Outgoing CEO talks about working across teams, being data-driven and having a purpose 

 

[SINGAPORE] When DBS in 2015 set its sights on being recognised as the world&rsquo s best bank, there was scepticism within the management ranks. In terms of the size of assets, DBS was not within spitting distance of the world&rsquo s top 10 banks and still is not. It is the largest in South-east Asia though.

 

But as its chief executive Piyush Gupta pointed out: &ldquo Changi has been named the best airport in the world. Singapore Airlines is not the biggest airline, but is the best airline in the world. Big doesn&rsquo t necessarily mean best.&rdquo  

 

Gupta started at DBS when he was 50. As he ends his 16-year run at the helm, he can look back at a roll-call of the bank&rsquo s accolades and achievements and a success story that has been profiled in various case studies by the likes of Harvard Business School and consulting firm McKinsey. 

 

There have been awards galore including &ldquo World&rsquo s Best Bank&rdquo by Global Finance in 2018, &ldquo World&rsquo s Best Bank&rdquo by Euromoney and &ldquo Global Bank of the Year&rdquo by The Banker, just to name a few. 

 

The numbers speak for themselves. In 2009, DBS&rsquo market capitalisation stood at S$35 billion. It is now a staggering S$132 billion. Return on equity (ROE), a measure of how efficiently it is using shareholders&rsquo funds, has gone from 8.4 per cent, when it lagged its peers, to outpacing them at 18 per cent. Net profit has grown five times, from S$2.1 billion to S$11.4 billion. And the list goes on. 

 

Perhaps it starts off with having a clear vision. Gupta told The Business Times that he presented a PowerPoint deck with &ldquo eight, nine&rdquo slides to the board as he was trying to land the job.  

 

In 2009, it was an inauspicious time to join though. Five CEOs had come and gone in the past decade. 

 

As he began work at DBS, he realised: &ldquo We were trying to run a multi-country multinational bank with the infrastructure which was suited to a single-country organisation.&rdquo There were disparate policies across markets and across businesses such that an identical credit application could get approved in Hong Kong but rejected at home.  

 

Successful strategies with a touch of luck  

Long-term vision is all very well, Gupta noted, but it was important to deliver results in the short term too. &ldquo We got lucky, and we started seeing results very quickly.&rdquo

 

One success story was expanding its China franchise just as the market started to open up. &ldquo How do you bank 1,000 companies in China? That was our strategy.&rdquo

 

DBS&rsquo trade finance book went from S$6 billion to S$60 billion between 2010 and 2012, a whopping 10 times growth as the renminbi internationalised. 

 

Another area was turning around the underperformance of the Singapore home market. Management improved the loan-deposit ratio, regained market share in mortgage and unsecured lending. It also became a leader in the bancassurance market.

 

Yet another key priority was to grow the wealth management business which brought in a handsome 23 per cent of DBS&rsquo income at the last count. 

 

Back in 2009, DBS&rsquo private bank was a low-key business that few knew about. Gupta joked that it resembled Fort Knox in that it mostly took in fixed deposits.

 

Wealth management was a small contributor to the group&rsquo s bottom line. But for the CEO, the idea of a wealth continuum &ndash serving wealthy clients from the affluent category to the ultra-high-net-worth segment seamlessly &ndash posed an exciting opportunity for DBS. He said: &ldquo We figured that these segments had very high growth potential in Asia.&rdquo  

 

With the idea that this was a chance for DBS to stake its claim to the wealth management business, he persuaded Tan Su Shan from Citi to join DBS and develop the business.

 

Doing banking like a tech firm  

Breakdowns and outages notwithstanding, DBS remains at the forefront of digital banking with its various apps, including DBS digibank, PayLah! and iWealth. Over the years, it has revamped its tech architecture, become more data-driven and transformed its culture to be more startup-like. 

 

It is no surprise that with Gupta&rsquo s background in technology and operations, he turned to technology to scale up and reinvent DBS. But this was also against a backdrop where mega merger and acquisition deals were unlikely to happen, given the various political sensitivities and regulatory environment. 

 

There was huge growth potential in the big markets of India and Indonesia, but costs were also high to expand there physically. Meanwhile, fintechs were springing up everywhere.    

 

But there was an &ldquo aha&rdquo moment when he met Alibaba&rsquo s Jack Ma, who was developing   Alipay and seeing banking in a completely different light. 

