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DBS Group Holdings: Asia's Best Bank and Singapore's Development Story
I. Introduction & Episode Roadmap
Picture this: May 2024, and the digital ticker boards across Marina Bay Financial Centre's gleaming towers flash a historic number. DBS Group Holdings has just become the first Singapore-listed company ever to surpass SGD 100 billion in market capitalization. The milestone isn't just a number—it's the culmination of a 56-year journey from a government-backed development bank financing nascent factories to Asia's preeminent financial institution.
In May 2024, DBS became the first Singapore-listed company to cross SGD 100 billion in market capitalisation, which increased further to SGD 124 billion at year end. Total shareholder returns for 2024 were 51%, the highest in DBS' history outside crisis-rebound years, comprising a share price gain of 44% and a dividend return of 7%.
The central question we're exploring: How did a government development bank created to finance industrial projects—started by a team of young bureaucrats with no banking experience—transform into the "World's Best Bank" and Southeast Asia's largest financial institution?
DBS Group Holdings reported an impressive financial performance for the year 2024, with its net profit increasing by 11% to a record SGD 11.4 billion. The return on equity was sustained at 18.0%, matching the previous year's record. To put that in context: DBS now delivers returns that put many developed-market global banks to shame, all while operating from a city-state smaller than New York City.
DBS is the largest bank in Southeast Asia by assets and among the largest banks in Asia, with assets totaling S$739 billion as of 31 December 2023. It also holds market-dominant positions in consumer banking, treasury and markets, securities brokerage, equity and debt fund-raising in other regions aside from Singapore, including in China, Hong Kong, Taiwan and Indonesia.
This is a story that unfolds across several eras: from nation-building in the late 1960s, through aggressive regional expansion in the early 2000s, a turbulent decade of leadership instability, and finally the remarkable digital transformation under Piyush Gupta that turned a "stuffy loan shop" into a technology-first institution benchmarking itself against Google and Amazon rather than rival banks. Each chapter reveals critical lessons about government-linked enterprise evolution, the opportunities and pitfalls of Asian Century banking, and how traditional institutions can transform themselves from within to face digital disruption.
Our multi-year structural transformation, growth in high-ROE businesses and diversified franchise across Asia have enabled us to deliver outsized returns to our shareholders.
II. Singapore's Independence and the Birth of DBS (1965-1968)
The Context: A Nation Without Resources
To understand DBS, you must first understand Singapore in 1965—a newly independent nation with virtually nothing to recommend it as an economic proposition. Expelled from the Malaysian Federation, Singapore was a tiny island at the southern tip of the Malay Peninsula with no natural resources, no agricultural hinterland, and a population of under two million people primarily engaged in entrepôt trade—acting as a middleman for goods passing through the Strait of Malacca.
The DBS company history began on July 16, 1968, when it was officially established as The Development Bank of Singapore Limited. This pivotal moment arose from Singapore's need for robust industrial financing following its separation from Malaysia in 1965. The nation was charting a course towards industrialization, moving away from its reliance on entrepôt trade.
The founding fathers of Singapore—Lee Kuan Yew, Goh Keng Swee, and their colleagues—recognized that survival required rapid industrialization. But industrialization required capital, and Singapore's commercial banks were ill-suited to provide long-term financing for manufacturing ventures. Commercial banks focused on trade finance, letters of credit, and short-term lending. Who would provide the seven-year loans to build factories?
Back in 1960, the government invited a United Nations (UN) industrial survey mission to assess the economic situation in Singapore and to come up with an industrialization programme for the city. The proposal included setting up a development bank, together with an economic body to attract foreign investments to Singapore and also provide industrial financing and management of industrial estates. In April 1968, then Minister for Finance, Goh Keng Swee revealed the government's plans to form a development bank with equity participation from the public in order to have greater financing for Singapore's industrialisation project.
Creation as a Development Financing Institution
Listed on the Singapore Exchange, DBS was officially incorporated by the Government of Singapore on 16 July 1968 to take over the industrial financing responsibilities of the Economic Development Board (EDB).
The founding capital structure revealed the Singapore government's characteristic pragmatism about private sector involvement: With a startup capital of S$100 million, share ownership in its first year of operations comprised the following: S$48.6 million by the Singapore government; S$25.9 million by commercial banks; S$7.6 million by insurance companies and other financial institutions. The government maintained control but deliberately brought in private capital—both for the money and to align commercial interests with national development.
The establishment of the DBS marked the first time the private sector was allowed to fully participate in the financing of manufacturing and other industrial projects in Singapore.
Hon Sui Sen and the Founding Team
Hon Sui Sen, who served as the EDB's chairman until December 1968, was appointed as the first president and chairman of the DBS. He was one of 12 members on the bank's inaugural board of directors, six of whom were representatives of banks and other financial institutions with shareholdings in the company.
What made the founding team remarkable was their inexperience—and perhaps that was an advantage. Mr Hon Sui Sen was DBS' first Chairman and President. He joined DBS from the Singapore Economic Development Board in 1968, expanding the bank's services beyond development financing to a full-fledged financial institution.
DBS commenced operations on 1 September 1968 under Hon Sui Sen, who served as its inaugural Chairman and President, with a mandate to mitigate financing gaps in a nascent economy lacking sufficient private sector capital for large-scale projects.
