Is this morally correct ? Slash workers, produce good returns to push share price, big bonuses to top executives ...

a good corporation is one that manage its growth efficiently - govt only realise recently when it says to "quality growth" and not growth at all costs.., create a vibrant and happy culture in the organisation, profitable, top are not greedy, employees' gratitudes in turn will pass on to society and less fortunate...the list go on etc........

incirent      ( Date: 20-Apr-2009 08:02) Posted: I fully agree with an article in the Business Times that DBS needs to have a tough new CEO.  The previous CEO did the right thing by slashing 900 DBS staff members corresponding to the downturn in the banking business. However, his action was not taken kindly by the politicians in power. This might be one of the causes for his illness to deteriorate so rapidly. Look, the bottom line of running a successful business is to produce a good Balance Sheet. If the Balance Sheet is not "greasy" enough to reward the shareholders, the stock price will go down and the CEO will be blamed. MBA 401, MBO, Management By Objective, in this case it is finance and not politics, stupid.

By SIOW LI SEN

UNVEILING his vision for DBS to become a leading pan-Asian bank, new chief executive Piyush Gupta said yesterday it has to tackle its huge deposit base, rebuild management strength in Hong Kong and grow rapidly in India and Indonesia.

 

DBS will also 're-orientate' its focus on the Middle East, he added.

Calling DBS a 'very strong deposit surplus bank', Mr Gupta said 'we're more hurt than other banks' when interest rates are low. On its 'unbalanced balance sheet', he said DBS 'needs to build up our customer assets ... needs to be more than just a savings bank'.

DBS's government link is a strong magnet for deposits and the 2008-09 financial crisis has made savers park even more money with the bank.

Speaking at DBS's full-year 2009 results announcement, Mr Gupta said it should offer a wider suite of products, including appropriate investment products, and sell more mortgages and unsecured loans.

Its loan-to-deposit ratio fell to 71 per cent in 2009 from 74 in 2008, and it 'needs to do more to improve that ratio'.

But Mr Gupta declined to say what would be an optimum ratio for DBS.

Loans growth in 2009 was 3 per cent and 2 per cent for Q4 quarter-on-quarter. Net interest margin fell to 2.02 in Q4, from 2.03 in Q3 and 2.04 a year earlier.

While full-year and Q4 earnings rose 6 per cent to $2.04 billion and 67 per cent to $493 million respectively, Mr Gupta is under pressure to deliver better results amid the low interest rate and sluggish loans growth environment.

Unimpressed analysts said a tax write-back contributed to the Q4 earnings boost, as bad debt charges surged 43 per cent from a year earlier, according to a Reuters report.

Mr Gupta wants to improve the relationship with DBS Group's POSB or mass-market customers. He noted the long queues at branches and its ATMs, which have the highest ATM usage anywhere in the world.

DBS will launch a programme to look at processes, documentation and policies to make them more customer-centric, Mr Gupta said.

As for becoming a leading pan-Asian bank, DBS has the financial strength and expertise to do so, Mr Gupta pointed out. It is near the top of 23-25 double AA rated banks worldwide, and benefited during the financial crisis amid a flight to quality, he pointed out. 'When I go round the region, DBS is really well known,' he explained. Not just in Indonesia but also in Hong Kong and Taiwan, 'we're seen as a progressive bank'.

DBS should aim for a revenue mix of 40:30:30 Singapore, Greater China, South and South-east Asia in five years, Mr Gupta said. It now gets 62 per cent and 27 per cent of revenue from Singapore and Greater China. 'We are also making progress in our growth markets,' Mr Gupta noted. 'In Taiwan, we have delivered a profit a year ahead of schedule. We have strengthened our franchise in Indonesia, growing to 40 branches in 11 cities.

'So our aspiration is to continue to focus on this playing field. What that means therefore (is) we're also unlikely to be looking at expanding our businesses in domestic franchises in Europe, in North America (and) frankly even the Middle East. We have enough to do in our backyard and that's where we hope to focus, that's where we hope to build our future certainly for the next five or 10 years.'

DBS will rebuild its management strength in Hong Kong, after people there were pulled to help out in Taiwan and mainland China, he said. Asked about DBS Hong Kong's slipping market share, Mr Gupta said it can be improved, though a 3-5 per cent market share is not bad.

On the group's Islamic Bank of Asia (IBA) unit, there is no change to the strategy, which is to mediate flows from the Middle East to Asia. 'What we might do is re-orientate our focus - in the sense of building a domestic presence in the Middle East - we'll take a pass on that,' Mr Gupta said.

hi incirent, i beg to differ.

 if everone think ahead and cut 5-10% of headcount. then what is perceived as recession becomes real. and if it is real become worse.

in the end the sheer force of those being out and down will pull you down as well.

do more good to others and the good will come back to you. +ve cycle.

smart alek cut cost retrench today pay big big retrenchment benefits then 6 months later found not enough people doing work. hire back. is it really smart?

for long term investor unless being short to extreme like c really there is no effect. the write down is far more, much more then the salary save.

but by doing a show, it make everyone take a short term stand. so is that good.

 the winning formula is to do long term business and let the magic of compound return do the trick. the drankan way of quick return with huge yearly bonus has shown its down side effect. should be do away.

better to reward very very small yearly (make it a law) and pay over 20 years or for as long as business stay.

ave return of investment is 6% (Graham) and believe it still stay true today.

incirent      ( Date: 20-Apr-2009 08:02) Posted: I fully agree with an article in the Business Times that DBS needs to have a tough new CEO.  The previous CEO did the right thing by slashing 900 DBS staff members corresponding to the downturn in the banking business. However, his action was not taken kindly by the politicians in power. This might be one of the causes for his illness to deteriorate so rapidly. Look, the bottom line of running a successful business is to produce a good Balance Sheet. If the Balance Sheet is not "greasy" enough to reward the shareholders, the stock price will go down and the CEO will be blamed. MBA 401, MBO, Management By Objective, in this case it is finance and not politics, stupid.

Judging from the media info, As AML is the only cancer without staging, he probably has the illness as early as one year ago and he did not make it to the transplant stage.  After the chemo put the cancer into remission, you need to do a transplant to make sure the remission stay put.

Why is ah koh so early to announce the good news that he is recovering......did not even bother to sit down with the panel of doctors to talk about it ??

Anyway, a company cannot go without a CEO for very long......the second liner with be spending a many time eyeing on what is the color of the new leather sit.....