Singapore's largest bank DBS said Friday that it will cut 6 percent of its workforce by the end of this month and reported 38 percent drop in the third quarter net profit.
Chief Executive Richard Stanley said most of the 900 jobs will be cut from its offices in Singapore and Hong Kong, he added this was the largest job cut ever.
He said the cuts were necessary for the DBS to be a streamlined organization to tide over the current financial crisis.
"To be more productive and efficient, we will restructure and streamline the organization. Regrettably, this has resulted in the need to reduce our workforce by six percent or about 900 people, primarily Singapore and Hong Kong, by the end of the month," he told reporters.
"Obviously this is a very difficult situation for the people who will be affected, we will provide severance and support in line with the market, in fact, we have announced that we will provide counseling and job outplacement services, we will treat people with dignity and respect and we will move on."
The DBS is the first financial institution in Singapore to announce job cuts in the midst of the current financial crisis and economic slowdown.
Early Friday the Singapore-based bank said in a statement that its net profit fell 38 percent in the three months to September, reflecting lower market-related income, higher allowances to strengthen the balance sheet and disciplined expense management efforts.
Net profit in the third quarter was 379 million Singapore dollars (256 million U.S. dollars), down from 610 million Singapore dollars in the same quarter last year.
Net interest income in the third quarter rose 2 percent from a year ago to 1.07 billion Singapore dollars, while net fee income declined 22 percent to 316 million Singapore dollars.
The DBS said it set aside general allowances of 129 million Singapore dollars to strengthen the balance sheet against increased macroeconomic uncertainties.
It said these additional general allowances raised the coverage for non-ABS collateralized debt obligations (CDOs) in the investment portfolio to 25 percent from 6 percent previously.
The DBS was the last of three local banks to report profits for the September quarter.
On Wednesday, the Overseas-Chinese Banking Corporation (OCBC) Bank reported 13 percent drop in the third quarter net profit while the United Overseas Bank (UOB) said last week its profit fell 5.1 percent for the same period.
Source: Xinhua
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