S. Dhanabalan, who was part of the original team that left EDB to start DBS in 1968 and later served as DBS Chairman, recalled the entrepreneurial spirit of those early days. It didn't make sense. We took the risks, but we didn't get the full returns. So, we felt we should start commercial banking. The board was against it, because they were all commercial bankers, who naturally did not want competition. Moreover, there was a change in policy then, and new banks were being given licences to conduct business in Singapore.
Mr Hon Sui Sen was the first Chairman and President of the Development Bank of Singapore, from 1968 to August 1970. In 1970, Mr Hon was persuaded by then-Prime Minister Lee Kuan Yew to become the Finance Minister of Singapore. He served as Finance Minister for 13 years until his passing on Oct 14, 1983.
The DBS story is inseparable from Singapore's story—created three years after independence, staffed by government officials turned bankers, majority-owned by the state through Temasek Holdings to this day. DBS's largest and controlling shareholder is Temasek Holdings, Singapore's second-largest sovereign wealth fund after GIC. As of 31 March 2023, Temasek owns 29% of DBS shares.
III. From Development Bank to Commercial Banking (1968-1990s)
Industrial Financing Years
Its main function was to provide loans to manufacturing and processing industries with the aim of supporting the establishment of new industries and upgrading existing ones. The bank also supported development projects such as urban renewal and tourism schemes. In addition, the bank began commercial banking operations on 16 June 1969.
The transition from pure development finance to commercial banking was neither automatic nor unopposed. The Bank's concern when it was founded was to provide development financing, principally for the manufacturing sector. Mr Hon soon realised that just providing development financing at fixed rates for long periods would not suffice. Commercial banks were moving in the same field. Moreover, clients of DBS were not satisfied with term loans. They wanted overdrafts, bills financing, short-term facilities, foreign currencies, hedging possibilities, funds management, investment banking, and other banking services. Thanks to Mr Hon's subtle diplomacy, DBS was able to make the transition into a fully-fledged commercial institution, with active operations in virtually every dimension of the banking industry.
The Pivot to Commercial Banking
The logic was straightforward: development financing meant taking equity-like risks for debt-like returns. Commercial banking offered recurring revenue and higher margins.
Fortunately, Mr Hon persuaded him. We put up a case, and Mr Hon forwarded it to Dr Goh, who then approved. So that was the start of our commercial banking business: a little counter at the entrance of our rented premises in Shenton Way, and two cashiers.
First Branch and Regional Expansion
The bank opened its first branch in Singapore in 1972, strategically located in Jurong, the heart of the nation's industrial estate. This branch offered a comprehensive suite of banking services to support local businesses.
The bank's international journey began in April 1977 with the establishment of a branch in Tokyo, Japan. This marked a crucial step in its evolution beyond domestic operations.
Going Public and Diversification
The bank listed on the Stock Exchange of Malaysia and Singapore on 29 November 1968, enabling broader funding access while remaining government-majority owned.
It was during his period of leadership that the Bank also set up an insurance company, The Insurance Corporation of Singapore. A wholly-owned finance subsidiary was also founded.
By the 1980s and 1990s, DBS had transformed from a specialized development lender into Singapore's largest bank with a comprehensive suite of consumer, corporate, and investment banking services. But it remained fundamentally a Singapore-centric institution—dominant in its home market but with limited regional presence. That would change dramatically with the strategic acquisitions of the late 1990s and early 2000s.
IV. The Transformative POSB Acquisition (1998)
Singapore's Oldest Bank
POSB Bank, often known as POSB, is a Singaporean bank offering consumer banking services. It is the largest and oldest local bank in continuous operation in Singapore with over four million customers. Established on 1 January 1877 as the Post Office Savings Bank, POSB currently operates as part of DBS Bank after being acquired on 16 November 1998. Having served generations of Singaporeans for more than 145 years, it is known as the "People's Bank", and prides itself on being "neighbours first, bankers second". Founded on 1 January 1877 as the Post Office Savings Bank (POSB), the bank was part of the Postal Services Department in the Straits Settlements.
POSB was more than a bank—it was a national institution. Every Singaporean child opened a POSB savings account; the orange passbook was practically a rite of passage. The bank operated the densest network of branches and ATMs on the island, embedded in heartland neighborhoods across the city-state.
The Deal and Government Strategy
On 24 July 1998, the Ministry of Finance announced the acquisition of POSBank by DBS Bank, which was fully acquired on 16 November 1998 for S$1.6 billion, at the same time, ceased to exist as a statutory board under the Ministry of Finance. The merger was seen to enable POSBank to compete better with full-fledged commercial banks, to better serve more sophisticated customers, and in line with the government's call for local banks to merge and create larger and stronger banks to compete internationally.
The timing was significant—mid-1998, during the depths of the Asian Financial Crisis. Singapore's banks had weathered the storm better than their Thai or Indonesian counterparts, but the crisis exposed the vulnerability of small, undercapitalized institutions. The government's response was consolidation.
This will help them to hold their own in Singapore, as MAS progressively opens the domestic market to competition from foreign banks. It will also give the local banks the financial strength to cushion increased market and currency risks, and larger asset size to reap economies of scale, in order to become significant regional players. For the non-government linked local banks, these are commercial decisions which the banks have to make for themselves. However, for the banks in which the government holds a controlling stake, the government will take the initiative to merge the banks, where it makes business sense. This will set the pace for consolidating and upgrading the domestic banking sector.
Strategic Rationale
The acquisition's importance extended beyond financial metrics. The bank was then renamed POSBank in 1990, before being acquired by DBS Bank on 16 November 1998 for S$1.6 billion (first announced on 24 July 1998), giving it a dominant market share with over four million customers.
