DBS CEO aces succession, sets high bar
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to add RICs.
By Anshuman Daga
SINGAPORE, Aug 8 (Reuters Breakingviews) -Piyush Gupta is going out on a high, and in style. He is stepping down from DBS Group DBSM.SI after nearly 15 years as CEO. The Indian-born put Singapore's $72 billion lender on the Asian map, led it to deliver stellar shareholder returns, and has pulled off a flawless succession plan. It sets a high bar for his successor.
It's a classic, drama-free, transition of power, befitting of its home city-state. Hours after reporting record first-half net profit of 5.76 billion Singaporean dollars ($4.3 billion) and a nearly 19% return on equity, DBS on Wednesday said Tan Su Shan, 56, head of institutional banking, would succeed Gupta in March 2025. Unveiling his departure and her elevation at the same time sends a strong message of stability.
Tan is credited with transforming the firm into one of Asia's top wealth managers, having earlier led that business for nearly a decade. The Singaporean was widely regarded as the strongest candidate for the top job. Overall, the ex-Morgan Stanley and Citi banker is a solid pick to lead the firm.
That is just as well because Gupta, lauded as the region's top financier, leaves big shoes to fill. Under his leadership, DBS has delivered a 475% total return to shareholders since he took over in late 2009, trouncing gains over the period at nearly all global peers and the benchmark Straits Times Index, per LSEG data. Recent tech issues have been mostly resolved and the bank, part-owned by sovereign investor Temasek, trades at 1.4 times its estimated 2025 book value. Among big lenders, JPMorgan JPM.N trades higher at 1.6 times.
Tan will lead the group through a trickier growth phase. Though DBS' expanding wealth business is a good buffer as the world enters an era of lower interest rates, China is keeping a close watch on capital outflows and India is likely to do the same. Meanwhile, recent acquisitions will need careful handling as Sino-American relations worsen: DBS, for example, has recently become the top foreign bank in Taiwan, an island at the centre of a highly charged territorial dispute, after it bought Citi's consumer business. Shareholders may look to Tan to return excess cash, rather than do more bolt-on deals.
Nonetheless, the mark of a good leader is smooth succession. After a messy CEO change at rival HSBC HSBA.L and abrupt departure of the frontrunner at Standard Chartered STAN.L, Piyush is handing over a strong business in a well-organised manner. Jamie Dimon who has run the $570 billion JPMorgan for only a few years longer, and is yet to name a successor, may take note.
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CONTEXT NEWS
Singapore's DBS Group on Aug. 7 named Tan Su Shan as its next chief executive from March 28, 2025. Tan, head of institutional banking, will take over from Piyush Gupta, who has led the bank since 2009.
Tan, 56, has worked at Southeast Asia's largest lender since 2010. Before her current role, she led the consumer banking and wealth management business for nearly a decade. The veteran banker of more than 35 years will be the first woman to lead DBS.
Graphic: Piyush Gupta has led DBS to stellar shareholder returns https://reut.rs/3AhOF9t
Editing by Una Galani and Aditya Srivastav
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