banking and capital markets
January 12, 2012
First Stop Singapore; Next Stop Asia Pacific
CEO Piyush Gupta is pushing Singapore’s DBS beyond the city-state’s confines in a bid to develop a leading pan-Asian franchise.
By Matthew Miller
Eager to build a national banking champion to cement Singapores status as a rising financial power, the city-states authorities endorsed a bold expansion strategy at Development Bank of Singapore in the late 1990s. The lender went on an acquisition spree between 1997 and 2001, spending more than 12 billion Singapore dollars ($9.3 billion) to acquire local banks in Hong Kong, Indonesia, the Philippines and Thailand. The pieces never added up to a greater whole, though. Profits rose, but costs escalated at an even faster pace, and margins shrank. When the global financial crisis struck in 2008, the renamed DBS Group Holdings saw its stock price plunge by nearly two thirds and was forced to raise expensive capital with a big rights issue.
Today, Singapores flagship bank has recovered with its ambition intact. This time, however, DBS is pursuing its regional goals on a sounder basis under CEO Piyush Gupta. A veteran of Citigroups Asian operations, Gupta has injected new life into DBSs platform since taking over as chief executive two years ago. He has bolstered the groups management ranks with senior executives recruited from the likes of Standard Chartered and Morgan Stanley. He is knitting the banks far-flung operations more than 250 branches in 12 Asian markets into a coherent whole by offering a common platform of global transaction services, trade finance and wealth management to small and medium-size enterprises and their owners across the region. And Gupta is rapidly expanding the banks modest branch network in China and India, seeing those two massive markets as the motor of Asian prosperity. ....