How Did DBS Group Holding Ltd Distribute Its Value Created In 2016?

DBS Group Holdings Ltd (SGX: D05) or DBS in short, is one of the three major banks based out of Singapore.

One of the main things that investors do is to understand how a company generates its income. Very seldom, however, investors look at how a company distributes the income it has created.

Personally, I think the latter can also help us to evaluate the company better. In fact, it might help us better understand the long-term sustainability of a company’s existence. Ideally, I would like to see that the value created is distributed more diversely to the different stakeholders.

So how did DBS Group distribute the value it created in 2016? Let’s have a look.

Source: DBS Group 2016 Annual Report

The above is a quick summary of how DBS Group distributed its 2016 value generation of $5.8 billion.

Out of the total amount, shareholders account for the biggest pie at 27%, follow by the society at 14% and employees at 11%.

Clearly, the lion’s share of the value generation went to the shareholders given that they are a major capital provider to the bank.

Next, paying 14% of the value generated to society allows the society to continue to operate optimally in the long run. After all, a bank will not strive without a stable and prosperous community.

Moreover, as banking is essentially a service, it is important that DBS Group has the right people who can deliver an excellent service to its customers. As such, sharing a portion of the value creation with the employees through bonus and incentives are necessary for the long-term.

Last but not least, the remaining undistributed value are retained to ensure that DBS Group can continue to develop and grow in the future. This is necessary as the former can only be sustained if the bank continues to invest for its future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for DBS Group Holdings Ltd.