Once again, Sinkies are asked to bend down again.
DBS cuts 900 jobs, reports 38% fall in Q3 profit
SINGAPORE - 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 per cent of the workforce. He added that this was the largest job cut ever.
The job cut will be across all businesses and all levels.
Laid off staff will be paid the equivalent of one month's salary for every year of service as per market practice.
DBS said it has no plans to cut beyond this and also clarified that there are no plans for salary cuts. Back in 2001, DBS laid off 200 staff in Singapore and implemented pay cuts.
“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 per cent as market-related income took a hit from the global financial crisis and bigger provisions.
Third quarter net profit totalled S$379 million (US$256 million), down from S$610 million in the same period last year, it said in a statement.
Analysts polled by Dow Jones Newswires had predicted an average S$572 million 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 per cent to S$1.07 billion from last year but net fee and commission revenues dropped 22 per cent to S$316 million.
Other non-interest income plunged 87 per cent on the year to S$11 million.
The bank said it set aside S$129 million in provisions, compared with just S$10 million 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 per cent while United Overseas Bank reported last week a 5.1 per cent drop in profit for the same period. - AFP
DBS cuts 900 jobs, reports 38% fall in Q3 profit
SINGAPORE - 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 per cent of the workforce. He added that this was the largest job cut ever.
The job cut will be across all businesses and all levels.
Laid off staff will be paid the equivalent of one month's salary for every year of service as per market practice.
DBS said it has no plans to cut beyond this and also clarified that there are no plans for salary cuts. Back in 2001, DBS laid off 200 staff in Singapore and implemented pay cuts.
“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 per cent as market-related income took a hit from the global financial crisis and bigger provisions.
Third quarter net profit totalled S$379 million (US$256 million), down from S$610 million in the same period last year, it said in a statement.
Analysts polled by Dow Jones Newswires had predicted an average S$572 million 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 per cent to S$1.07 billion from last year but net fee and commission revenues dropped 22 per cent to S$316 million.
Other non-interest income plunged 87 per cent on the year to S$11 million.
The bank said it set aside S$129 million in provisions, compared with just S$10 million 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 per cent while United Overseas Bank reported last week a 5.1 per cent drop in profit for the same period. - AFP
Ask people not to cut, GLC cut first, so now no holds bar for all other MNC in Singapore to cut. Usually people cut others and keep own. Only cowardly dictators cut own and save others.
