DBS Thai Danu Bank Successfully Completes Bt13.5 billion Re-Capitalization

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Majority Shareholder DBS Bank Backs Deal

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Half of DTDB Shareholders
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BANGKOK, June 15, 2000 - DBS Thai Danu Bank (DTDB) said today it has successfully completed its Bt13.5 billion re-capitalization program in the midst of difficult market conditions and sell-offs in the Thai financial sector.

The capital increase included units of DTDB shares and warrants through a rights issue and a local private placement, and an issue of non-voting capital securities DBS Bank (DBS), DTDB's Singapore-based parent.

The rights issue raised a total of Bt4.1 billion, and the private placement was successful in raising a further Bt1.9 billion. DTDB officials expressed satisfaction that half of its 10,000 shareholders subscribed to the rights issue, calling their support "a strong demonstration of shareholder confidence in the bank."

DBS Bank had as part of the re-capitalization program maintained its 52% ownership and taken up the shortfall in both the rights issue and the private placement through a Bt7.5 billion issue of non-voting capital securities.

DBS officials on April 28 had re-stated its commitment to DTDB and the Thai banking market, announcing at the time its intent to take up any shortfall in the capital raising through non-voting capital securities.

Pornsanong Tuchinda, President of DBS Thai Danu Bank, said the bank was pleased to have successfully completed the re-capitalization.

"We are excited to have achieved this increase in capital, which will allow us to grow our business and deal aggressively with NPLs. The decision to increase our capital, and do it in a way that would preclude subsequent increases in the foreseeable future, was in itself an aggressive step."

"With this new capital, we will be among the strongest capitalized banks in Thailand and regionally, with an implied total capital ratio of over 20%."

"The vast majority of financial analysts had recommended subscription to this issue, and saw the merit of our decision. I believe this will become even more evident as we put the problems and issues of the past two years behind us, clean up our balance sheet, and get back on a growth track."

"We have a bold plan for the future. We intend to not only grow our traditional lending business, but also develop new capabilities and services to increasingly sophisticated clients."

"On NPLs, we have been successful in restructuring these problem loans, but we need to be realistic. Our goal is to put a large part of our NPL problem behind us, get back to business, and seek growth while competitors continue to grapple with their own NPL issues."

"We are now in a position to move forward with our plans for DTDB, and undertake them with a greater level of confidence than any other institution in Thailand," Pornsanong said.