SINGAPORE, Oct 22 - DBS Group <DBSM.SI>,
Singapore's biggest bank, said it will compensate as much as S$80
million to some investors who bought structured products linked to
collapsed bank Lehman Brothers.
Separately, Hong Leong Finance <HLSF.SI>, a small lender,
also said it will buy back Lehman-linked mini-bonds from elderly
and less-educated customers, while Malaysian lender Maybank
<MBBM.KL> said it has identified mini-bond investors for
compensation.
The move came after hundreds of investors staged protest rallies
in Singapore and the Monetary Authority of Singapore, the central
bank, launched a probe against alleged mis-selling of these risky
products by banks.
About 9,700 people in Singapore, many of them retirees, stand to
lose most or all of their money after they bought Lehman-linked
structured products from banks and other financial
institutions.
DBS, Singapore's biggest bank by assets, said in a late night
statement that it agrees with the central bank on the need to give
priority to "vulnerable" customers and is fast-tracking such
cases.
DBS sold S$360 million worth of structured products linked to
Lehman to 4700 investors in Hong Kong and Singapore and will
announce a final decision next week about the fate of other
investors, it said.
The Singapore banks' decision follows a deal reached in Hong
Kong last week whereby the territory's banks will buy back
Lehman-linked structured products from holders at market value, as
proposed by the government there. [ID:nHKG311649]
Many affected Singapore and Hong Kong investors claimed they
were told the investments were relatively safe and that they had
been asked to buy the products when they went to renew their fixed
deposits.
DBS said when these products were sold 18 months ago the
financial landscape was different.
"Nobody could have imagined the extent of the fallout from the
US subprime crisis, or the collapse of a venerable 158-year-old
financial institution like Lehman."
Shares of DBS fell 8.2 percent on Wednesday, underperforming the
5.2 percent decline in the benchmark Singapore index <.FTSTI>
after a JPMorgan report said Lehman-linked products issue could hit
2008 earnings by 8-10 percent.
$360 million becomes $80 million. 
I hope Singapore's market only $80 million.
