At DBS, we see good corporate governance as the cornerstone
of any effective, well-run organisation. Integrity, honesty and
transparency in dealings are crucial to retaining investor
confidence and in ensuring a firm’s reputation. Not only do we
benchmark ourselves against the Singapore Code of Corporate
Governance, we also adopt, where appropriate, international
best practice corporate governance standards.
This report describes DBS’ corporate governance processes with
specific reference to the guidelines in the Code, and also
includes information required
to be disclosed under the Best
Practices Guide and the Interested Person Transactions Policy in
the SGX Listing Manual.
|DBS Management Committee
(left to right)
David Lau, Frank Wong, Jeanette Wong,
Jackson Tai, Rajan Raju, Eric Ang
and Steve Ingram
Board's Conduct of its Affairs
Principle 1: Every company should be headed by an
effective Board to lead and control the company.
Role of the Board
DBS Group Holdings (“DBSH”) Board, which has overall
responsibility for managing the affairs of DBS Group, including
reviewing its financial performance, setting its strategic
direction and performance objectives and reviewing major
corporate initiatives, comprises 14 members, excluding
Ang Kong Hua who joined the Board in March 2005.
Of these, two are executive directors, three are directors
associated with Temasek Holdings Pte Ltd (“THL”), DBSH’s substantial shareholder, and nine are independent directors.
The three directors associated with THL were not appointed at
the request of THL and do not report to THL or take directions
from THL. Six of the 14-member Board are non-Singaporeans.
Certain matters specifically require Board approval, including:
||the consolidated financial statements and directors’ report of
the DBS Group;
||any strategic plan for the DBS Group and how actual results
compare with the plan;
||the annual budget for the DBS Group;
||all strategic acquisitions and divestments by the DBS Group;
||all major fund-raising exercises of the DBS Group; and
||all decisions that will have a major impact on the reputation
or standing of the DBS Group.
The Board conducts five scheduled Board meetings a year with at
least one meeting held over two days. The agenda includes
review of financial performance and discussions on corporate
strategy, business plans, major corporate initiatives and review of
potential strategic acquisitions or alliances.
In addition to the scheduled meetings, the Board also holds ad
hoc meetings as and when required. Meetings are allowed to
be held via teleconference and video-conference. Board
approval for specific proposals may also be obtained through
written resolutions by circulation due to exigencies.
Attendance at Board and Committee Meetings
@ the number of meetings held during the period the director was a member of the Board and/or
1) Appointed on May 3, 2004 (Board and Audit Committee)
2) Appointed on January 13, 2004 (Board Risk Management Committee)
3) Resigned on April 30, 2004 (Board and Audit Committee)
4) Appointed on May 3, 2004 (Board and Compensation Committee)
5) Resigned on April 30, 2004 (Board and Compensation Committee)
6) No physical meetings held. Approval of nominations by circulation
New and existing directors undergo comprehensive orientation
and training programmes. New directors are provided with
relevant materials on directors’ roles and responsibilities. They
are also briefed by the company secretary on their fiduciary
responsibilities, and by the CEO and key business and
functional heads on the Group’s businesses and operations.
Board and Board committee members are also updated regularly
on key accounting and regulatory changes. In 2004, the Audit
Committee received comprehensive briefings on fraud risk
management, tax risk management and anti-money laundering,
as well as changes to key accounting standards, such as
Financial Reporting Standards (FRS) 32, 39, 102 and 103.
Directors are given unrestricted access to all DBS staff.
Integrity, honesty and transparency in dealings
are crucial to retaining investor confidence and
in ensuring a firm’s reputation.
A number of Board committees have been established to assist the
Board in discharging its responsibilities and to enhance the
Group’s corporate governance framework. The committees include
the Executive, Board Risk Management, Audit, Compensation and
Nominating Committees. The operations of the Audit Committee
are described in the section “Audit Committee”.
Each of these committees has its own written terms of reference
that describes the responsibilities of the committee.
