DBS CEO Piyush Gupta is unsackable

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DBS faces lawsuits in India after takeover of Lakshmi Vilas Bank​

DBS's Lakshmi Vilas acquisition was the first time the Reserve Bank of India turned to a foreign lender to bail out a local bank. PHOTO: ST FILE

FEB 21, 2021

SINGAPORE (BLOOMBERG) - DBS Group Holdings, South-east Asia's largest lender, said it's facing lawsuits in India related to its recent takeover of a struggling local bank.
Holders of Lakshmi Vilas Bank's equity shares and Tier-II bonds that were written off before the effective date of amalgamation took legal actions against DBS's local unit in various high courts in India, the Singapore-based lender said in a reply to questions from Bloomberg News.
The acquisition was completed on Nov 27, DBS said earlier this month.
"DBS has no incremental unprovided risks on these lawsuits," it said. "Other legal liabilities in the normal course of business have also been suitably provided for."
DBS's Lakshmi Vilas acquisition was the first time the Reserve Bank of India turned to a foreign lender to bail out a local bank as India's financial industry suffered a series of shocks since the outbreak of a shadow banking crisis in 2018.
While the suits named DBS' India unit as a respondent, the primary respondents would be the Indian government and the RBI, who drafted and approved the amalgamation programme, according to DBS. An RBI spokesman declined to comment on the matter.
DBS chief executive officer Piyush Gupta expects Lakshmi Vilas to become profitable in 12 to 24 months as the Singapore bank sets aside amalgamation expenses and allowances for soured assets, he said at a Feb 10 earnings media briefing.

 

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DBS says digital services disruption has recurred after services were restored on Wed morning​

DBS said all of its digital banking services had been restored as at 2am, after service outages were reported at about 10am on Nov 23 (right), but some users were still unable to access the services at 9am (left). PHOTOS: SCREENGRAB FROM ST READER, TWITTER

Isabelle Liew

NOV 25, 2021

SINGAPORE - A "digital banking issue" that disrupted services for DBS Bank and POSB users for more than 15 hours recurred on Wednesday morning (Nov 24).
DBS, in an update to its Facebook post at 10.50am, said its services had been restored early Wednesday morning. But "unfortunately, yesterday's digital banking issue has recurred and this has affected our services," it added.
"We know this has affected many of our customers, and we are doing our best to resolve the situation. We apologise for the inconvenience caused."
Earlier, at about 8.15am, DBS said all of its digital banking services had been restored as at 2am, after service outages were reported at about 10am on Tuesday. It also acknowledged the severity of the situation.
But some users were still unable to access the services at 9am, and took to DBS' Facebook page to complain about the prolonged disruption.
More than 360 outage reports were made at 9.15am, according to outage monitoring website Downdetector, which tracks outages by collating status reports from a series of sources, including user-submitted errors on its platform.
Facebook user Ronny Gunawan said: "The mobile app is still (showing) the same error 'digital services are not available' and 24 hours have passed since it started."

Another user, Alvin Lim, said: "Still unable to access any online banking services like eNets or Paynow. The issue has not been fixed."
At around midnight, the bank said that DBS PayLah! and e-commerce transactions were available, but the recovery process for digibanking services was still ongoing.
The disruption of DBS' Internet and mobile banking services began at around 10am on Tuesday. Almost 600 reports were made on Downdetector at about 2.30pm.
DBS also took some services - such as digibank and e-commerce transactions - offline from 10pm to 11pm on Tuesday night as part of recovery efforts.
Payment services provider Nets said in an updated Facebook post at around 9am on Wednesday that its eNETS Debit service has been fully restored.
In a Facebook post at around 1pm on Tuesday, Nets had said that the eNETS Debit service for DBS customers was temporarily unavailable.
"DBS customers using eNETS debit Internet banking will not be able to perform any transactions for the time being. We are working with DBS to restore the service as soon as possible and apologise for the inconvenience caused," it said.

 

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DBS suffers worst disruption in a decade, may face 'supervisory action' from MAS​

The app was still inaccessible at 5pm on Nov 24 (left). At 10.35pm, DBS said its digital banking services were “returning to normal”. ST PHOTOS: BENJAMIN SEETOR
Rei Kurohi and Isabelle Liew

NOV 25, 2021

SINGAPORE - A problem with DBS Bank's access control servers disrupted its online banking services, including PayNow, for the second day on Wednesday (Nov 24).
Reacting to the bank's worst outage in more than a decade, the Monetary Authority of Singapore (MAS) said it will consider taking "supervisory action".
"This is a serious disruption and MAS expects DBS to conduct a thorough investigation to identify the root causes and implement the necessary remedial measures," said MAS assistant managing director of banking and insurance Marcus Lim.
"MAS will consider appropriate supervisory actions following the investigation," he added in a statement on Wednesday evening.
"MAS expects all financial institutions to have systems and processes to ensure the consistent availability of financial services to their customers," he said.
Under MAS regulations, financial institutions must ensure that the total unscheduled downtime for critical systems affecting services for customers does not exceed four hours within any 12-month period.
Banks must also inform MAS of any incidents affecting critical systems within an hour.

In a Facebook video post on Wednesday, DBS country manager for Singapore Shee Tse Koon apologised to affected customers for causing them inconvenience and blamed faulty access control servers for the outage.
He did not elaborate on details of the server fault.
Access control servers are part of a bank's security system. They handle both log-in and payment verification using means such as biometrics, authentication tokens and one-time passwords.

"Please rest assured that my colleagues and I are doing all that we can to remedy the situation," Mr Shee said.

The disruption, which was first reported at around 10am on Tuesday, is the worst DBS has seen since 2010, when a major systems failure took down all consumer and business banking services at DBS. Customers were unable to withdraw cash from ATMs or make point-of-sale payments for about seven hours.
Mr Shee on Wednesday assured customers that cash deposits belonging to DBS and POSB customers are safe, and transactions can still be made in person at bank branches or through phone banking.
The bank said services were fully restored at around 2am on Wednesday but the same problem later recurred, with users complaining they were still unable to log in to the app and website at around 9am.
"I know that many of you have been facing difficulties accessing our digital banking services. I realise that this is a cause for concern and frustration, and I'm very sorry for the inconvenience and the anxiety it has caused," Mr Shee said.
He added: "While the situation is less severe than yesterday, we know that many of you are still unable to get access. We acknowledge the gravity of the situation and as we work to resolve matters, we seek your patience and understanding."

