DBS Bank Singapore’s industrialization programme of the 1960s included the creation of an industrial finance institution or development bank. When the Economic Development Board (EDB) restructured its operations in 1968, its industrial financing arm was spun off. This was to become the Development Bank of Singapore (DBS).
Incorporated under the Companies Act in 1968, DBS was also licensed as a commercial bank under the Banking Act. On account of its development bank status, it was initially exempted from certain provisions of the Banking Act. At the time of its incorporation, the government subscribed for 49 per cent of its equity, 25 per cent was offered to financial institutions and 26 per cent to the public. In 1987, the Public Sector Divestment Committee recommended that the government’s share be reduced to around 30 per cent. In February 2006, government ownership through Temasek Holdings and its subsidiaries was 28 per cent.
Initially, the operations of DBS focused on industrial financing through medium- and long- term loans, equity participation and guarantees, in line with the country’s development plans, which included the development of a financial centre.
The growth of DBS mirrors the trajectory of the local economy. In the early 1970s, it began to expand its commercial banking activities, and in 1983, began calling itself the DBS Bank. It quickly became one of the Big Four (now Big Three) local banks, diversifying into commercial, international and merchant banking. DBS acquired POSBank and its subsidiaries for $1.6 billion in November 1998, to become the largest retail bank in Singapore. With the merger of DBS Kwong On Bank with Dao Heng Bank and Overseas Trust Bank in 2003, DBS Bank (Hong Kong) Limited became the fourth- largest banking group in Hong Kong. For 2005, DBS reported a group net profit of $985 million, and group income before operating expenses was $4.64 billion.