The DBSH and DBS Bank Executive Committee (“Exco”)
comprises six members (S Dhanabalan (Chairman), Jackson Tai,
Frank Wong, Bernard Chen, Fock Siew Wah and Kwa Chong
Seng) and is authorised to exercise all the powers of the Board,
except those which the Board may only exercise by law or
which the Board has expressly reserved for itself. The DBSH
and DBS Bank Exco meets twice a month. During those
meetings, the Exco reviews and decides on credit proposals
requiring its approval. The Exco also discusses, and where
required, endorses strategic and other major issues that are
brought up prior to discussion with, and where required,
approval by the full Board. During the year, major initiatives
reviewed by the Exco included:
||DBS Thai Danu Bank merger proposal;
||Proposed divestment of Wing Lung Bank stake; and
||Proposed US$750 million Upper Tier 2 subordinated
The BRMC meets four times a year. In 2004, the BRMC
continued to serve as an active Board forum to review and
exercise oversight on DBS’ risk management activities. The
matters deliberated at the 2004 BRMC meetings included:
(a) periodic updates on the risk profiles of DBS Group, covering
trading market risk, structural market risk, credit risk (including
country risk) as well as operational risk, (b) updates on various
risk management initiatives, such as Basel II Accord preparation,
Market Risk Internal Models preparation and Business Continuity
Management preparedness of the DBS Group, and (c) proposed
revisions to risk management policies and framework.
The Compensation Committee (“CC”) comprises five members
(Thean Lip Ping (Chairman), S Dhanabalan, Fock Siew Wah,
Leung Chun Ying and Wong Ngit Liong). The Chairman of the
Committee is an independent director.
The role of the CC is to:
||review and approve the remuneration, including the grant of
share options and performance shares, to the executive
directors of DBSH and DBS Bank;
||review and approve the aggregate variable cash bonuses,
share options and performance share grants to the
employees of DBS Group; and
||oversee management development and succession planning
in DBS Group.
A number of Board committees have been established to assist the
Board in discharging its responsibilities and to enhance the Group’s
corporate governance framework.
Executive directors, who are not members of the CC, may
attend meetings but do not attend discussions pertaining to
themselves, including their own performance and remuneration.
As required by regulation and its Articles, DBSH has established
a Nominating Committee (“NC”) comprising five members
(Bernard Chen (Chairman),
S Dhanabalan, Gail Fosler, Leung
Chun Ying and Thean Lip Ping). The Chairman of the Committee
is an independent director.
Regulations issued by the Monetary Authority of Singapore
(“MAS”) require the NCs of Singapore banks to identify
candidates and review all nominations by the Board, any Director
or any member of DBSH for the following positions in DBSH:
||Director/Alternate Director (for appointment or re-appointment,
election or re-election). In deciding on the appointment of new
candidates to the Board, the NC will take into account the
proposed appointee’s background, experience and other
||membership of the Executive Committee, the Compensation
Committee, the Audit Committee, the Board Risk
Management Committee and any other Board committees
that may be established from time to time; and
||the Chief Executive Officer, Deputy Chief Executive Officer,
President, Deputy President and Chief Financial Officer,
including any other officer, by whatever name called, who has
responsibilities and functions similar to any of these officers.
Beyond the regulations, all appointments of key business and
functional heads, and the heads of major subsidiaries in the
Group, must be approved by the NC. In 2004, the NC
reviewed and approved the appointments of the Head of
Group Audit, Group Human Resources and Group Legal and
Board Composition and Balance
Principle 2: There should be a strong and independent
element on the Board, which is able to exercise objective
judgement on corporate affairs independently, in
particular, from Management. No individual or small
group of individuals should be allowed to dominate the
Five of the directors are considered non-independent. They are
S Dhanabalan (Chairman), Jackson Tai, Frank Wong, Fock
Siew Wah and Kwa Chong Seng.
Mr Dhanabalan is Chairman of THL. Mr Jackson Tai and Mr Frank
Wong are executive directors. Mr Tai is the Vice-Chairman and
CEO of DBSH and DBS Bank, and Mr Wong is the Chief
Operating Officer of DBSH and DBS Bank, Vice-Chairman of
DBS Bank and Chairman, DBS Bank (Hong Kong). Mr Fock and
Mr Kwa are non-executive directors of THL, but are not nominated
nor appointed by THL. They do not report to or take directions
from THL and act in their personal and independent capacity as
directors of DBSH. Under the draft Banking (Corporate
Governance) Regulations 2003 (the “Regulations”) issued by
MAS, directors who are also non-executive directors of a
substantial shareholder are deemed not to be independent.
