DBS Thai Danu Bank Announces Bt 80.0 Million Net Profit For 3Q02

* * *

Bt 210.9 million (US$ 4.9 million) Net Profit for 9M02, 84.7% increase from a year ago

* * *

A 14.9% growth in Total Income Contributes to Gains

BANGKOK, OCTOBER 18, 2002 - DBS Thai Danu Bank, a subsidiary of DBS Bank, today reported an unaudited net profit of Bt 210.9 million (US$ 4.9 million) for the nine months of 2002 (9M02), representing an 84.7% increase from the same period last year. Net profit for the third quarter (3Q02) alone was Bt 80.0 million (US$ 1.8 million), a 12.4% rise from the previous quarter.

Bank officials attributed the year-on-year improvement to a 14.9% increase in total income. Net interest and dividend income rose by 8.7% to Bt 1,755.5 million. Non-interest income grew 33.7% to Bt 708.8 million, mainly from higher fee and commission income and gains from sale of investments. Operating expenses increased by 8.0% to Bt 1,663.5 million. The increase was due largely to higher expenses for IT in fulfilling our commitment to enhance service quality, specific business tax and contribution to the Financial Institutions Development Fund (FIDF). Operating profit for 9M02 was Bt 800.8 million, up 32.3% from the same period last year.

Quarter-on-quarter (Q-o-Q) net profit increased by 12.4% due mainly to a 13.9% increase in total income. Net interest and dividend income grew by 3.8% to Bt 614.9 million. Non-interest income was up by 43.0% to Bt 292.2 million, attributable mainly to an increase in gains from sale of investments and other income. Operating expenses rose by 3.9% to Bt 577.1 million as a result of an increase in IT expenditure, specific business tax and the contribution to FIDF. Operating profit was up by 36.8% to Bt 330.0 million.

As at 30 September 2002, the Bank's non-bank customer loans stood at Bt 77,321.3 million, a 4.5 % growth over the end of the same period last year, and 2.8% over the end of last year. Total assets increased to Bt 101,633.9 million. Non-bank deposits declined by 5.6% to Bt 72,953.0 million as the Bank managed actively its funding base. Quarter-on-quarter, loans grew by 1.1% and non-bank deposits declined by 4.6%. The Bank's loan to deposit ratio was at 106.0%.

The Bank remained one of the highest capitalized banks in Thailand with a capital adequacy ratio (CAR) of 12.5%, well above the Bank of Thailand's minimum requirement of 8.5%.

As at 30 September 2002, non-performing loans (NPLs) by account basis were Bt 4,416.1 million, a decrease from Bt 4,619.3 million at the end of the same period last year. The current NPL ratio of 5.6% was an improvement compared to 6.2% in the corresponding period last year. Quarter-on-quarter, the NPL ratio of 5.6% was marginally higher than 5.4% recorded in 2Q02 as NPLs rose slightly by Bt 260.0 million.

In continuing to be prudent given existing market uncertainties, the Bank's Board of Directors decided to add a further Bt 200.0 million to its provisions for NPLs in 3Q02.

President and CEO Pornsanong Tuchinda said, "The financial results for the nine months reflects the steady growth in our profitability. However, external uncertainties are our main concern. As a result, we will continue our policy of being prudent in order to maintain high asset quality, strict cost discipline and optimizing the use of the existing resources. Meanwhile centralization of operations will be stepped up to help the Bank reap efficiency gains from economies of scale."

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 210.9 million for the nine months of 2002 (9M02), an 84.7% increase from the same period last year. The better financial performance was due mainly to improved operating performance. Net interest and dividend income was up by 8.7% to Bt 1,755.5 million. Non-interest income rose by 33.7% to Bt 708.8 million, due mainly to a 13.1% growth in fee and commission income and a 169.7% increase in gains from sale of investments. Operating expenses was up 8.0% to Bt 1,663.5 million, due primarily to higher expenses for IT in fulfilling our commitment for enhancing service quality, additional specific business tax and increased contribution to the Financial Institutions Development Fund (FIDF). Operating profit was Bt 800.8 million, a 32.3% increase over the same period last year.

Quarter-on-quarter (Q-o-Q), net profit increased by 12.4% to Bt 80.0 million. The increase was attributable mainly to a 13.9% rise in total income which outpaced the 3.9% expense increase. Net interest and dividend income was up 3.8% to Bt 614.9 million. Non-interest income rose by 43.0% to Bt 292.2 million, due largely to higher gains from sale of investments and other income. Operating expenses rose 3.9% to Bt 577.1 million as a result of higher IT expenditure, specific business tax and the contribution to FIDF. Operating profit was Bt 330.0 million, 36.8% higher than the previous quarter.

As at 30 September 2002, year-on-year non-bank customer loans expanded by 4.5% to Bt 77,321.3 million. Total assets rose to Bt 101,633.9 million. Non-bank deposits decreased by 5.6% to Bt 72,953.0 million. The loan-to-deposit ratio was 106.0%. As compared to the end of last year, loans grew by 2.8%. Q-o-Q, loans expanded by 1.1% while non-bank deposits declined by 4.6%.

Capital Adequacy
As at 30 September 2002, the Bank's capital adequacy ratio (CAR) stood at 12.5%, well above the 8.5% minimum requirement specified by the Bank of Thailand.

NPLs and Provisions
As at 30 September 2002, NPLs classified under account basis were Bt 4,416 million. NPL as a percentage to total loans was 5.6%.

Given the continued uncertainties in the market, the Bank's Board of Directors maintained its prudent provisioning policy and made additional loan loss provision of Bt 200.0 million in 3Q02.