DBS Bank is already Southeast Asia's largest bank and the 90th largest bank in the world. DBS Banks acquisition of POSBank will result in a combined asset base of $93 billion and shareholders funds of $9.4 billion, making the enlarged DBS Bank the 65th largest bank in the world.
The merger presented significant cultural challenges. "POSB is the People's Bank," said Ms Foh. "It had a different culture from DBS. So, before the merger, we had to strategise and consider questions such as: How would POSB be changed? What would we do with the POSB brand? How can we prevent attrition of POSB staff?" Ms Nora Kang, a veteran "POSB girl" who in 1998 served as General Secretary of the POSB Staff Union, had similar questions when she heard news of the merger.
The decision to preserve the POSB brand—rather than absorbing it entirely into DBS—proved inspired. POSB still operates one of the highest number of bank branches in Singapore, especially in the suburban heartland neighbourhoods, and operates the highest number of ATM outlets throughout Singapore. The brand equity of "People's Bank" remains invaluable for retail banking in Singapore.
V. Aggressive Regional Expansion: Hong Kong and Beyond (1999-2003)
Entry into Hong Kong
The POSB acquisition whetted management's appetite for transformative deals. If consolidation was the path to regional relevance, DBS would lead the charge.
DBS started its operations in Hong Kong in 1999 by acquiring Kwong On Bank from Leung's family & Japanese-based Fuji Bank, and renamed it as DBS Kwong On Bank Limited. It acquired Dao Heng Bank (and its subsidiary Overseas Trust Bank) in 2001. The three banks were later merged under the trading name of DBS Bank (Hong Kong) Limited.
The Dao Heng Acquisition – The Largest in SE Asian Banking History
The Dao Heng deal was audacious. A pivotal moment came in 2001 when DBS acquired Hong Kong's Dao Heng Bank for SGD 10 billion, which at the time was the largest banking acquisition in Southeast Asian history. This acquisition significantly strengthened DBS's presence in Hong Kong and positioned it as a major player in the Greater China region.
Having bought Dao Heng at 3.3 times its book value, did DBS pay too much? "That's a popular question," says Michael Siu, a Hong Kong-based banking analyst for Salomon Smith Barney. "At the time [of the transaction] the price was deemed to be quite 'full.'"
The strategic logic was compelling—but execution proved difficult. DBS' total franchise, size and scale increased, making DBS the fourth largest bank in Hong Kong, the third largest credit card issuer and one of the leading consumer banks. DBS is now the only bank with market leading operations in both Singapore and Hong Kong.
With the acquisition of Dao Heng, DBS has reduced the concentration of its assets in Singapore from 80.0% at June 30, 2000 to 55.5%, and has established Hong Kong as its second pillar, with 36.3% of DBS' assets, up from 7.8% of total assets before the acquisition at end June 2000.
Integration and Rebranding
In 2003, DBS Bank merged the three banks, DBS Kwong On Bank Limited, Dao Heng Bank and Overseas Trust Bank, to form DBS Bank (Hong Kong) Limited.
The bank was previously known as The Development Bank of Singapore Limited, which "DBS" was derived from, before the present abbreviated name was adopted on 21 July 2003 to reflect its role as a global bank.
The rebranding was symbolic—DBS would no longer be defined by "Development Bank of Singapore" but would stand for something broader. Yet the aggressive acquisition strategy left scars. The lender went on an acquisition spree between 1997 and 2001, spending more than 12 billion Singapore dollars ($9.3 billion) to acquire local banks in Hong Kong, Indonesia, the Philippines and Thailand. The pieces never added up to a greater whole, though. Profits rose, but costs escalated at an even faster pace, and margins shrank. When the global financial crisis struck in 2008, the renamed DBS Group Holdings saw its stock price plunge by nearly two thirds and was forced to raise expensive capital with a big rights issue.
"We didn't know where true north was," says Gupta. "If somebody came along with what seemed like a good idea and said, 'Let's do that,' we would do that." Although DBS doubled total income and net profits in the eight years following the Dao Heng buyout, the lender failed to integrate its operations and deliver promised synergies. Return on equity hovered in the single digits for all but three years over the past decade, while the bank's cost-to-income ratios remained high and fee income as a percentage of revenue stayed flat. "The bank basically created an expectation in its acquisition of Dao Heng that it then was unable to deliver and spent many years justifying," says institutional banking head Wong, who served as chief financial officer between 2003 and 2008.
VI. The Turbulent 2000s: CEO Turnover and Challenges (2000-2009)
Leadership Instability
The decade following Dao Heng was marked by serial leadership transitions that hindered strategic consistency. Within 10 years, DBS cycled through five different CEOs—an unusual level of turnover for an institution of its stature.
Succession of Leaders
Philippe Paillart was appointed CEO in January 2001. While he successfully closed the Dao Heng acquisition, the integration challenges proved formidable. Jackson Tai, an American banker, succeeded him as CEO from June 2002 to December 2007. Tai helped transform DBS from a Singapore-centric bank into a regional player, but his tenure coincided with mounting challenges.
Navigating the 2008 Financial Crisis
The reputation of DBS became mired in the financial crisis's worst excesses when $360 million worth of structured notes created by Lehman Brothers Holdings, which DBS had sold mostly to private investors in Hong Kong and Singapore, became worthless when the U.S. brokerage went bust. In July 2009, Singapore's monetary authority temporarily banned DBS, along with nine other local financial institutions, from selling structured notes altogether. In Hong Kong, DBS agreed to pay HK$651 million ($83.6 million) to 2,160 local customers who lost money on the notes. For 2009, DBS raised its loan-loss allowances by 95 percent, to S$1.53 billion, as nonperforming loans doubled from a year earlier, to 2.9 percent of all loans.
