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An Investor’s Guide to Understanding DBS Group Holdings Ltd’s Cost Structure

DBS Group Holdings Ltd (SGX: D05) is one of the three major banks based out of Singapore. In this article, we will look at an important aspect of the company, its cost structure, to help us better understand its business.

How it spends money

DBS’ cost structure can be broken down mainly into two categories – employee-related and others. Let’s look at some numbers below:


Source: DBS Group 2018 Annual Report

Employee-related costs of S$3.2 billion accounted for the majority of the bank’s expenses (55% of DBS’ total expenses of S$5.8 billion in 2018). In other words, human resource is one of the most important factors (if not the most important factor) that will drive the overall success of the bank.


Source: DBS Group 2018 Annual Report

After employee expenses, computerisation expenses accounted for the next biggest portion of DBS’ 2018 expenses. This cost will likely grow at a decent rate in the next few years as the bank positions itself to compete in the increasingly digitalised environment.

Another observation that we can draw from here is that a significant amount of DBS’ expenses are fixed in nature. Thus, the bank is well-positioned to benefit from operating leverage as it grows its customer base over time.


The above is just a quick overview of the overall cost structure of DBS, which will help interested investors learn more about the bank. Investors may want to go even further by analysing other aspects of the costs – such as cost trends, margins and benchmarking against other local banks – before investing in DBS’ shares.

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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. The Motley Fool Singapore has recommended the stocks of DBS Group Ltd.