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01-09-2015, 11:02 PM
Singapore’s DBS looks for bigger slice of investment pie
Michael Bennet
[Image: michael_bennett.png]
Reporter
Sydney
[Image: 382453-a9548d26-5071-11e5-b4b9-6e09adcdd8b2.jpg]
DBS head of institutional banking Jeanette Wong and CEO Piyush Gupta. Picture: James CroucherSource: News Corp Australia
[b]Singapore’s DBS Bank, the newest foreign player to enter Australia, has outlined plans to grow its corporate loan book to $5 billion in the next few years and pick off slivers of the investment banking market.[/b]
After winning approval in June from the regulator to carry out institutional banking, DBS chief executive Piyush Gupta, alongside NSW Treasurer Gladys Berejiklian, yesterday officially launched the group’s branch in Sydney.
Acknowledging challenges such as the dominance of the big four banks and the downturn in commodity prices that is dragging on the economy, Mr Gupta said Southeast Asia’s biggest bank, however, believed the “megatrend” of Australia’s integration into Asia was only just beginning.
DBS helped finance Vitol’s $2bn buyout of Shell Australia’s downstream assets, plus the consortiums that bought Port Botany and Port of Newcastle.
“Our views are driven by long-term megatrends of what is happening around the region, not where the short-term cycles are. We’re of the belief Australia’s integration into Asia is inexorable,” Mr Gupta said yesterday.
“We’re obviously cognisant of the fact the Aussie banks are big, so we have no intention of going up against the Aussie banks. The banking market is an oligopoly … I don’t think anyone is going to take meaningful share away from (them).”
DBS, whose market value is about $44bn, is the 41st foreign bank operating through a branch. There are also seven foreign subsidiary banks, such as Asian majors HSBC and Bank of China, according to The Australian Prudential Regulation Authority.
DBS, which has employed about 20 local staff, has no plans to expand into retail banking like deposits and mortgages, but Mr Gupta conceded the rapid shift to digital could one day present retail opportunities.
DBS continues the trend in recent years of growing interest from Asian banks, which have increased their share of assets as Europeans withdrew, according to the Reserve Bank.
But while the number of foreign-owned banks has more than doubled since the early 1990s, they have struggled to increase their overall share of assets.
Backed by the Singaporean government’s 29 per cent stake in the bank, Mr Gupta said DBS had “deep pockets” and more capital to put to work than many global rivals. He said DBS could grow loans to $4bn-$5bn in the next “couple of years”, mostly from “new business” rather than taking market share from the big four.
“I think there is an opportunity to build a nice and important business which is linked to this connectivity to Asia. And while it won’t ever challenge the big four, I think it can be a meaningful and material business for a player like ourselves.
“It allows us to fill out the suite we need to offer our Asian clients (and) it allows us to service a set of new Australian clients as they come into Asia.” Mr Gupta said it was “natural” for Australia to increasingly “plug into” Asia as global growth shifted to the east, which was more than just a “China story”, but also driven by nations like Indonesia and India.
And while the mining sector was struggling, the export of Australian services would be the “next big thing”, particularly tourism, education, professional services, property, and healthcare. “We are just at the cusp of a massive integration story,” he said.
DBS will offer loans, trade finance, acquisition financing and structuring, plus “niche” investment banking services like corporate advice.
But a full-scale investment bank with equity capital markets was not on the cards. “We tend to leverage the fact we have a lot of client footprint and use that for our M&A business — which is actually a very profitable M&A business — but not by hiring a lot of investment bankers,” Mr Gupta said. “Our investment banking capabilities are good but we prefer it to be more niche because we’re not trying to compete with the Goldmans of the world in the global marketplaces in that category.”
- THE AUSTRALIAN
- SEPTEMBER 02, 2015 12:00AM
Michael Bennet
[Image: michael_bennett.png]
Reporter
Sydney
[Image: 382453-a9548d26-5071-11e5-b4b9-6e09adcdd8b2.jpg]
DBS head of institutional banking Jeanette Wong and CEO Piyush Gupta. Picture: James CroucherSource: News Corp Australia
[b]Singapore’s DBS Bank, the newest foreign player to enter Australia, has outlined plans to grow its corporate loan book to $5 billion in the next few years and pick off slivers of the investment banking market.[/b]
After winning approval in June from the regulator to carry out institutional banking, DBS chief executive Piyush Gupta, alongside NSW Treasurer Gladys Berejiklian, yesterday officially launched the group’s branch in Sydney.
Acknowledging challenges such as the dominance of the big four banks and the downturn in commodity prices that is dragging on the economy, Mr Gupta said Southeast Asia’s biggest bank, however, believed the “megatrend” of Australia’s integration into Asia was only just beginning.
DBS helped finance Vitol’s $2bn buyout of Shell Australia’s downstream assets, plus the consortiums that bought Port Botany and Port of Newcastle.
“Our views are driven by long-term megatrends of what is happening around the region, not where the short-term cycles are. We’re of the belief Australia’s integration into Asia is inexorable,” Mr Gupta said yesterday.
“We’re obviously cognisant of the fact the Aussie banks are big, so we have no intention of going up against the Aussie banks. The banking market is an oligopoly … I don’t think anyone is going to take meaningful share away from (them).”
DBS, whose market value is about $44bn, is the 41st foreign bank operating through a branch. There are also seven foreign subsidiary banks, such as Asian majors HSBC and Bank of China, according to The Australian Prudential Regulation Authority.
DBS, which has employed about 20 local staff, has no plans to expand into retail banking like deposits and mortgages, but Mr Gupta conceded the rapid shift to digital could one day present retail opportunities.
DBS continues the trend in recent years of growing interest from Asian banks, which have increased their share of assets as Europeans withdrew, according to the Reserve Bank.
But while the number of foreign-owned banks has more than doubled since the early 1990s, they have struggled to increase their overall share of assets.
Backed by the Singaporean government’s 29 per cent stake in the bank, Mr Gupta said DBS had “deep pockets” and more capital to put to work than many global rivals. He said DBS could grow loans to $4bn-$5bn in the next “couple of years”, mostly from “new business” rather than taking market share from the big four.
“I think there is an opportunity to build a nice and important business which is linked to this connectivity to Asia. And while it won’t ever challenge the big four, I think it can be a meaningful and material business for a player like ourselves.
“It allows us to fill out the suite we need to offer our Asian clients (and) it allows us to service a set of new Australian clients as they come into Asia.” Mr Gupta said it was “natural” for Australia to increasingly “plug into” Asia as global growth shifted to the east, which was more than just a “China story”, but also driven by nations like Indonesia and India.
And while the mining sector was struggling, the export of Australian services would be the “next big thing”, particularly tourism, education, professional services, property, and healthcare. “We are just at the cusp of a massive integration story,” he said.
DBS will offer loans, trade finance, acquisition financing and structuring, plus “niche” investment banking services like corporate advice.
But a full-scale investment bank with equity capital markets was not on the cards. “We tend to leverage the fact we have a lot of client footprint and use that for our M&A business — which is actually a very profitable M&A business — but not by hiring a lot of investment bankers,” Mr Gupta said. “Our investment banking capabilities are good but we prefer it to be more niche because we’re not trying to compete with the Goldmans of the world in the global marketplaces in that category.”
