DBS: There be value?

In Banks on 21/06/2010 at 5:08 am

I’m putting DBS on my “Value?” watch”list. I’ve never ever owned DBS preferring HSBC and UOB (this via Haw Par).

I never regretted not owning DBS esp since 1998 when the CEO post became an FT only post and FTs  dominated senior mgt.

Fat gd it did DBS’s shareholders including Temasek. According to the Boston Consulting Group, DBS has had a total shareholder return between 2005 and 2009 at negative 4.6%. OCBC had 2.4% relative total shareholder return and UOB 0.4%. OCBC has an FT CEO, but the rest of senior mgt is largely “home-grown”. UOB is on its third CEO from the Wee family (where banking is in the blood?), but the rest of top mgt is also largely home-grown.

But based on the relatively new home-grown chairman’s comments reported last week, DBS could be a different animal, if the FTs are willing and can execute his vision, this and this.

But first, let’s add to the FT balls-up list. I’m not the only one amazed to read in BT  that only now is DBS 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.

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.

Hell’s bells, I’m surprised that DBS is only thinking about this juz now. OCBC and UOB have been doing this from the day they set up overseas branches in faraway places.  They never did corporate banking but focused on trade financing. So did OUB.

A major test of execution is what happens to the head of Consumer Banking, “Wealth Terminator” Rajan. He signed-off on the HN5 Notes and targeting their sale to fixed deposit customers.

But the appointment of the last CEO of POSBank is a gd sign, as is the chairman’s desire that the next CEO be “home -grown”.

Hopefully DBS will no longer be a place where “FTs rule OK”, but a meritocracy,that gives the same opportunities to home-grown staff as to FTs.

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