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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published June 18, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>DBS in strategic rethink over business abroad
Bank plans to focus more on supporting foreign ventures of Asian businesses and rich clients
By CONRAD TAN
(SINGAPORE) DBS Group is rethinking the way it does wholesale banking in the Middle East, Europe and the United States, and is planning to focus more on supporting the overseas ventures of Asian businesses and rich clients, instead of broad corporate lending.
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>'We're reviewing all our businesses and investments to see how we can maximise our capital and focus on doing the things we can do well.'
</TD></TR><TR><TD vAlign=top>
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>The bank will still lend to local firms in those markets, but will seek out those looking to invest in Asia or set up operations here.
This sharper focus on business segments where it has an edge over local rivals in overseas markets is the result of taking a hard look at the group's businesses and where its strengths lie, DBS chairman Peter Seah said yesterday.
'We're reviewing all our businesses and investments to see how we can maximise our capital and focus on doing the things we can do well,' he said. 'We're in a hurry to do that because we want to move our performance up quickly.'
Facilitating investments into Asia can be a very profitable focus for DBS's overseas operations in the US, Europe and the Middle East, Mr Seah said, in his first full-length interview since he became chairman on May 1.
'It's something that we need to focus more on, because at the moment, our operations in those countries are really standalone lending units which do not necessarily generate the type of value-add that we should be generating,' he said.
'With a small presence in London or Los Angeles (where its Europe and US offices are) there is just so much you can do in a domestic market. You're very challenged to be able to compete with the domestic banks, because your funding is limited to interbank funding.
'Where we have enormous value-add would be the Asian perspective and flavour.'
DBS only gives details of its operations in Singapore, Hong Kong, the rest of Greater China and South and South-east Asia. Loans elsewhere - including the Middle East, US and Europe - made up $15.7 billion, or 11.4 per cent, of the group's $137 billion in customer loans at the end of March. In 2009, the 'rest of the world' operations contributed just $336 million in income - 5.1 per cent of the total - and $120 million, or 5.9 per cent, of the group's net profit.
DBS has already changed the focus of some of its businesses, including its Islamic Bank of Asia (IB Asia) subsidiary, which suffered a US$77.1 million loss last year due to bad loans in the Middle East.
DBS said last month that IB Asia will focus more on investment banking and private equity, rather than corporate lending. Some IB Asia staff have been moved to DBS, though none lost their jobs.
'We ran into some problems in our presence in the Middle East,' Mr Seah said. 'We had moved quite fast in the Middle East before. We need to pause now and review what we need to do. It's important that we focus our capital and our people on the areas of growth that make the most sense to the bank.'
Earlier this year, DBS also sold its stake in Indian joint venture Cholamandalam DBS Finance (Chola) at a heavy loss, after Chola's ill-fated expansion into consumer finance that saddled it with bad loans during the financial crisis.
DBS is now expanding in India on its own. It has 10 branches there and hopes to open up to six more, focusing on serving businesses and the rich.
But the group isn't about to pull back from its overseas operations. Rather, it wants to concentrate on business segments where it has an edge over local rivals, Mr Seah said.
'Our primary thrust is to service our customers in Asia. But many of our corporate customers and private bank customers are global in the way they operate and invest,' he said. 'So it's quite important for us to be able to provide the non-Asian part of the connectivity. Otherwise, we may lose out on the growth part of the business.'
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT>[/FONT]</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>DBS in strategic rethink over business abroad
Bank plans to focus more on supporting foreign ventures of Asian businesses and rich clients
By CONRAD TAN
(SINGAPORE) DBS Group is rethinking the way it does wholesale banking in the Middle East, Europe and the United States, and is planning to focus more on supporting the overseas ventures of Asian businesses and rich clients, instead of broad corporate lending.
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
</TD></TR><TR><TD vAlign=top>
- Mr Seah
</TD></TR><TR><TD vAlign=top>
</TD></TR></TBODY></TABLE></TD></TR><TR><TD height=39>
This sharper focus on business segments where it has an edge over local rivals in overseas markets is the result of taking a hard look at the group's businesses and where its strengths lie, DBS chairman Peter Seah said yesterday.
'We're reviewing all our businesses and investments to see how we can maximise our capital and focus on doing the things we can do well,' he said. 'We're in a hurry to do that because we want to move our performance up quickly.'
Facilitating investments into Asia can be a very profitable focus for DBS's overseas operations in the US, Europe and the Middle East, Mr Seah said, in his first full-length interview since he became chairman on May 1.
'It's something that we need to focus more on, because at the moment, our operations in those countries are really standalone lending units which do not necessarily generate the type of value-add that we should be generating,' he said.
'With a small presence in London or Los Angeles (where its Europe and US offices are) there is just so much you can do in a domestic market. You're very challenged to be able to compete with the domestic banks, because your funding is limited to interbank funding.
'Where we have enormous value-add would be the Asian perspective and flavour.'
DBS only gives details of its operations in Singapore, Hong Kong, the rest of Greater China and South and South-east Asia. Loans elsewhere - including the Middle East, US and Europe - made up $15.7 billion, or 11.4 per cent, of the group's $137 billion in customer loans at the end of March. In 2009, the 'rest of the world' operations contributed just $336 million in income - 5.1 per cent of the total - and $120 million, or 5.9 per cent, of the group's net profit.
DBS has already changed the focus of some of its businesses, including its Islamic Bank of Asia (IB Asia) subsidiary, which suffered a US$77.1 million loss last year due to bad loans in the Middle East.
DBS said last month that IB Asia will focus more on investment banking and private equity, rather than corporate lending. Some IB Asia staff have been moved to DBS, though none lost their jobs.
'We ran into some problems in our presence in the Middle East,' Mr Seah said. 'We had moved quite fast in the Middle East before. We need to pause now and review what we need to do. It's important that we focus our capital and our people on the areas of growth that make the most sense to the bank.'
Earlier this year, DBS also sold its stake in Indian joint venture Cholamandalam DBS Finance (Chola) at a heavy loss, after Chola's ill-fated expansion into consumer finance that saddled it with bad loans during the financial crisis.
DBS is now expanding in India on its own. It has 10 branches there and hopes to open up to six more, focusing on serving businesses and the rich.
But the group isn't about to pull back from its overseas operations. Rather, it wants to concentrate on business segments where it has an edge over local rivals, Mr Seah said.
'Our primary thrust is to service our customers in Asia. But many of our corporate customers and private bank customers are global in the way they operate and invest,' he said. 'So it's quite important for us to be able to provide the non-Asian part of the connectivity. Otherwise, we may lose out on the growth part of the business.'
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT>[/FONT]</TD></TR></TBODY></TABLE>
