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DBS Vickers Building an Asian Securities Powerhouse

DBS Vickers Building an Asian Securities Powerhouse. Media Fact Sheets - February 13, 2001. Existing Industry Structure. Fragmented Extremely volatile and cyclical Limited product offering and income heavily reliant upon brokerage commissions. Internet Threat. Deregulation.

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DBS Vickers Building an Asian Securities Powerhouse

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  1. DBS VickersBuilding an Asian Securities Powerhouse Media Fact Sheets - February 13, 2001

  2. Existing Industry Structure • Fragmented • Extremely volatile and cyclical • Limited product offering and income heavily reliant upon brokerage commissions Internet Threat Deregulation Future Industry Competitive Landscape • Consolidation to increase scale • Income diversification via more value-added products and services to reduce over-dependence on brokerage commissions • Investment in online trading and infrastructure The Changing Competitive Landscape of the Securities Business

  3. Summary Profile of DBS and Vickers Ballas DBS Securities Background Vickers Ballas Background General • Vickers Ballas is one of the largest stockbrokers in Singapore with the highest market capitalisation of S$854.3 million(a) • Key business activities include stockbroking, equity capital markets and other financial services • Strong regional presence in Singapore and Hong Kong, Thailand, the Philippines and Indonesia • DBS Securities is the wholly-owned stockbroking arm of DBS Bank. • Offers full broking service in Singapore, Malaysia, Hong Kong, Indonesia, the Philippines, Thailand as well as a sales office in London • The July 2000 issue of Euromoney named DBS Securities the Best Domestic Securities House in Singapore Business Strategy • With over 80% of its revenue from stock broking, Vickers Ballas is currently actively leveraging its strong market share in Singapore to diversify to new, less volatile revenue sources through • Actively building up its unit trusts business • Tie-ups with fund managers, e.g. Alliance Capital Management, ABN AMRO Asset Management, Dresdner Asset Management, etc., to improve product offering • Equity Capital Markets Group expanded its business activities to include the management of IPOs, fund raising exercises, general corporate advisory services to clients • With over 80% of its 1999 total revenue coming from traditional stockbroking business, DBS Securities plans to upgrade the skills of its existing sales force to offer a wider range of wealth management products and exploit cross-selling opportunities with the Bank’s customer base • DBS Securities aims to be the first in Singapore to automate its processing and settlements, allowing for better customer data management, product diversification and customisation Distribution/Online Strategy • 207 Remisiers and dealers in Singapore, 131 in Hong Kong and 7 branches in Thailand • Online trading platform, vb.com was launched in 1998 in Singapore and has achieved a near 10-fold increase to 17,000 in the number of accounts signed up • 166 Remisiers & Dealers in Singapore • Launched online trading in September; currently has 5,500 online customers and expects to have approximately 15,000 customer by the end of 2001 (a) As at February 9, 2001

  4. Introducing DBS Vickers Securities - Transaction Highlights Rationale • Customer focus • Strategic fit • Market leadership • Economies of scale • Synergies (cost savings and cross-selling) • Shareholder value creation Transaction Structure • Vickers Ballas will distribute to its shareholders all of its shares in Vickers Capital, representing approximately 80.23% of Vickers Capital • DBS acquires a 59.5% stake in Vickers Ballas • Shareholders will also receive S$0.90 per Vickers share • Singapore Technologies will retain 40.5% stake and Vickers Ballas will be taken private • The entity will be renamed DBS Vickers Securities • DBS Vickers Securities will acquire 100% of DBS Securities Valuation • Total cash consideration paid by DBS: S$443.9 million • Total value to Vickers shareholders: S$1.44 per share, representing 40.1% premium to the last closing share price* or 1.40x Vickers 2000 book value (equivalent to 1.19x 2000 book value adjusted for the distribution of Vickers Capital) * As at February 9, 2001

  5. Brokerage - an Integral Part of Overall Wealth Management A Merger with Opportunities THE CUSTOMER Products/Services Products/Services Deposit Assets Borrowings Cash Short-termDebts Brokerage Credit Cards Short-termInvestments Medium-term DebtsLong-term Debts Long-term (Retirement)Investments • Unit Trusts • Pension Funds • Mortgage • Other Personal Lending Net Worth Home Insurance Other Assets

  6. DBS Vickers 2,241(b) UOB/Kay Hian 1,108 (c) Kim Eng 946 GK Goh 886 Ong Asia 309 DBS Vickers will be a Dominant Player Total Assets(a) (S$ million) (a) As at December 31, 1999 (b) Adjusted for distribution of Vickers Capital to existing shareholders (c) As at March31, 2000

  7. Extending Our Regional Presence Revenue Breakdown by Region(a) DBS Vickers Securities Other11% HongKong 42% Singapore 47% (a) Based on unaudited financials for year 2000

  8. Hong Kong DBS Kwong On Bank Thailand DBS Thai Danu Bank Singapore DBS Bank Bigger Presence to Better Serve the Customer: Wider Range of Products & Greater Access Leveraging DBS Bank’s Extensive Branch Network and Customer Base… …To Increase Cross-Selling Opportunities Customer Segments Products Channels - DBS Vickers Channels - DBS Bank • Unit trusts • IPO placements • Fixed income • Remisiers • Online Mass Retail • DBS Bank branches Mass Affluent • Unit trusts • IPO placements • Margin trading • Fixed income • Financial consultants • Online • Priority Banking • Unit trusts • IPO placements • Margin trading • Wrap account • FX, Derivatives • Fixed income High Net Worth • Financial consultants • Online • Private Banking The Philippines Bank of Philippine Islands • Institutional sales team • DBS Asset Management Institutional Fund Managers • IPO placements • Cash management • Equity-linked instruments • FX, Derivatives • Fixed income • Research Corporate • Equity cap mkts • Debt cap mkts • M&A • Private equity • FX, Derivatives • Research • DBS Vickers • DBS Bank

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