Breaking news: Temasek and DBS issues statement that CEO Piyush Gupta's job is safe

[LITTLEREDDOT]

Commentary: DBS CEO’s 30% variable pay cut raises issues of accountability​

Singapore banks rely heavily on "pay for performance" practices to reward senior management. They must ensure that remuneration policies drive the right behaviour, says NUS corporate governance expert Mak Yuen Teen.

Mr Piyush Gupta, the DBS chief executive officer, had his variable pay cut by 30 per cent in 2023, as a result of the digital disruptions experienced by the bank's customers. (Photos: Reuters)

Mak Yuen Teen​

14 Feb 2024

SINGAPORE: Last week’s news that DBS had cut the variable pay of its CEO Piyush Gupta by 30 per cent delivered on the board’s promise in November 2023 that senior management would be held accountable for the bank’s repeated and prolonged digital service disruptions.
Collectively, the variable pay of members of the bank’s group management committee was reduced by 21 per cent. Mr Gupta’s pay cut amounted to S$4.14 million (US$3.08 million).
DBS online banking and payment services were disrupted several times last year, leaving many customers unable to pay their transactions and draw money from automated teller machines (ATMs). This culminated in the Monetary Authority of Singapore (MAS) imposing restrictions on DBS’ activities to ensure that it focuses on restoring the resilience of its digital platforms.
To date, DBS has spent about S$25 million out of a special budget of S$80 million set aside in November last year to enhance system resiliency, on items such as infrastructure, hiring of consultants and reallocation of resources, said Mr Gupta in a results briefing on Feb 7.

PIYUSH GUPTA’S PAY AND PERFORMANCE​

In 2022, Mr Gupta was paid S$15.4 million, including deferred remuneration and benefits, making him the highest-paid bank CEO in Asia Pacific that year. With the recently announced pay cut, Mr Gupta would get about S$11.26 million in 2023, assuming his base salary and benefits remain unchanged from 2022. DBS provides the breakdown of remuneration in its annual report in March.
Interestingly, despite DBS’ two-day digital banking service outage in November 2021, Mr Gupta’s total pay that year was nearly 50 per cent higher at S$13.6 million compared to 2020. Granted, his 2020 pay was cut, like his counterparts at other banks, as COVID-19 hit profits across the industry.
However, his 2021 package also exceeded his 2019 total pay of S$12.1 million, and his variable pay in 2021 was 55 per cent higher than in 2020. Both his annual cash bonus and deferred remuneration increased compared to the earlier years, and increased further in 2022.
The 2021 digital disruption was mentioned in several places in that year’s annual report. However, it was not mentioned in the assessment of the CEO performance. Instead, it cited Mr Gupta’s role in leading DBS to “deliver its best year ever in 2021, not only in terms of financial performance but also across a range of key scorecard goals”.
Mr Gupta’s significant pay cut this year is likely the result of the board exercising its discretion to adjust his remuneration, rather than him not meeting specific key performance indicators (KPIs).
During the bank’s results briefing last week, Mr Gupta reportedly stressed the bank’s record earnings, said that everything else was extraordinarily strong, including its customer feedback score, and referred to the disruptions as “tech instances”.
DBS uses a balanced scorecard approach to measure its success in serving stakeholders and executing its long-term strategy. The balanced scorecard has a 40 per cent weighting on “traditional key performance indicators”, 20 per cent on “transform the bank” and 40 per cent on “areas of focus”, in which qualitative priorities are disclosed within each pillar.
DBS also discloses outcomes for these priorities, through trends in some quantitative indicators but mostly through qualitative assessments. Based on the priorities and outcomes disclosed in its recent annual reports, it is unclear how outcomes which may be particularly important to DBS customers, such as service availability, data privacy and cybersecurity resilience, are prioritised and whether they will affect senior management remuneration.

COMPENSATION PACKAGES AT OTHER BANKS​

The three local banks are quite aggressive in using variable pay practices – so-called “pay for performance”. Between 2018 and 2022, the variable pay percentages of all three banks' CEOs were between 80 per cent and 91 per cent of their total pay every year, except for OCBC in 2021 when it changed its CEO.
In contrast, the variable pay percentages for the CEOs of the "Big Four" Australian banks – Commonwealth Bank (CommBank), National Australia Bank (NAB), Westpac and ANZ Bank – were generally in the range of between about 40 per cent and 60 per cent over the past five years.
The Australian banks’ CEOs were also paid consistently less than their Singaporean counterparts. For example, CommBank’s CEO Matt Comyn was paid the equivalent of S$6.44 million for the latest financial year, based on the current exchange rate and on a comparable accounting basis.
CommBank’s market capitalisation is about twice DBS’, its total assets about 40 per cent higher, it trades at a price-earnings ratio of more than twice that of DBS, and its total shareholder return is also superior.
The CEOs of the other three Australian banks were paid between S$5 million and S$5.4 million in the latest financial year. NAB is also bigger than DBS, while all the Big Four Australian banks are larger than OCBC and UOB.
While one cannot simply compare pay across markets or based on bank size, it does raise the question as to whether such large differentials are justified, when we take into account differences in competitiveness and regulatory environment of the banking sector in the two countries.
More importantly, the high reliance on variable pay requires that appropriate and challenging hurdles are set for performance. Otherwise, there is a risk of remuneration driving the wrong behaviour or resulting in excessive remuneration. In addition, there needs to be transparency on how performance is measured and how specific KPIs affect senior management remuneration.

