#1011100000 600000 10 00001 11000 000000 10000 × DBS 0010100-0-0000 11111100000 10011 6T1I1I00 0011100TOTO 10 00 01 10 01 10 001 00 5000111101010 000 110 00 20100 011 100 00 0 0 10 00-0000-0000-TOOTO-001010010 000000000-0000-0000-00001100 0000-0000-0000-00-0-00-0-0010 Creating shareholder value from digitalisation Chng Sok Hui Chief Financial Officer 17 November 2017 The presentations contain future-oriented statements, including statements regarding the Group's vision and growth strategy in the light of anticipated trends as well as economic and market conditions. Such statements necessarily involve risks and uncertainties, which may cause actual performance in future periods to differ from projections. DBS IN#2Agenda for the day Digital Transformation Consumer and SME (Singapore, Hong Kong) Consumer and SME (Growth Markets) Presentations Transforming technology and culture Showcases Tech and Ops | APIs Use of data insights Other Businesses¹ • 1 Corporate Bank, Private Bank, Markets, and Others Pre-empt disruptors Bancassurance || POSB Smart Buddy Disrupt incumbents digibank | Tally Digitalise for profitability . Audit Cash Management Wealth Management Strategic Marketing Reimagining Audit Treasury Prism iWealth XDBS 2#344% of the bank: High performing and rapidly digitalising business Consumer and SME (Singapore, Hong Kong) 2017 income: S$11.6bn Pre-empt disruptors Rapidly transforming to digital Gaining market share, creating new income streams #1 in Singapore in mortgage, auto loans, cards, banca today1 S$5.1bn Income Cost-income ratio ROE 11% CAGR 2 49% 43% 22% 24% 38% (2015) vs Group: 4% 2015 2017 2015 2017 44% (2017) . Jewel in the crown • Likely to grow income at double-digit 2017 figures annualised based on 1H17, where applicable Has potential to contribute -50% of the bank's income in 5 years 1 Ranking for mortgage, auto loans, cards based on balances (source: Credit Bureau Singapore, Sep 17); Ranking for bancassurance based on new business weighted premiums (source: Life Insurance Association, 9M17) 2 2015-2017 ☑DBS 3#4First bank to develop methodology to measure digital value creation Consumer and SME (Singapore, Hong Kong) 2017 income 44% • 11% CAGR 24% ROE Two distinct segments based on customer behaviour • Digital • 23% CAGR 27% ROE 49% (2015) ● Traditional • -2% CAGR • 19% ROE 60% (2017) Digital (D): predominantly online / mobile interactions Traditional (T): predominantly offline interactions We have been progressively helping our customers adopt Digital behaviours The Digital segment is growing faster, with superior ROE 2017 figures annualised based on 1H17, where applicable; CAGR refers to 2015-2017 income DBS 4#5Agenda 2017 income Digital, 60% · 23% CAGR 27% ROE 44% • 11% CAGR ⚫ 24% ROE 01 Robust and well-tested methodology to measure digital value creation Traditional, 40% • -2% CAGR 02 Digital segment demonstrates clearly superior financial and operating metrics • 19% ROE 03 Rigorous business planning to drive digital adoption and progressively reduce cost-income ratio (CIR) ☑DBS 5#6Robust, well-tested methodology based on customer behaviour Three behavioural criteria for "Digital customers" 1 Product purchase or segment upgrade via digital channels 2 More than 50% of financial OR transactions via digital channels 3 More than 50% of non-financial OR transactions via digital channels Add/delete payee For each customer, all associated income and all associated costs are completely and accurately attributed • • Account opening ¡Wealth DBS Remit • Pay bills online • Change personal details Customers must re-qualify on a rolling 12-month basis ☑DBS 6#7P&L for Digital and Traditional segments based on customer view Consumer and SME (Singapore, Hong Kong) Traditional Income Cost Direct Indirect Overheads Profit CIR Digital Income Cost Direct Indirect Overheads Profit > End-to-end P&L constructed following a set of principles · • • CIR • Digital and Traditional customers identified based on banking behaviour Complete attribution of all income streams and costs Full reconciliation to Group financial statements Granular data to ensure methodology rigour Time-tested over three years ☑DBS 7#8Agenda 2017 income Digital, 60% · 23% CAGR 27% ROE 44% • 11% CAGR ⚫ 24% ROE 01 Robust and well-tested methodology to measure digital value creation Traditional, 40% • -2% CAGR 02 Digital segment demonstrates clearly superior financial and operating metrics • 19% ROE 03 Rigorous business planning to drive digital adoption and progressively reduce cost-income ratio (CIR) ☑DBS 8#9Superior returns from Digital segment 2017 profit and loss (S$bn) Total T D Digital is material Customers (m) 5.9 3.6 2.3 39% of customers contribute Income 5.1 2.0 3.1 60% of income and 68% of Costs 2.2 1.1 1.1 profit before allowances Profit before allowances 2.9 0.9 2.0 Key indicators Digital is more