|As challenging as the environment has been, we are redoubling our efforts to build momentum. Our expectations for the future are high. Our corporate governance system and strategies are in sync, aimed at producing better returns. The ultimate goal is to increase return on equity to above 15 percent on a strong capital base. This represents a significant increase over the historical rate.
We intend to leverage POSBankâs franchise to create the best retail distribution in Singapore and then export this franchise to our network overseas. We expect to grow our Enterprise Banking business in Singapore and elsewhere in Asia where it makes sense. We will champion the Governmentâs efforts to develop Singapore as the leading financial centre in the region and participate fully in financial sector initiatives whenever and wherever we can. We will continue to push hard on electronic banking. Promoting the DBS brand in the region and leveraging our overseas affiliates to do so is a high priority, starting with re-naming and recapitalising TDB. And, we will continue to seek out acquisition opportunities to extend our Asian franchise and strategic alliances to fill critical gaps in our products and services.
We expect to take advantage of the recent changes to capital adequacy guidelines in the composition of Tier 1 and Tier 2 capital, accessing markets to restructure our capital base to make it more cost effective and efficient, as well as exploring share buy-backs to optimise returns to shareholders.
For 1999, NPLs in Singapore are expected to peak though the outlook for recovery in the region remains uncertain. We believe however that the Bank is well positioned to benefit when the recovery is under way.
Mr Ngiam Tong Dow retired as Chairman and CEO of DBS Bank in May 1998. We would like to thank him for his leadership and dedication. Under his stewardship, DBS Bank grew rapidly and the foundation was laid for the Bankâs regional strategy.
Two other directors also left the Board. Mr Khaw Boon Wan stepped down in May 1998 to join the Board of the Monetary Authority of Singapore.
Mr Timothy William Faithfull left in April 1999 when he took up responsibilities in Shell Canada. We thank them for their valuable advice and insights and our Board members for their continuing guidance over the year.
We would also like to record our appreciation to our 10,664 employees for their unstinting efforts in 1998 and our shareholders for their continued support.