DBS (Development Bank of Singapore)

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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.”
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http://www.valuebuddies.com/thread-5552-...#pid120145
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DBS is the logical choice, among the three local banks, for the China newly launched CIPS...

DBS among banks China selects for international payments

SINGAPORE (Oct 8): DBS Group Holdings ( Valuation: 2.40, Fundamental: 2.20) says it is among the first batch of banks selected by China's central bank for its cross-border international payments system.

The new system, launched on Thursday, will clear yuan transactions overseas.

"As the first and only Singapore bank chosen for the launch, the bank is committed to leverage its experience in Asian financial markets like Singapore and Hong Kong to support developments in renminbi internationalisation and China's financial reforms," DBS says.

The yuan is now widely used for international trade, investments and official reserves.
http://www.theedgemarkets.com/sg/article...l-payments
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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Don't Be Stupid Lah:

Big is not always beautiful... it is the quality that matters... rara kings and queens are the ones focusing on numbers... the real GODFathers focus on working the qualities and deliver them

http://www.straitstimes.com/business/ban...tor=CS3-17

[img=100x66]filesystem:chrome-extension://clhhggbfdinjmjhajaheehoeibfljjno/temporary/812340242_42447_7466023526066979211.jpg[/img]
The Straits Times
DBS ranked 8th largest private bank in Asia-Pacific, Banking News & Top Stories - The Straits Times
Banking News -SINGAPORE - DBS is now the eighth largest private bank in the Asia-Pacific by assets under management (AUM), bigger even than Morgan Stanley, according to annual rankings released on Friday (Oct 16) by Private Banker International, a journal for the global wealth industry.. Read more at straitstimes.com.
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(17-10-2015, 07:06 AM)greengiraffe Wrote: Don't Be Stupid Lah:

Big is not always beautiful... it is the quality that matters... rara kings and queens are the ones focusing on numbers... the real GODFathers focus on working the qualities and deliver them

http://www.straitstimes.com/business/ban...tor=CS3-17

[img=100x66]filesystem:chrome-extension://clhhggbfdinjmjhajaheehoeibfljjno/temporary/812340242_42447_7466023526066979211.jpg[/img]
The Straits Times
DBS ranked 8th largest private bank in Asia-Pacific, Banking News & Top Stories - The Straits Times
Banking News -SINGAPORE - DBS is now the eighth largest private bank in the Asia-Pacific by assets under management (AUM), bigger even than Morgan Stanley, according to annual rankings released on Friday (Oct 16) by Private Banker International, a journal for the global wealth industry.. Read more at straitstimes.com.

In some industries, size does matter. One of them, is Private Banking. The regulatory cost is getting higher, and only those with "sufficient" size, will survive. There is no surprise to see consolidation of private banking market, which includes DBS bought SocGen Asia Private Banking biz not too long ago  Big Grin

(not vested)
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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(17-10-2015, 09:50 PM)CityFarmer Wrote:
(17-10-2015, 07:06 AM)greengiraffe Wrote: Don't Be Stupid Lah:

Big is not always beautiful... it is the quality that matters... rara kings and queens are the ones focusing on numbers... the real GODFathers focus on working the qualities and deliver them

http://www.straitstimes.com/business/ban...tor=CS3-17

[img=100x66]filesystem:chrome-extension://clhhggbfdinjmjhajaheehoeibfljjno/temporary/812340242_42447_7466023526066979211.jpg[/img]
The Straits Times
DBS ranked 8th largest private bank in Asia-Pacific, Banking News & Top Stories - The Straits Times
Banking News -SINGAPORE - DBS is now the eighth largest private bank in the Asia-Pacific by assets under management (AUM), bigger even than Morgan Stanley, according to annual rankings released on Friday (Oct 16) by Private Banker International, a journal for the global wealth industry.. Read more at straitstimes.com.

In some industries, size does matter. One of them, is Private Banking. The regulatory cost is getting higher, and only those with "sufficient" size, will survive. There is no surprise to see consolidation of private banking market, which includes DBS bought SocGen Asia Private Banking biz not too long ago  Big Grin

(not vested)

Private banking is high class bucket shop. VB is anytime sharper than the nice looking suit and jacket bankers that know nuts about asset classes let alone the global mandates that they are talking about.

In an environment that has been ever closer due to the deluge of information made available by the www, intermediaries are fast becoming a facilitator of trades at lowest costs. Lowest costs also means that the quality of advice is questionable.

Caveat Emptor is the ultimate cautionary statement.

GG was part of advisory desk in PB during the nascent eras of the 90s and since then not much had progressed. The serious bankers are the ones that really pull together a set of clients and help them in meeting the deals that clients originated hardly the other way round. The rest of the bankers are just high class bucket shop brokers that appear good but lacking in quality.

Just watch out for negative surprises on DBS' upcoming results.

UOB also has their own PB unit but most likely they are the true blue quality books while OCBC is taking the middle road on the organic vs inorganic path.

Not Vested
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Hi GG, what do u mean by the true blue quality book that UOB is likely to have?
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(18-10-2015, 08:26 AM)blah Wrote: Hi GG, what do u mean by the true blue quality book that UOB is likely to have?

There is a difference between growing a business organically and know your clients well to grow with them.

There is also a difference in buying a business and buying them rapidly to gain scale of business in hope to cut costs and cause demoralised employees and disllusioned long term clients.

There is also a difference in acquiring a quality business and take time to integrate both the new employees and clients into an existing culture...

U decide what you are after and what you are happy with.

YMMV
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Ic. Thanks!
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Hi GG,

Have a curious question. What is the difference in products offered to private banking clients and that of regular clients? Personally, I feel there is not much difference in the products peddled out to both groups. It is still the same where the bank offers bonds or funds and then extract a high management fee for managing these funds.

Perhaps you can offer insights in the difference between the both. Thanks!
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