Exacerbating the bank's woes, CEO Richard Stanley, another former Citibanker, died from leukemia in April 2009, less than a year after taking the top job.
The bank was adrift. Customer satisfaction scores were the lowest among Singapore banks. The share price had collapsed from crisis lows. The board needed to find a leader who could fundamentally reimagine what DBS could become.
VII. The Piyush Gupta Era Begins: Transformation Thesis (2009-2014)
The New CEO and His Background
Piyush Gupta BBM (Hindi: पीयूष गुप्ता; born 24 January 1960) is a Singaporean banker and the chief executive officer (CEO) of DBS Group between 2009 and 2025. He is vice-chairman of the Institute of International Finance since 2013, and a board member of Enterprise Singapore since 2024.
Gupta was one of three children, born in Meerut, India, to R.S. Gupta and Minnie Gupta. He attended St. Columba's High School and later earned a bachelor's degree in economics from St. Stephen's College, Delhi. After graduating, he joined the Indian Institute of Management, Ahmedabad for a Post Graduate Diploma in Management. In 1982 and at the age of 22, Gupta started his career at Citibank India as a management trainee. He did several assignments with Citibank India, eventually being the chief-of-staff to the India head. He moved to Singapore in 1991 as the chief-of-staff to the Asia head, and was posted to Indonesia in 1998, as country manager.
In 2000, he left Citigroup to start up a dot-com company, but closed his venture and re-joined Citigroup in 2001. Gupta was country officer in Malaysia from 2002 to 2007, where he helped built up Citigroup's branch network, before assuming the role of country officer in Singapore and the head of the Corporate and Investment Bank in ASEAN. In 2008, Gupta was appointed the CEO of Citibank in South East Asia, Australia and New Zealand. In 2009, he left Citigroup to join DBS Group as the CEO.
What made Gupta different? Unlike typical commercial bankers, his roots at Citi were in operations and technology—he was a protégé of former Citi CEO John Reed, perhaps the first global banker to understand the importance of information technology to the industry. This background would prove decisive.
Piyush Gupta, the Indian-origin Chief Executive of Singapore's largest bank, DBS Group, will step down in March 2025. Gupta took the helm at DBS in 2009 after a 27-year career at Citigroup.
Inheriting a "Stuffy Bank"
In 2009, DBS had the lowest customer satisfaction scores of any bank in Singapore. Today, it's been recognised as the world's best digital bank multiple years over — thanks in large part to its deliberate digital transformation journey.
At the time, DBS was primarily a two-market bank, with a meaningful presence only in Singapore and Hong Kong. Our ROE stood at just 8.4% the previous year. We served five million customers, mostly in Singapore, and had the lowest customer satisfaction scores among the Singapore banks.
Gupta described what he inherited as a "stuffy bank, a loan shop" that lacked ambition. The institution was bureaucratic, risk-averse, and complacent in its dominant market position. From day one, Gupta was determined to change that.
"Making Banking Joyful" – The Radical Mission
The mission statement Gupta introduced seemed almost absurd for a bank: "Make banking joyful." The notion of "joyful banking" initially seemed unconventional—banking is paperwork, fees, queues, and frustration—but it was a deliberate provocation to break away from the industry's traditional image.
Early on in 2013, Gupta also realized that DBS needed to start thinking like big tech. "Our frame of reference had to be Amazon or Alibaba. We had to stop thinking about what other banks will do."
VIII. The Digital Transformation: Becoming the "D" in GANDALF (2014-2019)
The 2014 Awakening
DBS has the advantage of having embarked on our digital transformation journey early in 2014, well ahead of our peers. This has put some daylight between us and the competition. Our efforts in leveraging digital technology to shape the future of banking have been recognised with awards such as "World's Best Digital Bank" by Euromoney and "Most Innovative in Digital Banking" by The Banker. We architected our digital transformation around three pillars: being digital to the core, embedding ourselves in the customer journey and operating like a start-up.
The year 2014 marked a pivot point. Technology was disrupting entire industries—telecommunications, transportation, retail. Why should banking be immune?
In 2014, CEO Piyush Gupta and his leadership team launched a digital transformation programme intended to "Make Banking Joyful". Under this programme, the bank would consider itself "a technology company delivering banking services" and benchmark its progress against leading technology companies and aim to be the "D" in the acronym GANDALF, alongside Google, Amazon, Netflix, Apple, LinkedIn, and Facebook.
The "GANDALF" aspiration—being worthy of inclusion alongside tech giants—became internal shorthand for the transformation. DBS wouldn't compare itself to other banks; it would ask "What would Jeff [Bezos] do?"
Core Transformation Strategy
By being digital to the core – that is repurposing our technology stack to run on cloud and open source, leveraging APIs (application programming interfaces) and microservices – and growing our in-house tech capabilities, we were able to lay the foundations to be an AI-fuelled bank.