 

Gupta said: &ldquo We told ourselves that this was only the shackles in our own mind. We could do banking like a tech company does banking.&rdquo  

 

In 2014, DBS announced plans to invest S$200 million over three years to better harness digital technologies. This was on top of the S$1 billion the bank had invested in strategic technology initiatives at the time. 

 

According to Gupta, the board said: &ldquo Okay, S$200 million, to accelerate our digital transformation. But your financial metrics like cost-income ratio &ndash that will deteriorate.&rdquo It added: &ldquo Don&rsquo t worry about it. We will give you air cover, because you need to invest if you&rsquo re going to get there.&rdquo

 

With the new technology coming in at a fraction of the price of the existing technology, DBS started seeing payback on its efforts earlier than expected. 

 

Long-term stability 

A strong and supportive board and a stable, large shareholder are one theme that underlines the DBS success story. 

 

Director Peter Seah became chairman in 2010, not long after Gupta joined. Both had cut their banking teeth at Citi. &ldquo Both of us have the same banking instincts (on taking) the appropriate amount of risk and reward. Our styles of banking resonated with each other,&rdquo said Gupta. 

 

DBS also benefited from having a strong anchor shareholder in state investment firm Temasek with its 30 per cent stake. 

 

Agile and data-driven culture 

CEOs often cite the importance of people, but nowhere has the transformation been more apparent than at DBS with its 41,000 strong workforce.

 

&ldquo Internally focused and policy-driven, that was the DBS of old, with decisions that went up to committees,&rdquo recalled Gupta. 

 

The biggest change since then? He said: &ldquo We&rsquo ve tried to move away from vertical management and silos to horizontal management. We&rsquo ve got 60 &lsquo journeys&rsquo , where people from different teams, including business, operations, (and) technology, participate and work together.&rdquo

 

DBS is also massively data-driven now. &ldquo People are looking at live data, live transactions the entire time. We plug in artificial intelligence and experimentation too.&rdquo That gives the bank nimbleness, Gupta noted. 

 

&ldquo DBS now has a culture where individuals are more accountable and willing to take decisions,&rdquo he added.

 

He pointed to the appointment of Tan as the bank&rsquo s next CEO as a sign of the strength of the management bench strength. The vacancies that have opened up as a result of her promotion have also been filled by internal people. 

 

Teams are continuously innovating, within bounds, of course. Gupta calls it &ldquo a hundred flowers blooming&rdquo .

 

&ldquo In the last few years, I&rsquo ve been focused on making sure that we&rsquo ve not only embedded a way of working which outlasts me, but also built a team which outlasts me.&rdquo

 

Companies with a sense of purpose 

People who have met Gupta know that he is not only an erudite CEO, but also a thinker, equally comfortable with giving his view on geopolitics as with speaking about technology and banking challenges. 

 

Another area he is passionate about is companies giving back to society. He takes issue with comments that businesses support social causes only for their self-interest.

 

Gupta said: &ldquo A company inherits rights and responsibilities. As a people&rsquo s bank and heartland bank, if we had only focused on money, we wouldn&rsquo t have served certain segments, such as the migrant worker, and we could have raised our ROE by one to two percentage points.&rdquo

 

In 2014, DBS set aside S$50 million to establish the DBS Foundation. Last year, DBS committed up to S$1 billion &ndash S$100 million each year &ndash over the next decade and pledged 1.5 million employee volunteer hours to support vulnerable communities.

 

He added: &ldquo If we want DBS and POSB to be successful and thriving in 2030, 2040, and we do not have the support of the people nor strong brand resonance, we would face a much more difficult time in the future. To be around for the long term, people must believe that you have a right to exist.&rdquo

Roughly 86% of Panin Bank, Indonesia&rsquo s 12th largest lender, is up for sale

 

[SINGAPORE] DBS Group, South-east Asia&rsquo s top bank by assets, is the frontrunner to buy a controlling stake in Indonesia&rsquo s Panin Bank, three people with knowledge of the matter said.

 

The Singapore lender was competing with Malaysia&rsquo s CIMB Group in the second round of the bidding process, according to one of the people.

 

Roughly 86 per cent of Panin Bank, Indonesia&rsquo s 12th largest lender, is up for sale. As of Tuesday&rsquo s market close, the combined holding owned by Australia&rsquo s ANZ and the Gunawan family was worth US$1.8 billion.

 

ANZ, which owns 39 per cent according to LSEG data, has been trying to sell its stake since 2013. The founding Gunawan family is flexible about how much it might sell and the amount will depend on the offer price, sources have said.

