MEDIA STATEMENT
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SINGAPORE, 13 October 2008 - When Lehman Brothers filed for bankruptcy protection on 15 September 2008, a credit event occurred in High Notes 5 as Lehman Brothers was one of the eight Reference Entities in the 'First-to-Default' basket of this Note. This triggered the early redemption of High Notes 5 and the unwinding process has begun.
DBS Bank (Hong Kong) Limited was one of the distributors of the Constellation Structured Retail Notes. Lehman Brothers Holdings Inc was also one of the Reference Entities in some series of the Constellation Notes. The bankruptcy of Lehman thus triggered a credit event and an early redemption of the affected Constellation Notes.
We expect that the final valuation of the Notes, which is market determined, will be completed on or around 31 October 2008. In the worst case scenario, customers could lose their entire investment.
Setting up of Investor Care Centres
DBS is concerned about customers who have purchased investment products with Lehman exposure and understand the anxiety they are facing. We have set up dedicated Investor Care Centres both in Singapore and Hong Kong, staffed by experienced staff specially trained to handle queries on the affected Notes. These Centres have been operational since 24 September 2008. We respect the trust our customers have placed in the bank and we are dealing with every customer complaint received in a comprehensive manner.
Appointment of Independent Consultants
To provide added assurance that the bank is acting in our customers' best interests and in consultation with Monetary Authority of Singapore (MAS), DBS Bank has appointed Mr Gerard Ee on 02 October 2008 as an independent external consultant to review our customer complaints handling process in Singapore. In addition to the bank's existing compliance and audit process, his appointment is intended to provide added assurance that every customer complaint is reviewed fairly, effectively and promptly.
The bank has also appointed international accounting firm KPMG to ensure fair and transparent valuation processes of the final credit redemption amounts for High Notes 5 in Singapore and the affected Constellation series in HK.
Rajan Raju, MD & Head of Consumer Banking Group said: "Over 300 customers have approached our Investor Care Centre and we are addressing their concerns about their investments. As soon as each case is reviewed, DBS will inform the respective customers of the outcome. Customers who are not satisfied with the outcome also have the option of escalating the matter to FiDREC. In the event where evidence of mis-selling is established, DBS Bank will not hesitate to take responsibility."
We encourage our High Notes 5 customers who have further queries to contact us at 1800-111-1111 or email customerservice@dbs.com where our dedicated team at the Investor Care Centre will be happy to assist.
About DBS
DBS is one of the largest financial services groups in Asia with operations in 16 markets. Headquartered in Singapore, DBS is the largest bank in the country as measured by assets, and a leading bank in Hong Kong. DBS' "AA-" and "Aa1" credit ratings are among the highest in the Asia-Pacific region.
As a bank that specialises in Asia, DBS leverages its deep understanding of the region, local culture and insights to serve and build lasting relationships with its clients. DBS provides the full range of services in corporate, SME, consumer and wholesale banking activities across Asia and the Middle East. The bank is committed to expand its pan-Asia franchise by leveraging its growing presence in mainland China, Hong Kong and Taiwan to intermediate the increasing trade and investment flows between these markets. Likewise, DBS is focused on extending its end-to-end services to facilitate capital within fast-growing countries in Indonesia and India.
DBS acknowledges the passion, commitment and can-do spirit in each of its 15,000 staff, representing over 30 nationalities. For more information, please visit www.dbs.com.