The retrenchments were aimed at reducing staffing costs, which rose 38.5 per cent from the previous year to S$389 million in the first half.

Net profit fell 10.6 per cent in the six months.

"As a performance-based organisation, we continuously assess our operations for optimal efficiency," an official said.

"With changing market conditions, we are looking at ways of further tightening our operations to reflect a prudent response to a more challenging environment."

DBS, the largest bank in Southeast Asia, went on a recruitment and acquisition binge in the past two years to bolster its regional ambitions. Earlier this year it acquired Hong Kong's Dao Heng Bank, adding to earlier purchases in the Philippines, Indonesia and Thailand.

The retrenchment came amid a bank merger fever in Singapore which has seen DBS lose out to United Overseas Bank (UOB) in a battle to acquire smaller rival Overseas Union Bank (OUB).

News reports said up to 2000 jobs may be slashed when UOB and OUB formalise their merger, and more are on the line following the recent union between Oversea-Chinese Banking and Keppel TatLee Bank.

The consolidation reduces the number of Singapore banks from five to three, part of a government blueprint to create fewer but bigger banks.

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