Asia Transaction Banking Delivering ... - Live more, Bank less · Standard Chartered A1 AA-...
Transcript of Asia Transaction Banking Delivering ... - Live more, Bank less · Standard Chartered A1 AA-...
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
Asia Transaction Banking
Delivering Sustainable Returns
Tom McCabe Managing Director
27 March 2014
Strong revenue growth and operating leverage
(1) Profit before allowances
Revenue
2
47%
39% 35%
38%
2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013
Expenses Profits (1) Cost to Income S$m
+26% CAGR +18% CAGR +32% CAGR +3% pt YOY
Balanced growth across products, segments and geographies
740
344 396
1,080
426
657
1,410
492
918
1,485
568
917
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
177 180
356 330 354 370 356 325 300
240 216 193 189
396 369 364
Four years of consistent growth
Avg Quarterly Income (S$m)
Balances (S$b)
*Cash Revenue includes Securities & Fiduciary Services
Trade
Cash +23%
+28%
Deposits
Loans +46%
+22%
3
185
270
352 371
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
14 18 18 20 23 30
40 45 47 53 50 52
58 59 63 63 52 56 58
65 67 73
81 82 87 85
94 95 95
109 115 119
Diversified earnings across segments and geographies
Commodities, MNC and Institutional Investors revenue grew at 40% CAGR
Revenue ex Singapore and Hong Kong at S$540m, up from S$212m in 2010
4
2010 2013
392
938 348
547
Revenue by Segments S$m
+16%
+34%
Small Medium Enterprises
Large Corporates
China +51%
CAGR
Indonesia
+34% CAGR
Hong Kong
+28% CAGR
Taiwan +42%
CAGR India
+28% CAGR
Singapore
+23% CAGR
Rest of World
+14% CAGR
Other Businesses
Institutional Bank ex GTS
GTS
2010 2011
S$b
2012 2013 2010 2011 2012 2013
Group Revenue Group Profit Before Allowances
Transaction Banking Contribution to Profits
5
4.1
18% 21% 15% 10%
42%
5.0
4.5 4.3
38% 35%
48% 44%
47% 48%
34%
51%
39%
17% 17% 14%
36% 34%
47%
49%
10%
38%
48%
7.6 7.1
8.9
8.1
2010-2011 2012-2013
2014
Launch New Products and Infrastructure
IDEAL 3.0 – Redefining Internet Banking
Commercialisation of new payment products
Liquidity Management Structures
Automate Risk tools
ERP Systems Capabilities
ROE Balance Sheet Strategies
Deepen Wallet Penetration
Regional Sales Team
Talent Development
Profitability, Sustainability and up-tiering Client Relationships
Deeper penetration into FI and MNC segments
Acquire more SMEs
Increase sales effectiveness
Accelerate Cash Management growth
Increase fee income
Diversify source of USD funding
Leverage technology to create scale
Advanced Working Capital Advisory
Decision Analytics
Talent development
Assess and address gaps
Strategy Development
Key Product Priorities
Technology Investments
10,000+ New Sales Calls
Alignment with RM Segments
Commodity Trade Finance
Geographic Expansion
Performance Mgt Tools
People Agenda: Skills, Expertise and Leadership
Our Journey becoming a Leading Transaction Bank
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“Successfully upgraded its online banking platform to provide corporates with a faster and
simpler way to manage cash and
trade transactions…”
Recognized DBS IDEAL as a solution
that is “forward thinking, innovative
and pragmatic”
IDEAL 3.0 : DBS Award Winning Innovation
18,000 new sign ups in 2013
3 million payments per month
30,000 client enquiries daily
9,500 e Alerts sent daily, leveraging Push technology
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Leading in “breadth of product
offerings, website design and