ACCOUNTABILITY OF BANK CEOS​

Although the Australian banks’ CEOs have relative lower pay at risk, they are nevertheless held accountable when things go badly wrong.
Over the last five years, NAB and Westpac fired their CEOs, with no annual bonuses paid and forfeitures of deferred remuneration for certain years. To be fair, in the case of NAB, it was for serious misconduct that received particularly strong criticism from the Royal Commission into misconduct in the financial services sector in Australia, followed by revelations of serious fraud involving a senior staff due to excessive delegation by the CEO and poor internal controls. For Westpac, it violated money laundering and terrorism financing regulations more than 23 million times.
Elsewhere, there were bank CEOs who resigned over digital disruptions. In October 2023, the CEO of Canada’s Laurentian Bank resigned following a significant IT outage. Mizuho Financial Group CEO stepped down in April 2022 after it was criticised by Japan’s banking regulator for shortcomings in governance and corporate culture that were thought to be behind a series of system glitches in 2021.

MORE TRANSPARENCY NEEDED​

Although banks here have not faced allegations of widespread misconduct like the Australian banks, there are nevertheless important takeaways from the findings of the Royal Commission there that may be relevant.
First, balanced scorecards that are used by banks may not be achieving their objectives. Second, there is a need to review remuneration policies at all levels and in different functions. Third, and most importantly, culture, governance and remuneration are key causes of misconduct – and they are inextricably linked.
Given the significant reliance of our local banks on variable pay to reward their senior management, they need to ensure that their remuneration policies drive the right behaviour.
For financial KPIs, there is little or no emphasis on total shareholder returns, which matters to investors. In the case of DBS, deferred remuneration does not appear to come with further performance conditions, as DBS disclosed that vesting is based on time rather than future performance. Although they are subject to malus (forfeiture) or clawback, this is unlikely to be used for events such as digital disruption.
Remuneration policies of the local banks are also lacking in sufficient transparency. KPIs are vague, their relative importance unclear and evaluation of achievement likely to be highly subjective. This makes it challenging to use remuneration to hold CEOs accountable.
While the DBS board has shown that it is prepared to exercise discretion in cutting its CEO pay, boards need to strike an appropriate balance between objectivity and discretion. There is room for banks here to improve the transparency regarding their senior management remuneration.
Ultimately, the remuneration policies for senior management and even rank-and-file employees must be subject to appropriate oversight by a truly independent committee. If the remuneration committee and the board approve a policy that drives the wrong behaviour, then they should bear some responsibility.
Mak Yuen Teen is Professor (Practice) of Accounting and director of the Centre for Investor Protection at the NUS Business School, where he specialises in corporate governance.

 

[Hightech88]

Commentary: DBS CEO’s 30% variable pay cut raises issues of accountability​

Singapore banks rely heavily on "pay for performance" practices to reward senior management. They must ensure that remuneration policies drive the right behaviour, says NUS corporate governance expert Mak Yuen Teen.

Mr Piyush Gupta, the DBS chief executive officer, had his variable pay cut by 30 per cent in 2023, as a result of the digital disruptions experienced by the bank's customers. (Photos: Reuters)

Mak Yuen Teen​

14 Feb 2024

SINGAPORE: Last week’s news that DBS had cut the variable pay of its CEO Piyush Gupta by 30 per cent delivered on the board’s promise in November 2023 that senior management would be held accountable for the bank’s repeated and prolonged digital service disruptions.
Collectively, the variable pay of members of the bank’s group management committee was reduced by 21 per cent. Mr Gupta’s pay cut amounted to S$4.14 million (US$3.08 million).
DBS online banking and payment services were disrupted several times last year, leaving many customers unable to pay their transactions and draw money from automated teller machines (ATMs). This culminated in the Monetary Authority of Singapore (MAS) imposing restrictions on DBS’ activities to ensure that it focuses on restoring the resilience of its digital platforms.
To date, DBS has spent about S$25 million out of a special budget of S$80 million set aside in November last year to enhance system resiliency, on items such as infrastructure, hiring of consultants and reallocation of resources, said Mr Gupta in a results briefing on Feb 7.

