Dbs Group Holdings Ltd · SGX:D05
Dbs — Investor Day (2023)
167 slides from Dbs's investor day presentation, 2023
Slide 1: Overview
Overview Piyush Gupta Chief Executive Officer
Slide 2: Our investment thesis
Our investment thesis Financial Growth Diversified outperformance opportunities access to driven by digital from early moves Asia’s growth transformation in Sustainability 2
Slide 3: Structural drivers of Asia's long term growth remain intact
Our investment thesis Structural drivers of Asia’s long term growth remain intact Diversified access to Large Asian markets offer significant Asia’s growth growth upside Singapore, a bridge between East and West, beneficiary of growing regional trade 3
Slide 4: Our investment thesis: growth opportunities in sustainability
Our investment thesis Annual sustainability banking revenue pool of >US$30b in Asia through 20301 Growth opportunities Transition pathways allow us to create from early moves innovative solutions for our clients in Sustainability Sustainability-linked revenues quadrupled over the last three years to
Slide 5: Investor Day 2023
Investor Day 2023 Financial Growth Diversified outperformance opportunities access to driven by digital from early moves Asia’s growth transformation in Sustainability 5
Slide 6: Financial outperformance driven by digital transformation
Financial outperformance driven by digital transformation Revenue (S$b) Net profit (S$b) Return on Equity1 (%) Top 20 growth Top 20 growth Top decile 16.5 8.2 15.0% Rank 11.2% #8 ROE Improvement 10.8 Rank 4.5 #44 2.5%pt Structural External 1.3%pt & Others 2015 2022 2015 2022 2015 2022 1 Global peer
Slide 7: What we have achieved since 2017
What we have achieved since 2017… Transforming the way we manage… … leading to superior business outcomes 1. 1 Continued to create sustainable advantage with technology 4 Delivered on our goals in Consumer & 4. SME 2 Changed the way we work 2. 4. 5 Created outperformance in PB, GTS and T&M through d
Slide 8: Continued to create sustainable advantage with technology
1. Continued to create sustainable advantage with technology Multi-year journey of building our own technology DNA Cloud Experimentation Modernised Tech Stack Built culture of innovation and enabled by Hybrid Multi-Cloud Deepened experimentation to keep abreast of emerging technologies our Tech capa
Slide 9: Changed the way we work
2. Changed the way we work Breaking organisational silos, becoming data-driven and extending reach through partners Managing Driving horizontal collaboration for through efficiency & Journeys effectiveness Industrialising AI to Acquiring customers at Data / AI drive broad-based Ecosystems scale thro
Slide 10: Redesigned credit processes for scale and effectiveness
3. Redesigned credit processes for scale and effectiveness Driving scale and managing portfolio risk through Data and AI/ML Growing in new Enhancing segments and effectiveness of markets through portfolio data-driven management with underwriting early warnings and triggers SOH Kian Tiong 1120am Pres
Slide 11: Delivered on our goals in Consumer & SME
4. Delivered on our goals in Consumer & SME Income (S$b) Cost to Income (%) Return on Equity (%) 4.1 6.8 49 40 22 37 2015 2022 2015 2022 2015 2022 ▪ Doubled digital share of customers to 60% ▪ Closed last mile gaps ▪ Further rationalised our distribution ▪ Broadened our product range ▪ Made di
Slide 12: Top four private bank in Asia
5. Top four private bank in Asia1 AUM Growth2 Income (S$b) Cost to Income (%) Return on Equity (%) 9% vs 3.1% 1.1 1.7 46% vs 69% Asian 16 30 Asian CAGR3 Peers4 2017 2022 2022 Average5 2017 2022 ▪ Sharpened phygital model to leverage RMs and technology ▪ Outperformed on RoAUM driven by enhanced clien
Slide 13: Scaled our Global Transaction Services franchise
5. Scaled our Global Transaction Services franchise Income (S$b) Cost to Income (%) Return on Equity (%) 1.9 3.3 38 32 18 38 2017 2022 2017 2022 2017 2022 ▪ Improved market access and capacity, and reduced latency ▪ Capitalised on shift from offline-to-online commerce through high-volume, low-value,