functionality..on DBS IDEAL”
50 Host to host clients China, India and Taiwan payments up 50% Launched Regional Credit Interest Optimization
and Cross Border Sweeping Complete suite of Supply Chain Financing solutions
New Payments, Liquidity Mgmt &
Supply Chain Financing
Capabilities
18 new multi-country mandates Complex clients 200+ accounts in 1 structure 192 clients >S$1m of annualized revenue Ability to support Regional Treasury centers
Regional Product & Sales Team
$5b assets sold across our network 40 active investors $24b new deposits; USD deposits grew 54% YOY Diversified funding base and improved ROE
Balance Sheet Efficiency
Best in Working Capital and Trade Finance in
Southeast Asia 2013
Ranked #1 in Liquidity Management Satisfaction 2011-2013
Best Global Cash Management Bank
in APAC (small corporates)
2013
Figures relate to 2013
Investing into high growth & high ROE revenue pools
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Investing for Sustainability: “Fit for Growth”
Singapore -China Corridor
Simplified Chinese
申请表
2.5K RMB accounts opened
1st Bank Outside Europe to achieve
Crystal Mark for T&Cs
Online Account Opening
Increase operational efficiency
E-appointment for Branches
20% of branch account openings
Regional Account Opening
Forms
ST Connect: risk control and
monitoring system for Structured Trade
Finance
Upgrade of IMEX 6.5: Add supply chain module, improve
workflow and user experience
Enhancements to DBS IDEAL:
Login Monitoring, mChallenge
IDEAL eReports : Banking on the go
FactorPro : New ARP
transaction processing platform
IDEAL Connect, our point-to-point
secure file transfer solution
Integrated Payment Engine in
Hong Kong & SIngapore
SFS* efficiency improvement saves:
650,000 papers over 4,000 cust &
DBS hrs
20 Audits & regulatory inspection
completed in last 2 years
21 New Product Approvals
completed in last 2 years
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*SFS refers to Securities & Fiduciary Services
SG HK CN IN ID1 1 1 1 1 1
2 1 1 1 0 0
3 1 1 1 1 1
4 1 1 0 0 0
5 1 1 0 0 0
6 1 1 0 0 0
7 1 1 1 0 1
8 1 1 0 0 0
9 1 1 0 0 0
10 1 1 0 0 0
11 1 1 0 0 0
12 0 0 0 1 0
13 1 1 1 1 1
14 1 1 1 1 1
15 1 1 1 1 1
16 1 1 1 1 1
17 1 1 0 0 0
18 1 0 0 0 0
19 1 1 0 0 0
Trad
e
Prod
uct S
uite
Cash
Prod
uct S
uite
SG HK CN IN ID TW ROW
Trad
e
Pro
du
ct S
uit
e
1 1 1 1 1 1 1 0
2 1 0 0 0 0 0 0
3 1 1 0 0 0 0 0
4 1 1 0 1 1 0 1
5 1 1 1 1 1 1 1
6 1 1 1 1 1 1 1
7 1 1 1 1 1 1 1
8 1 1 1 1 1 1 1
9 1 1 1 1 1 1 1
10 1 1 1 1 1 1 1
11 1 1 1 1 1 1 1
12 1 1 1 1 1 1 1
13 1 1 0 1 0 0 1
14 1 1 1 1 1 1 1
15 1 1 0 1 0 0 0
16 1 1 1 0 1 0 0
Cas
h
Pro
du
ct S
uit
e
17 1 1 1 1 1 1 1
18 1 1 1 1 1 1 1
19 1 1 1 1 1 1 1
20 0 1 0 0 0 0 0
21 1 1 1 1 1 1 1
22 1 0 0 0 0 0 0
23 0 1 0 0 0 0 0
24 1 1 1 1 1 1 1
25 1 0 0 1 0 0 0
26 1 0 0 1 0 0 0
27 1 0 0 1 0 1 0
28 1 1 1 0 1 1 0
29 0 1 0 0 0 0 0
30 0 1 0 0 0 0 0
31 1 0 0 0 0 0 0
32 1 0 0 0 0 0 0
33 1 1 1 1 0 0 0
34 0 1 0 1 1 0 0
35 1 0 0 0 0 0 0
91 new revenue streams across DBS franchise
High degree of linked FX income
Increased distribution and coverage capabilities
Positioned for Continued Growth
Grew from 59 revenue streams in 2009 to 150 revenue streams
2009
2013
Major revenue streams from products which didn’t exist in 2009
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Game Changing Innovation: DBS Working Capital Advisory
1 Industry and peer Benchmarking using a database of 65,000 companies