PIYUSH GUPTA’S PAY AND PERFORMANCE​

In 2022, Mr Gupta was paid S$15.4 million, including deferred remuneration and benefits, making him the highest-paid bank CEO in Asia Pacific that year. With the recently announced pay cut, Mr Gupta would get about S$11.26 million in 2023, assuming his base salary and benefits remain unchanged from 2022. DBS provides the breakdown of remuneration in its annual report in March.
Interestingly, despite DBS’ two-day digital banking service outage in November 2021, Mr Gupta’s total pay that year was nearly 50 per cent higher at S$13.6 million compared to 2020. Granted, his 2020 pay was cut, like his counterparts at other banks, as COVID-19 hit profits across the industry.
However, his 2021 package also exceeded his 2019 total pay of S$12.1 million, and his variable pay in 2021 was 55 per cent higher than in 2020. Both his annual cash bonus and deferred remuneration increased compared to the earlier years, and increased further in 2022.
The 2021 digital disruption was mentioned in several places in that year’s annual report. However, it was not mentioned in the assessment of the CEO performance. Instead, it cited Mr Gupta’s role in leading DBS to “deliver its best year ever in 2021, not only in terms of financial performance but also across a range of key scorecard goals”.
Mr Gupta’s significant pay cut this year is likely the result of the board exercising its discretion to adjust his remuneration, rather than him not meeting specific key performance indicators (KPIs).
During the bank’s results briefing last week, Mr Gupta reportedly stressed the bank’s record earnings, said that everything else was extraordinarily strong, including its customer feedback score, and referred to the disruptions as “tech instances”.
DBS uses a balanced scorecard approach to measure its success in serving stakeholders and executing its long-term strategy. The balanced scorecard has a 40 per cent weighting on “traditional key performance indicators”, 20 per cent on “transform the bank” and 40 per cent on “areas of focus”, in which qualitative priorities are disclosed within each pillar.
DBS also discloses outcomes for these priorities, through trends in some quantitative indicators but mostly through qualitative assessments. Based on the priorities and outcomes disclosed in its recent annual reports, it is unclear how outcomes which may be particularly important to DBS customers, such as service availability, data privacy and cybersecurity resilience, are prioritised and whether they will affect senior management remuneration.

COMPENSATION PACKAGES AT OTHER BANKS​

The three local banks are quite aggressive in using variable pay practices – so-called “pay for performance”. Between 2018 and 2022, the variable pay percentages of all three banks' CEOs were between 80 per cent and 91 per cent of their total pay every year, except for OCBC in 2021 when it changed its CEO.
In contrast, the variable pay percentages for the CEOs of the "Big Four" Australian banks – Commonwealth Bank (CommBank), National Australia Bank (NAB), Westpac and ANZ Bank – were generally in the range of between about 40 per cent and 60 per cent over the past five years.
The Australian banks’ CEOs were also paid consistently less than their Singaporean counterparts. For example, CommBank’s CEO Matt Comyn was paid the equivalent of S$6.44 million for the latest financial year, based on the current exchange rate and on a comparable accounting basis.
CommBank’s market capitalisation is about twice DBS’, its total assets about 40 per cent higher, it trades at a price-earnings ratio of more than twice that of DBS, and its total shareholder return is also superior.
The CEOs of the other three Australian banks were paid between S$5 million and S$5.4 million in the latest financial year. NAB is also bigger than DBS, while all the Big Four Australian banks are larger than OCBC and UOB.
While one cannot simply compare pay across markets or based on bank size, it does raise the question as to whether such large differentials are justified, when we take into account differences in competitiveness and regulatory environment of the banking sector in the two countries.
More importantly, the high reliance on variable pay requires that appropriate and challenging hurdles are set for performance. Otherwise, there is a risk of remuneration driving the wrong behaviour or resulting in excessive remuneration. In addition, there needs to be transparency on how performance is measured and how specific KPIs affect senior management remuneration.

ACCOUNTABILITY OF BANK CEOS​

Although the Australian banks’ CEOs have relative lower pay at risk, they are nevertheless held accountable when things go badly wrong.
Over the last five years, NAB and Westpac fired their CEOs, with no annual bonuses paid and forfeitures of deferred remuneration for certain years. To be fair, in the case of NAB, it was for serious misconduct that received particularly strong criticism from the Royal Commission into misconduct in the financial services sector in Australia, followed by revelations of serious fraud involving a senior staff due to excessive delegation by the CEO and poor internal controls. For Westpac, it violated money laundering and terrorism financing regulations more than 23 million times.
Elsewhere, there were bank CEOs who resigned over digital disruptions. In October 2023, the CEO of Canada’s Laurentian Bank resigned following a significant IT outage. Mizuho Financial Group CEO stepped down in April 2022 after it was criticised by Japan’s banking regulator for shortcomings in governance and corporate culture that were thought to be behind a series of system glitches in 2021.

