Total fee income (3.7)0.8 Fee to income ratio (%) – 2000 Fee Income CAGR: 36.2% 1H002H001H01 1H01 / 1H00 (%) 1H01 / 2H00 (%)

10 Other income : FX & securities trading doubled (S$ million) Foreign exchange Gains on securities & derivatives trading Gains on investment securities Gains on fixed assets Other income202419(5.0)(20.8) Total H002H001H01 1H01 / 1H00 (%) 1H01 / 2H00 (%)

11 Emphasis on non-interest income yields strong returns Dec 98 Dec 99 Dec 00 Jun 00 (%) Non-interest income to Operating Income * * Excluding gains on disposal of non-core assets Jun 01

12 (S$ million) Sales Volume H991H002H00 u Investment products include Horizon, Ei8ht, Up and other DBSAM programs Investment products Record growth in wealth management products 1H Insurance

13 (S$ b) S$ Current accounts S$ Autosave deposits S$ Savings deposits S$ Fixed deposits (2.0) ACU Fixed deposits DBS Kwong On DBS Thai Danu (0.2) Others* Sub-total Dao Heng Total Market share of S$ deposits31.8%32.3%32.8% Dec 2000 Jun 2000 Jun 2001 YoY Difference Customer Deposits Deposit base provides platform for cross selling wealth management products * * Include a once off short-term deposit of $5.0b 114.9

14 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

15 (S$ million) Staff costs Occupancy expenses Technology-related expenses Professional & consultancy fees383533(13.2)(5.7) Others Total H002H001H01 1H01 / 1H00 (%) 1H01 / 2H00 (%) Operating costs increased 26% due to timing and non-recurring items

16 (S$ million) 1H2000 1H2001 Computerisation Others Staff costs Advertising (+26.1%) Cost-to-Income Ratio: 39.90%49.01% Cost-to-Asset Ratio (a) :1.10%1.30% Focused investment in people, technology and products (a) Annualized without Dao Heng Bank

17 n Phone Banking Technology Procurement Most significant investments completed between January 1, 2000 and June 30, 2001 Consultants now limited to implementation of specific, technical projects Use of consultants winding down n DBS Securities’ Projects n Customer Relationship Mgt n Treasury & Mkts System n E-Commerce/Payments n Risk Mgt System n Datawarehouse n Call Centre Automation H99 9M00 1H01 n Branch Reconfiguration Customer Service n POSBank, DTDB & DKOB Integration Strategy Development n Retail Strategy n Improving Profitability (DTDB NPL, Recapitalisation of DTDB, Sale of DBSL shares, acquisition of BPI) n Institutional Banking Group Reorganisation Re-engineering Processing & Services n Process Improvement n Procurement n E-banking initiative n Cost & Profitability Mgt System Measurement

18 Cost management measures initiated to contain increase to 2000 growth rate Improve processes for greater efficiency Reduce focus on non-performing businesses Defer low revenue yielding projects Performance enhancement program to optimise efficiency

19 Low cost/income ratio by international standards (a) Based on Dec 2000 cost/income ratios 1H2001 Cost/Income for International Peers (a) (%) 49.2

20 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

21 Dao Heng Bank DBS Thai Danu Bank 5 Regional Countries Others Singapore NBk NPL/NBk Loans (%) (S$ million) 1,112 3,907 7,085 8,121 8,149 7,666 4,411 4, % Asset quality continues to improve

22 73% of NPLs are graded “Substandard” 1, ,834 85% 72% 73% 1, % Total 9% 18% 17% (S$’M ) 1% 318 Substandard Doubtful Loss

23 General Provisions (GP) Specific Provisions (SP) SP+GP/NPLs (SEC) (%) SP+GP/Unsec NPLs (%) SP+GP/NPLS (%) 980 1,894 3,147 3,852 4,286 3,978 2,286 (S$ million) Cumulative provisions covered 146.5% of unsecured NPLs and 54.7% of total NPLs 2,643

24 Further diversification post acquisition of Dao Heng Bank 55% Singapore 9% Others 36% Hong Kong Total Assets: S$156 bn DBS + Dao Heng 75% Singapore 12% Others 13% Hong Kong Total Assets: S$116 bn DBS (June 2001)

25 Efficient capital management (a)Includes goodwill, minority interest and capital required against asset base. DBS Group Holdings Consolidated Capital Adequacy (a ) (b) (%) Dec 2000 Hybrid Tier 1 Preference Shares Tier 2 Sub-debt 1H01 Net Income Adjustments for Dao Heng/ Others Jun %

26 DBS will maintain a healthy buffer above the regulatory Tier I requirement of 8% DBS capital position post Dao Heng * Source : Annual reports of respective banks DBS (%) HSBC CitiGroup StanChart BNP ANZ Westpac Fortis Dresdner