2 Customised analysis of client’s operations and concise action steps using Diagnostic Tools
3 Industry best practices, user networks and thought leadership with Advice and Insights
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Creating free cash flow for our clients
Prudent risk management defines DBS
Average tenor of trade assets approx four months
Targeted customer selection
70% of trade assets are bank or cash backed
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2013 2014F YOY
GDP Growth 7.6 7.8 0.2
CHINA Exports US$b 2200 2420 10%
Imports US$b 1953 2128 9%
SINGAPORE
GDP Growth 4.1 4.0 (0.1)
Exports US$b 437 455 4%
Imports US$b 395 412 4%
INDIA
GDP Growth 4.8 5.3 0.5
Exports US$b 318 334 5%
Imports US$b 482 511 6%
INDONESIA
GDP Growth 5.8 6.0 0.2
Exports US$b 180 195 8%
Imports US$b 187 199 6%
Source: CEIC, Bloomberg and DBS Research
Asia trade growth is massive, but… margins & risk varies across markets and products
US$580b of New Trade growth
in 2014
China 395
Hong Kong 50
India 45
Indonesia 27
Singapore 35 Taiwan
31
83 81 105
269 262
320
2012 2013 2015F
Global Payments & Cash Mgt Revenue (US$b)
Global +11%
Asia +13%
Large revenue pool in Open Account Trade and Payments
(1) Source: FCI Statistics, WTO Release Apr 2014, DBS estimate. Based on Asia turnover 3-yr CAGR of 36% (2) Source: Oliver Wyman, DBS estimate. Asia includes Australia and New Zealand but excludes Middle East
Asia Payments & Cash Management revenue to reach $105b(2) by 2015
Asia Open Account Trade revenue to reach $4b(1) by 2015
13
1.9
3.8
0.0
1.0
2.0
3.0
4.0
Asia Open Account Trade Revenue (US$b)
2009 2012 2015F
+26% CAGR
Source: East & Partners Jan 2014
2010 2011 2012 2013
8.8 9.2
9.6 9.9
DBS % Primary Transaction Banking Relationships
DBS ranked Top 3 Trade Finance Bank in Asia
Strength of DBS: Strong client relationships
Rank Market Share
1 HSBC 22.5
2 CITI 14.7
3 DBS 10.5 4 SCB 9.5
5 JP Morgan 6.5
6 Bank of America 5.4
7 ANZ 5.3
8 Deutsche 4.6
“DBS Bank has muscled into the top ranks of global banks offering trade finance in Asia
…the trade expertise of […] and DBS bankers is rated significantly higher than that of 3 dominant providers
East & Partners Principal Analyst, said that the results confirmed the positive feedback East has been receiving over an extended period about the trade offerings of […] and DBS”
Business Times, 4 Mar 2014
“DBS has extremely good regional knowledge of local rules and compliance”
East & Partners Asia Head of Market Analysis
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CREDIT RATINGS (2) Moody’s S&P
DBS Aa1 AA-
HSBC Aa3 AA-
JP Morgan Chase Aa3 A+
Barclays A2 A
Standard Chartered A1 AA-
Citibank A2 A
Deutsche Bank A2 A
BNP Paribas A2 A+
Bank of America A2 A
Strength of DBS: Ability to drive Sustainable Growth
0%
20%
40%
60%
80%
100%
DBS GTS DBS Group European Banks
US Banks
Cost to Income (1)
(1) Source: Oliver Wyman
(2) As of Feb 14
GTS cost-income ratio drives superior returns and pricing power
Strong balance sheet, robust liquidity and high credit ratings
Clear and consistent strategy in terms of markets, clients and products
Institutional Banking Group expanding client base and customer-related activities in all key markets and segments
Wealth management & SME delivering record growth
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Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.
Asia Transaction Banking
Delivering Sustainable Returns
Tom McCabe Managing Director
27 March 2014