Saturday November 8, 2008
DBS to trim workforce
It is cutting 900 jobs after posting a steep profit drop
SINGAPORE: DBS Group Holdings Ltd will cut jobs for the first time since 2001 after reporting its steepest profit decline in two years.
The Singapore-based bank, South-East Asia’s largest, will trim 900 jobs or 6% of its workforce. Chief executive officer Richard Stanley, who joined in May from Citigroup Inc, said the reductions affected all levels of the organisation, with the bulk in Singapore and Hong Kong.
“We must run a tighter ship,” Stanley told reporters in Singapore yesterday. “This is a painful decision for DBS and for me personally but it’s something we have to do in a difficult environment.”
DBS is adding to the almost 150,000 financial-services positions lost worldwide since the credit crunch began, as the fallout begins to spread into Asia.
People walk in the lobby of a DBS Bank building - Reuters The bank posted a bigger-than-expected 38% drop in quarterly profit as losses from bad debts quadrupled, and warned the financial crisis has made business challenging.
The bank took S$319mil impairments on bad debt, including general writedowns of S$129mil to cover losses from risky derivatives, and took a S$70mil charge for compensating customers for Lehman-linked structured products.
The July–September net profit fell to S$379mil from S$610mil a year earlier. Analysts had predicted S$475mil.
DBS’ non-asset backed debt portfolio was written down to 25% from 6% previously. It had already written down 90% of its asset-backed securities.
Analysts had expected DBS to take impairments of as much as S$200mil on corporate collateralised debt obligations.
The result came after smaller local rivals reported below-forecast earnings, hurt by writedowns on bad debts.
Second-ranked United Overseas Bank posted a 5% drop and Oversea-Chinese Banking Corp, a 13% slide in third-quarter profit. — Agencies
For another perspective from The Straits Times, a partner of Asia News Network, click here.
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