As DBS Group Holdings&rsquo CEO Piyush Gupta prepares to hand over the reins to his successor, deputy CEO Tan Su Shan in March, he sought to assure shareholders that the bank would be in good hands.

 

&ldquo As I reflect on my journey at DBS, I feel good about where the bank is and am confident it will reach further heights under Su Shan&rsquo s leadership,&rdquo he says in the bank&rsquo s results statement on Feb 10. The results briefing, covering DBS&rsquo s FY2024 and 4QFY2024 ended Dec 31, 2024 results, was held on the same day. Gupta will retire on March 28, making the Feb 10 briefing his 61st and last.

 

When asked about leadership style and potential management changes, Tan pointed to earlier announcements made in December 2024. At the time, Han Kwee Juan, previously DBS Singapore&rsquo s country head, was named her successor as group head of institutional banking while Lim Him Chuan, the bank&rsquo s group head of strategy, transformation, analytics & research (GSTAR), was appointed as the new Singapore country head.

 

Tan added that a few more internal shifts would be announced this week.

 

&ldquo We' ve been grooming our internal slate of succession quite thoughtfully over the last 10 to 15 years. So when we make these announcements, [it] shouldn' t really be any surprise to anyone internally, and we should keep the stability of the management and the way we manage in our operating process,&rdquo she says during the briefing.

 

As for her leadership approach, Tan said she would do her best, but reiterated that she and Gupta &ldquo wear different&rdquo shoes, and would inevitably have different styles.

 

&ldquo Whatever has been said in terms of the culture of the bank, the way we do things, the embracement of digital transformation, the purpose and the focus on returns, whether it' s high ROE [return on equity] businesses, whether it' s, you know, releasing capacity from the use of generative AI [artificial intelligence], I want to be a CEO that is conscious of the macro movement,&rdquo she says.

 

She added that she also would be &ldquo risk aware&rdquo and attuned to major market trends, whether it' s technology or geopolitics, and &ldquo bringing it to how DBS can optimise or be ahead of the curve and serve our clients better and continue to grow&rdquo .

 

Beyond business, the bank&rsquo s clients and its digital transformation, Tan also says she will continue to remain &ldquo humble and hungry&rdquo .

 

DBS expects two rate cuts will focus on where it sees growth opportunities

 

Looking ahead, DBS now expects two rate cuts to take place in the second half of 2025, down from its earlier projection of four.

 

As a result, the bank expects its net interest income (NII) to remain above 2024&rsquo s levels, although it still expects group net interest margin (NIM) to decline to around 2.10 basis points (bps), depending on the asymmetry on the market trading book.

 

For specific provisions (SPs), the bank expects normalisation within the 17 bps to 20 bps range. At its current level, Tan says the bank&rsquo s SPs are &ldquo comfortable but not complacent&rdquo and that the bank is mindful of geopolitical risks.

 

&ldquo We continue to stress test our portfolio very, very regularly, whatever new news comes out from the Trump administration, we' re on top. We try to stay on top of it, but so it depends on what happens for the rest of the year, but there could be some potential for GP [general provision] write-backs as well,&rdquo she notes.

 

&ldquo If the external conditions remain stable, we might be able to reduce it. If it deteriorates sharply, and SPs exceed the normalised range of 17 to 20 basis points, then there could be a shift from the model GPs to SPs,&rdquo .

 

The bank&rsquo s pre-tax profit is also likely to be around the same levels as FY2024 although net profit is expected to be lower y-o-y due to the global minimum tax of 15%, compared to DBS' s effective rate of 12%. The amount comes up to around $400 million.

 

Navigating global uncertainties

 

On potential trade disruptions from Trump&rsquo s tariffs, Tan believes China is better prepared for Trump&rsquo s second term in office, so she isn&rsquo t overly concerned. Instead, DBS will focus on better intra-regional trade with the Regional Comprehensive Economic Partnership (RCEP). It will also look into trade opportunities between Asean, North Asia and Europe.

 

&ldquo Some of the Western MNCs [multi-national corporations] from Europe and the Asian MNCs are looking to do more within Asia as a result of this. So I think we just focus on where we see some growth opportunities,&rdquo she says.

 

However, she cautioned that there will be &ldquo a lot more volatility&rdquo in the markets and in rates due to policy swings and announcements from the Trump administration. Nevertheless, she stressed the need to look at the long term as well, considering that the current administration will last for four years.

 

&ldquo We can' t manage our business day by day [depending on Trump' s tweets]. We have to take a view and then be guided by longer term trends. We still believe that, whilst there will be reactions around some of the tariffs, at least for our markets in Asia, especially in China and Southeast Asia, the countries here are looking to be more resilient internally and to look at more intra-regional trade,&rdquo she says.

 

&ldquo Having said that, though we will stress test a portfolio. There will be inflation, there will be there will be longer routes to be taken, etc. There will be inflation which may keep rates higher for longer. So we have to prepare for that. And if rates remain higher for longer, then you know there might be some stresses in the SME [small- and medium-enterprise] book or in the consumer book that you have to be ahead of and be risk aware,&rdquo she adds.

 

For large corporations, Tan says the bank is continuing its stress tests based on real estate portfolios, based on the dislocation the bank may be seeing in things like automobiles or potentially in metals and mining.

 

&ldquo As long as we stress test and we make sure [we&rsquo re] okay on the margin, do we have enough buffer? Will these guys survive, and do we have enough collateral to repay them? Then these stress tests will be instructive to us on how we manage our total exposures,&rdquo she notes.

 

Gupta, for his part, noted that Trump&rsquo s first administration didn&rsquo t impact global trade particularly, although no one knows what he&rsquo s going to do in his second term. But the CEO points out that the total amount of global trade excluding the US continues to grow.

 

&ldquo I do see that there is enough tailwind around connectivity and interactivity around other countries in the world that give us an opportunity,&rdquo he says. &ldquo In Trump 1.0, we also found we don' t know about this time, that the shift from China to China plus one, is quite helpful to us. And so that was another, upside. So it depends on how exactly they levy tariffs, but it could actually have some interesting possibilities.&rdquo