MORE TRANSPARENCY NEEDED​

Although banks here have not faced allegations of widespread misconduct like the Australian banks, there are nevertheless important takeaways from the findings of the Royal Commission there that may be relevant.
First, balanced scorecards that are used by banks may not be achieving their objectives. Second, there is a need to review remuneration policies at all levels and in different functions. Third, and most importantly, culture, governance and remuneration are key causes of misconduct – and they are inextricably linked.
Given the significant reliance of our local banks on variable pay to reward their senior management, they need to ensure that their remuneration policies drive the right behaviour.
For financial KPIs, there is little or no emphasis on total shareholder returns, which matters to investors. In the case of DBS, deferred remuneration does not appear to come with further performance conditions, as DBS disclosed that vesting is based on time rather than future performance. Although they are subject to malus (forfeiture) or clawback, this is unlikely to be used for events such as digital disruption.
Remuneration policies of the local banks are also lacking in sufficient transparency. KPIs are vague, their relative importance unclear and evaluation of achievement likely to be highly subjective. This makes it challenging to use remuneration to hold CEOs accountable.
While the DBS board has shown that it is prepared to exercise discretion in cutting its CEO pay, boards need to strike an appropriate balance between objectivity and discretion. There is room for banks here to improve the transparency regarding their senior management remuneration.
Ultimately, the remuneration policies for senior management and even rank-and-file employees must be subject to appropriate oversight by a truly independent committee. If the remuneration committee and the board approve a policy that drives the wrong behaviour, then they should bear some responsibility.
Mak Yuen Teen is Professor (Practice) of Accounting and director of the Centre for Investor Protection at the NUS Business School, where he specialises in corporate governance.

See CB kia face also dulan.

Should claw back all his salaries and make him a bankrupt then send him back to the shithole where he belongs.

 

[Hightech88]

In 2022, Mr Gupta was paid S$15.4 million, including deferred remuneration and benefits, making him the highest-paid bank CEO in Asia Pacific that year. With the recently announced pay cut, Mr Gupta would get about S$11.26 million in 2023, assuming his base salary and benefits remain unchanged from 2022. DBS provides the breakdown of remuneration in its annual report in March.
Interestingly, despite DBS’ two-day digital banking service outage in November 2021, Mr Gupta’s total pay that year was nearly 50 per cent higher at S$13.6 million compared to 2020. Granted, his 2020 pay was cut, like his counterparts at other banks, as COVID-19 hit profits across the industry.
However, his 2021 package also exceeded his 2019 total pay of S$12.1 million, and his variable pay in 2021 was 55 per cent higher than in 2020. Both his annual cash bonus and deferred remuneration increased compared to the earlier years, and increased further in 2022.

This farker's pay was $12.13M in 2019 with subsequent astronomical increase to $15.4M in 2022 despite so many hiccups and outage causing so much misery to people.

So what's the point of cutting 30% of his salary to $11.26M when he wouldn't even feel a pinch?

Dunno why the fark is PAP continuing to employ this CECA Motherfarker and feed him tax payers monies despite so many screw ups.

https://www.businesstimes.com.sg/companies-markets/dbs-ceo-piyush-gupta-2019-pay-2-s121m

 

[LITTLEREDDOT]

"In 2023, the bank had a record year, with total income crossing the $20 billion mark for the first time. Net profit reached $10.3 billion and return on equity hit 18 per cent, which marked new highs."
Piyush Gupta can f**k up technology and everything but will not be sacked as long as he keeps making money for Temasek.

DBS CEO Piyush Gupta’s 2023 pay cut by 27% to $11.2 million​

The lower pay for Mr Piyush Gupta and other senior management reflected their accountability for digital disruptions in 2023. ST PHOTO: AZMI ATHNI

Sue-Ann Tan
Business Correspondent

MAR 06, 2024

SINGAPORE - DBS Bank chief executive officer Piyush Gupta was paid $11.2 million in 2023, the bank said in its annual report on March 6, a drop of 27 per cent from the $15.4 million he brought home in 2022.
This follows the bank’s announcement in February that the 2023 variable compensation for its CEO and other members of the group management committee was cut to hold them accountable for a series of digital disruptions in 2023.
DBS said in the report: “While the bank fared well against most priorities on its balanced scorecard, it fell short in technology resiliency.
“This and the resultant impact on customers and the franchise were taken into account when determining the scorecard performance of both the group and the CEO.”
The cut was made despite record 2023 profits and outperformance in many areas, it added.
In 2023, the bank had a record year, with total income crossing the $20 billion mark for the first time. Net profit reached $10.3 billion and return on equity hit 18 per cent, which marked new highs.
“The gaps in technology resiliency resulted in a lower scorecard appraisal by the board compared to the previous year,” it said in its remuneration segment of the report.