As at 5pm on Wednesday, users said some functions such as ATM withdrawals, card payments and DBS PayLah! were working, but the DBS website and mobile app were still inaccessible.
At 10.35pm, DBS said its digital banking services were "returning to normal", adding that it was monitoring the situation closely to ensure all services run smoothly.
Home-based baker Adeline Tan, 25, who sells her wares on Instagram, was among those affected by the disruption.
"Some of my customers were not able to make payment via PayNow today, but they are my regular customers, so I'm okay with them not paying yet as I trust that they'll pay once their DBS apps are working," she said.
"I usually pay my egg supplier via PayNow too and I haven't been able to since yesterday, but he has been very understanding."
Administrative assistant Clarice Pereira, 55, had to cancel a booking she had made for a nurse to look after her brother, a stroke patient, this weekend.
The service required payment to confirm the booking, and DBS is the only bank she uses for Internet banking, she said.
Ms Pereira managed to find a different service that agreed to take payment later, but she said the incident had prompted her to look into services at other banks.
"This has taught me not to rely on one bank for Internet banking," she added.

While DBS customers outside Singapore also could not access their Singapore-based accounts, those with accounts that were opened under the bank's overseas branches were not affected.
DBS spokesmen in Hong Kong, India and Indonesia told The Straits Times that their services were not facing any disruptions.
The bank also debunked rumours that the disruption in Singapore was linked to the sale of treasury bonds in Myanmar.
DBS said in a tweet on Wednesday: "There have been rumours that DBS' digibanking service disruption is linked to the sale of treasury bonds by Myanmar's National Unity Government. There is no truth to this. DBS has not sold any such bonds."

A number of news outlets in Myanmar had reported that the disruption was caused by a high volume of transactions after Myanmar nationals used DBS and POSB online services to buy zero-interest bonds issued by the National Unity Government (NUG).
Reuters news agency on Wednesday reported that the NUG had raised US$6.3 million (S$8.6 million) on the opening day of its inaugural bond sale on Monday to mainly Myanmar nationals overseas.
The NUG's target is to raise US$1 billion for a "revolution" to oust the military government that seized power in a coup in February.

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Past service outages at Singapore banks​

July 2021​

UOB customers were unable to access Internet and mobile banking services for about two hours. The bank apologised for the incident but did not provide details on what caused it.

November 2020​

Some DBS customers faced difficulties in accessing the business banking portal DBS Ideal for about a day. DBS said a small number of its corporate customers were facing "intermittent delays" but did not elaborate on the cause of the issue.

June 2019​

UOB's ATM, card payment, Internet banking and mobile application services were disrupted for about two hours. The bank apologised for the incident but did not provide details on what caused it.

September 2018​

OCBC's ATM network, online banking channels, Nets and card services were disrupted for about three hours. OCBC said a software failure caused the bank's systems to stop accepting new data, and subsequent human oversight resulted in the glitch not being detected for rectification earlier.

July 2018​

UOB apologised for a five-minute disruption to its ATM services.

February 2018​

Human error during maintenance works caused an islandwide service disruption to the Nets cashless payment system owned by DBS, OCBC and UOB. The disruption lasted nearly two hours.

November 2012​

Several DBS and POSB ATMs were out of service for an unspecified amount of time. DBS did not reveal the total number of affected ATMs or the cause of the issue.

September 2012​

UOB's ATMs and Nets services were disrupted for about an hour due to a technical fault.

September 2011​

A system-wide technical glitch affected OCBC's ATMs, card payments and Internet banking platforms for over four hours. A faulty connectivity device was blamed for the glitch, which "prevented the core banking system from connecting properly to the various front-end banking systems", OCBC said then.
The Monetary Authority of Singapore (MAS) reprimanded the bank, and ordered it to conduct thorough reviews of its systems.

July 2010​

An incorrect maintenance procedure by IBM engineers caused a major systems failure that took down all consumer and business banking services at DBS. Customers were unable to withdraw cash from ATMs or make point-of-sale payments for about seven hours.
The bank was censured by MAS and was required to set aside an extra $230 million in regulatory capital for operational risk.

 

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DBS customers unable to access banking services, bank working to resolve situation​

The bank said it will give an update once services are restored. PHOTO: LIANHE ZAOBAO
Isabelle Liew and Jessie Lim

NOV 26, 2021

SINGAPORE - Some DBS/POSB customers were unable to access the bank's Internet and mobile banking services on Tuesday (Nov 23).
The disruption began around 10am, according to outage monitoring website Downdetector, which tracks outages by collating status reports from a series of sources, including user-submitted errors on its platform. Almost 600 reports were made at about 2.30pm.
At about 10pm, there were still close to 300 reports being made, according to Downdetector.
But by 10.40pm, checks by The Straits Times found that DBS PayLah! had been restored for customers.
Acknowledging the disruption, DBS Bank said on Facebook: "Many of our customers have been unable to access our digital banking services today.
"The inability to access an essential service over such an extended period of time is unacceptable and we deeply regret the inconvenience caused."
The bank added it was doing its best to resolve the situation and as part of recovery efforts, it will take some services, such as digibank and 3D e-comm transactions, temporarily offline.

Apologising for the inconvenience caused, the bank said it will update once services are restored.
In a Facebook post earlier in the day, payment services provider Nets said that the eNETS Debit service for DBS customers was temporarily unavailable.
"DBS customers using eNETS debit Internet banking will not be able to perform any transactions for the time being. We are working with DBS to restore the service as soon as possible and apologise for the inconvenience caused," it said.
Some netizens took to DBS' Facebook page to complain about the disruption.
Facebook user Thomas Lo said around 6.30pm: "I can't do bank transfer, can't top up my cashcard to drive off the carpark gantry, did not carry enough cash with me for my dinner. So disappointing and caused so much inconvenience."

 

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DBS says digital banking services back to normal, disruption not due to cyber attack​

The disruption prevented customers from accessing services through the DBS website and app for about two days. ST PHOTO: ARIFFIN JAMAR
Prisca Ang and Rei Kurohi

NOV 26, 2021

SINGAPORE - DBS' digital banking services resumed on Thursday (Nov 25) after a disruption that prevented customers from accessing services through its website and app for about two days.
The outage was not caused by a cyber attack, said the bank.
In an update posted on Facebook at 9pm on Thursday, DBS said customer log-ins and transaction activities had returned to normal pre-disruption levels since Thursday morning, though some customers were still facing issues.
"Our digital banking services have returned to normal. Please be assured that DBS' systems remain secure and were not a target of a cyber attack," the bank said.
"For customers who are unable to log in or perform selected transactions, restarting your devices resolves the issue in some instances. Customers using Internet banking are advised to clear their browser cache before logging in again."
The outage did not significantly impact businesses here. Several companies The Straits Times spoke to said there has been minimal disruption to their services.
A Great Eastern (GE) spokesman said: "We have not seen any impact on existing Giro arrangements, payment processing or insurance payouts to policyholders via direct crediting or PayNow to their linked bank accounts."

The spokesman added that GE will advise customers about alternative payment modes and extend grace periods for premium payments where necessary.
"So far, we have only received an enquiry from one customer on this, and we are assisting accordingly," the spokesman added.
Ms Lee Tsui Lin, Prudential Singapore's head of operations, said the insurer provides customers with multiple options for premium payments.

"If any payment service is unavailable, they can tap other options.
"We also have a grace period for premium payments to ensure that customers have sufficient time to complete their payments in such scenarios," she added.

Mr Roy Kee, managing director of cleaning products manufacturer JRW International, said the disruption was not keenly felt as the company still uses cheques for some payments, and also banks with other lenders besides DBS.
"As a new convert to e-banking, this will shake my confidence a bit. The bank could have also communicated with clients better by sending us SMS messages about the disruption," he added.
DBS has seen disruptions to its website and mobile app services from Tuesday morning.

The bank's app was still inaccessible at 5pm on Nov 24 (left). At 10.35pm, DBS said its digital banking services were "returning to normal". ST PHOTOS: BENJAMIN SEETOR
In a Facebook post at 10.35pm on Wednesday, the bank said services were returning to normal and added that it was monitoring the situation closely to ensure they run smoothly.
Although customers said they could log in to its digibank online platforms on Thursday morning, many still could not make transactions or view past ones.
The bank urged customers to restart their devices and log in again.

After restarting her phone, Ms Allison Teo said she could log into the DBS digibank app around Thursday noon to transfer money to a friend via PayNow.
"It was just a small amount as she had helped to purchase a gift for a friend who was discharged from hospital. It wasn't really urgent but I don't like to delay payment," said Ms Teo, 42, a programme executive.
Reacting to the bank's worst outage in more than a decade, the Monetary Authority of Singapore (MAS) said on Wednesday evening that it would consider taking "supervisory action".
"This is a serious disruption and MAS expects DBS to conduct a thorough investigation to identify the root causes and implement the necessary remedial measures," said Mr Marcus Lim, MAS' assistant managing director of banking and insurance.
"MAS will consider appropriate supervisory actions following the investigation. MAS expects all financial institutions to have systems and processes to ensure the consistent availability of financial services to their customers," he added.

Under the central bank's regulations, financial institutions must ensure that the total unscheduled downtime for critical systems affecting services for customers does not exceed four hours within any 12-month period.
Banks must also inform MAS of any incidents affecting critical systems within an hour.
In a Facebook video post on Wednesday, DBS country manager for Singapore Shee Tse Koon apologised to affected customers for causing them inconvenience and blamed faulty access control servers for the outage.
He did not elaborate on details of the server fault.

Access control servers are part of a bank's security system. They handle both login and payment verification using means such as biometrics, authentication tokens and one-time passwords.
The disruption, which was first reported at around 10am on Tuesday, is the worst DBS has seen since 2010, when a major systems failure took down all consumer and business banking services at the bank.
Customers were unable to withdraw cash from ATMs or make point-of-sale payments for about seven hours.
DBS shares slid 0.83 per cent to $32.11 on Thursday.

 

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Impact of outage on DBS Bank's reputation, credibility likely to be limited, say experts​

Problems with the DBS website and mobile app prevented customers from accessing banking services for three days. PHOTO: LIANHE ZAOBAO
Rei Kurohi and Prisca Ang

NOV 26, 2021


SINGAPORE - DBS Bank may suffer some damage to its reputation and credibility as a result of the extended disruption to its services this week, but the impact is likely to be limited, said experts and observers on Thursday (Nov 25).
But they added that banks in general need to implement more safety nets to improve reliability, especially given the increasing use of technology and reliance on digital infrastructure in the financial sector.
Problems with the DBS website and mobile app prevented customers from accessing banking services for about two days from Tuesday.
While the bank said its services were returning to normal on Wednesday night, some customers continued to report issues on Thursday.
On Thursday, DBS advised those still facing issues to restart their devices and clear their browser cache before attempting to log in again.
Associate Professor Anand Srinivasan, who heads the finance department at the National University of Singapore (NUS) Business School, noted that DBS was recently named the World's Best Bank by British publication Euromoney for the fourth consecutive year.
He said this award is based on many factors, particularly the safety and soundness of its lending operations and customer deposits.

In this regard, DBS "continues to shine" and the recent disruption is likely to have minimal effects on its global reputation, he added.
Assistant Professor of Finance Aurobindo Ghosh from the Singapore Management University's Lee Kong Chian School of Business said the disruption, while "very distressing", should be viewed in the context of the bank's digital transformation as a whole.
He said DBS deserves the accolades it had received as it has been "at the forefront of digital transformation" in Singapore's financial services sector over the past decade and has launched many new and innovative digital financial products.

"Singaporeans are used to a high level of service. As an international bank, there could be some damage to the image and reputation of DBS as the main, and sometimes only, go-to option."
Prof Ghosh said there is a significant portion of Singaporeans who are underbanked - meaning they lack full access to mainstream financial services - and are unsure about adopting digital financial products.
"Disruptions tend to stick in the memory of those who were reluctant to begin with, so DBS must try to win back those clients and not lose the clients they already have," he added.
Experts from cyber-protection firm Acronis said the disruption could have been due to human error in a routine process such as maintenance or system upgrading.
DBS country manager for Singapore Shee Tse Koon had said on Wednesday that the issue was due to a problem with the bank's access control servers, but did not elaborate on the details.


On Thursday night, DBS said its systems remain secure and were not the target of a cyber attack.
Access control servers handle both login and payment verification using means such as biometrics, authentication tokens and one-time passwords.
Acronis chief information security officer Kevin Reed said authentication is one of the core components of Internet banking and banks rarely outsource this critical function.
"DBS hasn't shared much information about what happened, and the reason could be that they still don't know what the issue is exactly," he said.
"It's hard to tell, but a system upgrade or some external event could be causing a significant overload of the authentication platform, leading to its malfunctioning."

Mr Feixiang He, adversary intelligence research lead at cyber-security firm Group-IB, said modern financial systems are very complex and it can be implausible or impossible for banks to build everything in-house.
The increasing complexity of financial systems is accompanied by greater risks of cyber attacks and supply chain disruptions, he noted.
This presents challenges not only for cyber security but also in managing system changes and engineering site reliability.
"Such delicate ecosystems require close partnership among various organisations so that the fundamental principles of confidentiality, integrity, and availability are met," Mr He said.

Glitches can be introduced when system configuration changes are made or new software is introduced, he said. In such cases, having proper backup and rollback mechanisms in place can help organisations recover swiftly.
Prof Srinivasan said tech glitches often arise from outside the organisation and will become problematic only if there is a repeated pattern.
"I believe that the true usefulness of tech in banking for customers is not determined by large systemwide failures, but rather in its reliability for day-to-day usage.
"In this dimension, DBS, like most other Singapore banks, scores well," he added.

 

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DBS chief Piyush Gupta apologises for bank's worst outage in a decade; full review to be done​

Account holders could not access their balances or make payments when digital banking services were down for at least two days last week. PHOTO: LIANHE ZAOBAO

Joyce Lim
Senior Correspondent

DEC 3, 2021

SINGAPORE - DBS Bank will conduct a full review of its processes after its worst digital disruptions in a decade left the bank's customers fuming last week.
Chief executive Piyush Gupta apologised for the service outage, telling the Reuters Next conference on Friday (Dec 3): "The customers have the right to expect more from us and I share their frustration and their pain."
Account holders could not access their balances or make payments when digital banking services were down for at least two days last week.
Mr Gupta noted that as banks get more digital and technologically advanced, customer expectations also rise.
He said the bank will review its processes and come up with ways to do better.
DBS began encountering issues with its access control servers on Nov 23 that prevented customers logging into bank services. The problem resurfaced the following morning.
DBS said on Nov 25 that logins and transaction activities had returned to normal that morning, although some customers were still facing issues.

The bank said the disruption was not caused by a cyber attack and added that customer data was safe.
The Monetary Authority of Singapore (MAS) said last week that it would consider taking "supervisory action" over the outage.
Financial institutions must ensure that the total unscheduled downtime for critical systems affecting customer services does not exceed four hours within any 12-month period.
Last week's disruptions were not the first DBS has experienced.
In 2010, MAS took supervisory action when a similar outage took down all consumer and business banking services for more than six hours.

 

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DBS expects to fix shortcomings behind November outage over next few quarters: CEO​

In November 2021, a malfunctioning access control server led to the widespread unavailability of DBS' online banking services. PHOTO: LIANHE ZAOBAO

Prisca Ang

FEB 14, 2022

SINGAPORE - DBS Bank expects it will be able to fix shortcomings identified after reviews of the bank's worst digital disruption in a decade, over the next few quarters.
This is despite the bank being unable to recreate the circumstances of the incident.
A malfunctioning access control server led to the widespread unavailability of DBS' online banking services from Nov 23 to 25.
Chief executive Piyush Gupta said on Monday (Feb 14) that two sets of reviews have been carried out by experts, who have not been able to "replicate the problem" of why the server malfunctioned.
"Nevertheless, we've learnt a lot from the reviews and it's principally around our incidents management and recovery process," he said at a briefing on the lender's latest financial results.
"It took us some time to figure out what the problem was and some time to fix it, and frankly, we could have done a lot better in terms of the speed of recovery," said Mr Gupta.
He added that a third review is under way to validate the bank's processes.

"I'm sure we'll learn from that and continue to improve and make sure our recovery processes, in particular, are a lot more robust than they were," said Mr Gupta.
DBS posted better-than-expected fourth-quarter earnings owing to higher loan growth and fee income, and lower allowances set aside for bad loans.
Its net profit rose 37 per cent to $1.39 billion, topping the $1.36 billion forecast by analysts in a Bloomberg poll.
Mr Gupta apologised in December last year for the serious service failure, which left customers unable to access the bank’s online services.
"The customers have the right to expect more from us and I share their frustration and their pain," he said then.
The Monetary Authority of Singapore (MAS) imposed an additional capital requirement of $930 million on DBS last week due to the outage. This was four times higher than the $230 million that DBS had to set aside for a similar disruption of its digital banking services in 2010.
MORE ON THIS TOPIC
MAS penalty unlikely to derail DBS growth: Analysts
Banks must focus on reliability to retain confidence as they digitalise
Mr Gupta said on Monday that the bank is not in a position to speculate about when MAS will lift the requirement.
"A large part of what we need to do, which is to focus on our incident management and recovery processes, we've got under way. We have a third review finished by the summer, so I'm fairly confident that we can fix all our bases over the next couple of quarters," he added.
MAS took 14 months to lift the $230 million requirement it slapped on DBS in 2010.

 

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MAS penalty unlikely to derail DBS growth but sends clear signal on digital banking standards: Analysts​

Industry observers said the penalty will not hurt DBS' performance as the bank has built up ample capital. ST PHOTO: KUA CHEE SIONG

Prisca Ang

FEB 8, 2022


SINGAPORE - A central bank requirement for DBS Bank to set aside an additional $930 million in regulatory capital to guard against operational risks is unlikely to derail the bank's growth, even as it sends a clear signal for lenders to uphold high standards in digital banking, said analysts.
Industry observers told The Straits Times the penalty - the heaviest slapped on DBS so far - will not hurt its performance, as the bank has built up ample capital.
The Monetary Authority of Singapore (MAS) imposed the requirement on Singapore's largest lender on Monday (Feb 7) following the widespread outage of its digital banking services last November - its worst digital disruption in a decade.
The amount is four times higher than the $230 million DBS had to set aside for a similar disruption of its digital banking services in 2010.
MAS said DBS will need to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk.
This will reduce DBS' common equity tier 1 (CET-1) ratio, which measures a bank's core equity capital compared with its total risk-weighted assets, by 0.4 percentage point. The ratio indicates a bank's financial strength and ability to withstand risks.
DBS posted third-quarter earnings of $1.7 billion last November. It will report its fourth-quarter results next Monday, kicking off earnings season for local banks.

Phillip Securities Research analyst Glenn Thum said the additional requirement should not affect DBS' profitability by much.
He noted the bank's CET-1 ratio will be 13 per cent, factoring in the additional requirement and the impact arising from its acquisition of Citi's Taiwan consumer banking business, which it announced last month.
This figure is still well above the regulatory requirement and at the upper end of DBS' target ratio range of 12.5 per cent to 13.5 per cent. The bank has stressed that its dividend policy will not be affected.

Setting aside the additional $930 million to buffer against operational risks means the bank will have less money to spend on the likes of investments and hiring.
However, Mr Thum said the bank is unlikely to move forward with any big investments in the coming quarters, as it has to ensure the Citi acquisition goes through smoothly.
DBS will pay cash for Citi Consumer Taiwan's net assets plus a premium of $956 million, which will be determined at the close of the deal, which is expected in mid-2023.

Other recent sizeable investments by DBS include its acquisition of a 13 per cent stake in privately owned Shenzhen Rural Commercial Bank - announced last April - for 5.29 billion yuan (S$1.1 billion). The move is part of its plan to accelerate its expansion in China's Greater Bay Area.
It also completed its takeover of Lakshmi Vilas Bank in India in November 2020, adding 550 branches and more than 900 ATMs to its network in the country.
"In the short term, I would say (the additional capital requirement) is a considerable penalty to DBS," said Mr Thum, noting the requirement will be reviewed when MAS is satisfied that DBS has addressed the shortcomings found in an independent review of the incident.
"DBS has already taken steps to improve its systems and processes and, together with the independent expert, the bank should be able to get the penalty reviewed. I would not think that this would pose a medium or long-term problem for DBS," he added.

Maybank Kim Eng research head Thilan Wickramasinghe said this action shows the flipside of digitalisation.
"While going online offers significant advantages in terms of scale and superior service, the banking sector will have to contend with new and increased operational and security risks," he told ST.
"Going forward, expect higher capital buffers to be maintained in response to executing their digital strategies, while technology operational expenditure may likely remain elevated in the medium term."
MORE ON THIS TOPIC
Banks must focus on reliability to retain confidence as they digitalise
Impact of outage on DBS Bank's reputation, credibility likely to be limited, say experts
HSBC analyst Weldon Sng noted in a report that MAS has also said it would consider supervisory actions against OCBC over recent phishing scams involving the bank.
"At a 15.5 per cent CET-1 ratio as at 3Q21, OCBC is even more capitalised, but any possible capital impact might make a dividend raise that much less likely," he noted.
He added that the additional requirement on DBS suggests the new Singapore digital bank entrants will be held to similarly high standards not only in app service disruptions, but also for other regulatory requirements in banking such as anti-money laundering or know-your-customer activities.

 

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DBS CEO Piyush Gupta's 2021 salary jumps 48% to $13.6 million​

Mr Piyush Gupta's pay consisted of a salary base of $1.2 million, a cash bonus of $5.2 million, and shares worth $7.2 million. PHOTO: DBS GROUP HOLDINGS LIMITED
Janice Lim

MAR 10, 2022

SINGAPORE (THE BUSINESS TIMES) - With DBS Group posting a record net profit for last year, the annual salary for its chief executive Piyush Gupta has gone up as well.
Mr Gupta’s annual remuneration jumped 47.8 per cent to $13.6 million last year, according to the bank’s annual report released on Wednesday (March 9).
His total compensation in 2020 was $9.2 million, a 24 per cent drop from the year before as the economic fallout from the Covid-19 pandemic affected the bank’s earnings.
Mr Gupta’s pay last year consisted of a salary base of $1.2 million, a cash bonus of $5.2 million and shares worth $7.1 million. A non-cash component worth $75,462 was also part of his remuneration.
The shares amounting to $7.1 million do not include the estimated value of retention shares amounting to $1.4 million. These are used as a retention tool and to compensate staff for the time value of deferral, the report said. DBS employees do not receive ordinary dividends on unvested shares.
DBS’s financial year 2021 net profit jumped 44 per cent, hitting a record $6.8 billion. The 12.5 per cent return on equity was also the second-highest in more than 10 years.
South-east Asia’s largest lender said in its annual report that it managed to deliver “its best year ever in 2021” under the leadership of Mr Gupta.

“This achievement was all the more remarkable given ongoing challenges in the operating environment,” DBS said, citing issues such as rock-bottom interest rate levels and increased China idiosyncratic risks, following moves by its government to temper property market exuberance.
In the annual report, Mr Gupta spoke about how DBS needs to be more deeply embedded into the markets it already has a presence in, outside of Singapore and Hong Kong. This includes China, Taiwan, India and Indonesia.
Last year, the bank expanded its operations by acquiring Citigroup’s consumer banking business in Taiwan and bought a 13 per cent stake in Shenzhen Rural Commercial Bank to become its largest single shareholder.
These moves, along with the amalgamation of Lakshmi Vilas Bank in India at the end of 2020, would add between $1.2 billion and $1.3 billion to DBS’s revenue base and $500 million to its bottom line, said Mr Gupta.
In its sustainability report released on the same day, Mr Gupta said the bank has chosen to prioritise climate change concerns as the most immediate issue to tackle among a myriad of other environmental challenges and is weaving environmental, social and governance standards into its business.
DBS highlighted that it hit its target of growing sustainable investment to more than 50 per cent of its assets under management earlier than the set target date of 2024.
It also made its digital banking services more accessible to migrant workers, foreign domestic workers and seniors.

 

[LITTLEREDDOT]

Elderly woman in dispute with bank over $100k in losses for terminating insurance policy early​

The dispute centres on whether Madam Ong was tricked into making unwise investments or if it is just a case of buyer’s remorse. PHOTO: ST FILE

Joyce Lim
Senior Business Correspondent

OCT 17, 2022

SINGAPORE – A 69-year-old housewife is trying to recover more than $100,000 in losses after an early termination of an insurance policy she bought from DBS Bank in 2019.
The bank disputes her claims. Early termination usually involves high costs and it says the woman was made aware of this.
Madam Ong, as she wants to be known, says she was told she could take her money out after she had paid the premium for three years, whereas the bank says the minimum premium payment period for such products is 10 years.
It started when Madam Ong decided to buy an insurance product that also offered her annual payouts, after speaking to a DBS employee.
“All my life policies, I needed to go for medical check-ups, but not for this one. I didn’t think I could still buy insurance at the age of 66, but here was this person telling me that I can still be insured and I don’t have to go for a medical check-up in order to buy it,” said Madam Ong, who has filed a complaint against DBS with the Financial Industry Disputes Resolution Centre (Fidrec).
A DBS spokesman told The Straits Times that records showed that Madam Ong had specifically asked its bank employee for a product that, apart from insuring her, also offered her an income payout or annuity.
Madam Ong agreed to pay an annual premium of $60,000 for the Ready Payout Plus policy from Manulife, a Canadian insurer whose products are sold at DBS branches.

Even though the 15-year endowment plan guarantees a cash benefit every year, Madam Ong said it was the death benefit that she was drawn to. She thought her beneficiaries would get $426,000 upon her death, but learnt only last year that this was not the case.
The dispute centres on whether Madam Ong was a naive housewife who was tricked into making unwise investments, or if it is just a case of buyer’s remorse.
Fidrec could not comment on Madam Ong’s case due to confidentiality issues.

Madam Ong recalled receiving a call from the bank after she deposited over $2 million into her DBS account from a windfall she got from a collective sale some time in 2019.
“A bank officer said he had a product to recommend me, one that I cannot resist,” she recalled.
A DBS wealth manager and another staff member followed up with a visit to Madam Ong’s home, where a financial risk assessment was carried out.

An assessment of her finances was run using the bank’s standard financial planning needs framework.
“The policy that Madam Ong eventually purchased was in line with her assessed risk profile, met her indicated investment time horizon and was within her financial means,” the DBS spokesman said.
She added that DBS was fully compliant with Monetary Authority of Singapore guidelines in the sale of the investment product.
As the policy is only for those up to age 65, Madam Ong, who was 66 at the time, had to backdate her purchase to 2018, before her 66th birthday.
Madam Ong said: “I was told that I would be insured for a sum of $426,200. My understanding is that my family would get that money when I die. I don’t work and I thought I wanted to leave something for my family.
“I was told that as long as I pay for three years, I can take my money out (from the policy) later if I cannot afford the premium.”
The DBS spokesman said premiums on such products have to be paid for a minimum of 10 years.
Madam Ong told ST that she had planned to use the collective sale proceeds to pay the premiums, but she also needed money for a new home.
She decided to terminate her policy with Manulife in November 2021 as she wanted to use the money to help one of her three sons with his first property purchase.
“I got a shock when I called the bank and was told that I could get back only about $60,000, when I had paid over $180,000 in premiums,” said Madam Ong.

The bank advised her to keep the insurance plan as an early termination usually involves high costs and the surrender value payable to her would be less than the total premiums paid.
The policy illustration seen by ST shows that the guaranteed surrender value is lower than the total premiums paid for the first 13 years of Madam Ong’s policy.
It was only in the 14th year that the guaranteed surrender value would exceed the total premiums paid.
By then, Madam Ong would be 79 and would have paid about $597,000 in total premiums. Her guaranteed surrender value is projected at $607,341 or 1.7 per cent on top of the total premiums paid.
But based on an illustrated investment rate of return of 3.25 per cent per annum, the break-even point would be in the 13th year, with a profit of 5 per cent.
Apparently Madam Ong found out only last year that the basic sum insured of $426,200 is not a death benefit as she had thought.
The sum insured in the plan is a notional value and is used purely for the purpose of determining the guaranteed cash benefits and bonuses. It does not represent the amount the insurer will pay on the death of the life insured.
“I was very traumatised by it because I could have died and my family wouldn’t have gotten the $426,200,” said Madam Ong.
“I asked the bank for a refund because I considered the policy to be dubious and contentious.”

Said the DBS spokesman: “We recognise that elderly customers may potentially be more vulnerable (due to language, or not having enough knowledge about a certain product or service), and thus have strict controls in place to ensure that our customers are fully aware and understand what they are buying into.”
A supervisor had followed up with a call to confirm that Madam Ong understood the risks and penalties in the event of an early termination of the policy. The supervisor also checked if she was comfortable with the premium, the spokesman added.
“During this time, Madam Ong was free to clarify any doubts she may have with the supervisor, and to even discontinue with the policy purchase without incurring any charges or penalties should she change her mind at that point.”

 

[sbfuncle]

Madam Ong recalled receiving a call from the bank after she deposited over $2 million into her DBS account from a windfall she got from a collective sale some time in 2019.

What kind of collective sales can get windfall 2 mil
Stupid people got the luck .

 

[sbfuncle]

What kind of collective sales can get windfall 2 mil
Stupid people got the luck .

Stupid people make stupid overnight decision for investment.
Gansiokbin also made stupid overnight decision to buy jb whore house.
LOL

 

[LITTLEREDDOT]

Former DBS officer jailed for illegally accessing and leaking customer details​

David Sun
Correspondent

NOV 21, 2022

SINGAPORE - A former DBS officer was sentenced to 16 weeks’ jail on Monday for accessing customer details without authorisation and disclosing them to others.
Liong Yan Sin, 32, pleaded guilty to 10 charges under the Computer Misuse Act for accessing details of customers without authorisation, and six charges under the Banking Act for disclosing customer details to his friends.
Another 42 charges, including one for cheating, were taken into consideration for sentencing.
Liong was employed by DBS as a collections officer from July 2016 to December 2018.
As part of his job scope, he was given access to the customer information system, which allowed him to retrieve customer details.
It was made clear to him when he joined DBS that he was not to access customer details outside the scope of his duties.
But from May to December 2018, he made many unauthorised searches on the system for customer details.

The court was told that he did so because he was curious about customers whose names he had chanced upon in online forums or belong to his friends or relatives.
His co-accused are Dinath Silvamany Muthalliyar and Ang Kok How.
Dinath had worked as a collections officer at DBS with Liong, before moving to the Ministry of Manpower (MOM) as a levy administration manager.

From June 2018, Dinath asked Liong about the salary details of his colleagues at MOM to compare them with his own.
Between June and November 2018, Liong disclosed the salary details of five people to Dinath.
Ang and Liong were acquaintances who gambled, drank and played basketball together.

They were also acquainted with a woman known as Kelly, who had borrowed money from Ang to play poker. She owed him about $23,000 in September 2018 when she became uncontactable.
Liong used the DBS system to find Kelly’s customer details, which he then sent to Ang via WhatsApp.
DBS lodged a police report in December 2018.
Deputy Public Prosecutor Thiagesh Sukumaran said that while none of the customers whose details were disclosed reported harassment or intimidation, Liong had abused his position and breached the trust placed on him.
Dinath’s and Ang’s cases are still before the courts.
For each charge of unauthorised access to customer details, Liong could have been jailed for up to two years and fined up to $5,000.
For each charge of unauthorised disclosure of customer details, he could have been jailed for up to three years and fined up to $125,000.

 

[LITTLEREDDOT]

DBS has $1.3 billion exposure to Adani Group but CEO says bank is not concerned​

This comes after Adani’s US$10.5 billion acquisition of Swiss construction materials company Holcim. PHOTOS: MARK CHEONG, REUTERS

Prisca Ang

FEB 13, 2023

SINGAPORE – DBS, Singapore’s largest bank, has made loans to the tune of $1.3 billion to India’s Adani Group but its chief executive is not concerned, citing its “tightly managed” exposure.
The bulk of DBS Bank’s exposure is its $1 billion loan for Adani’s US$10.5 billion (S$14 billion) acquisition of Swiss construction materials company Holcim’s cement business in India, completed in September 2022. DBS was among several backers of the deal.
CEO Piyush Gupta said the cement companies are completely debt-free. “They are solid, cash-generating companies, so we are not concerned about the exposure,” he told reporters at the bank’s results briefing on Monday.
The cement industry has huge potential, given the growth in the market, he added, “and so that exposure is quite tightly managed”.
The remaining $300 million of DBS’ exposure is from financing to a range of companies under the Adani Group, said Mr Gupta.
“Again, those companies are working well. Their cash flows are secure.
“We have no exposure to any of the shares of Adani or promoter financing of Adani, so we are not affected by all these changes in the share prices or promoter share prices. So right now, we have no concerns about exposure. We don’t expect to do anything (about it),” he added.

DBS earlier kicked off the local banks’ earnings season with a record quarterly net profit of $2.34 billion in the fourth quarter – a 69 per cent jump from $1.39 billion a year ago – as higher interest rates continued to boost its income.
Billionaire Gautam Adani on Feb 6 announced the prepayment of US$1.1 billion worth of loans backed by shares of three of the group’s listed firms as the conglomerate sought to soothe investor nerves.
This follows a US$110 billion share rout after United States short-seller Hindenburg Research released a report on Jan 24 accusing the group of stock manipulation and improper use of offshore tax havens.
The Adani Group rejected the allegations and banks in India have largely brushed off the concerns surrounding the conglomerate. However, foreign banks such as Citigroup, Credit Suisse and Standard Chartered Bank have reportedly stopped accepting bonds and other securities of the group as collateral for margin loans.
Asked whether he expects financing costs for Indian companies to rise as a result of the Adani turmoil, Mr Gupta said: “I don’t think so. If you look at India, pricing has always been exceptionally low. In fact, the Indian large corporates borrow at way below India country risk. So the general view that this is going to tarnish all of the industry, I don’t see that happening.”
DBS has been the most aggressive among local banks in expanding in India. In November 2020, it completed its takeover of Lakshmi Vilas Bank. It was the first time India turned to a foreign bank to rescue a struggling local lender.

 

[LITTLEREDDOT]

DBS CEO Piyush Gupta’s 2022 pay rises 13.2% to $15.4 million​

Mr Piyush Gupta’s total compensation in 2021 was $13.6 million. PHOTO: BT FILE

Rosalind Ang

MAR 10, 2023

SINGAPORE – Mr Piyush Gupta, the chief executive of DBS Group, saw his annual earnings climb 13.2 per cent to $15.4 million in 2022 as South-east Asia’s biggest bank posted record profit and return on equity (ROE).
Mr Gupta’s 2022 pay consisted of a salary of $1.5 million, a cash bonus of $5.77 million and deferred remuneration in cash and shares of $8.04 million. A non-cash component – comprising club, car and driver benefits – worth $80,529 was also part of his pay package, according to the bank’s annual report released on Thursday.
In February, the bank reported a 20 per cent surge in net profit to $8.19 billion, with earnings driven by higher interest rates. It also achieved a new high on ROE of 15 per cent, up from 12.5 per cent in 2021.
Mr Gupta’s total compensation in 2021 was $13.6 million, a 48 per cent jump from 2020 when his pay fell 24 per cent to $9.2 million during the worst of the Covid-19 pandemic.
In a joint letter in the annual report, DBS chairman Peter Seah and Mr Gupta said that 2022 was a “breakout year” for DBS, with its ROE significantly surpassing previous highs of around the 12 per cent to 13 per cent range.
Against the backdrop of challenges like escalating geopolitical tensions, high inflation and slowing external demand, DBS said it managed to produce “solid financial performance and continued delivery against key scorecard goals”.
Mr Seah and Mr Gupta said: “Although we remain watchful, we take heart that our loan pipeline looks healthy.

“If animal spirits return to markets, we should also see some upside to fee income. Barring any unexpected shocks to the global economy, DBS’ ROE will comfortably be above 15 per cent.”
In the annual report, Mr Gupta said that DBS needs to continue strengthening its technology in areas such as cloud computing and site reliability engineering to improve scalability, automation and speed to market.
DBS has been undergoing digitalisation since 2014. Over the past five years since it began tracking the value of digitalisation, digitally engaged customers brought in more than twice the income on average than non-digital customers and cost less to serve, said Mr Gupta.
In 2022, DBS also collaborated with the Monetary Authority of Singapore on two trial applications. One was to trade tokenised assets and the other was to distribute purpose-bound vouchers using programmable money and retail central bank digital currencies.

 

[LITTLEREDDOT]

High volume of DBS PayLah log-ins leads to hours of delay in $3 meal cashback on Friday​

DBS' 5 Million Hawker Meals initiative, which runs from Feb 10 to Jan 19, 2024, aims to subsidise 5 million meals over a year. PHOTO: LIANHE ZAOBAO FILE

Osmond Chia

MAR 24, 2023

SINGAPORE - DBS PayLah app users faced delays in receiving their cashback on Friday when they made payments in hopes of claiming a $3 meal subsidy offered by the bank.
The delays were caused by a high volume of log-ins, DBS Bank said in a statement on Friday, adding that the issue was resolved by the early afternoon.
DBS said: “We are aware that some customers who had earlier made eligible transactions under the DBS 5 Million Hawker Meals scheme did not instantly receive their cashback. Please be assured that we have credited the cashback to your PayLah wallet.
“We apologise for the inconvenience caused.”
Users were initially told that they would have to wait till Monday to receive their cashback, and to expect delays logging into the app, according to screenshots of notices on the PayLah app.
A 54-year-old man, who declined to be named, said he was confused by the delay and the app message after buying a bowl of noodles from a participating stall in Upper Boon Keng Road on Friday morning.
“The cashback was glitch-free on March 3, 10 and 17, but there was no cashback this morning. But I had ordered the noodles already, so I couldn’t cancel. I hope DBS can sort out the glitch,” he said.

He received his money at 3.30pm.
DBS said on its website that users can expect “100 per cent instant cashback” of up to $3 as part of its 5 Million Hawker Meals initiative that runs from Feb 10 to Jan 19, 2024. There is no minimum spend required.
The campaign, which aims to subsidise five million meals over a year, is offered to the first 100,000 PayLah app users each Friday, and is meant to help customers cut back on spending amid rising expenses.
Users will be informed on the app when all 100,000 meals have been redeemed each Friday.
At least 11,600 hawker stalls with QR codes islandwide have signed up for the campaign.

DBS PayLah app users were told that they would have to wait till Monday to receive their cashback, and to expect delays logging into the app. PHOTO: ST READER
Some netizens have also taken to Reddit to complain that their cashback had been delayed.
Redditor Lexie52 posted on March 17 that he did not receive cashback despite scanning a QR code at a participating hawker stall. Most Redditors who commented on the thread said that they had received their cashback, although some said they faced delays.
Hawker food price inflation rose to a 14-year high of 8.1 per cent from a year earlier, according to the Singapore Department of Statistics.
To check a list of participating stalls, visit this website.

 

[LITTLEREDDOT]

MAS says disruption of DBS digital services unacceptable, calls for thorough probe into cause​

MAS has instructed DBS to conduct a thorough investigation to find out the root cause of the disruption. ST PHOTO: STEPHANIE YEOW

Gabrielle Chan

MAR 29, 2023

SINGAPORE - The disruption of DBS Bank’s digital services just a little over a year after a similar incident in November 2021 is unacceptable, said the Monetary Authority of Singapore (MAS).
In response to queries, MAS – the country’s financial regulator – said it takes seriously the reliability of banks’ critical IT systems, and that DBS has fallen short of MAS’ expectations to maintain the availability of systems at a high level.
MAS added that it has instructed DBS to conduct a thorough investigation to establish the root cause of the disruption and submit the findings to the regulator.
“MAS will take the commensurate supervisory actions after gathering the necessary facts,” said MAS.
DBS notified MAS early on Wednesday morning that its customers were experiencing difficulties logging into its digital banking services, it added.
It said: “MAS has been in close contact with DBS to ensure expedited recovery of its digital services and timely communications to customers on the disruption.
“We note the bank has since resumed normal digital banking services and is monitoring the situation.”

The 12 hour-long disruption of DBS’ services on Wednesday rendered customers unable to use the bank’s digital banking services.
From about 7am, users began reporting that DBS digibank online and mobile services were down.
At about 8.30am, there had been more than 360 reports from DBS customers who were having trouble logging into the portal.
By about 7.30pm, all DBS/POSB digibank mobile and online services, as well as DBS PayLah! and DBS mTrading services, had returned to normal.
In a statement late on Wednesday, DBS chief executive Piyush Gupta said the bank is disappointed that many of its customers were unable to access digital banking services.
He said: “We hold ourselves to higher standards, and it is our utmost priority to review the events of today. We acknowledge the gravity of the situation, appreciate our customers’ understanding, and deeply regret the inconvenience caused.”

 

[LITTLEREDDOT]

DBS/POSB digital services restored after disruption lasting more than 12 hours​

From about 7am on Wednesday, users began reporting that DBS digibank online and mobile services, including the popular PayLah app, were all down. PHOTOS: ST READER

Ang Qing

MAR 30, 2023


SINGAPORE – Following a disruption lasting more than 12 hours, DBS Bank customers were able to use its digital banking services again on Wednesday evening, after encountering problems logging into the portal earlier in the day.
In a Facebook post at about 7.30pm, DBS said DBS/POSB digibank mobile and online services, as well as DBS PayLah! and DBS mTrading services, have all returned to normal.
It added that it is monitoring the situation closely.
Earlier, DBS made the decision to extend banking services by two hours at all DBS and POSB branches as well as investment service Treasures centres, when its digital services suffered a disruption early in the morning.
From about 7am, users began reporting that DBS digibank online and mobile services, including the popular PayLah app, were all down.

That was when complaints by DBS customers started emerging on the website Downdetector, which tracks outages. By 8.30am, there were more than 360 reports from DBS customers who were having trouble logging into the portal.
DBS issued a statement at about 9.20am to confirm that its digital services were down.

At 12.49pm, DBS said access to these services, as well as investment platform DBS Vickers mTrading, was spotty and the connection might be slow for those who did manage to log in.
It said: “Please be assured that your deposits and monies are safe and secure.”
Earlier, DBS said customers could stay assured that its systems are secure and uncompromised, and that they could continue to use their DBS/POSB cards for transactions.
Several unhappy customers took to DBS’ Facebook page to report a host of issues, including being unable to retrieve one-time passwords and receiving prompts to reset their personal identification number (PIN).
One such user was engineer Su Yuanchang, who said he tried up to seven times from 8am to use the mobile banking app to pay his bills but, to his mounting frustration, his attempts were unsuccessful.

Mr Su, who is in his 50s, said: “It kept asking me to reset my PIN when I wanted to change my transaction limits, but I didn’t receive any PIN. Eventually, I couldn’t log in at all.”
Facebook user Mawar Elin Mamat said she was unable to pay her hospital bills because of the disruption.
On March 24, DBS PayLah app users faced delays in receiving their cashback when they made payments in the hopes of claiming a $3 meal subsidy offered by the bank.
The delays were caused by a high volume of logins, the bank said then.
In November 2021, a malfunctioning access control server disrupted services for DBS Bank and POSB users over three days, resulting in the bank’s worst digital disruption in a decade.

 

[LITTLEREDDOT]

MAS slaps requirement on DBS to set aside additional $930m in capital due to November outage​

DBS suffered its worst digital disruption in a decade from Nov 23 to 25 last year. PHOTO: LIANHE ZAOBAO

Prisca Ang

FEB 8, 2022


SINGAPORE - DBS Bank will have to set aside another $930 million in capital following the widespread outage of its digital banking services last November.
The Monetary Authority of Singapore (MAS) has imposed this additional capital requirement on Singapore's largest bank after it suffered its worst digital disruption in a decade, from Nov 23 to 25.
The central bank on Monday (Feb 7) said DBS will need to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk.
This translates into an additional amount of about $930 million in regulatory capital based on the bank’s financial statements as at Sept 30 – four times higher than the $230 million that DBS had to set aside for a similar disruption of its digital banking services in 2010.
The capital requirement refers to the amount of capital banks have to set aside as a buffer to cover unexpected losses and keep themselves solvent in a crisis.
MAS’ new requirement will not impact DBS’ dividend policy. But it will affect its capital ratios, which are used to measure a bank’s financial strength and ability to withstand risks.
The November disruption, which DBS had attributed to a problem with its access control servers, led to customers being unable to log in to the bank’s Internet banking platform and mobile app.

MAS noted deficiencies in the bank’s management of the incident and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged disruption.
The regulator said it has directed DBS to appoint an independent expert to conduct a comprehensive review of the incident, including of the bank's recovery actions.
The independent review will also have to assess how a similar incident can be prevented in future, said MAS.

In a statement on Monday, DBS chief executive Piyush Gupta said the bank will continue to review its systems and processes with an independent expert over the next few months.
He noted that customers rightly expect to have seamless and uninterrupted access to online banking services round the clock in a digital era.
“This is something we take very seriously. Since the November incident, DBS has taken a series of actions to improve the resilience of our services and incident response,” he said.

DBS told The Straits Times it has made several improvements to its access control server system since the incident, adding that the key focus has been on improving diagnostics and recovery protocols.
MAS said DBS has to rectify all shortcomings identified from the review and implement measures to ensure any future disruption to its digital banking services is resolved quickly and adequately.
“The additional capital requirement will be reviewed when MAS is satisfied that DBS Bank has addressed the identified shortcomings,” it added.

DBS said the MAS requirement will affect its capital ratios by 0.4 percentage point until remedial actions are completed.
The lender’s common equity tier 1 (CET-1) ratio as at Sept 30 would have been 13.4 per cent, including the capital impact arising from its acquisition of Citi’s Taiwan consumer banking business, which it announced last month.
The CET-1 ratio measures a bank’s core equity capital, compared with its total risk-weighted assets.
DBS said the ratio is at the upper end of its target CET-1 range and will therefore not impact its dividend policy.

Mr Marcus Lim, MAS' assistant managing director for banking and insurance, said the regulator requires financial institutions to have robust controls and processes to ensure that their IT systems are reliable and resilient, and essential financial services can be delivered continuously to customers.
"MAS will take appropriate supervisory action against any financial institution that falls short of our regulatory expectations," he added.