DBS Thai Danu Bank Announces Bt 71.2 Million Net Profit For 2Q02

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Bt 130.9 million (US$ 3.1 million) Net Profit for 1H02, a 78.8% increase from a year ago

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Boosted by a 5.3% increase in net interest & dividend income and 18.1% rise in non-interest income

BANGKOK, JULY 19, 2002 - DBS Thai Danu Bank, a subsidiary of DBS Bank, today reported an unaudited net profit of Bt 130.9 million (US$ 3.1 million) for the first half of 2002 (1H02), representing a 78.8% increase from the same period last year. Net profit for the second quarter (2Q02) alone was Bt 71.2 million (US$ 1.7 million), a 19.3% rise from the previous quarter.

Bank officials attributed the year-on-year improvement to a 5.3% increase in net interest and dividend income to Bt 1,140.6 million and an 18.1% rise in non-interest income to Bt 416.6 million. The growth in non-interest income was due largely to a 20.8% increase in fee and commission (to Bt 262.2 million) and a 135.8% rise in gain from sales of investments (to Bt 121.2 million). Operating expenses increased by 5.8% to Bt 1,086.3 million, due primarily to higher IT-related expenditure in our continuing efforts to improve our systems and service quality. Operating profit for 1H02 was Bt 470.9 million, a 15.1% improvement from a year ago.

Quarter-on-quarter net profit increased by 19.3% due mainly to an 8.0% expansion in net interest and dividend income to Bt 592.2 million. Non-interest income declined marginally by 3.8% to Bt 204.3 million as a result of lower gain from sales of investments and other income. However, fee and commission income increased by 8.4% to Bt 136.4 million in 2Q02. Operating expenses rose by 4.6% to Bt 555.3 million due mainly to increased IT-related expenditure. Operating profit went up by 5.0% to Bt 241.2 million.

As at 30 June 2002, the Bank achieved a 9.0% growth in its non-bank customer loans to Bt 76,495.6 million as compared to the same period last year, and 1.7% over the end of last year. Total assets increased to Bt 101,214 million. Non-bank deposits rose by 0.2% to Bt 76,468.0 million. Quarter-on-quarter, loans grew by 0.6% and non-bank deposits was down by 2.5%. The Bank's loan to deposit ratio was at 100.0%.

The Bank remained one of the highest capitalized banks in Thailand with a capital adequacy ratio (CAR) of 12.6%, well above the Bank of Thailand's minimum requirement of 8.5%.

The Bank's asset quality continues to improve. As at 30 June 2002, NPLs by account basis were Bt 4,156 million, a decrease from Bt 4,534 million in the same period last year. The current NPL ratio of 5.4% was an improvement compared to 6.4% in the corresponding period last year. Quarter-on-quarter, NPLs decreased by Bt 80 million.

In continuing to be prudent, the Bank's management decided to add a further Bt 120.0 million to its provisions for non-performing loans (NPLs) in 2Q02. The loan loss provision is now 150.5% of the new requirement set by the Bank of Thailand.

President and CEO Pornsanong Tuchinda said, "Despite the challenging times, the Bank's net profit expanded at a substantial rate of 78.8% for 1H02 as a result of our efforts to grow both interest and non-interest income. We will also continue on our strategy of maintaining superior asset quality and strict cost discipline."

DBS Thai Danu Bank, a subsidiary of DBS Bank of Singapore, is a commercial bank headquartered in Bangkok, Thailand. With 61 branches, the Bank offers a full range of banking services in Thailand including consumer, SME, and corporate lending as well as an international treasury function.

DBS Thai Danu Bank announced today a net profit of Bt 130.9 million for the first half of 2002 (1H02), a 78.8% increase from the same period last year. The increase in the Bank's financial performance was due mainly to an increase in net interest & dividend income and the non-interest income. Net interest and dividend income was up by 5.3% to Bt 1,140.6 million. Non-interest income rose by 18.1% to Bt 416.6 million, due mainly to a 20.8% increase in fee and commission income to Bt 262.2 million and a rise in gain from sales of investments by 135.8% to Bt 121.2 million. Operating expenses was up by 5.8% to Bt 1,086.3 million, due primarily to IT-related expenditure. Operating profit was Bt 470.9 million, a 15.1% increase from a year ago.

Quarter-on-quarter, net profit increased by 19.3% to Bt 71.2 million. The increase was attributable mainly to an 8.0% rise in net interest & dividend income to Bt 592.2 million. Non-interest income was down by 3.8% to Bt 204.3 million from lower gain from sales of investments and reduced other income, while fee and commission income improved by 8.4%. Operating expenses increased by 4.6% to Bt 555.3 million. Operating profit was Bt 241.2 million, 5.0% higher from the previous quarter.

As at 30 June 2002, year-on-year non-bank customer loans expanded by 9.0% to Bt 76,495.6 million. Total assets rose to Bt 101,214 million. Non-bank deposits increased by 0.2% to Bt 76,468.0 million. The loan-to-deposit ratio was 100.0%. As compared to the end of last year, loans grew by 1.7%. Quarter-on-quarter, loans expanded by 0.6% while non-bank deposits declined by 2.5%.

Capital Adequacy
As at 30 June 2002, the Bank's capital adequacy ratio (CAR) stood at 12.6%, well above the 8.5% minimum requirement specified by the Bank of Thailand.

NPLs and Provisions
NPLs continued to decline. As at 30 June 2002, NPLs classified under account basis were Bt 4,156 million. NPL as a percentage to total loans was 5.4%.

For prudent reasons, the Bank made further loan loss provisions amounting to Bt 120 million in 2Q02. Consequently, the level of provisions was 150.5% of the new requirement set by the Bank of Thailand.