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DBS Stock Post-Gupta – Buy, Sell or Hold?

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DBS Stock Post-Gupta – Buy, Sell or Hold?


The Singapore news headlines were buzzing late last week when the long time CEO of DBS Group Ltd (SGX: D05) Piyush Gupta, announced his retirement.

DBS succession
Credits: DBS

To my surprise, many Singaporeans reacted snidely to the news, either giving it a thumbs-up, or even reacting sarcastically to Mr Gupta’s birthplace.

My guess and hope is that the investing community, and presumably the Singapore nation, should feel saddened that a remarkable corporate veteran of Singapore’s largest bank has called time on his career.

DBS’ stewardship prior to Mr Gupta

It is surprising to learn that prior to Mr Gupta, none of his predecessors lasted more than 10 years at the helm.

The available list of DBS CEOs dates back to 1990, where Mr Ngiam Tong Dow became CEO, serving from May 1990 untill May 1998, before passing the baton to John T. Olds.

Mr Olds held the position for just over 2 years before Philippe Paillart took over. Mr Paillart is credited with helping DBS expand into North East Asia and developing a platform for business and growth in China.

Jackson Tai, a US citizen, succeeded Mr Paillart as CEO in June 2002. It was under Mr Tai’s tenure that DBS became a leading regional bank. Mr Tai served as CEO for a little over 5 years.

Mr Richard Daniel Stanley was the next CEO, serving from May 2008 to April 2009. Mr Richard Daniel Stanley passed away from leukaemia on 11 April 2009, capping his term as DBS CEO to just 1 year.

Mr Piyush Gupta, who had no prior experience with DBS, was brought in from Citigroup to be the next CEO. And he held on to that position for over 15 years, leading us to where we are today.

DBS’ achievements under Mr Gupta’s leadership

DBS share price
Source: TradingView

Ever wondered how DBS performed over the last 15 years under Mr Gupta’s tenure?

Adjusted for dividends, DBS’ total returns actually outpaced the S&P 500 during the same period, with a return of +761% versus +697%. Meanwhile, the Straits Time Index managed only around +85%.

In 2013, Mr Gupta sounded the war drums, emphasizing that DBS should embrace the culture and mindset of big tech rather than adopting the traditional mindsets of banks.

The digitalization push intensified, with DBS being one of the first movers in the digital wallet space in Singapore. While in countries like Malaysia, where digital wallet providers sprang up everywhere like mushrooms, digital wallets were fully entrenched by local Singapore banks.

Coupled with growth outside of Singapore, it is no wonder that, all in all, this Singapore banking stock trounced the S&P 500 by a fair margin.

The soon-new rein holder of DBS

Tan Su Shan

The succession of Piyush Gupta took years in the making.

The succession planning framework began when Gupta took over as CEO and was expedited when Gupta expressed his intentions to retire at the age of 65.

DBS Chairman Peter Seah spilt the tea on the entire succession framework as follows.

Enter Ms Tan Su Shan, who will take over the reins by March 2025. She has 14 years of experience with DBS, having been personally invited to join the bank by Piyush Gupta.

What stood out when Ms Tan Su Shan spoke was the simplicity of her vision for DBS, highlighting the 4Cs – Culture, Customers, Collaboration and Continuity. A homegrown talent, she has certainly made history as the first female CEO of DBS.

She will have big shoes to fill. But this time round, I feel that the succession planning was prepared well in advance and clearly outlined.

Buy, Sell or Hold DBS stock post-Gupta era?

Looking back at DBS under Mr Gupta’s tenure, DBS has morphed from Singapore’s largest bank into a world class bank by any standard. The bank is proof and a testament to the Singaporean miracle.

Many might argue that any decent or above-average individual could have served just as a mere placeholder.

But a gentle reminder: Singapore being a pragmatic and meritocratic country that it is, could have seen DBS overtaken by the likes of United Overseas Bank Ltd (SGX: U11) and Overseas Chinese Bank Corporation (SGX: O39) if it had lagged under a subpar leader.

Or, DBS being a bank with Temasek as one of its significant stakeholder, would have initiated a change of guard if Mr Gupta wasn’t up to the required standards.

I see similarities between running Singapore and DBS successfully. To paraphrase the late Mr Lee Kuan Yew’s famous speech:

Whoever governs DBS must have that iron in him/her. Or give it up. This is not just any listed company. It is the backbone of the Singapore financial system, thus your life and mine! 

Singaporeans, regardless of whether they are DBS shareholders, should appreciate that Mr Piyush, together with other foreign talents (including yours truly!), brought not only DBS, but Singapore to greater heights.

I am not licensed to give investment advice, but when the price is right, I would definitely want to buy and hold onto DBS stock forever, so long as the results show potential and management continues to walk the talk in delivering their growth plans.

p.s. if you want to learn how to analyse and find the best stocks to buy, Alvin shares our strategy at this live webinar.



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