valuable Income per customer (S$'000) 0.9 0.6 1.3 2X income per customer Cost-income ratio (%) 43 55 34 20pp lower CIR Return on equity (%) 24 19 27 9pp higher ROE Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences ☑DBS 9#10Consistently superior returns from Digital segment over time Profit and loss (S$bn) 2015 2017 2015 2017 D D Share of total (%) Digital increasingly material Customers (m) 1.9 2.3 33 39 Strong growth momentum Income 2.0 3.1 49 60 - driven by customer Costs 0.8 1.1 40 48 migration and uplift in income per customer Profit before allowances 1.2 2.0 58 68 Key indicators Income per customer (S$'000) 1.1 1.3 2X 2X Differential over T Digital increasingly valuable Higher income per customer Cost-income ratio (%) 40 34 -18pp -20pp Lower CIR Return on equity (%) 25 27 +8pp +9pp Higher ROE Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences DBS 10#1139% of customers contribute 68% of profit before allowances Digital share of customers, income and profit before allowances Customers 33 39 49 Income 60 Profit before allowances 58 59 68 +6pp +11pp +11pp 2015 2016 2017 0 10 20 30 40 50 60 70 Digital share (%) Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences ☑DBS 11#12Digital customers have consistently lower CIR and higher ROE CIR (%) 60 50 40 20 58 55 55 55 40 40 35 34 =4 T ROE (%) 30 27 27 D 25 25 20 19 19 18 T D 10 18pp 20pp 20pp Delta 0 2015 2016 2017 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences LO 8pp 8pp 9pp Delta 0 2015 2016 2017 ☑DBS 12#13Digital customers' superior CIR and ROE driven by four key factors Lower cost-to-acquire • Lower unit cost-to-serve • Higher income per customer year on year • Consistently faster growth in income per customer ☑DBS 13#14Digital customers: Lower cost-to-acquire Consumer Front office cost-to-acquire per account, 2017 43% SME 54% T D T D 2017 figures annualised based on 1H17, where applicable ☑DBS 14#15Digital customers: Highly engaged; multiple times more transactions... Customer-initiated transactions per customer, 2017 Consumer 16x 60 SME 389 6x 64 Online channel 4 Offline channel T D T D 3,521 2,255 Customers ('000) 84 81 Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences > DBS 15#16...so higher absolute cost-to-serve, but lower cost-to-serve as a percentage of income Income and cost-to-serve per customer, 2017 418 T Consumer 5,552 838 Income 1.5x D Cost-to-serve 2017 figures annualised based on 1H17, where applicable; income per customer excludes lump-sum income not tracked at customer level SME 12,068 Income 1.7x Cost-to-serve T D ☑DBS 16#17Consumer: Consistently higher income from broad-based engagement Multiple over T 2015 2016 2017 Income per customer 2x 2x 2x Products 2017 1.7x 838 1.6x Other lending 2.6x Credit cards Deposit balance 1.5x 3.4x Mortgages 418 2.2x Wealth and others Loan balance 3.6x 1.5x Deposits T D Investment balance 2.0x 2017 figures annualised based on 1H17, where applicable; income per customer excludes lump-sum income not tracked at customer level ☑DBS 17#18SME: Consistently higher income from broad-based engagement Multiple over T 2015 2016 2017 2017 Income per customer 2x 2x 2x Products 1.7x 12,068 3.6x Treasury 2.3x Trade finance Cash Deposit balance 2.6x 5,552 3.2x management 1.4x Loans T D Loan balance 1.3x 2017 figures annualised based on 1H17, where applicable; income per customer excludes lump-sum income not tracked at customer level ☑DBS 18#19Digital customers: Consistently faster growth in income per customer Relative income growth for same customer cohort, 2016 v 2015 Slower than overall Moderately slower than overall Faster than overall Consumer SME T 1 D 2 T to D T 1 D 2 T to D Total Total Deposits Mortgages Credit cards Loans Cash management Other lending Wealth and others % of customers 65 28 7 Trade finance Treasury 1 Existing Digital customers (D): Faster income growth 2 Newly migrated Digital customers (T to D): Also show faster income growth 65 28 7 ☑DBS 19#20Agenda 2017 income Digital, 60% · 23% CAGR 27% ROE 44% • 11% CAGR ⚫ 24% ROE 01 Robust and well-tested methodology to measure digital value creation Traditional, 40% • -2% CAGR 02 Digital segment demonstrates clearly superior financial and operating metrics • 19% ROE 03 Rigorous business planning to drive digital adoption and progressively reduce cost-income ratio (CIR) ☑DBS 20 20#21We have changed the way we run our business Acquire Transact • . Increase customer acquisition through wider distribution Lower acquisition cost • Eliminate paper, create instant fulfilment • Decrease cost Drive 'sticky' customer behaviours, cross-sell through contextual marketing . Engage • Increase income per customer ☑DBS 21 24#22We have changed the way we run our business • Acquire Transact Engage • • From • Branch-led Feet-on-street Paper-heavy Brick and mortar channels く • • To • Ecosystem strategy for