1. The Development Bank of Singapore Ltd ("DBS Bank") is pleased to announce that the Government of Singapore has accepted its proposal to purchase the business undertaking of The Post Office Savings Bank of Singapore and Credit POSB Pte Ltd ("Credit POSB") (collectively referred to as "POSBank") for a consideration of $1.6 billion. This acquisition combines the largest and the fifth largest Singapore financial institutions to further strengthen DBS Bank's position as the largest Southeast Asian bank and one of the largest banks in Asia. After the acquisition, DBS Bank and its subsidiaries will have assets of approximately $93.4 billion, customer deposits of approximately $59.3 billion and shareholders' funds of approximately $9.4 billion based on the position as at 31 December 1997.

2. The global banking industry is undergoing rapid transformation, characterized by the consolidation of financial institutions and increasing investment in technology and human resources. The acquisition provides a number of key advantages including:-

  • By far the largest retail banking business in Singapore with a retail customer base of more than 3.3 million, a total deposit base of approximately $59.3 billion and the biggest originator and provider of home mortgages, GIRO services, and electronic share applications for initial public offerings.
  • Extensive domestic market coverage to enhance cross-selling, distribution of banking, investment and insurance products and provision of financial advisory services.
  • Distribution strength with over 170 branches and more than 950 ATMs nationwide to provide significant opportunities both for deposit gathering and new product offerings.
  • Larger and more diversified deposit base to provide a significant source of stable and lower cost funding for DBS Bank's operations.
  • Increased economies of scale with greater operational efficiencies through the integration and rationalization of DBS Bank's retail banking business, mortgage business, information technology operations, treasury operations and back office processing with annual cost savings estimated to be $30 million which represents approximately 20% of POSBank's 1997 operating expenses. It is estimated that DBS Bank will incur a one time pre-tax restructuring charge of approximately $50 million.

3. Chairman S. Dhanabalan said "We view this acquisition as a unique opportunity to strengthen DBS Bank's market leadership in Singapore, particularly in retail banking. The POSBank retail network and brand are very well known and effective in mobilizing savings, and for this reason, we intend to retain and build on POSBank's established identity."

4. DBS Bank will retain the POSBank brand and build on its established infrastructure. The POSBank brand will be expanded to include a wider range of products and services presently offered by DBS Bank's branches. With enhanced technology capabilities, this will position DBS Bank as the premier retail banking service provider. The current specialized service offered by DBS Bank for high networth individuals will be enhanced and delivered through a separate channel. With its enlarged size, DBS Bank will also be able to significantly increase its investments in cutting edge technology and human resources.

5. "The combined financial and managerial resources and the economies of scale will allow the DBS Group to compete more effectively in the rapidly changing and consolidating market place for banking and financial institutions," said Chairman S. Dhanabalan.

6. "By sharing successful best practices and talent in our two companies," said President and Chief Operating Officer Ng Kee Choe, "we can take advantage of the unique strengths of both organizations to serve our customers better and deliver even greater shareholder value. This acquisition will result in a dynamic organization that is focused on delivering long term benefits to our shareholders, customers, staff and community."

7. Shareholders should benefit from the creation of a stronger, more competitive force in the financial services sector in Singapore and throughout Asia, additional profit from cross-selling of products and service, the enlarged funding base and the expected cost savings resulting from the acquisition. The management of DBS Bank expects the earnings per share to be accretive in the first full year of the acquisition as DBS Bank begins to realize cost savings benefits and enhanced revenues from cross-selling opportunities.

8. DBS Bank will absorb all the staff of POSBank on their existing terms and conditions of service in the first instance. Meantime, both DBS and POSBank have instituted a hiring freeze. The acquisition will provide all employees with better prospects and broader career opportunities because of DBS Bank's enhanced position and outlook.

9. Mr Moses Lee, Chairman of POSBank, will be invited to join the DBS Bank Board. Mr Dileep Nair, Chief Executive Officer of POSBank, will join DBS Bank as Executive Vice President to manage and enhance the POSBank brand under a new retail banking division.

10. The Government has accepted DBS Bank's proposal to purchase all the assets and liabilities of POSBank except for the proposed POSBank headquarters premises currently under construction, and certain equity and bond securities, for a purchase consideration of $1.6 billion. DBS Bank will be acquiring total deposits of $25.5 billion and total assets of $26.9 billion as at 30 June 1998. POSBank's adjusted net tangible assets as at 30 June 1998 was $1.164 billion. The purchase consideration of $1.6 billion, which represents a multiple of 1.37x the adjusted net tangible assets, is fair value.

11. The purchase consideration will be satisfied through an issue by DBS Bank of new non-voting convertible preference shares which are convertible into an equivalent number of new ordinary DBS Bank shares. The non-voting shares will be convertible 60% into local shares and 40% into foreign shares. The non-voting convertible preference shares will not be listed on the Stock Exchange of Singapore as it is not the intention of the Government to sell these shares in their present form. The non-voting shares are convertible at any time into ordinary shares by the Government and will be mandatorily convertible into ordinary shares upon the sale by the Government. The Government has agreed not to sell, prior to 1 January 2002, any shares issued to it as consideration for the acquisition.

