DBS Unveils New US$ 100 Million Treasury & Markets Centre

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Investment In Systems, Facilities, Technology And Staff Bears Fruit As Transaction Volume Triples, Trading Volume And Net Income See Double-Digit Growth

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DBS Commits To Being "Asia's Best Advisory Bank"

SINGAPORE, NOV. 10 - DBS Bank today unveiled its new Treasury & Markets facility in Singapore, a US$100 million investment in systems, facilities, technology and people trading in foreign exchange, interest rates, equity, credit, fixed income instruments, and investment and risk advisory services.

The DBS Asia Treasury Centre marks a milestone in the evolution of DBS Treasury & Markets' operations over the last 18 months, as it moves beyond Singapore to become a multi-product regional treasury house.

DBS' goal is to grow into the best advisory bank in the region for Asian clients, and the new centre opened today will enable the group to provide clients with customised solutions to manage their risks across all financial products and asset classes.

DBS officials said the investment in treasury & markets operations is already showing results, with trading volumes and net income showing double-digit growth over the past 12 months, and transaction volumes tripling over the last 18 months.

The latest recognition of the Bank's performance comes from AsiaRisk, an industry magazine that next week will anoint DBS its "Domestic Derivative House of the Year 2000 in South Asia." DBS has also emerged as the most active player in Singapore government securities, with its market share growing from 17% in 1999 to 27% for third quarter of 2000.

DBS is also the most active market maker in Singapore dollar swaps from one to ten year durations, and is among the top three in market making in Thai Baht swaps. During the year, DBS Treasury & Markets also offered the biggest ever S$ structured product (US$200 million US$/S$ FX range option), and transacted a recent US$500 million five year swap into Singapore dollars for a single corporate deal.

The design of the new Asia Treasury Centre, a 3,000 square metre facility twice the size of the previous premises, reflects DBS' approach to capturing the Asian market for Treasury.

At the centre of the dealing room is the marketing and advisory team, which highlights the Bank's central focus on its clients. Flanking the client desk are the various product groups, comprising foreign exchange, interest rates, equity, credit, and fixed income, and across is the investment and risk advisory team. Overseeing it all is an in-house compliance team managing market, legal and operational risks, as well as a research team providing comprehensive qualitative and quantitative research support.

DBS says it has organized its new facilities along these lines in order to be able to respond faster and more comprehensively to client requirements across all products and multi-asset classes.

"Our goal is no less than to be the best advisory and risk management bank for all our Asian-based clients across all Asian currencies. We are today in a unique position to achieve this," said Frank Wong, Senior Managing Director and head of DBS Treasury & Markets Group.

"We are now able to leverage our expertise throughout Asia, where 90 percent of our customers are based, to provide the best risk management products and services, along with the most incisive advisory services for our clients.

"Adding to our regional knowledge and skills, we have brought a global perspective and global capability to the Treasury team here. We have built a deep team of treasury experts with international experience, and we have the risk management products and services for our private and corporate clients.

"We have also deployed some of the very best information technology systems available. This includes an integrated, front-to-back trading system with powerful risk management capabilities. This Murex system brings all the division's various products and services onto one common, integrated platform.

"Taken together, this is a US$100 million investment in people and systems and technology and new facilities which we are very excited about, and believe clients will see as a commitment to providing the best service and performance of any Asian bank, or any bank in Asia for that matter," Wong said.

DBS is the first bank in the region to employ the powerful Murex solution across Treasury & Market's entire product line. This enables its advisors, dealers and ultimately, customers, to take advantage of state-of-the-art technology that helps identify and manage all manner of financial risk.

Murex provides efficient, straight-through processing, live data and information available across the entire system, as well as scalability and compatibility with other systems. It helps traders and clients to simulate a variety of stress situations and see its impact on their investments or business.

DBS has also adopted a hub and spoke approach to delivering its services to customers across the region. The new Asia Treasury Centre in Singapore is headquarters to Treasury & Markets' risk management, and financial engineering and product specialists. While its subsidiaries in Hong Kong, Thailand and its other offices in the region focus on providing sales and marketing services. In this way, local offices can build on their local sales and understanding of customer needs, and be "centres of excellence" in their respective local currency.

By centralising the risk management system, and financial engineering and product specialists in Singapore for all of the bank's regional operations, DBS believes it can ensure a better integrated and cost-efficient process in the delivery of advisory services for its customers across the region.

"Importantly, these systems add to our ability to manage the stringent rules of compliance that must accompany today's complex financial products.

"Risk management is central to the future of many increasingly important banking activities," said Wong, "and good risk management helps protect a customer from the vagaries of world markets, capital and currency hazards, inherent business risks, and from potentially damaging economic and political developments, or to profit from it. We mean to make stringent risk management an integral part of every decision made here, for DBS and for our clients," he said.

"This is a cliché, but in the end, no matter how much we spend or how much time we focus on systems and processes, it is the people that make the difference. Showing customers how a previously unforeseen option fits perfectly with their needs, or how it solves a nagging dilemma is crucial. And regardless of how much the system or infrastructure has changed, it is the people who push the button and make the difference.

"To this end, we have made 57 new hires since June 99, and have in place a powerful mix of Asia and international expertise we think would be the envy of any bank in the world.

"Customers -- whether institutions, companies or individuals -- are realising that the best banks, like DBS, can provide tailored solutions to their specific needs, and that many lessons from the financial crisis two years ago point to the overwhelming merits of risk management.

"Global growth in trading over-the-counter derivatives - the perfect way to hedge these risks -- continues to outpace all other treasury and markets activities, and DBS plans to be there to provide those services and products," Wong said.