wider outreach Data-driven digital marketing and search engine optimisation Digital onboarding Paper-less, straight-through processing ("Design For No Operations") Seamless, omni-channel Product-focused Generic engagement approach Embedding ourselves in the customer journey - driving 'sticky' customer behaviours Contextualised research and marketing for cross-sell ☑DBS 22 2242#23Acquire: KPIs set and tracked across products to drive results KPIs Examples Online deposit account opening Consumer Increase digital acquisition share: • Deposits Digital share of deposits onboarding • Cards • Loans 43% • Equity Unit trusts 11% 32pp • General insurance SME Increase digital share of: • New account opening • Banker's guarantee Loans Increase subscriptions: 2014 2017 Online deposit account opening Digital share of deposits onboarding 64% 27% • IDEAL - online banking platform 2014 2017 2017 figures annualised based on 1H17, where applicable 137pp ☑DBS 23 23#24Transact: KPIs set and tracked to drive results KPIs Consumer Migrate transactions to digital: • Deposits • Remittance • Loans • Equity Unit trusts SME Migrate transactions to digital: Example Cross-border payments: Customer-initiated Volume of transactions (m) 2.9 4.5 6.1 D • Cash • Trade FX 1.7 Design for "no-ops": 0.5 0.4 0.4 0.3 • Cash and trade processing T • Loan creation, disbursements and servicing Account opening and maintenance 2014 2015 2016 2017 2017 data refers to full-year forecast across segments for Singapore and Hong Kong ☑DBS 24 24#25Engage: KPIs set and tracked to drive results KPIs Consumer Increase number of: Examples to drive 'stickiness' Omni: Instant points redemption, budget tracking, etc. • Digitally engaged customers • 30-day, 90-day active customers Improve customer satisfaction: • Internet banking • Mobile banking OMNI CATCH HK$600,000 Prizes worth up to DBS Omni 【搶利是 Prosperity Catch) XDBS Omni deliveroo $50 EasyPayment $50 Insta Discount up to HK$300 for your newbile 2.5x Average spend per Omni user SME Increase number of: • • Digitally engaged customers BusinessClass members and activities • Visits to DBS websites Increase share of: • Internet banking login frequency • Mobile banking usage Rebate Contextual marketing: Drive cross-sell and up-sell Database Offers Library Propensity Internal External Ecosystem data data data Loans Cash Trade models 30 Dynamic Leads & Customer Database FX T&M Trigger engine Contact rules Unified offer engine Feedback loop Chatbot SMS Low value leads RM High value prospects DM/eDM Branch Bizcare ATM DBS IDEAL Social media Omni-channel marketing Online Account Opening Online Loan Application Online LC/BG Application DBS IDEAL/DealOnline online fulfilment Campaigns ~S$1bn Incremental deposits ☑DBS 25#26Upside in Digital customer base to drive progressively lower CIR Consumer and SME (Singapore, Hong Kong) Digital share of customers (%) Cost-income ratio (%) 33 > 50-60 43 <40 39 39 2015 2017 Aspiration Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable 2017 Aspiration ☑DBS 26#27Summary: Digitalisation driving significant value creation 2017 income 44% • 11% CAGR ⚫ 24% ROE 01 Robust and well-tested methodology to measure digital value creation Digital, 60% · 23% CAGR 27% ROE Traditional, 40% • -2% CAGR 02 Digital segment demonstrates clearly superior financial and operating metrics • 19% ROE 03 Rigorous business planning to drive digital adoption and progressively reduce cost-income ratio (CIR) ☑DBS 27#28011100000 600000 10 00001 11000 000000 10000 × DBS 0010100-0-0000 11111100000 10011 6T1I1I00 0011100TOTO 10 00 01 10 01 10 001 00 5000111101010 000 110 00 20100 011 100 00 0 0 10 00-0000-0000-TOOTO-001010010 000000000-0000-0000-00001100 0000-0000-0000-00-0-00-0-0010 Creating shareholder value from digitalisation Chng Sok Hui Chief Financial Officer 17 November 2017 The presentations contain future-oriented statements, including statements regarding the Group's vision and growth strategy in the light of anticipated trends as well as economic and market conditions. Such statements necessarily involve risks and uncertainties, which may cause actual performance in future periods to differ from projections. DBS IN#29APPENDIX ☑DBS 29#302015-2017 Profit and loss 2015 2016 2017 Consumer and SME (Singapore, Hong Kong) Total T D Total T D Total T D Profit and loss (S$bn) Customers (m) 5.9 3.9 1.9 5.9 3.8 2.2 5.9 3.6 2.3 Income 4.1 2.1 2.0 4.9 2.2 2.7 5.1 2.0 3.1 Costs 2.0 1.2 0.8 2.2 1.2 1.0 2.2 1.1 1.1 Profit before allowances 2.1 0.9 1.2 2.7 1.0 1.8 2.9 0.9 2.0 Key indicators Income per customer (S$) 708 537 1,056 821 578 1,244 858 568 1,306 Cost-income ratio (%) 49 58 40 44 55 35 43 55 34 Return on equity (%) 22 18 25 23 19 27 24 19 27 Customer base as of Jun 2017; other 2017 figures annualised based on 1H17, where applicable; numbers have slight rounding differences ☑DBS 30 50