DBS Bank has positioned itself at the forefront of digital transformation with a substantial annual technology budget of USD 1 billion (SGD 1.34 billion) in 2024, representing approximately 6% of its income. This investment demonstrates the bank's commitment to building robust AI capabilities while maintaining its position as Asia's leading digital bank. The bank's data architecture is built on three fundamental pillars that support its AI ambitions: Cloud-Native Infrastructure—DBS has developed a sophisticated hybrid cloud environment that combines private and public cloud capabilities. This infrastructure hosts over 90% of the bank's applications and workloads, providing the computational power necessary for advanced AI operations. The bank's cloud strategy has resulted in three times more efficiency than the industry benchmark in managing virtual machines and four times the workload capacity of a typical bank on a single piece of hardware.
Building AI and Data Capabilities
In 2018, we recognised that AI industrialisation would be a defining competitive advantage and kicked off an aggressive transformation.
The results speak for themselves: Our data analytics and artificial intelligence (AI)/ machine learning (ML) initiatives delivered over SGD 750 million of economic value in 2024, more than double that in the previous year. We now have over 1,500 models across more than 370 use cases. They include sending more than 1.2 billion personalised nudges to more than 13 million customers across the region.
The economic value generated from the bank's AI/ML use cases has demonstrated a clear and exponential growth trajectory. In 2022, these initiatives delivered S$180 million in economic value, comprising a revenue uplift of S$150 million and S$30 million in productivity gains and cost avoidance. In 2023, this figure more than doubled to S$370 million. In 2024, the economic value surged again, more than doubling to over S$750 million.
Harvard Business School (HBS) has published a case study on DBS' strategy towards Artificial Intelligence (AI), highlighting the bank's use of AI. Developed over the course of eight months, the case is the first relating to AI that HBS has done on an Asian bank, and the first for a Singaporean company. Authored by Professor Feng Zhu, MBA Class of 1958 Professor of Business Administration at HBS and Co-Chair of the Harvard Business Analytics Program, the case maps the bank's strategy and implementation as it industrialised its use of AI since 2014 to unlock business value, as well as how DBS is now approaching Generative AI.
In 2023, DBS was ranked #1 for AI Strategy Leadership in the Global Evident AI Index, an independent benchmark which ranks 50 of the largest financial institutions in North America, Europe and the Asia-Pacific based on their approach towards AI readiness. Overall, DBS ranked #10, and was the only Asian bank to be in the Index's Top 10.
Cultural Revolution: Startup Mindset
The transformation wasn't just technological—it required rewiring the organization's DNA. Simply put, we've embraced the challenge of becoming more like a technology company than a traditional bank. This mindset shift has been crucial in balancing our scale with the need for agility and innovation in AI implementation. To do this, we've drawn inspiration from tech giants to drive our transformation initiatives, keeping our focus firmly on the customer. Honing into AI specifically, our decade-long journey to become an AI-fuelled bank has been built on three pillars: process, technology, and people. On the process front, we've created a standardized, repeatable approach called the DBS AI Protocol (ALAN, named after Alan Turing), which has enabled us to scale to over 800 models and 350 use cases across the bank.
Product Innovation: PayLah!, digibank, and APIs
In 2014, DBS released its mobile wallet service named PayLah!, which garnered more than 100,000 users less than two months after its launch in Singapore. As of 2018, PayLah! had more than 1 million users.
More than seven in 10 PayNow fund transfers and payments in Singapore today are performed by DBS customers. Our mobile wallet PayLah!, which marked its 10th year in service, hit a record 41.6 million logins a month, which included more than 60% of all scan-to-pay transactions in hawker centres, outpacing peers. Outside of Singapore, 2.8 million users can pay at over 77 million QR acceptance points worldwide. In the past year, cross-border QR payments made through PayLah! nearly tripled in transaction volume.
IX. India Strategy: Digital-First Market Entry & LVB Acquisition (2016-2020)
India's First Mobile-Only Bank
Singapore, India, 26 Apr 2016 - DBS Bank, Singapore's largest bank and a leading bank in Asia, today officially unveiled digibank, India's first mobile-only bank. A revolutionary offering, digibank brings together an entire suite of ground-breaking technology – from biometrics to artificial intelligence (AI) – to enable customers to enjoy a whole new way of banking. Breaking away from conventional banking norms with their onerous form-filling and cumbersome processes, digibank is a completely paperless, signatureless and branchless bank.
The strategic logic for India was clear: competing against large domestic banks with massive branch networks was financially impractical for a foreign player. Digital distribution was the only way to achieve scale without prohibitive fixed costs.
Account-opening can be done easily and effortlessly at an extensive network of outlets run by DBS' partners; for a start, this includes over 500 cafes across India. Significantly, there is no paperwork involved. Instead, customer authentication is done purely using the Aadhaar card, a biometrics-enabled ID which has been issued to over 1 billion Indians in what is the world's largest biometric identification programme.
Said DBS CEO Piyush Gupta, "India's banking system is at the cusp of massive change, and as a bank committed to shaping the future of banking, we are excited to roll out a revolutionary, mobile-only bank. With digital, we are able to create a completely different customer experience. What's more, digibank's efficiencies and lower costs enable us to pass on significant benefits to customers in the form of greater customer value."
In 2016, DBS launched India's first mobile-only bank, digibank, which now has ~1 million savings accounts. In November 2020, Lakshmi Vilas Bank was merged with DBS Bank India Limited. The bank now has a network of ~530 branches in 19 Indian states.
The Lakshmi Vilas Bank Merger – A Historic First
Lakshmi Vilas Bank (LVB) is now amalgamated with DBS Bank India Limited (DBIL), the wholly owned subsidiary of DBS Group Holdings Ltd. The scheme of amalgamation is under the special powers of the Government of India and Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949, India, and came into effect on 27 November 2020.
