FOLLOWING IS A STATEMENT FROM DBS CHAIRMAN S. DHANABALAN ON THE MATTER OF THE COMPANY'S DIRECTOR AND EXECUTIVE DIRECTOR COMPENSATION:

SINGAPORE, MAY 17 - DBS Bank said today compensation levels for DBS' directors and non-executive directors are consistent with best practices among banking and financial firms in the region and around the world.

"There are really two issues here, which much of the reporting has distilled into one and which has confused the matter somewhat. One is the matter of non-executive Director compensation; the other is that of executive compensation, particularly that of senior executives who also serve on the Board.

"The Board's compensation committee sets top management compensation and fees of non-executive directors. Half the members of this committee are independent directors so there is no question about its objectivity.

"The committee establishes compensation practices that will attract and retain top talent and which reflects compensation levels and practices of other major banking and financial organizations. In doing this, it relies on data on industry-wide practices and compensation levels and not the practice in any one bank, and draws on the expertise of consultants with wide experience in this area.

"Non-executive directors are paid basic fees of $50,000 per annum with some adjustment for those who chair or serve on sub-committees. They are reported in the category less than S$250,000.

"This is well below the amounts paid by companies of similar size elsewhere.

"Directors do not merely attend Board meetings. They have fiduciary and legal responsibilities. Given their level of activity and the degree to which we rely on them, DBS is getting exceptionally good value from this group, and shareholders and other investors should be very pleased they are as committed as they are.

"Regarding the compensation of executive directors, the discussion has focused on the compensation of two top executives who we reported earned more than S$1 million in 2000.

"One of the executives, Ng Kee Choe had his 31 years' retirement gratuity scheme commuted and paid in 2000. This is a one-off payment. There was also a contractual performance bonus payment to the outgoing CEO, John Olds.

"Virtually all the discussion that has taken place has ignored the fact that fully 65% of their compensation in 2000 was in the form of performance bonuses. Performance-based compensation is a principle that is being applied today at all levels within DBS, not just at senior levels.

"We have heard and appreciate the concerns of investors, but we believe the concern is misplaced. Our top management may have been paid well in 2000. But it was largely because they met their targets and earned significant bonuses. We shouldn't have to feel embarrassed by that."

DBS Bank is the flagship bank of DBS Group Holdings in Singapore. It is ranked among the top banks in Asia, the 70th largest in the world, a recognised leader in Internet banking and e-commerce and the market leader in Singapore-dollar loans and deposits, and equity fund raising. Beyond Singapore, DBS Group serves corporate, institutional and retail customers through subsidiaries in Hong Kong, The Philippines, Indonesia and Thailand, and international banking services through a network of 13 overseas branches and offices.