12. POSBank has played an important role in the community in promoting national savings. DBS Bank will continue to promote thrift and encourage savings by all. It will therefore keep its services accessible and affordable, particularly basic savings accounts. In particular, to inculcate the saving habit among the young, DBS Bank does not intend to levy charges on basic savings accounts operated by children, full time students below the age of 21 years and full time National Servicemen.

13. To manage the process of phasing POSBank's depositors into DBS Bank, the Government has agreed to continue to grant the tax exemption on interest income earned on POSBank's savings deposits, existing and new, based on the following schedule:-

  Time Period Tax Exemption
Stage One To 31 December 2001 For all deposits of POSBank savings account depositors
Stage Two 1 January 2002 to 31 December 2004 For the first $100,000 balance for each POSBank savings account depositor
The Government guarantee on all POSBank deposits will be removed as of the closing date of the acquisition.

14. For existing home mortgages of Credit POSB including applications received as of this Press Release date, DBS Bank intends that, up to 31 December 1999, these home mortgages would enjoy interest rate margin differentials of between 1 1/2% and 1 3/4% lower than those of DBS Bank's corresponding rates for home mortgages. Thereafter, over the next three years up to 31 December 2002, DBS Bank will gradually move the rates to competitive market levels.

15. For applications received by Credit POSB after this Press Release date up to and including the Closing Date, in respect of new purchases of homes and not for refinancing, DBS Bank intends to maintain the above mentioned interest rate margin differentials up to 31 December 1999.

16. The acquisition is subject to legislative, regulatory and shareholders approvals and is expected to close before 30 November 1998.

17. Morgan Stanley Dean Witter is serving as financial advisor to DBS Bank on the acquisition and will render a fairness opinion to DBS Bank's board of directors.

For further enquiries, please contact:

DBS Bank Media Hotline Numbers : 321 5060 / 321 5164
Customer Hotline Number : 1800 222 6333

Click here for more information on POSBank's Letter to Customers and
Q & A.


Dear Customers,

We are pleased to inform you that DBS Bank will be acquiring the business undertaking of POSBank. The acquisition will include POSBank's Deposit and Loan portfolio as well as its branch and ATM network. This acquisition is expected to be completed by 30 November 98.
DBS Bank's broader range of products and services will be progressively offered through all the POSBank branches to be acquired. In time, DBS Bank customers will therefore be able to enjoy the convenience of a wider banking network of more than 170 branches and 950 ATMs. DBS Bank will also enhance its services to high networth customers through a separate channel of delivery.
We shall keep in close touch with you as we move forward, and inform you of improved services as and when they are introduced.
In the meantime, should you have any queries, please call 1800-222 6333 or e-mail


Following our announcement, you may have some questions about your DBS Bank account. We have a short Q&A here to answer some of your immediate concerns. If you have further questions, please call our Customer Hotline at 1800 222 6333.

                    Deposit Accounts & Loans

Q1: What will happen to my existing DBS Bank accounts?

A: There will be no change to your existing DBS Bank accounts and your existing banking arrangements such as standing orders, Interbank GIRO with DBS Bank.


Q2: What about my existing savings passbook, cheque book and ATM cards? Am I expected to change them?

A: You will continue to use your existing DBS Bank passbook, cheque book and ATM card at DBS Bank branches, ATMs and other electronic banking facilities. There is no need for you to change them.


Q3: Besides my DBS savings accounts, I also have accounts with POSBank. Am I required to transfer or consolidate my accounts with DBS Bank or POSBank?

A: No, there is no need for you to transfer or consolidate your accounts. Depending on your deposits amounts, some customers may find that they will enjoy higher interest rate for their consolidated balance at DBS Bank.


Q4: Can a customer now transfer funds between his accounts maintained at both banks?

A: No, not at the moment but it is our plan to make banking services more convenient for our customers. This will be possible when the necessary changes are made to the existing computer systems.


Branches and ATM networks

Q1: Can I open/close accounts or transact at any of the POSBank branches?

A: Currently, it is not possible for you to transact at POSBank branches and ATMs because our computer systems are not integrated yet. We will inform you when you can use the expanded network.


Q2: Will you be changing your banking hours to be the same as those of POSBank?

A: It is not necessary for us to keep to one set of opening hours for all branches. Opening hours will have to depend on location of the branches and local needs of the customers.


Q3: Can I now transact at POSBank ATMs?

A: No, our computer systems are currently not integrated yet. We will inform you when this arrangement is available.


Q4: Will you standardise the range of electronic banking services such as phone and Internet banking, for both banks?

A: Yes, we will work progressively towards allowing all customers to enjoy the same level of convenience.

DBS Group News Releases
Further Assistance
Terms & Conditions | Privacy Policy | Fair Dealing Commitment | © 2007 DBS Bank Ltd | Co. Reg. No. 196800306E