This is the first time the RBI has allowed a foreign bank to rescue a struggling Indian bank.
The LVB acquisition was remarkable for multiple reasons. First, it demonstrated regulatory trust in DBS—the RBI chose a foreign bank to rescue a distressed domestic institution, breaking precedent. Second, it transformed DBS's India footprint overnight.
DBIL is infusing INR 2,500 crore capital in amalgamation to support the credit growth and in return DBIL will penetrate the Indian market with more branches and ATMs. DBIL is operating with just 27 branches in India, however the numbers would grow as it has 563 branches of LVB from 27 November 2020.
Massive Scale Expansion
DBS has been present in India for 30 years, opening its first office in Mumbai in 1994. DBS Bank India Limited is the first among the large foreign banks in India to start operating as a wholly owned, locally incorporated subsidiary of a leading global bank. The bank now has a network of 530+ branches across 19 states in India.
In 2024, income in India grew 25% as we leveraged our full-service platform spanning institutional, wealth and retail banking to more fully participate in India's growth.
X. Global Recognition and Record Performance (2016-2024)
World's Best Bank Accolades
In a feat unmatched by other banks globally, DBS has become the first bank to concurrently hold three global best bank awards. This was achieved after DBS was named "World's Best Bank" by leading global financial publication Euromoney in its 2019 Awards for Excellence. It follows the bank's wins of Global Finance's "Best Bank in the World" in August 2018 and The Banker's "Bank of the Year – Global" in November 2018. This is the first time an Asian-headquartered bank has been named "World's Best Bank" by Euromoney since the award was launched in 1993. Past winners included Bank of America, BNP Paribas, Citi and UBS.
DBS was named as the world's best bank for 2019 in the Euromoney Awards for Excellence at a gala dinner held at the London Hilton Park Lane tonight. The Singapore-based bank is the first from outside the US or western Europe to receive the top prize in the 27-year history of the Euromoney awards programme, which is considered the most coveted and competitive in the global banking industry.
The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named "World's Best Digital Bank" by Euromoney and the world's "Most Innovative in Digital Banking" by The Banker. In addition, DBS has been accorded the "Safest Bank in Asia" award by Global Finance for 16 consecutive years from 2009 to 2024.
Financial Performance Breakthrough
DBS Group delivered another record-breaking financial performance in 2024, with net profit rising 11% to SGD11.4bn ($8.4bn) and return on equity (ROE) sustaining at 18.0%. Total income grew 10% to SGD22.3bn, fuelled by an expanding net interest margin, record-high fee income, and a rebound in markets trading income. The cost-income ratio remained stable at 40%, and asset quality remained sound with specific allowances at 13 basis points of loans.
Record-setting profits of S$11.4 billion in FY 2024 for DBS Group (DBSDY), with EPS growth at a CAGR of 12.5%.
Since 2009, our market capitalisation has quadrupled even while we paid out SGD 40 billion in dividends. DBS' total shareholder returns since the end of 2009 ranked in the top decile of the world's 100 largest banks.
Recent Strategic Moves: Taiwan and Beyond
DBS Bank Ltd (DBS) announced today that it has agreed to acquire the consumer banking business of Citigroup Inc (Citi) in Taiwan (Citi Consumer Taiwan) via a transfer of assets and liabilities, and will pay Citi cash for the net assets of Citi Consumer Taiwan plus a premium of SGD 956 million. Scope of acquisition Citi Consumer Taiwan has been operating in Taiwan since 1985, and currently has 2.7 million credit cards and unsecured accounts, 0.5 million deposit and wealth customers and 45 branches.
DBS Bank Ltd (DBS) today announced that it has completed the acquisition of Citigroup Inc.'s consumer banking business in Taiwan (Citi Consumer Taiwan), with the integration successfully executed over the weekend of 12 and 13 August 2023.
Overnight, revenue from the market will more than double to over SGD 1.3 billion. With the transaction, I am also confident that we will be able to provide more value to our customers, in particular, helping them grow their wealth through innovative products, and helping those who are business owners expand into new markets or participate in regional trade flows.
XI. Leadership Transition: The Tan Su Shan Era
Piyush Gupta's Departure
In 2024, he announced on August 7 that he would step down from his role on March 28, 2025. Tan Su Shan was appointed deputy CEO with immediate effect and will succeed him.
Piyush Gupta, CEO of Singapore's largest bank, DBS Group, is retiring on 28 March, marking the end of his leadership stint that began in November 2009. Gupta is credited with steering the bank through a transformative digital journey, pioneering the early adoption of AI and investing in digital banking.
Under his leadership, DBS has expanded its customer base to over 18 million consumer clients, grown its workforce to approximately 41,000 employees, and amassed SGD 827 billion (around $612 billion) in assets.
"We achieved a record financial performance in 2024 with return on equity of 18.0%, one of the highest among developed market banks. Balance sheet management supported net interest income growth while improving investor sentiment drove wealth management fees and treasury customer sales to new highs. "While macroeconomic and geopolitical uncertainties persist, the franchise and digital transformations carried out over the past decade position us well to continue delivering healthy returns. As I reflect on my journey at DBS, I feel good about where the bank is and am confident it will reach further heights under Su Shan's leadership."
Tan Su Shan: First Female and First Internal CEO
After 15 years at the helm, Piyush Gupta announced last month that he will step down as CEO of DBS Bank in March 2025, to be succeeded by Tan Su Shan, who will become the bank's first female head and first internal candidate to be chosen for the top spot.