The remuneration is based on a scorecard that comprises key performance indicators like how the bank fares against shareholder, customer and employee indicators, as well as focus areas such as progress in transforming the bank, scaling growth across markets and managing risks.
Mr Gupta was not alone in receiving a pay cut.
The total variable pay for senior management including the CEO was reduced by 21 per cent to reflect senior management’s accountability for the digital disruptions, DBS said in the report.
Senior management’s aggregate total compensation – excluding that of the CEO – was lowered to $63.5 million in 2023, from $73.8 million in 2022.
Mr Gupta’s base salary, which stood at $1.5 million, remained unchanged, but he received a lower cash bonus of $4.1 million, a drop from $5.8 million in 2022. His deferred remuneration also dropped to $5.6 million.
Of the deferred award, about 17.4 per cent will be in cash, while the remaining will be in the form of share

 

[rushifa666]

See peesia moron grads? All his toilet paper are from university of Mumbai. You are lowered class than him. No matter hiw he fuck up he will never be fired

 

[birdie69]

"In 2023, the bank had a record year, with total income crossing the $20 billion mark for the first time. Net profit reached $10.3 billion and return on equity hit 18 per cent, which marked new highs."
Piyush Gupta can f**k up technology and everything but will not be sacked as long as he keeps making money for Temasek.

DBS CEO Piyush Gupta’s 2023 pay cut by 27% to $11.2 million​

The lower pay for Mr Piyush Gupta and other senior management reflected their accountability for digital disruptions in 2023. ST PHOTO: AZMI ATHNI

Sue-Ann Tan
Business Correspondent

MAR 06, 2024

SINGAPORE - DBS Bank chief executive officer Piyush Gupta was paid $11.2 million in 2023, the bank said in its annual report on March 6, a drop of 27 per cent from the $15.4 million he brought home in 2022.
This follows the bank’s announcement in February that the 2023 variable compensation for its CEO and other members of the group management committee was cut to hold them accountable for a series of digital disruptions in 2023.
DBS said in the report: “While the bank fared well against most priorities on its balanced scorecard, it fell short in technology resiliency.
“This and the resultant impact on customers and the franchise were taken into account when determining the scorecard performance of both the group and the CEO.”
The cut was made despite record 2023 profits and outperformance in many areas, it added.
In 2023, the bank had a record year, with total income crossing the $20 billion mark for the first time. Net profit reached $10.3 billion and return on equity hit 18 per cent, which marked new highs.
“The gaps in technology resiliency resulted in a lower scorecard appraisal by the board compared to the previous year,” it said in its remuneration segment of the report.


The remuneration is based on a scorecard that comprises key performance indicators like how the bank fares against shareholder, customer and employee indicators, as well as focus areas such as progress in transforming the bank, scaling growth across markets and managing risks.
Mr Gupta was not alone in receiving a pay cut.
The total variable pay for senior management including the CEO was reduced by 21 per cent to reflect senior management’s accountability for the digital disruptions, DBS said in the report.
Senior management’s aggregate total compensation – excluding that of the CEO – was lowered to $63.5 million in 2023, from $73.8 million in 2022.
Mr Gupta’s base salary, which stood at $1.5 million, remained unchanged, but he received a lower cash bonus of $4.1 million, a drop from $5.8 million in 2022. His deferred remuneration also dropped to $5.6 million.
Of the deferred award, about 17.4 per cent will be in cash, while the remaining will be in the form of share

Why must all the credits go to him when Delhi Bank of Sindiapore making f billions of profits? Is he the only one working and the rest of staff are sleeping?

 

[blackmondy]

Scammers had a great field time under this useless shitskin's watch.

 

[LITTLEREDDOT]

DBS/POSB digital banking services down for some customers​

This includes logging into their bank accounts on their apps and using PayLah!. PHOTOS: ST READER

Ang Qing

MAY 02, 2024


SINGAPORE - Some users of DBS/POSB’s digital services have reported difficulties accessing Singapore’s biggest bank’s services since about 5.40pm.
This includes logging into their bank accounts on their apps and using PayLah!.
The Downdetector website, which tracks service disruptions, recorded a total of more than 2,200 reports from users who had issues with DBS and POSB’s services at about 6.10pm.
This comes two days after the Monetary Authority of Singapore said it will lift restrictions on the bank’s non-essential banking activities, which had been imposed in response to disruptions to the bank’s services in 2023.
The Straits Times has contacted DBS Bank and the Monetary Authority of Singapore for comment.

