From
http://news.sg.msn.com/article.aspx?cp-documentid=1774346
Singapore's DBS Group, Southeast Asia's biggest bank by assets,
said Friday it was cutting 900 staff to trim costs amid the global
credit crisis, and reported a slump in third quarter net
profit.
Chief executive Richard Stanley said most of the cuts, to be
carried out at the end of the month, will come from its offices in
Singapore and Hong Kong and will account for six percent of the
workforce.
"To be a streamlined organisation, I believe we must run a
tighter ship," he told reporters.
"We have been vigilant on costs but as the economy enters a more
difficult and uncertain phase, many financial institutions around
the world and in Asia have made headcount reductions," he
added.
"To be more productive and efficient, we will restructure and
streamline the organisation. Regrettably, this has resulted in the
need to reduce our workforce by six percent or about 900 people,
primarily (in) Singapore and Hong Kong, by the end of the
month."
Earlier Friday DBS said net profit in the three months to
September fell 38 percent as market-related income took a hit from
the global financial crisis and bigger provisions.
Third quarter net profit totalled 379 million Singapore dollars
(256 million US), down from 610 million dollars in the same period
last year, it said in a statement.
Analysts polled by Dow Jones Newswires had predicted an average
572 million dollars net profit.
"The operating environment is increasingly challenging for
financial institutions the world over," Stanley said.
"We took upfront prudential levels of allowances to strengthen
our balance sheet and with strong capital and liquidity, I believe
we are well positioned to ride out the uncertainties ahead."
Net interest income in the September quarter grew two percent to
1.07 billion dollars from last year but net fee and commission
revenues dropped 22 percent to 316 million dollars.
Other non-interest income plunged 87 percent on the year to 11
million dollars.
The bank said it set aside 129 million dollars in provisions,
compared with just 10 million dollars a year ago, partly to cover
its collateralised debt obligations (CDOs) portfolio.
CDOs are securities backed by a range of assets including bonds,
loans and their derivatives, including corporate loans, high-grade
mortgages, subprime mortgages, car loans and credit card debt.
DBS was the last of three local banks to report earnings for the
September quarter.
Oversea-Chinese Banking Corp (OCBC) said earlier this week third
quarter net profit fell 13 percent while United Overseas Bank
reported last week a 5.1 percent drop in profit for the same
period.