Su Shan, 56, brings solid credentials to her new role, having had more than 35 years of experience in consumer banking, wealth management and institutional banking. Besides Singapore, she has worked in major financial centres such as Hong Kong, Tokyo and London. Su Shan joined DBS in 2010 and spent the first three years building the foundations of the Wealth Management business. She subsequently spent almost equal lengths of time managing the Consumer Banking / Wealth Management and the Institutional Banking businesses, which account for 90% of DBS' income. Su Shan led the day-to-day efforts to operationalise the bank's digitalisation strategy across the businesses she ran.
Tan has big shoes to fill as Gupta's successor, she told reporters, but "our shoes are different. We wear different kinds of shoes, so our styles may be different. But some things will not change going forward." The way forward, she said, will still center on the "four C's" that are integral to DBS: culture, customers, collaboration, and continuity.
XII. Competitive Positioning: DBS vs. Singapore Peers
The Big Three: DBS, OCBC, and UOB
It is one of the "Big Three" local banks in Singapore, along with Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB).
Beyond strengthening Singapore's position as a financial centre, DBS, UOB, and OCBC are also among the largest companies listed on the Singapore Exchange (SGX). Collectively, they make up over 50% of the Straits Times Index (STI), Singapore's benchmark stock index.
The three largest Singaporean banks — DBS Bank Ltd., Oversea-Chinese Banking Corp Ltd and United Overseas Bank Limited — reported another year of strong profitability in 2024, largely powered by robust growth in fee income led by wealth management, and higher trading income, while net interest income remained broadly stable as a decline in net interest margins (NIM) was offset by a rebound in loan growth. Full-year NIM narrowed slightly to an average of 2.1% in 2024 from 2.2% in 2023. At the same time, other key credit fundamentals remained strong. Asset quality was sound and we expect a moderate increase in problem loans and credit costs in 2025, from low levels in 2024. Core capital levels were robust, with the common equity tier 1 (CET1) capital ratios at 15.1% to 15.4%, on a Basel III fully phased-in basis.
DBS's Competitive Advantages
You see, DBS had a far larger deposit base compared to OCBC and UOB. Its dominant deposit base and stronger franchise pulled more wealth assets into its ecosystem – capturing a bulk of the wealth inflows.
Among the three, DBS continues to demonstrate clear leadership in return on equity, a key driver of its premium market valuation. OCBC is showing signs of stabilisation, while UOB will need to reignite earnings momentum to lift shareholder returns in the coming quarters.
In FY2024, DBS achieved a record net profit of $11.4 billion and a return on equity of 18.0%. Total income grew 10% to $22.3 billion, supported by commercial book net interest margin expansion, fee income surpassing SGD 4 billion for the first time, record-high treasury customer sales and a rebound in markets trading income.
Currently trading at $34.80, UOB has a market capitalisation of about $58.2 billion. For FY2024, UOB reported a record net profit of $6.0 billion, a 6% increase from the previous year.
The valuation differential is stark: With the strong performance in the share price of DBS, it is now trading at a price-to-book ratio of 2.3x, after the price-to-book ratio of 1.2x for UOB.
XIII. Bull Case and Bear Case Analysis
The Bull Case for DBS
Digital Leadership Creates Sustainable Moat DBS's decade-long investment in digital transformation has created genuine competitive advantages that are difficult to replicate. The bank's AI capabilities—delivering SGD 750 million in economic value in 2024—represent real efficiency gains and customer experience improvements. Now, even if lower rates bring down net interest margins, Tan says DBS can still earn a return in the mid-to-high teens, as it continues to increase market share and realises gains from AI. DBS has been one of the few large banks globally to put a number on how much value it is gaining from its AI investments.
Wealth Management Growth Engine Compound annual growth of assets under management in wealth has topped 20% over the past three years. In 2024, DBS's wealth management income rose by 18% to S$5.2 billion, while non-interest income in wealth rose by 45%.
Dominant Deposit Franchise DBS's POSB heritage gives it an unassailable retail deposit base in Singapore, funding loans at lower cost than competitors. This structural advantage translates directly to higher net interest margins.
Asia Growth Exposure DBS is positioned in the right geographies—Greater China, Southeast Asia, India—to benefit from Asian middle-class wealth accumulation over coming decades.
The Bear Case for DBS
Interest Rate Sensitivity NIM compression is the biggest earnings headwind. As global rates decline, DBS's outsized benefit from higher rates will reverse.
Greater China Property Exposure In particular, the banks' CRE exposures in mainland China and Hong Kong SAR, China remain a key credit risk. All three banks posted higher NPL ratios in their real estate exposures, with UOB underperforming the other two banks.
Valuation Premium At 2.3x price-to-book versus 1.2x for UOB, DBS is priced for perfection. Any execution missteps under new leadership could trigger multiple compression.
Technology Resilience Concerns The bank faced significant service outages in 2023. On 1 November 2023, in response to the incidents, the MAS imposed restrictions on DBS: prohibiting it from acquiring any new business ventures and requiring it to pause all non-essential IT changes for 6 months. DBS was also prohibited from reducing the size of its branch and ATM networks in Singapore. CEO Piyush Gupta apologised for the disruption and stated that the bank will set aside a special budget of S$80 million to enhance system resiliency.
Porter's Five Forces Analysis
Threat of New Entrants: Low-Moderate Banking is heavily regulated, requiring licenses and substantial capital. However, digital-only banks and fintechs can target specific segments without the full regulatory burden of universal banking.