 

[LITTLEREDDOT]

DBS may resume non-essential banking activities but higher capital buffer stays: MAS​

MAS said it will closely monitor DBS’ progress on the remaining deliverables and the effectiveness of the measures implemented. ST PHOTO: GIN TAY

Ang Qing


APR 30, 2024

SINGAPORE – The Monetary Authority of Singapore (MAS) has said it will not extend a six-month restriction on DBS Bank’s non-essential banking activities past April 30.
The pause was among penalties imposed on Nov 1 in response to disruptions to the bank’s services in 2023.
However, Singapore’s largest bank must continue to set aside additional regulatory capital by applying a multiplier of 1.8 times to its risk-weighted assets for operational risk – a penalty imposed in May 2023 – the authority said in a statement on April 30.
Such buffers help banks deal with unexpected losses and remain solvent in times of crisis.
In 2022, DBS Bank was required to apply a multiplier of 1.5 times to these assets after it suffered its worst outage in more than a decade the previous year.
In 2023, MAS imposed measures restricting the bank’s non-essential IT changes and barring it from acquiring new business ventures until April 30, following disruptions to DBS’ digital banking and ATM services in March and May that year.
On its decision to retain the capital requirement, MAS said on April 30: “The multiplier of 1.8 times will be lifted when MAS is satisfied that DBS Bank has demonstrated the ability to maintain service availability and reliability, and handle any disruptions effectively.”


MAS said the bank had made “substantive progress to address the shortcomings identified from service disruptions experienced by its customers in 2023”.
It added: “Improvements have been made to its technology risk governance, system resilience, change management and incident management.”
In its remediation process, some longer-term measures by DBS Bank, such as the simplification and strengthening of the bank’s systems architecture, are still being worked on.
MAS said it will closely monitor DBS’ progress on the remaining deliverables and the effectiveness of the measures implemented.
“In the event of service disruptions, MAS expects DBS Bank to promptly recover its services and communicate to its customers in a clear and timely manner,” it added.
Responding to the announcement, DBS Bank said it has been implementing a comprehensive technology resiliency road map since May 2023 to ensure that services run more smoothly for customers. Chief executive Piyush Gupta said: “The pause has allowed us to reflect on the areas we needed to improve on, and to better address them... In the months ahead, we will continue to prioritise resources to strengthening technology resiliency.”

 

[LITTLEREDDOT]

The Peter-Piyush show at DBS hits $100 billion, and Singapore should cheer​

The journey has not always been smooth, but it has eventually been rewarding for the bank.​

Ravi Velloor
Senior Columnist

DBS CEO Piyush Gupta (left) and DBS chairman Peter Seah (right) at the Singapore Corporate Awards held at the Ritz-Carlton, Millenia Singapore on Aug 30, 2022. PHOTO: SINGAPORE CORPORATE AWARDS

MAY 02, 2024

Earlier this week, at a Peranakan restaurant near Holland Village, DBS Group Chairman Peter Seah, some board members, and the bank’s top management including CEO Piyush Gupta gathered over drinks and dinner.
Mr Seah seemed to be in a good mood, frequently inclined to break into song.
Perhaps he had good reason; DBS, he surely knew, was poised to report another stellar quarter. What’s more, the bank’s market capitalisation was within sniffing distance of attaining $100 billion -- unprecedented for a Singapore firm.
On Thursday (May 2), it crossed that key marker, when the market opened to the news that DBS had delivered a record first quarter profit of $2.96 billion in January to March, 2024, a 15 per cent increase on year that beat estimates.
A $100 billion (US$73.5 billion) valuation is a hefty valuation for a firm sired and raised in a tiny island state, with a population of less than six million. With the high interest rate regime likely to persist for longer and MAS on April 30 lifting some curbs on the bank’s non-essential IT changes and on acquiring new business – punitive measures imposed in the wake of technology disruptions endured by the bank last year -- those valuations could be more enduring than a day’s blip on your Bloomberg or Reuters trading screens.
Singapore is a rare, developed country where banks lead the valuations; elsewhere, in the Group of Seven developed nations, Canada seems to be the only country in a similar situation. Tech companies lead in the US and Germany, fashion firms in France, and automakers in Japan and Italy. In Britain, pharma major AstraZeneca is the most valuable firm on the stock market.
As for DBS vis a vis its Asian banking peers, only the top Chinese, Indian and Japanese banks -- all servicing significantly bigger domestic markets -- exceed its market valuations.