 

Binding bids for the stake are due by end-April or early May subject to market conditions, according to two of the people, who added that the thinking of the bidders could change.

 

The sources declined to be identified as the matter was private.

 

DBS, ANZ and CIMB declined to comment. Panin Bank&rsquo s President Director Herwidayatmo referred Reuters&rsquo request for comment to its controlling shareholders.

 

If successful, DBS&rsquo acquisition of the Panin Bank stake would be first deal under incoming CEO Tan Su Shan.

 

Tan, who will assume the role on March 28, told Reuters this week that DBS is open to bolt-on acquisitions if they fit strategically, created additional value and are earnings accretive within an acceptable period of time.

 

Analysts say the deal would propel DBS, which has a unit in Indonesia, to rank among the country&rsquo s top 10 biggest banks.

 

PT Bank DBS Indonesia has one head office and 33 other offices with 3,011 employees in 15 major cities, according to the DBS website.

 

Panin Bank&rsquo s businesses span consumer financing to private wealth. Singapore&rsquo s Oversea-Chinese Banking Corp and Japan&rsquo s Sumitomo Mitsui also showed interest in the sale earlier on, sources have said.

 

Panin Bank, formally known as Bank Pan Indonesia, was founded by Mu&rsquo min Ali Gunawan in 1971 and listed on the Jakarta stock exchange in 1982.

 

Its net profit climbed 8.2 per cent to US$165 million last year as interest income rose, and it provisions for bad debt fell.

 

The bank&rsquo s shares have plunged by about a fifth for the year to date, sliding along with other Indonesia stocks and the rupiah as investor jitters over government policy and the country&rsquo s fiscal health grow. 

She will focus on boosting the bank&rsquo s high-return businesses such as wealth and transaction banking

[SINGAPORE] DBS Group&rsquo s incoming CEO Tan Su Shan is open to &ldquo bolt-on&rdquo acquisitions, and will focus on boosting the Singaporean lender&rsquo s high-return businesses such as wealth and transaction banking.

 

Tan, 57 and currently deputy CEO, will become DBS&rsquo first female CEO and also the first to be appointed from within the ranks of the bank on March 28. She will replace Piyush Gupta, 65, who has led the South-east Asia&rsquo s No 1 lender for 15 years.

 

A Singaporean and an Oxford University graduate, Tan will take up the top job against the backdrop of the bank posting record annual revenue and profits, although in the near-term she will have to deal with global economic and market volatility.

 

&ldquo We recognise that there will be significant uncertainty in the macroeconomic environment and geopolitical landscape, driven by ongoing military conflicts, the risk of escalating tariffs, and potential shifts in policy,&rdquo she said.

 

&ldquo We do scenario planning regularly, and have in place targeted early warning triggers, along with action plans,&rdquo Tan, who has been with the bank for 15 years, told Reuters in response to questions emailed to the bank.

 

Besides its presence in Asian financial hubs Singapore and Hong Kong, DBS&rsquo main markets in the region include India, China, Taiwan and Indonesia. It competes with global banks such as HSBC and Standard Chartered in those markets.

 

&ldquo I am also focused on &lsquo sweating&rsquo our acquisitions in India and Taiwan, and building on the strength of our Asia footprint and markets outside Singapore,&rdquo she said.

 

Tan said DBS would like to stay focused on its existing operational footprint and not spread itself &ldquo too thin&rdquo . &ldquo We will only do the deal if it fits our strategy, creates additional value and is accretive within an acceptable period of time,&rdquo she added.

 

&ldquo We are only interested in bolt-on deals rather than large-scale M& As which will divert attention from our areas of focus, including digital and AI &ndash key drivers of the future,&rdquo Tan said.

 

DBS has identified about 13,000 staff for upskilling or reskilling, including for AI and data-related skills, with around 10,000 having already begun training, to ensure employees are future-ready, she added.

 

The bank has also created a new role of chief operating officer, to be assumed by current group audit head Derrick Goh and will be effective from April 1, will oversee both the bank&rsquo s operations and transformation.

 

&ldquo One of Su Shan&rsquo s key strengths is her ability to build and empower teams, identifying areas for improvement and developing people and culture so that the team can perform at full potential,&rdquo Gupta said about his successor in response to questions emailed to the bank.

 

&ldquo She is also a hands-on leader, customer-centric and well-connected, and should play off these strengths.&rdquo