Although the Regulations are not yet law, we have treated
Mr Fock and Mr Kwa as not independent purely because of the
provision in the draft Regulations.
The NC adopts the definition of independence as stated in the
Code and the Regulations. The independence of each director
is reviewed annually by the NC.
Apart from the five directors mentioned above, the NC has
reviewed and confirmed the independence of the remaining
directors (Bernard Chen, Gail Fosler, Goh Geok Ling, Leung
Chun Ying, Narayana Murthy, Peter Ong, John Ross, Thean Lip
Ping and Wong Ngit Liong).
DBS Building Tower One
The DBS HQ in Singapore is a 50-storey tower
block built in 1973. The four round concrete
caissons in the building’s foundation inspired the
original design of the DBS logo in 1972.
In particular, while Mr Wong is Chairman and Chief Executive
Officer of the Venture Group of companies (“Venture”), and
Venture has made payments to DBS which exceeded $200,000
in the last financial year, he has been assessed as independent
as such payments are not material to DBS’ financials.
Mr Thean is a non-profit sharing consultant at Singapore law
firm KhattarWong (“KW”). While KW rendered services to DBS,
and earned fees which exceeded $200,000 in the last financial
year, Mr Thean does not participate in KW’s deliberations
relating to DBSH. As such, he is viewed as independent.
While there is no limit on the number of directors that may be
appointed under DBSH’s Articles, the Board considers its
current board size to be appropriate, taking into account the
nature and scope of DBS’ operations.
With their deep and broad knowledge, expertise and
experience, Board members provide valuable insight and
advice during Board discussions.
Chairman and Chief Executive Officer
Principle 3: There should be a clear division of
responsibilities at the top of the company – the working
of the Board and the executive responsibility of the
company’s business – which will ensure a balance of
power and authority, such that no one individual
represents a considerable concentration of power.
The Chairman and CEO functions in DBS are assumed by
different individuals. The Chairman, Mr Dhanabalan, is a
non-executive director, while the CEO, Mr Jackson Tai, is an
The CEO is the most senior executive in DBS and assumes
executive responsibility for DBS’ business, while the Chairman
assumes responsibility for the management of the Board.
|DBS Hong Kong
DBS Hong Kong recorded another year
of robust sales
in investment and
bancassurance products, performing
exceptionally well in unit trusts where
now has at least 5% market share.
|DBS Treasures Banking
Under Treasures Priority Banking,
DBS offers comprehensive advisory
services tailored to the individual’s
The Board agenda is set by the CEO and approved by the
Chairman. Board members are provided with comprehensive
materials in advance of Board meetings, and all major issues
and initiatives are discussed and reviewed by the Board.
The Chairman hosts a private session without the presence of
executive directors at every board meeting.
Principle 4: There should be a formal and transparent
process for the appointment of new directors to the
Board. As a principle of good corporate governance,
all directors should be required to submit themselves for
re-nomination and re-election at regular intervals.
New directors are appointed by the Board based on
recommendations by the Nominating Committee (“NC”).
In reviewing the suitability of new candidates, the NC takes into
account certain criteria set out in the relevant regulations and
the Articles of Association. These include the requirement that
the Board must comprise a majority of Singapore citizens or
permanent residents, a majority of directors must be
independent and not more than two directors may be executive
directors. In addition, the NC ensures that the candidate is
qualified for the position.
The NC also takes into consideration whether a candidate has
multiple directorships and whether these other directorships will
constrain the candidate in setting aside sufficient time and
attention to DBS affairs.
All new directors must submit themselves for re-election at the
next annual general meeting of DBSH. One-third of the directors
must also retire by rotation at each annual general meeting.
Directors are appointed for two-year terms, up to a maximum of
three two-year terms. In reviewing the re-appointment of directors, the NC will take into account a range of factors,
including the director’s level of participation at Board and
Board committee meetings and his performance and
contributions during the term. The maximum tenure of three two-year
terms may also be exceeded if the NC considers that the
director’s experience and expertise are valuable to DBS Group
and cannot be easily replaced by a new director.
