Group Provisions and Provisions as Percentage of Operating Profit

1999: S$1,063.2 million (+6.7%)
1998: S$996.4 million

Provisions as % of Operating Profit
1999: 54.1% (-34.8 percentage points)
1998: 88.9%

Of the total provisions made by the Group in 1999, S$763.4 million in specific provisions were related to DTDB, S$122.8 million for loans to the Regional Countries (excluding DTDB) and S$191.6 million for loans to Singapore and other countries' borrowers.

All classified loans have been fully provided for.

The decline in ratio was due to the higher operating profit in 1999.

Group Total Non-Performing Loans (NPLs) & NPLs as Percentage of Total Loans

Including DTDB
1999: S$8,149 million (+15.0%)
1998: S$7,086 million

Excluding DTDB
1999: S$4,942 million (+17.3%)
1998: S$4,212 million

NPL/Total Loans
1999: 9.3% (+1.1 percentage points)
1998: 8.2%

Out of the total NPLs of S$8,149.0 million, S$4,529.8 million (56%) were secured by collateral; and S$4,951.5 million (61%) were in the substandard category.

Group Cumulative Specific & General Provisions as Percentage of Unsecured NPLs

Cumulative General Provisions
1999: S$1,191.0 million (+6.7%)
1998: S$1,115.7 million

Cumulative Specific Provisions
1999: S$3,094.8 million (+52.3%)
1998: S$2,031.7 million

Cumulative Provisions as % of Unsecured NPLs
1999: 118% (+15 percentage points)
1998: 103%

Cumulative Provisions as % of Non
Performing Loans
1999: 52.6% (+8.2 percentage points)
1998: 44.4%

Group total cumulative provisions at end-December 1999 amounted to S$4,285.9 million, representing a provision coverage of 118% of unsecured NPLs.

Capital Adequacy Ratio

In 1999, DBS Bank issued US$750 million of subordinated term debt qualifying as Tier 2 capital. Together with profit retained for the year, the total Capital Adequacy Ratio (CAR) of the Group at end-December 1999, measured according to the Bank of International Settlements (BIS) guidelines was 19.2%, more than twice the minimum BIS' requirement. The overall CAR is managed with a view to providing flexibility for business expansion as well as optimising return on equity over the medium term.

Tier 1 Capital
Tier 2 Capital
S$ million
Total Capital 12,842
Risk weighted assets including market risks 66,790
Capital Adequacy Ratio
Tier 1
Total (Tier 1 & 2)