The hongbaos totalling S$18 million given to 18,000 DBS employees came from senior managers' bonus pool, said Peter Seah, chairman of DBS Group Holdings, on Thursday.
As a result, the special bonus did not increase the bank's costs, he said at the bank's annual shareholders' meeting.
Answering a question on the S$18 million bonus, Mr Seah said that the gesture was much appreciated by employees and increased "bonding" among all staff.
The hongbaos generated a fair bit of buzz not just among banks but also other industries.
Some sniped that the bonus could have been taken from the employees' 2015 pay increase while others said that it put pressure on them to do the same.
DBS, South-east Asia's largest bank, said in February that the S$1,000 for each employee was to celebrate SG50 - a nationwide effort to celebrate Singapore's 50th birthday - and also for reaching S$50 billion in market capitalisation.
The S$1,000 hongbao was announced after the bank released its full-year 2014 results. For 2014, net profit - including one-time items - rose to a record S$4.05 billion, up 10 per cent from FY2013's and double that of 2009.
Excluding one-time items, net profit rose 10 per cent to S$3.85 billion.
The hongbaos were for staff up to the level of vice-presidents. In Singapore, some 10,000 employees got the money.
DBS has in total 21,000 employees. In its annual report, DBS said that the total remuneration for 19 of its most senior managers (excluding chief executive Piyush Gupta) in 2014 amounted to S$53 million.
Mr Gupta received S$10.12 million, up 10 per cent from 2013's S$9.2 million.
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