The NC also reviews the appointments of all Board committee
members. In reviewing such appointments, the NC seeks to
ensure that the appointee has the relevant experience and skills
to make a meaningful contribution to the particular committee,
and that Board committee memberships are equitably
distributed among directors where possible.
Principle 5: There should be a formal assessment of the
effectiveness of the Board as a whole and the contribution
by each director to the effectiveness of the Board.
DBSH has implemented a process to assess the performance
and effectiveness of the Board as a whole as well as to assess
the performance and effectiveness of individual directors.
For collective Board appraisal, each director assesses the
Board’s performance as a whole and provides feedback to the
Chairman of the Board and the Chairman of the NC. Both
Chairmen consolidate the feedback and present the findings to
the Board annually. Board performance is judged on the basis
of accountability as a whole, rather than strict definitive
financial performance criteria, as it would be difficult to apply
specific financial performance criteria to evaluate the Board.
The Board has found the collective Board assessment useful in
evaluating its effectiveness, as directors have provided
constructive feedback and suggestions for improvement.
DBS Mumbai branch, established
in 1995, is poised to benefit from
India’s fast growing and rapidly
In the case of individual assessment, each director is evaluated
on the basis of his or her attendance, knowledge and
contribution to the effectiveness of the Board. Each director
completes a self and peer evaluation form, which is seen only by
the Chairman of the Board. Where the feedback indicates that a
director can benefit from development of certain aspects of his/her
work on the Board, this will be communicated individually.
Access to Information
Principle 6: In order to fulfil their responsibilities, Board
members should be provided with complete, adequate
and timely information prior to Board meetings and on an
Directors are provided with the agenda and meeting materials
in advance of Board meetings.
Management provides the Board with a monthly update
covering financial results, market and business developments,
business and operations metrics and updates on major issues.
Directors have access to the company secretary and senior
management at all times. Directors requiring external professional
advice will be assisted by the company secretary, with DBS
bearing the cost of such external advice.
The company secretary attends all board meetings and ensures
that board procedures are followed and relevant regulations
are complied with. The company secretary attends all meetings
of the Board and the Audit Committee. The minutes of the Audit
Committee and the BRMC are circulated to the Board.
Principles 7 to 9 of the Code deal with remuneration matters. These
matters will be covered separately in the Remuneration Report.
Accountability and Audit
Principle 10: The Board is accountable to the shareholders
while the Management is accountable to the Board.
DBS recognises the importance of keeping the Board regularly
updated on DBS’ performance and prospects. As stated above,
Management provides the Board with a monthly update apart
from the regular Board meetings.
DBS’ expertise in raising funds
for telecommunication companies
helped us land a standout mandate
from PT Mitra Global
Telekomunikasi Indonesia last year.
The heads of all business and support units provide a quarterly
certification to the CEO and the Chief Financial Officer (“CFO”)
stating, inter alia, that the head of such business or support unit
is not aware of any circumstances not otherwise dealt with in
the financial statements that would render any amount stated in
the financial records misleading. The CEO and CFO in turn
provide a Letter of Representation on a quarterly basis to the
Audit Committee and the external auditors, Ernst & Young
(“EY”), confirming that the financial statements have been
properly drawn up.
Disclosure to investors is addressed in the section “Communication with Shareholders” below.
Principle 11: The Board should establish an Audit
Committee (“AC”) with written terms of reference which
clearly set out its authority and duties.
The AC comprises independent non-executive directors Bernard
Chen (Chairman), Goh Geok Ling and Peter Ong.
The role of the AC is to:
||review the financial statements prior to submission to the Board;
||review with the external auditor the audit plan, the
evaluation of the system of internal accounting controls and
the external auditor’s audit report;
||review the scope and results of the internal audit procedures;
||nominate the external auditor;
||review the cost effectiveness, independence and objectivity of
the external auditors and (where the auditors also supply a
substantial volume of non-audit services to DBS) to keep the
nature and extent of such services under review, seeking to
balance the maintenance of objectivity and value for money;
||review interested person’s transactions; and
||perform any other functions which may be agreed by the
AC and the Board.
