DBS appoints new Malaysia head, sparks expansion talk

Singapore

DBS' move to appoint a new country head in Malaysia has sparked talk of its expansion there via a digital banking outfit.

On Monday, South-east Asia's largest lender announced that Raof Latiff, currently group head of digital for institutional banking and group head of global transaction services product management, will become its Malaysia country head from June 1.

Mr Latiff, who joined the bank in 2017, takes over from Jeffrey Ling who will be retiring from the role.

With the economic outlook "in the clear", DBS may feel that it is timely to "revisit plans" to expand its presence in Asia, of which, entering a new market in Malaysia may yield greater results, Phillip Securities analyst Tay Wee Kuang told The Business Times.

Unlike its banking peers, DBS currently has a negligible presence in Malaysia. Malaysia is a key market for OCBC and UOB, making up 20 per cent of OCBC's operating profit as at Q4 2020, and about 14 per cent of UOB's operating profit as at Q4 2020.

Sanford C Bernstein analyst Kevin Kwek reckoned that Malaysia is "unlikely to allow DBS to do more in the traditional way".

But as the country is keen to issue digital bank licences, DBS' appointment of a new country head could be its way of "prepping up for a way to attack the market" through the digital route if it becomes possible, said Mr Kwek.

Penetrating the Malaysia market via the digital banking route is also a logical move as it will enable DBS to go on an asset-light operation, which has been a "consensus go-to model" for banks within the region, Phillip's Mr Tay added.

"DBS may be capitalising on the timely opportunity to apply for digital banking licence in Malaysia," he noted. He further told BT that Mr Latiff's wealth of experience will be "useful for laying down operational groundwork" to build a banking presence in a new market.

Bank Negara in December last year set out its licensing framework for digital banks, and plans to award up to five such licences. According to Malaysian reports, about 40 parties have "registered their interest" to apply for a digital banking licence. The deadline to submit applications for the digital banking licence is June 30, with granting of the licences expected in the first quarter of next year.

Prior to joining DBS, Mr Latiff held several senior regional positions at global banks, including Citigroup, JPMorgan and HSBC, and brings with him over 25 years of banking experience in areas such as transaction banking, foreign exchange and treasury functions across the region.

He has been "instrumental" in developing and driving the digital transformation of the bank's institutional banking franchise, said the lender in a statement. DBS did not elaborate further on plans to expand into Malaysia.

Alongside his new country management responsibilities, Mr Latiff will continue to oversee the bank's institutional banking ecosystems and strategic platform partnerships.

Lim Soon Chong, previously the bank's group head of investment products and advisory for DBS' consumer banking and wealth franchise, succeeded Mr Latiff from Jan 1 this year. The bank said this has allowed for a "smooth transition" ahead of Mr Latiff's move into his new role.

To further help with the transition, Mr Ling will stay on as a senior adviser alongside Mr Latiff to help continue the engagement with the bank's key clients in Malaysia.

Tan Su Shan, DBS group head of institutional banking, said: "The new appointments reflect our commitment to groom talent from within, and enable us to continue to provide more development opportunities to our senior team across the region."

A "large" proportion of the bank's senior leaders have also been developed internally, including over 80 per cent of its managing directors, Ms Tan added.

Shares of DBS closed up 46 Singapore cents or 1.7 per cent higher at S$27.10 on Monday.