Slide 14: Digitised Treasury & Markets
5. Digitised Treasury & Markets Income1 (S$b) Cost to Income (%) Return on Equity (%) 1.9 2.7 50 44 8 14 2017 2022 2017 2022 2017 2022 ▪ Enabled pricing and structuring at scale and speed ▪ Implemented electronic distribution within and outside of the bank ▪ Improved trading efficiency by enhancing
Slide 15: Increasing contribution from capital-light, high-return businesses
5. Increasing contribution from capital-light, high-return businesses 50 47 47 3 categories 46 combined 42 41 40 40 39 37 % of Group income 30 Wealth Management1 20 Global Transaction Services 10 Treasury customer sales 0 15 16 17 18 19 20 21 22 1 Wealth management income comprising Treasures, TPC a
Slide 16: Scaling our India franchise
6. Scaling our India franchise Income (S$m) Cost to Income (%) Return on Equity (%) 183 551 86 78 13% 11% (3) vs Industry 5 5-year 2017 2022 2017 2022 2017 1 Average 2022 Average ▪ Expanded network to >500 branches ▪ Full-service platform, similar to any local bank ▪ Leveraging digital capabilities
Slide 17: Agenda
Agenda Overview Overview Group Financials Closing Remarks Technology Capabilities New Way of Working Credit Risk Management Enablers Powering the future of banking with Streamlining customer & employee Data & AI journeys via workflows & workbenches Consumer & Private GTS T&M India Businesses SME Ban
Slide 18: Group Financials
Group Financials Chng Sok Hui Chief Financial Officer
Slide 19: Well-positioned for success with strong balance sheet and digital capabilities
Well-positioned for success with a strong balance sheet, digital capabilities and momentum from growth markets Drivers: 1 2015 to 2022 2 Outlook ✓ Strong balance sheet and capital; well-positioned to capture opportunities Proven results from Well-positioned for future with strong digital transformat
Slide 20: ROE and total shareholder returns versus global peers
5 15 25 -15 -5 -25 0 5 10 15 20 25 anco do Brasil MS Bk Montreal SBI Banco do Brasil DBS Itau Unibanco Itau Unibanco China Merchants TD ina Merchants QNB Hana RBC 2022 ROE (%) JPM DBS DNB Bank of Jiangsu BOA BNS RBC Industrial GS SBI TD Banco Bilbao UOB KBC BMO Capital One PNC JP Morgan KB CIBC 4th
Slide 21: Transformation has widened structural ROE advantage
Transformation has widened structural ROE advantage ROE (%) 15.0 DBS 13.2 12.1 12.5 3-4pp above peers 11.7 10.1 SG peer 10.6 11.4 9.1 11.5 average 11.2 11.5 10.1 9.7 9.9 7.5 Fed cuts rates to zero 2015 16 17 18 19 20 21 22 21
Slide 22: 2015 to 2022: Group ROE structurally improved by 2.5pp
2015 to 2022: Group ROE structurally improved by 2.5pp External drivers +2.2pp Structural drivers +2.5pp1 +0.3pp 15.0% +0.6pp +1.6pp +0.3pp +0.3pp +1.6pp 11.2% -0.9pp A B C 2015 Financial Interest Credit Market Extended Growth in New 2022 ROE leverage rates cycle growth superior high-ROE capabilitie
Slide 23: Extended superior deposit franchise to FCY
A. Extended superior deposit franchise to FCY Deposits (quarterly average, $b) Digital capabilities boosted deposit franchise: DBS 7.4% cagr 522 (of which FCY 8.0% cagr) • Higher SGD savings market share at 53%1 61 • FCY CASA ratio up 19pp to 54% 317 Peer average Despite higher FCY deposits, deposit
Slide 24: Growth in high-ROE fee income outpacing peers
B. Growth in high-ROE fee income outpacing peers Net fee income ($m) 2015-2022: >2x peers 9% cagr, 3,524 ROE impact +0.6pp 2x of peers 3,091 Others 2,144 Cards Transaction Services Wealth management 2015 2021 2022 24
Slide 25: New capabilities in credit risk management driving lower allowances
C. New capabilities in credit risk management driving structurally lower allowances SP / loans (bp) SP higher than peers SP lower than peers 72 61 38 31 34 23 23 SG peer 19 19 31 12 13 average 20 15 15 8 DBS 2015 16 17 18 19 20 21 22 ROE impact of structurally lower allowances: +0.3pp 25
Slide 26: Outlook: Near-term fundamentals sound