The AC also has explicit authority to investigate any matter within
its terms of reference. It has full access to and co-operation of
management and full discretion to invite any director or executive
officer to attend its meetings. The AC has reasonable resources to
enable it to discharge its functions properly.
In its review of the audited financial statements for the financial
year ended 2004, the AC discussed with management and the
external auditors the accounting principles that were applied
and their judgement of items that might affect the financials.
Based on the review and discussions with management and the
external auditors, the AC is of the view that the financial
statements are fairly presented in conformity with generally
accepted accounting principles in all material aspects.
In 2004, the AC met five times. In addition to reviewing the
financial results, the internal and external auditors’ reports, and
discussing the usual business of the AC, the AC also discussed
more wide-ranging issues, including the lessons learnt from high
profile operational lapses in other banks.
The Group Audit Head, the Group Legal and Compliance Head
and the external auditors attend every AC meeting. In addition,
the AC meets with the external auditors separately after each
AC meeting without the presence of management.
The AC has received the requisite information from EY and has
considered the financial, business and professional relationship
between EY and DBS, for the financial year 2004. The AC has
also conducted an annual review of the volume of non-audit
services provided by EY to satisfy itself that the nature and
extent of such services will not prejudice the independence and
objectivity of the auditors before confirming their re-nomination.
The AC is of the view that EY can be considered independent.
Principle 12: The Board should ensure that the Management
maintains a sound system of internal controls to safeguard
the shareholders’ investments and the company’s assets.
A sound system of internal controls can only operate within a
defined organisational and policy framework. The management
framework at DBS
clearly defines the roles, responsibilities and
reporting lines of business units and support units. Delegation of
authority, control processes and operational procedures are
documented and disseminated to staff. While all employees
have a part to play in upholding the system of internal controls,
certain corporate functions such as Group Audit, Group Risk and
Group Compliance provide independent oversight and control.
A sound system of internal controls can only operate within a defined organisational and policy framework. The management framework at DBS clearly defines the roles, responsibilities and reporting lines of business units and support units.
Internal controls are reviewed on an ongoing basis by Group
Audit, whose work is supplemented by that of the external
auditors. The role of Group Audit and the external auditors is
described in the section on “Internal Audit”.
Risk management is essential to the DBS Group’s business.
Group Risk is responsible for instituting firm-wide risk
management framework and infrastructure. Risk management
processes have been integrated throughout
the DBS Group into
the business planning, execution and monitoring processes,
particularly through the approval process for new products
and/or services. Business units also perform periodic control
self-assessment processes to review and attest to the effectiveness
of their internal control environment. The risk management
process in DBS is also strengthened through the regular
deliberations of the Board Risk Management Committee.
The Group Compliance function has specific accountability for
instilling and maintaining a strong compliance culture and
framework within the DBS Group.
The AC has reviewed the adequacy of DBS’ control
environment and has made its report to the Board.
Based on the information furnished to the Board, nothing has
come to the Board’s attention to cause the Board to believe that
the internal controls and risk management processes are not
satisfactory for the type and volume of business conducted.
Principle 13: The company should establish an internal
audit function that is independent of the activities it audits.
Group Audit is an independent function that reports directly to the
Audit Committee and the CEO. Its scope of work covers all
business and support functions in the DBS Group, both in
Singapore and overseas. All audit offices
in the Group follow a
consistent set of code of ethics based on principles recommended
by the USA Institute of Internal Auditors.
The annual audit plan is developed under a structured Risk
Assessment Approach that examines all of the Group’s activities
and entities, the inherent risks and internal controls. Audit
assignments are identified based on this approach and audit
resources are focused on the higher risk activities.
The progress of corrective actions on all outstanding audit issues
is monitored monthly through Group Audit’s centralised Global
Audit Tracking System. Information on outstanding issues is
categorised and reported to senior and
through the Monthly Control Reports.
All copies of reports with adverse opinions and a monthly
summary of all audit reports issued in the month are copied to
the Chairman of the Audit Committee, external auditors and
senior executives of the Group including the CEO, CFO, Group
Legal and Compliance Head and Group Risk Head.
