Tan Su Shan as next DBS CEO seen as a nod to continuity

BANKING icon Piyush Gupta’s impending departure from DBS is unlikely to rock the boat for South-east Asia’s largest bank, according to analysts.

In fact, market watchers said that DBS is likely to have picked its group head of institutional banking Tan Su Shan to be its next CEO for the sake of continuity.

On Wednesday (Aug 8), the bank appointed Tan as deputy chief executive on top of her current role. She will replace Gupta when he retires in March 2025.

This gives Tan around eight months to transition to the CEO role, during which she will “try out and get comfortable with all the moving parts to run a bank”, Gupta said at a media briefing on Wednesday.

She will be DBS’ first female CEO, and the first home-grown staff member hired internally to take the top role at the bank.

Tan’s appointment may not come as a surprise, as markets have speculated that she was a potential successor, analysts said.

They also expect little change in DBS’ direction under Tan’s management, given that she has been at the bank for over a decade, and is already part of the core team that is driving its culture and goals.

“Given the extended transition period and Tan’s extensive experience working with Gupta for 14 years at DBS (and before DBS at Citi), we view Tan as a continuity candidate,” said Lorraine Tan, director of Asia equity research at Morningstar.

Shares of DBS were down slightly on Thursday, after the announcement of Gupta’s retirement. The counter closed 0.2 per cent lower at S$33.57.

Meanwhile, OCBC was up 1.1 per cent to S$14.23, and UOB ended 0.5 per cent higher, at S$30.

However, DBS continues to rank among the top performers in Singapore’s blue-chip Straits Times Index this year. The counter is up 10.5 per cent in the year to Aug 8, compared to the index’s 0.8 per cent gain over the same period.

The strong performance led the bank in May to be the first Singapore-listed company with a market capitalisation of above S$100 billion.

Tan – who has been looking after DBS’ institutional business since 2019 – managed the bank’s consumer banking and wealth management segments from 2010 to 2019.

Peter Seah, DBS chairman, said at the briefing that Tan performed well in looking after the “two big parts of the bank that contribute the lion’s share of the bank’s income”.

The succession process will likely be smooth, since she is well-entrenched into the culture and operating norms of the bank, said Ivan Tan, a banking analyst at S&P Global Ratings.

Investors can expect continuity in DBS’ core focus and regional strategy under her management, he added.

Meanwhile, her key priorities ahead would be to drive growth in North Asia amid a structural slowdown, and pursue new growth opportunities in India, said Thilan Wickramasinghe, head of Singapore research at Maybank Securities.

She would also have to focus on staying the course with capital returns, Wickramasinghe said.

Tan has been a front runner for the position, in his view.

A research analyst at RHB noted that the bank’s capital plan agenda is driven by the board, which remains intact. Thus, the analyst does not expect the appointment to derail its dividend and capital return thesis.

In fact, Morningstar’s Tan noted potential for an increase in shareholder distributions before Gupta’s departure, if DBS continues to deliver strong results.

S&P’s Tan said there will likely be individual differences in leadership style, and certain strategic or business aspects might evolve. But he expects DBS will continue to build on its key pillars, such as its Asia-focused regional strategy, digital innovation and sustainability.

Speaking at the briefing, DBS’ Tan noted four points that she will focus on: culture, customers, collaboration and continuity.

On succeeding Gupta, who has helmed DBS for nearly 15 years, Tan noted that she had “big shoes to fill”.

“But, guess what? Our shoes are different; we wear different kinds of shoes. Our styles may be different, but some things may not change going forward,” she said.