DBS Group Holdings is in a “strong position” to continue “healthy” shareholder returns and outperform its peers, says deputy CEO Tan Su Shan.
In her first letter to shareholders in DBS’s FY2024 annual report, released March 6, Tan says “strategic initiatives” implemented by outgoing DBS CEO Piyush Gupta over the past 15 years have “propelled” the bank “from an underperforming domestic franchise to one of the world’s best banks”.
“The strategic moats we have built mean our successes are not easy to replicate and there is momentum in our business,” says Tan in a column titled “Deputy CEO reflections”. “Our strategic vision will preserve our relevance and ability to stay ahead. As such, we are in a strong position to continue delivering healthy shareholder returns and outperforming peers.”
Tan was appointed deputy CEO in August 2024. She will be appointed CEO after DBS’s 26th annual general meeting on March 28.
The 57-year-old was succeeded as group head of institutional banking by Han Kwee Juan on Jan 1. She was previously the group head of consumer banking and wealth management for close to a decade.
Tan says leading the bank’s two customer-facing divisions under Gupta’s leadership has been an “invaluable experience”. “Operationalising our digitalisation strategy, I learnt early on about the importance of personally owning every digital journey. At the same time, understanding the intricacies of our business and culture has allowed me to build teams that perform at their full potential.”
She cautions that the world “continue[s] to face uncertainty in the macroeconomic environment and geopolitical landscape, with potential policy shifts that could disrupt supply chains and cause market volatility”.
Tan says her team is “proactively” addressing these challenges. “Internally, we have implemented rigorous stress tests across various risk parameters, as well as leveraged technology to automate processes and improve our agility in responding to changing conditions. Externally, we have supported our customers by offering bespoke financial advice, innovative hedging and investment solutions, and alternative strategies for managing supply chain disruptions.”
See also: DBS’s CEO Piyush Gupta earns $17.6 mil in FY2024 after another year of record earnings
Technological developments, particularly generative AI, have already brought about “profound changes”, says Tan, and will continue to disrupt business models. “At the same time, societal challenges continue besetting the world: climate change, demographic shifts, rising income inequality and issues of trust. The backdrop of uncertainty presents both challenges and opportunities.”
Four Cs
In her reflections, Tan reiterates “four Cs” that will shape her priorities as the next leader of Southeast Asia’s largest bank by assets: continuity, culture, customer and connectivity. Tan first mentioned the “four Cs” at the release of the bank’s 1HFY2024 results on Aug 7, when she was also announced as Gupta’s successor.
First, on continuity, Tan says DBS’s “overarching vision” has been to “build the best bank for a better world”. “Our strategy has been formulated based on the megatrends of a rising Asian century, digitalisation and sustainability. These will not change in the foreseeable future.”
“Continuity is preserved throughout the organisation, from the board and senior management to the cadence of our internal rituals of scorecard setting, and the way we manage. This ensures we remain clear in our objectives, builds resilience in our operations and preserves the trust of our stakeholders,” she adds.
Second, on culture, Tan says the bank will need to “constantly think about new target operating models, new skills and new ways of working to stay ahead”. “Our culture underpins our ability to do so, and ensures that we are ready to reinvent ourselves when needed.”
Third, the customer remains at the centre of everything DBS does, says Tan. “Our policies and processes have embedded this mindset while pivoting to a horizontal structure has enhanced it. As a result, we can quickly adopt the customer’s evolving perspective and leverage data-driven experimentation to optimise our offerings... It shapes our ability to deliver future-ready solutions and a differentiated customer experience which ultimately builds trust and wins us market share.”
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Finally, internal and external connectivity “remains a core driver” of DBS’s business, says Tan. “Externally, we will continue to leverage our extensive regional network and suite of digital solutions to embed ourselves deeper in customer journeys and industry ecosystems. Internally, we will further connect the dots across business units to amplify a holistic one-bank solution.”
The past 15 years have shaped DBS into a “high-performing, high-returns institution”, says Tan. DBS’s 18% return on equity (ROE) in FY2024 is one of the highest among developed market banks, she adds. “I am intimately aware of the factors that have made us successful… While DBS’s efforts have already borne fruit with the rapid growth of high-ROE franchises, there is still a long runway ahead.”
Shares in DBS closed 9 cents higher, or 0.2% up, at $45.62 on March 5, 3.78% higher year-to-date and 49.38% higher from a year ago.
Photos: Albert Chua/The Edge Singapoer