Group Audit meets regularly with the external auditors to
strengthen working relationships between both parties, discuss
matters of mutual interest, develop
a common understanding
and co-ordinate the audit efforts.
In the course of 2004, Group Audit carried out its functions
in accordance with the general description provided above.
The department is adequately resourced and has the required
mandate from the AC and the CEO to carry out its functions
Group Audit meets regularly with the external auditors to
strengthen working relationships between both parties, discuss
matters of mutual interest, develop a common understanding
and co-ordinate the audit efforts.
The professional competence of the internal auditors is
maintained through Group Audit’s continuing professional
development programme, which focuses on updating auditors’
knowledge of auditing techniques, regulations and banking
products and services.
The Group Audit Head is Edmund J Larkin. Mr Larkin has a
Bachelor of Commerce degree from the University of New South
Wales and is an Associate Member of the Institute of Chartered
Accountants in Australia and Securities Institute of Australia.
As stated above, Group Audit works closely with the external
auditors, EY. The external auditors carry out, in the course of
their annual statutory audit, a review of the effectiveness of DBS’
material internal controls and risk management to the extent of
their audit plan. Material non-compliance and internal control
weaknesses noted during their audit, along with any
recommendations, are reported to the AC.
Communication with Shareholders
Principle 14: Companies should engage in regular,
effective and fair communication with shareholders.
Dissemination of Information
DBS has an active dialogue with shareholders, both institutional
and retail, and takes its responsibilities towards shareholders very
seriously. DBS holds a media and analysts briefing after the
release of its quarterly results. All press releases, audited financial
statements and financial results announcements are published on
SGXNET and DBS’ website. A dedicated investor relations team meets key institutional investors on a regular basis.
During the year, DBS management met more than 160 local
and foreign investors in more than 150 meetings. The meetings
included five investor conferences – two in New York, and one
each in London, Singapore and Hong Kong.
DBS does not practise selective disclosure. Price sensitive
information is first publicly released, either before DBS meets
with any group of investors or analysts or concurrently.
This dissemination process is continuous throughout the year to
ensure the company meets disclosure and reporting obligations.
DBS recognises that the annual general meeting (“AGM”) is an
important opportunity for retail investors to meet with the Board
and management. In addition to the Board, members of the
Management Committee and the external auditors are also
available to answer shareholders’ queries. DBS conducts a
briefing session for shareholders on the financial statements just
before the commencement of the AGM.
DBS has reviewed the Code recommendation that companies
encourage greater shareholder participation at annual general
meetings by allowing shareholders to vote in absentia via such
methods as email, fax etc. Following advice that the present
legal and regulatory environment is not entirely conducive to
absentia voting methods (particularly email voting), DBS has
decided to defer the introduction of absentia voting methods
until an appropriate time.
Code of Conduct
DBS has an internal code of conduct that applies to senior
management and staff. The code of conduct incorporates the
industry’s code of ethics, and covers areas such as client
confidentiality, business conduct, conflicts of interests and insider
trading. All staff are required to acknowledge annually that they
have read and understood the code and have agreed to abide by it.
The following disclosures are required to be made under the
SGX Listing Manual and recommendations of the Working
Group formed by the three Singapore banking groups:
Dealings in Securities/Best Practices Guide
The SGX-ST Best Practices Guide recommends that staff of listed
companies should not trade in the company’s securities:
||during the period beginning one month before the release
of the half-year and full-year results; and
||during the period beginning two weeks before the release
of the first quarter and third quarter results
and ending on the date of release of the said results.
As the first quarter and third quarter financial results are, in
practice, available to certain staff before the commencement of
the two-week period recommended in the Best Practices Guide,
DBS has extended the two-week “black-out” period to three
weeks for the first quarter and third quarter results.
|DBS Hong Kong
DBS’ Call Centre in Singapore
consistently scores above 80%
in a customer satisfaction survey
|DBS Treasures Banking
DBS operates in 14 markets and multiple time zones
around the world.
Directors and staff are also reminded periodically in writing that
the general prohibition on trading while in possession of
material non-public information applies at all times.
