atans1

DBS: What the new chairman shld be looking at

In Banks, GIC, Temasek on 24/03/2010 at 5:27 am

CIMB is regarded as having overtaken DBS in the race to become a leading bank in the region according to Ranu Dayal of  Boston Consulting, BT reported a few days ago, though DBS remains the biggest South-east Asian bank by market capitalisation.

Hey whaz this?

CIMB is from M’sia, a country that is not as meritocratic as S’pore according to the then SM and PM  in the 1990s, now MM and SM respectively. While SM cocks things up regularly (for example, in the 1990s and early noughties, when he was PM, S’pore got complacent and productivity fell), MM gets most things right.

So how come CIMB overtakes our national banking champ (err shld it be chump?). Makes me ashamed to be a S’porean. I mean the meritocratic policy is in this region “uniquely S’porean”

Wait a minute, DBS has had Foreign Talents as CEOs and senior executives since the late 1990s. Could this be the problem? The FT policy trumps the meritocratic policy.

I am surprised that anti-government subversives are not using DBS to show up the government.  Given the track record of DBS,  one could reasonably argue that the FT policy is rubbish — overpaying for Dao Heng so much so that DBS had to take an impairement charge of over S$1 billion; making its Treasured clients (they are only S’poreans, not “countrymen”) poorer (HN5 notes); and running down the expensively acquired POSB brand before realising its potential and spending $ rebuilding the brand.

And the SDP and friends can reasonably cite CapitaLand, another TLC, as an example where FTs are scarce, but where locals do well at managing a TLC. The CEO is a local and so are many senior executves. It is the leading regional property company (by reputation and market cap) and a big player in China. More than can be said of FT-laden, spastic DBS.

Of course, one could argue that there is no casual relationship between bad performance and being FT-laden,and gd performance and being local-led.  And that one FT- laden bank does taint other FT-led companies. So look at the other listed TLCs — Keppel, KepLand, SembCorp, SIA, SATS, ST Technologies, SIA Engr, SingTel, Starhub, M1 and NOL. And judge for yrself.

Back to DBS, yesterday BT had an article speculating what the incoming chairman could do for shareholders. Well he could relook the FT policy at DBS: is the policy flawed or just that the wrong FTs were recruited? Too many people from Citi, the bank that the US government had to rescue? As a HSBC shareholder and customer, I can attest to the damage that these ex-Citbankers did before they moved on.

Update on 25 March 2010

Footie fans (FTs and those who hate RI, I assume) insist I post this to show that locals can be as rubbishy as FTs.

http://atans1.wordpress.com/2010/03/25/singtel-local-talent-policy-not-working/

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