27 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

28 Putting the strategy together – positioning for the future Optimal Organisation n Business units reorganised n Built seasoned management team n Enhanced training n Redesigned incentive systems Wholesale Banking: Capital Markets, Advisory, Treasury, FX and Trade Financing Management Wealth Brokerage Services Bancassurance Consumer Banking DBS / OUB Vickers Ballas Frank Russell TD Waterhouse CGNU Dao Heng Kwong On Thai Danu BPI n Aligned internal practices to global standards n Strengthened risk management and credit approval policies n Prudent management of off-balance sheet exposures and liquidity, forex, interest rate and investment risks Leading IT Capabilities n On-line, real-time systems n Data warehouse application with data mining capabilities (CRM) n E-commerce infrastructure n E-payment gateway n Comprehensive, complementary channel mix n Reconfigured branches n Integrated on-line services n Usage of sophisticated capital instruments n Maximise non- dilutive capital n Sale of non-core assets n Scale / Scope n Regionalisation / diversification n Growth / market share n Pricing flexibility Policies, Processes and Systems Balanced Channel Mix Efficient Capital Structure n Infrastructure building and reorganisation substantially completed n Focused areas

29 Infrastru cture Geography Products Significant infrastructure investment to create world class back office and STP initiatives n Vickers Ballas n TD Waterhouse n Frank Russell n CGNU n Dao Heng / Kwong On n OUB Strategic roadmap

30 n Establish critical mass, presence and scale in twin pillars (Singapore, Hong Kong) n Selectively strengthen presence in certain markets (e.g. Thailand, Malaysia after OUB) n Monitor increased Greater China presence post WTO liberalization n No plans for Australia, North Asia (Korea and Japan), but carefully watching opportunities Infr astr uct ure Geography Products Strategic roadmap: Geography

31 n As of first close on July 20, DBS’ effective ownership in Dao Heng Bank is 71% n 98% of Dao Heng shareholders have tendered their shares n Dao Heng Bank governance and management in place n Harmonization objectives and implementation plan defined n Harmonization infrastructure up and running n Key milestones defined with good progress to date Dao Heng Bank became a DBS subsidiary on June 29, 2001 Dao Heng harmonization ahead of schedule (a) Assumes 100% of outstanding options exercised

32 n Leverage infrastructure across business units n Create Regional Processing Centres for appropriate processes n Centralize remaining branch back-office processes n Pursue selected out-sourcing, in-sourcing and co- sourcing n Focus on quality (ISO certification of process factories, 6 sigma initiative) Continue trend of significant unit cost reductions and increase of straight-through processing rates Infr astr uct ure Geography Products Strategic roadmap: Infrastructure

33 n Retail brokerage – Vickers Ballas, TD Waterhouse n Wealth management – leverage distribution for best-in-breed products, capitalize on MPF / CPF deregulation and excess liquidity n Bancassurance – provide insurance related savings products. Life and general insurance partnership with CGNU n Unsecured consumer lending n Credit cards n SME lending n Treasury / FX n Trade finance n Corporate finance n Leveraged finance Asset Accumulation Enterprise and Consumer Lending Infr astr uct ure Geography Products Corporate & Investment Banking Strategic roadmap: Products

34 Bancassurance alliance accelerates wealth management business n Sale of 100% of ICS to CGNU n 10-year exclusive bancassurance strategic alliance for life and general insurance n Total proceeds to DBS of S$446 million of which: uS$395 million as payment for ICS and the bancassurance alliance uS$51 million special dividend from ICS n DBS to receive additional payments of up to S$20 million on meeting performance targets n DBS will record a net initial gain of S$139 million Transaction Highlights n Accelerates revenue growth in DBS’ wealth management business n Expands DBS’ sales channels with the establishment of a specialist sales force dedicated to insurance, wealth management products n Provides DBS with a dedicated bancassurance product provider without equity investment n DBS retains ownership of customers, concentrates on distribution, leaving product manufacturing to CGNU n Allows DBS to rationalize ownership in ICS and continue policy of monetizing assets n Allows DBS to strengthen capital position by $139 million Strategic Rationale DBS has concluded a bancassurance alliance with CGNU

35 Only bank whose non-core asset disposals largely completed n Singapore Petroleum Company n DBS Land n DBS Tampines Centre n POSBank Centre n DBS Securities Building n Insurance Corporation of Singapore (ICS) What we have done n 4 listed companies (Keppel Capital, NatSteel, Intraco, CWT) What needs to be done Insignificant n Focusing on core banking and financial businesses n Divested non-core assets ahead of MAS guidelines

36 Significant Events Affecting Results and Outlook

37 n Top line earnings impacted by weaker economic conditions and adverse competitive environment n Focus on other non-interest income bolsters results n Expenses peaked amidst repositioning activities n Improved asset quality and strong capital position n Completing the regional and wealth management platform Completing the regional and wealth management platform

Completing the regional and wealth management platform July 23, 2001 First Half 2001 Results Briefing