Outlook: Near-term fundamentals sound 2023 ROE likely to be above 17% • Full-year NIM at 2.05-2.10% Base • Fee income growth of high-single digit case • Cost-income ratio below 40% • SP / loans expected at 10-15bp Bank will comfortably weather a recession • Stress tested portfolio, asset quality to
Slide 27: Medium-term ROE of 15-17% and CET-1 at 12.5-13.5%
Medium-term ROE of 15-17% and CET-1 at 12.5-13.5% Faster growth Higher ROE Capital in capital-light with scale headroom to high-ROE support businesses profitable growth and higher External drivers distributions >17% 15% to 17% 15% 1 2 3 2022 2023 Interest Credit BEPS1 Business Growth Capital Medium
Slide 28: Faster growth in capital-light high-ROE businesses
1. Faster growth in capital-light high-ROE businesses Income (as % of group) Categories combined 50 47 42 39 40 30 Wealth management1 20 Global Transaction Services 10 Treasury Market Sales 0 2015 17 22 Medium-term 1. Wealth management comprising Treasures, Treasures Private Client and Private Banki
Slide 29: Increasing scale in growth markets
2. Increasing scale in growth markets Forecasted market revenues1 Target high potential India, Indonesia, China Taiwan Business model in place to drive scale opportunities in in high growth markets: 2027F Cagr growth markets US$b 2022-27 Digital ecosystem led customer acquisition and engagement Tr
Slide 30: Capital headroom to support profitable growth and higher distributions
3. Capital headroom to support profitable growth and higher distributions • Ordinary dividend lifted by 24 cents to $1.68 in 2023 • Baseline: +24 cents per year sustainable in the medium term, barring unforeseen circumstances • Further upside of $3b based on CET-1 operating range of 12.5-13.5%, dist
Slide 31: Medium-term ROE of 15-17% and CET-1 at 12.5-13.5%
Medium-term ROE of 15-17% and CET-1 at 12.5-13.5% Faster growth Higher ROE Capital in capital-light with scale headroom to high-ROE support businesses profitable growth and higher External drivers distributions >17% 15% to 17% 15% 1 2 3 2022 2023 Interest Credit BEPS1 Business Growth Capital Medium
Slide 32: Appendix
APPENDIX x DBS
Slide 33: Estimation of ROE impact from structural drivers
Estimation of ROE impact from structural drivers Drivers Approach Structural (A1) Excess deposit volume growth over peers from 2015-2022 (+$61b) multiplied by the net return on low risk liquid assets (A) Extended superior deposit franchise to FCY (A2) Deposits growth at same rate as peers (+$144b) m
Slide 34: Tech Capabilities
Tech Capabilities Jimmy Ng Group CIO & Group Head, Technology & Operations
Slide 35: Unlocking our sustainable advantage
Unlocking our sustainable advantage SRE Cloud API AI/Data Blockchain SRE1 Talent Bench 1. Site Reliability Engineering 35
Slide 36: Transforming tech capabilities takes time
Rome was not built in a day. Transforming tech capabilities takes time 2000 2005 2010 2015 2023 >10 years >10 years 7 years 9 years Key takeaways Journey to cloud Massive use API-driven of data architecture Site Reliability Experimentation Talent bench Engineering with new tech 36
Slide 37: Being the in
Being the in 37 37
Slide 38: Our digital transformation journey: turning boulders into pebbles
Our digital transformation journey: turning boulders into pebbles Pre-2014 Single rigid system 2023 Nimbler tech stack 38
Slide 39: Our digital transformation journey: turning boulders into pebbles
Our digital transformation journey: turning boulders into pebbles Pre-2014 Single rigid system 2023 Nimbler tech stack Replatforming from boulders to pebbles >99% Mainframe Optimised cloud 9.7% Work in 2014 2015 2016 2017 2018 2019 2020 … 2023 progress 39
Slide 40: Our modern tech stack enables scale and agility
Our modern tech stack enables scale and agility Total deployment releases Deployment frequency BANKS TECH 4X 417,000/day 770,000 570,000 per year 470,000 per year 4,000/day 200,000 2,100/day Leading global bank 2017 2018 - 2019 2020 - 2021 2022 1,300/day 40 40