“Crossing $100 billion in market capitalisation is a seminal moment for DBS and Singapore,” an exultant Mr Gupta told me. “It is testament to the value we have been able to unlock through the multi-year structural transformation of our franchise. We are also proud to fly Singapore’s flag high on the international stage. Our Return on Equity and Total Shareholder Return are now in the top decile of the world’s 100 largest banks.”

Pieces fall in place​

It is a moment to look back, and consider how DBS got here.
It was only in November, 2017 that the label of Singapore’s most valuable company, long held by SingTel, passed on to DBS, then worth a little more than $62 billion.


Both companies had started their overseas thrust around roughly the same time and SingTel too had built up a sizeable regional footprint; owning Australia’s No. 2 telco, and significant stakes in telcos in booming India and Indonesia, as well as in the Philippines and Thailand. While the two companies operate in different market circumstances, their fortunes have diverged significantly. DBS has gone on to make significant advances in value creation, but SingTel is worth less than $40 billion today.
By any yardstick, therefore, this has been an extraordinary corporate journey for DBS, a lender that began as a development bank spawned in the groves of the Economic Development Board.
The seeds for its current eminence were probably laid during the Asian Financial Crisis when the government forced banking consolidation, and POSB was folded into DBS, giving it added bulk.
On Mr Lee Kuan Yew’s prodding, DBS also began casting its net worldwide for talent, leading to John Olds coming in as the bank’s first non-Singaporean CEO.
Not all the CEOs who followed proved equally meritorious but in 2009, the board, led by then-Chairman Koh Boon Hwee and including the redoubtable tech entrepreneur NR Narayana Murthy of India’s Infosys, picked veteran Citi banker Piyush Gupta as CEO.

The DBS board, led by then-Chairman Koh Boon Hwee and including the redoubtable tech entrepreneur NR Narayana Murthy of India’s Infosys, picked veteran Citi banker Piyush Gupta as CEO in 2009. ST PHOTO: LIM YAOHUI
Mr Koh possibly saw in Mr Gupta a familiarity for and aptitude for technology that might prove useful for DBS’s future. It would prove an inspired choice.
A year later, the DBS Chair passed into the hands of Mr Peter Seah, the former President and CEO of OUB bank who had made his mark in an earlier era by famously buying the credit-card business of Chase Manhattan Bank as it exited retail in Asia – a purchase that would lead to a windfall for OUB.
Big personalities both – Mr Seah was known to haze juniors during his student days at University of Singapore and in the 1990s gave OUB a profile way in excess of its standing as the smallest of Singapore’s four big banks of the time-- the two seem to have settled into a mutually comfortable relationship.
Both are known to carry a fine understanding of the imperatives of balancing between short-term results and investing for the long term.

Mr Peter Seah assumed the role of chairman at DBS on May 1, 2010. PHOTO: DBS BANK
Together, they famously called on Chinese tech entrepreneur Jack Ma in 2014, as Alibaba prepared to list in New York. The meeting put terror into the pair that platforms like Alibaba could disrupt banking eventually.
“If it walks like a duck, and talks like a duck, it is a bank,” Mr Gupta once quipped to me.
It left Mr Gupta convinced that if DBS did not disrupt its own bank, some other entity, such as Alibaba’s Ant Financial, would do so.
The DBS board swiftly handed Mr Gupta $200 million to pursue a digitalisation strategy. That strategy would have three key pillars: being digital to the core, embedding the bank in the customer journey, and thinking and acting like a startup.

Overcoming disruptions​

The results are plain to see, and the early start on digitalisation proved especially beneficial amid the disruptions brought by the pandemic.
The haste to digitalise also brought issues. Disruptions to DBS’s digital banking and ATM services -- in 2023, there were issues in March and May -- vexed thousands of Singaporeans and put the bank in an unfavourable light.
Even as the bank had a record year, the board cut Mr Gupta’s compensation by more than a quarter because of this, and several in top management also saw their packages trimmed.
The tech hiccups, some bank insiders tell me, were on account of too many technological pieces being moved too fast at the same time along the various businesses.
DBS also revealed last November that it had financed property purchases by individuals or companies that are being investigated by Singapore authorities for money laundering.
Those issues aside, there is little doubt that DBS is now operating with a remarkable degree of efficiency and investors are responding.
In 2015, DBS was 46th for return on equity (ROE) -- 11.2 per cent -- among the world’s Top 100 banks. At the end of 2023, it had jumped to No. 7 on this measure, with an ROE of 18 per cent.
This out-performance was not on account of NIM, or net interest margin, but structural improvements and a soaring deposit franchise led by digital capabilities. High return businesses such as wealth management and global transaction services also contributed.
By end-2023, its price to book was among the highest globally, outstripping local peers and global institutions such as HSBC, Citi and Deutsche Bank.
The bank seems confident it can continue this solid performance.
A slide presentation made to analysts following full year 2023 results asserted that “we are confident of achieving medium term ROE of 15 per cent to 17 per cent despite normalisation of interest rates and credit costs, as well as changing tax regimes.”

