Friday, November 07, 2008
DBS to axe 900 staff
DBS Group, which reported a slump in third quarter net profit, will cut 900 staff from Singapore and Hong Kong or 6 per cent of its workforce by the end of this month to reduce costs, its CEO Richard Stanley said on Friday.
The cuts will be across various business units and at all levels of seniority, said Mr Stanley at the bank's quarterly results briefing.
DBS staff were informed of the impending retrenchment - the bank's first since 2001 - on Friday morning. But affected individuals have not been told yet.
'To be a streamlined organisation, I believe we must run a tighter ship', Mr Stanley 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.'
To be more productive and efficient, he said DBS will have to restructure and streamline the organisation.
'Regrettably, this has resulted in the need to reduce our workforce by six per cent or about 900 people, primarily in Singapore and Hong Kong, by the end of the month.'
DBS earlier on Friday posted a 38 per cent drop in quarterly profit, below expectations, as losses from bad debts quadrupled and it warned the financial crisis has made business challenging.
The bank said on Friday it earned $379 million (in July-September, compared with $610 million a year ago.
Analysts had predicted a net profit of $475 million, according to the average of five forecasts compiled by Reuters.
DBS's result came after its smaller rivals reported below forecast earnings, hurt by writedowns on bad debts including complex products such as collateralised debt obligations.
Singapore's second-ranked lender, United Overseas Bank, posted a 5 per cent drop and Oversea-Chinese Banking Corp announced a 13 per cent slide in third-quarter profit.
DBS, which is 28-per cent owned by Singapore state investor Temasek Holdings, has benefitted from strong loan growth, but an end to the city-state's property boom and slowing Asian economies are likely to crimp lending and lead to an increase in non-performing loans.
DBS shares dropped 11 per cent in the third quarter, less than the 12.2 per cent drop in OCBC, but more than the 9.8 per cent drop in UOB shares.
The cuts will be across various business units and at all levels of seniority, said Mr Stanley at the bank's quarterly results briefing.
DBS staff were informed of the impending retrenchment - the bank's first since 2001 - on Friday morning. But affected individuals have not been told yet.
'To be a streamlined organisation, I believe we must run a tighter ship', Mr Stanley 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.'
To be more productive and efficient, he said DBS will have to restructure and streamline the organisation.
'Regrettably, this has resulted in the need to reduce our workforce by six per cent or about 900 people, primarily in Singapore and Hong Kong, by the end of the month.'
DBS earlier on Friday posted a 38 per cent drop in quarterly profit, below expectations, as losses from bad debts quadrupled and it warned the financial crisis has made business challenging.
The bank said on Friday it earned $379 million (in July-September, compared with $610 million a year ago.
Analysts had predicted a net profit of $475 million, according to the average of five forecasts compiled by Reuters.
DBS's result came after its smaller rivals reported below forecast earnings, hurt by writedowns on bad debts including complex products such as collateralised debt obligations.
Singapore's second-ranked lender, United Overseas Bank, posted a 5 per cent drop and Oversea-Chinese Banking Corp announced a 13 per cent slide in third-quarter profit.
DBS, which is 28-per cent owned by Singapore state investor Temasek Holdings, has benefitted from strong loan growth, but an end to the city-state's property boom and slowing Asian economies are likely to crimp lending and lead to an increase in non-performing loans.
DBS shares dropped 11 per cent in the third quarter, less than the 12.2 per cent drop in OCBC, but more than the 9.8 per cent drop in UOB shares.
# posted by Birdie @ 11:59 PM 