Bargaining Power of Suppliers: Low Banks source capital from depositors and wholesale markets—both highly competitive with many alternatives.
Bargaining Power of Buyers: Moderate Retail customers are relatively sticky (switching costs are real), but corporate and institutional clients can and do shop for the best rates and service.
Threat of Substitutes: Moderate and Rising Fintechs, digital payments (PayNow, cross-border QR), and alternative lending platforms chip away at traditional banking revenues.
Industry Rivalry: High Singapore's banking market is consolidated among three local champions plus international players. Competition for deposits, loans, and wealth management is intense.
Hamilton Helmer's 7 Powers Framework
Scale Economies: Strong DBS benefits from scale in technology investment, regulatory compliance, and deposit gathering. Its larger deposit base funds loans at lower marginal cost.
Network Effects: Moderate PayLah!'s dominance in Singapore scan-to-pay creates network effects—more merchants accept it because more consumers use it, and vice versa.
Switching Costs: Strong Banking relationships are sticky. Salary crediting, bill payment arrangements, mortgage relationships, and accumulated transaction history make switching costly.
Counter-Positioning: Historical Strength DBS's early embrace of digital transformation represented counter-positioning against incumbents who couldn't cannibalize existing branch networks. This advantage has narrowed as competitors caught up.
Cornered Resource: Moderate The POSB brand and branch network in Singapore heartlands is a semi-exclusive resource, though not irreplicable.
Process Power: Strong DBS's industrialized AI platform (ALAN) and data infrastructure represent genuine process advantages built over a decade.
Branding: Strong "World's Best Bank" accolades and "Safest Bank in Asia" create meaningful brand equity, particularly important in wealth management where trust is paramount.
XIV. Key Metrics to Watch
For investors tracking DBS's ongoing performance, three KPIs merit primary attention:
1. Return on Equity (ROE)
ROE is the ultimate measure of banking profitability—how much the bank earns relative to shareholders' capital. DBS's 18% ROE in 2024 was among the highest for developed-market banks globally. Sustained ROE in the mid-to-high teens would validate the transformation story; decline toward single digits would suggest structural challenges.
2. Net Interest Margin (NIM)
NIM measures the spread between what banks earn on loans and pay on deposits. DBS benefited enormously from rising rates, with NIM expanding from historical levels around 1.7% to above 2.0%. Watch for NIM trajectory as rates normalize—management's ability to offset margin pressure through volume growth and fee income will be critical.
3. Wealth Management AUM and Fee Income Growth
Wealth management is the highest-ROE business and key growth engine. Compound AUM growth above 15-20% and sustained fee income expansion would signal successful execution of the wealth strategy across Singapore, Hong Kong, Taiwan, and emerging affluent markets.
XV. Conclusion: The Next Chapter
DBS's journey from development bank to World's Best Bank is extraordinary—but the story isn't over. The bank faces a leadership transition for the first time in 15 years, a normalizing interest rate environment, and the imperative to continue innovating while maintaining the scale and stability expected of a systemically important institution.
According to Tan, being able to manage IT and data complexity effectively is becoming more important in the AI era, especially with the advent of potentially autonomous AI agents. "This was one step back, two steps forward," she says of the reaction to the 2023 service disruption. "We've regrouped, redesigned, rehired, and made ourselves stronger. We've also created a better foundation from which to grow in agentic AI."
The Singapore government's development bank has become a case study taught at Harvard Business School. The bank that once had the lowest customer satisfaction scores in Singapore now defines what a modern bank should look like. The institution that struggled for identity during five CEOs in a decade achieved record profits under steady leadership.
We leverage our technology capabilities, new ways of working and deep ecosystem partnerships to develop innovative solutions that create greater value for our 19 million customers. Our roots as the Development Bank of Singapore have made purpose a part of our DNA.
For long-term investors, DBS represents a rare opportunity: exposure to Asian growth through a well-managed, digitally-advanced, conservatively-run financial institution trading at a premium that may or may not be justified by its competitive position. The premium valuation means expectations are high—but DBS has consistently exceeded expectations for over a decade.
The central question looking forward: Can Tan Su Shan and her team maintain the culture of innovation and transformation that Gupta built, while navigating a more challenging macroeconomic environment? The answer will determine whether DBS remains Asia's best bank—or becomes another cautionary tale of institutional complacency after a charismatic leader's departure.
What started as a government tool for nation-building has become something far more valuable: proof that Asian institutions can compete with—and beat—the best in the world at their own game.
Myth vs. Reality
| Common Narrative | Reality Check |
|---|---|
| "DBS is just a Singapore bank" | DBS generates significant income from Hong Kong, Greater China, India, Indonesia, and Taiwan. Singapore accounts for roughly half of income. |
| "Government-linked companies are inefficient" | DBS's 18% ROE and 40% cost-income ratio compare favorably with best-in-class global banks. Government ownership (via Temasek) has provided patient capital for transformation. |
| "Bank digital transformation is mostly marketing" | DBS can quantify SGD 750 million in economic value from AI/ML in 2024. Digital customers generate 2x income at 60% of the cost of traditional customers. |
| "The Gupta era was all about expansion" | The most important changes were cultural and technological—"GANDALF" mindset, startup-style experimentation, and industrialized AI adoption. Acquisitions were selective and strategic. |
| "Interest rates drove all the profits" | While NIM expansion helped, wealth management and fee income grew faster. ROE improved from 8.4% in 2009 to 18% in 2024—a structural transformation, not just rate sensitivity. |
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