Disruptions to DBS’s digital banking and ATM services in 2023 had vexed thousands of Singaporeans and put the bank in an unfavourable light. ST PHOTO: AZMI ATHNI
Wider industry also acknowledges the transformation at DBS.
“Contemporary banking is about technology and of course, the traditional skill of risk mitigation,” a senior figure in the consulting industry told me recently. “DBS did the tech part well and there have been no blowups on the risk side. You are looking at the results.”
DBS staff talk of a CEO who runs a tight ship, is completely involved in the business, and communicates effectively -- both directly and through a formidable communications team.
Most importantly, Mr Gupta “gets” technology, they say. Although his degrees are in economics and management, tech staff whom he confronts go well-prepared into meetings expecting to be asked penetrating questions.
Some of that dates back to 1985, when, in his early days at Citi, he was asked to lead the transformation when the bank’s India operations started automating its manual-based ledgers.
“What outsiders and customers see in DBS today is just the lipstick,” a senior figure in the bank told me this week. “The real story is backstage – how the technology platform is used and managed, the agility of the technology engine, and how it is used to extract data. Every serious discussion in the bank inevitably includes technology.”

DBS’ market capitalisation was within sniffing distance of attaining $100 billion - unprecedented for a Singapore firm. ST PHOTO: LIM YAOHUI
Mr Gupta once told me that his mission and vision is to “make DBS invisible… to hide DBS inside everything else you want to do with your life.”
As for Mr Seah, who is 77 this year, he can look back on this moment as cresting a long and distinguished career in finance, and helping to shape the industry here.
Back in 1997, as the Asian Financial Crisis swirled, then-Deputy Prime Minister Lee Hsien Loong had asked him to chair the Sub-committee on Banking and Finance which was part of the larger Committee on Singapore’s Competitiveness.
In doing so, Mr Lee had thrown Mr Seah’s committee the longest rope he could have wished for: “I have told them that if all their proposals are accepted, it probably means that they have not been radical enough.”
Mr Seah’s committee returned with 55 proposals to place Singapore at the heart of the Asian financial services industry. Not all were accepted.
Today, as Prime Minister Lee prepares to leave office, Mr Seah can look him in the eye and say he has delivered in more ways than one.

 

[LITTLEREDDOT]

DBS and POSB digital banking services restored after disruption lasting more than 2 hours​

The issues DBS users faced include logging into their bank accounts on their apps and using PayLah!. PHOTOS: ST READER

Ang Qing

MAY 02, 2024

SINGAPORE - Some DBS/POSB customers reported difficulties accessing the digital services of Singapore’s biggest bank for more than two hours on May 2.
From about 5.40pm, several users had faced issues logging in to their bank accounts online and on their apps, and using PayLah!.
The Downdetector website, which tracks service disruptions, recorded a total of more than 2,200 reports from users who had issues with DBS and POSB’s services at about 6.10pm.
DBS Bank, in a statement on Facebook at 6.54pm, acknowledged that customers were experiencing issues with DBS/POSB digibank Online and Mobile, and DBS PayLah!.
It said: “We have identified the issue and have activated measures to recover the services.
“You can continue to use your DBS/POSB credit or debit cards to make payment. Alternatively, to find the ATM nearest to you, please visit go.dbs.com/sg-locator.”
The bank assured customers that their money and deposits remained safe.

Disgruntled customers took to social media to air how they had been affected by the disruption.
Facebook user Jess Thia said she could not pay for her meal during the peak period for dinner, while another user Jimmy Tang quipped that “we are supposed to go cashless... not be cashless and unable to pay”.
In an update at 9.10pm, DBS said its services were progressively restored between 7.37pm and 8.03pm.
However, checks by The Straits Times at about 9.25pm found that some users were notified that high-risk transactions could not be made as several services remained unavailable.

Some users were notified that high-risk transactions could not be made as several services remained unavailable. PHOTO: ST READER
The service disruption comes two days after the Monetary Authority of Singapore said it will not extend a six-month restriction on DBS’ non-essential banking activities.
The restriction had been imposed in response to disruptions of the bank’s services in 2023.
The bank, however, must continue to set aside additional regulatory capital, a penalty imposed in May 2023 for the service disruptions.
On April 30, DBS said it has been implementing a comprehensive technology resiliency road map to deliver a higher degree of service availability to customers since May 2023.
Several areas, including the strengthening of the bank’s systems architecture, remain a “work in progress”, the bank said then.