Slide 41: Our hybrid multi-cloud strategy
Cloud Data API Experiments SRE Talent Our hybrid multi-cloud strategy gives us efficiency and flexibility Private Cloud Hybrid, Multi-cloud Public Cloud In-house Infrastructure Workload portability Advanced as a Service (IaaS) & surge capacity capabilities Efficiency achieved below On-demand Cutting
Slide 42: Cost-efficient private cloud rivals major service providers
Cloud Data API Experiments SRE Talent Cost-efficient private cloud rivals major service providers Cloud hardware generations Gen 1.0 Gen 1.5 Gen 2.0 (2016) (2018) (2020-2022) Benefits Capacity 250 VMs 2x 500 VMs 2x >1,000 VMs • Downsized data centre by 75% Cost $330* ~1/3 $120* ~1/2 $70* Efficiency
Slide 43: Operate is efficiently managed, enabling investment for capability
Cloud Data API Experiments SRE Talent Operate is efficiently managed, Spend enabling us to invest for capability S$’bn 16.5 11.9 1.6 1.1 46% Group Income 36% Build expenses 64% 54% Operate expenses 2017 2022 Tech CIR 10% 10% Marginally lower, significant Operate CIR 6% 5% volume & capability growth
Slide 44: Key capabilities in ADA, our data platform
Cloud Data API Experiments SRE Talent We have built key capabilities in ADA, our data platform DATA DATA DATA MODEL MODEL ACQUISITION ACCESS DISCOVERY DEVELOPMENT DEPLOYMENT 10+ silos to Proprietary Metadata and CPU and GPU State-of-the-art tools 1 platform integrated security data lineage farms on
Slide 45: Data platform transforms data into competitive differentiator
Cloud Data API Experiments SRE Talent Our data platform transforms the bank’s data into a competitive differentiator Consolidates data to a single source of truth Vision Plus Avaloq Core banking Murex 100s… 45
Slide 46: Data platform transforms data into competitive differentiator
Cloud Data API Experiments SRE Talent Our data platform transforms the bank’s data into a competitive differentiator Consolidates data to a single source of truth Vision Plus Avaloq Core banking Murex 100s… 46
Slide 47: Data platform: enabling on-demand capacity
Cloud Data API Experiments SRE Talent Our data platform transforms the bank’s data into a competitive differentiator Enabling on-demand capacity Hybrid, Private Cloud Multi-cloud Public Cloud Storage Model Compute Data Compute GPU Farms 47
Slide 48: API-driven architecture increases connectivity with ecosystem partners
Cloud Data API Experiments SRE Talent API-driven architecture increases connectivity with ecosystem partners API connectivity External API layer Internal API layer Core product systems 2018 2022 API marketplace in a nutshell External APIs ~150 ~1,500* 10X Discover Publish Subscribe External API volu
Slide 49: Internal APIs enabled Workflows and Workbenches
Cloud Data API Experiments SRE Talent Internal APIs also enabled us to develop our Workflows and Workbenches Relationship Internal manager Credit Operations Compliance Single sign-on And more… Role-based Workbenches and Workflows Internal API layer Core product systems 49
Slide 50: Maturing our Site Reliability Engineering practice
Cloud Data API Experiments SRE Talent Maturing our Site Reliability Engineering (SRE) practice to scale safely and securely CAPE Learnt from DSAP Architecture & Capacity Launch Planning Readiness DBS SRE …And created spective Wreckoon Testing Framework Retro- our SRE framework SV Genie DARE Observab
Slide 51: Experiment with new technologies to create business opportunities
Cloud Data API Experiments SRE Talent Experiment with new technologies to create business opportunities Blockchain / smart contract technology foundational capabilities Tokenisation, Compliance, Automated market Operational efficiency Node-as-a-service, wallet management legal & surveillance maker &
Slide 52: Our people – a decade-long transformation
Cloud Data API Experiments SRE Talent Our people – a decade-long transformation ... hiring from big tech, Diversified our global talent pool design firms 12,000 technologists ... and more *To be established in mid-2024 52