To further strengthen its corporate governance practices in relation
to staff personal dealings in securities, DBS implemented a
personal investment policy in 2001. The policy requires selected
staff who may have access to price-sensitive information in the
course of their duties to obtain prior approval from Group
Compliance or designated supervisors before trading in securities
listed in countries where DBS has a major presence, such as
Singapore and Hong Kong. Such staff must generally effect trades
in affected securities through the DBS Vickers group of companies.
DBS Vickers is DBS’ 100%-owned stockbroking subsidiary.
Related Party Transactions
The DBS Group’s policy on transactions with related parties is in
compliance with statutory and regulatory requirements, namely:
||(in the case of DBS Bank) Section 29 of the Banking Act,
Chapter 19; and
||(in the case of DBSH) MAS Directives to Financial Holding
Companies No. 8 and Chapter 9 of the SGX Listing Manual
on interested person transactions (see the section “Interested
Person Transactions Policy” immediately following this section).
Under Section 29(1)(d) of the Banking Act, a bank cannot grant
unsecured credit facilities, directly or indirectly, which in the
aggregate and outstanding at any one time exceed the sum of
||the bank’s directors;
||any firm in which the bank or any of its directors has an
interest as a partner, manager or agent, or to any individual
or firm of whom or of which any of its directors is a guarantor;
||a company in which any of its directors, whether legally or
beneficially, owns more than 50% of the issued capital or in which any of its directors controls the composition of the
board of directors, but excluding public companies, the
securities of which are listed on SGX or other stock
exchange approved by MAS and the subsidiaries of such
public companies; and
||any corporation, other than a bank, that is deemed to be
related to the bank as described in Section 6 of the
In addition, under Section 29(1)(e) of the Banking Act, a bank
shall not grant to any of its officers (other than a director) or its
employees or other persons, being persons receiving
remuneration from the bank (other than any persons receiving
remuneration from a bank in respect of their professional
services), unsecured credit facilities which in the aggregate and
outstanding at any one time exceed one year’s emoluments of
that officer or employee or person.
To ensure compliance with Section 29(1)(d) and (e), DBS Bank
has taken the following steps:
||Compliance with Section 29(1)(d) and (e) is an integral part
of the credit approval process;
||Before directors are appointed, they are notified of the
requirement of Section 29(1)(d) and their existing facilities, if
any, are adjusted to comply; and
||A semi-annual reminder is sent to all directors to update their
particulars and related interests, as defined in Section
Directive 8 restricts lending and guarantees by a financial holding
company such as DBSH. Under Directive 8(1)(a), a financial
holding company may not, inter alia, grant any credit facility to
any person other than a subsidiary or any of its officers (other
than a director) or its employees or other persons, being persons
receiving remuneration from the financial holding company (other
than in respect of professional services rendered). In particular,
under Directive 8(2), a financial holding company shall not grant,
directly or indirectly, unsecured advances or loans under Directive
||Any subsidiary which in the aggregate and outstanding at
any one time exceeds the sum of $5,000 except to any
subsidiary which is a bank licensed under the Banking Act,
a finance company licensed under the Finance Companies
Act or, with MAS’ prior approval, a foreign banking
||Any of its officers (other than a director) or its employees or
other persons, being persons receiving remuneration from
the financial holding company (other than in respect of
professional services rendered) which in the aggregate and
outstanding at any one time exceeds one year’s emoluments
of that person.
Compliance with MAS Directive No. 8 is an integral part of the
credit approval process for all credit facilities granted by DBSH.
The DBSH Group has granted credit facilities to the following related parties in the ordinary course of business on normal terms and
conditions. The outstanding amounts of these credit facilities and the estimated values of collaterals at December 31, 2004 are as follows:
1) Excludes transactions between DBS Bank’s subsidiary companies and their own subsidiary companies
# Amount under $500,000
Interested Person Transactions Policy
As a listed company on the Singapore Exchange, DBSH is required to comply with Chapter 9 of the SGX Listing Manual on
interested person transactions. To ensure compliance with Chapter 9, DBSH has taken the following steps:
||Compliance with Chapter 9 is an integral part of the credit approval process for the entire DBS Group; and
||A semi-annual update of directors’ personal particulars is obtained.
The following are details of the interested person transactions entered into by the DBS Group in 2004: