By SIOW LI SEN
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TO ITS many critics, DBS can at least tick one complaint off. The bank is hiring a soon-to-be local, a move that should satisfy those who bemoan the trend of certain large Singapore companies picking foreigners for their top posts.
Joining DBS as chief executive in November is Citibanker Piyush Gupta, a permanent resident awaiting his Singapore citizenship. His appointment is subject to regulatory approval, the bank said yesterday.
Since 1998, when Ngiam Tong Dow stepped down as CEO to make way for American John Olds, who was then followed by Frenchman Philippe Paillart and two more Americans - Jackson Tai and Richard Stanley (the latter died of leukaemia in April while in office) - none of the appointments have met with unqualified success. Which probably is why some observers have felt justified in wondering why not appoint a local or DBS insider who could be just as good, (or bad).
In picking Mr Gupta, who is Citigroup's CEO for Southeast Asia Pacific, DBS has gone for familiarity, a safe pair of hands. A career banker, he is unlikely to rock the boat by taking needless risks. And he is quite adept in dealing with regulators having been Citi country officer in Indonesia, Malaysia and Singapore.
India-born Mr Gupta, who joined the US bank in New Delhi in 1982 when he was 22, displayed a wild side only very briefly in 2000 when he tried being an Internet entrepreneur during the dotcom boom. He returned to Citi's fold in 2001 when he went on to serve as Citi Country Officer in Malaysia and Singapore before becoming CEO for Citi in Southeast Asia Pacific.
Starting from India, his banking experience has been honed in South-east Asia, more specifically Indonesia and Malaysia. Mr Gupta is joining DBS at a relatively benign period, unlike his predecessor Mr Stanley who entered the bank in May 2008 when the global financial crisis was in full swing.
DBS does not need fixing. The economy is clearly recovering - whether the bounceback will take the shape of a U or V, or be sustainable, is another matter. While more bad loans will hit the bank, they are not expected to wreak material damage.
But Mr Gupta does face an uphill task at DBS if his brief is to regain the momentum that the bank has lost to the competition. Since it overpaid for Hong Kong's Dao Heng Bank back in 2001, DBS has not had any meaningful acquisition. It missed opportunities in the region, notably Indonesia, and it exited Thailand after nine expensive and difficult years in 2007.
Indonesian banks enjoy the highest growth and returns in the region, and while DBS has tried to expand its network there, it lags behind local rivals United Overseas Bank and OCBC Bank, which managed to buy into domestic banks.
DBS may be South-east Asia's largest bank, yet Malaysia's No. 2 CIMB has a bigger footprint in the region, said Morgan Stanley analyst Matthew Wilson.
At home, Mr Gupta will have to tackle DBS's mountain of deposits and make it work for both customers and shareholders. He also has the unenviable job of regaining Singaporeans' trust in the structured notes arena.
While Great Eastern, a unit of OCBC Bank, is basking in customers' goodwill over its full refund for badly performing structured products, DBS is preparing to fight investors in court over its ill-fated High Notes.
DBS also faces angry investors in Hong Kong as it has offered to compensate investors only in cases where there was evidence of questionable sales practices. But this is where Mr Gupta's Citi experience could help. RBS analyst Trevor Kalcic said Citi is well regarded when it comes to customer service and retail banking.
He also has a lot of South-east Asia experience which will be good for DBS which needs to enhance its regional footprint, said Mr Kalcic.
But one sceptic notes that a DBS CEO is a much bigger role than any of his past positions. And being at Citi for essentially your entire career may be limiting, he added.
A banker who knows his limits, however, may not be a bad thing at all.
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