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SINGAPORE: DBS Bank will soon start to compensate nearly a quarter of its affected investors who have bought Lehman-linked structured products.
"To date, we have found that a number of cases did not meet the standards DBS upholds and the Bank will be compensating these customers with effect from tomorrow (Thursday)," said DBS CEO Richard Stanley in a statement on Wednesday.
"Based on the number of cases we've reviewed, we estimate that the total customer compensation in Singapore and Hong Kong will be in the range of S$70-80 million."
The news comes as the bank said its initial expectation of the worst-case scenario, whereby investors will lose their entire principal investment amount, is likely to materialise.
4,700 customers in Singapore and Hong Kong had invested S$360 million in Lehman-linked structured products.
In Singapore, 1,400 DBS customers invested a total of S$103 million in DBS High Notes 5 notes.
Of these customers, two-thirds were from its DBS Treasures private banking customers, who have a minimum of S$200,000 cash and/or investments.
80 per cent of these customers are below the age of 60.
DBS said it will make a final announcement next week when the final credit redemption amount, based on prevailing market conditions, is determined.
- CNA/yb
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