DBS CEO can still laugh his way to the bank

As 2019 draws to a close, it is timely to review the performance of the largest bank in Singapore – DBS Group. In a year which many analysts predicted to be a challenging year for DBS Group, the Singapore bank stunned many critics by posting a series of solid financial results. For nine months, net profit rose 13% to $4.88 billion. Total income grew 12% to $11.1 billion. Against this backdrop, DBS CEO can laugh all the way to the bank.

Piyush Gupta joined the bank in November 2009. In the blink of an eye, ten years had passed. Under the helm of the current DBS CEO, the Singapore bank has enjoyed a decade of tremendous growth.

Of course, there were challenges along the way, such as the European debt crisis (2011-2012), the oil slump (2014-2016) and the unfolding trade war between USA and China. Somehow, the DBS CEO managed to steer the bank to safe harbor and grew the bank to an even bigger scale than what it was ten years ago. Very impressive indeed.

DBS CEO

According to SGX filing, DBS CEO Piyush Gupta held 1.84 million of DBS shares as at 25 February 2019. Most of the shares were awarded to him as part of his remuneration for being DBS CEO. In 2016, at the peak of the oil slump, DBS CEO had purchased 200,000 DBS shares from the open market in a move widely seen as “putting his money where his mouth is”. Apart from the shares, the DBS CEO also held about 1.03 million options of DBS shares as at 25 November 2019.

In all fairness, I do think the DBS CEO deserves to be paid well as the bank enjoyed robust growth for the past five years. Net income surged from $4.05 billion in 2014 to $5.5 billion in 2018. Given the slew of positive quarterly results in 2019 so far, the full-year net income for 2019 is likely to surpass FY2018.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether DBS Group share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

DBS CEO guided bank to the promised land?

With US Federal Reserve cutting interest rates three times in 2019, it remains to be seen if DBS Group can continue to sustain its robust financial results for FY2020. The outlook by the DBS CEO for FY2020 is that NIM is expected to decline by 7bps and that loan growth will be similar to 2019.

For sure, DBS CEO Piyush Gupta certainly knows how to make hay while the sun shines. It seems that DBS is banking on the window of opportunity by focusing on loan growth. Despite the geopolitical tensions and challenging macro-economic condition, DBS Group saw its total loan increased to $358 billion as at 30 September 2019 from $345 billion as at 30 September 2018.

Much of the loan growth comes from the building and construction segment. Apparently, DBS CEO had [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: December 25, 2019 — 2:01 pm

2 Comments

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  1. Thanks, Gerald, for your diligence in continually posting your study. Happy New Year and Kung Hei Fat Choy in 2020.

    I made some money in this counter twice this year by listening to your advice.

  2. Hi Leo,

    Wishing you a prosperous new year ahead! Happy that you made money in the stock market!
    Just to clarify that the articles are not meant to be advice because I am not licensed to do so.
    Nonetheless, look forward to engaging you and fellow members in 2020!

    Regards,
    Gerald
    https://sgwealthbuilder.com

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