Slide 53: More technologists than bankers
More technologists than bankers – Cloud Data API Experiments SRE Talent Having a breadth of talents and skill sets Data Tech Design Analytics Data Technology • Full Stack & Mobile Web Developer • Digital Product Designer • Data Scientist • Data Engineer • DevOps Engineer • Design Researcher • Big Da
Slide 54: Unlocking our sustainable advantage
Unlocking our sustainable advantage Cloud API AI/Data Blockchain SRE1 Talent Bench 1. Site Reliability Engineering 54
Slide 55: New Way of Working
New Way of Working Han Kwee Juan Country Head, Singapore
Slide 56: Technology is leveraged uniquely to scale growth
Technology is leveraged uniquely to scale growth Cloud SRE API AI/Data Blockchain SRE Talent Bench 56
Slide 57: Managing through Journeys
Technology is leveraged uniquely to scale growth 01 Managing Cloud API SR through AI/Data E Blockchain SRE Journeys Talent Bench (MtJs) 57
Slide 58: Industrialising AI / ML
Technology is leveraged uniquely to scale growth 02 Industrialising Cloud SR AI/Data API Blockchain E AI / ML SRE Talent Bench 58
Slide 59: Ecosystems
Technology is leveraged uniquely to scale growth 03 Cloud API SR Ecosystems AI/Data E Blockchain SRE Talent Bench 59
Slide 60: Technology is leveraged uniquely to scale growth
Technology is leveraged uniquely to scale growth 01 03 Managing Ecosystems Cloud API through AI/Data SR Blockchain Journeys E SRE (MtJs) Talent Bench 02 Industrialising AI /ML 60
Slide 61: Managing through Journeys (MtJs)
01 Managing through Journeys (MtJs) Current success Performance • Multi-functional teams working is anchored on: Value Cells Map & Control as one to deliver differentiated Tower customer experience Continuous • Shift from a vertical siloed Innovation Listening organisation into a horizontal Workflow
Slide 62: MtJs enable speed and agility
01 MtJs enable speed and agility Performance Cells • Performance Cells (PC) are cross-functional teams Value Map & organised horizontally and aligned on common KPIs Control Tower • Workflow Workbench enables orchestration of work and ease of collaboration within the PC Continuous Innovation Listenin
Slide 63: Performance Cells – organised horizontally with shared KPIs
Performance Cells – organised horizontally + shared KPIs Performance Cell (PC) Performance Management Architecture (PMA) Outcomes / Business Unit (BU) Co-PC Lead Support Unit (SU) Co-PC Lead Metrics Target Actual Weightage • 5-star rating Dedicated multi-functional team + Flow-to-work/ • Straight-th
Slide 64: MtJs enable speed and agility
01 MtJs enable speed and agility Performance Cells • Performance Cells (PC) are cross-functional teams Value Map & organised horizontally and aligned on common KPIs Control Tower • Workflow Workbench enables orchestration of work and ease of collaboration within the PC Continuous Innovation Listenin
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Slide 66: MtJs enable speed and agility
01 MtJs enable speed and agility Performance Cells • Performance Cells (PC) are cross-functional teams Value Map & organised horizontally and aligned on common KPIs Control Tower • Workflow Workbench enables orchestration of work and ease of collaboration within the PC Continuous Innovation Listenin
Slide 67: MtJs enable speed and agility
01 MtJs enable speed and agility Performance Cells • Performance Cells (PC) are cross-functional teams Value Map & organised horizontally and aligned on common KPIs Control Tower • Workflow Workbench enables orchestration of work and ease of collaboration within the PC Continuous Innovation Listenin
Slide 68: Value Maps & Control Towers provide insights and drive outcomes
Value Maps & Control Towers provide insights and drive outcomes Value Maps establish scientific relationships between Control Towers reflect timely data on business drivers and defined levers, drivers and outcomes customer indicators to enable interventions LEVERS DRIVERS OUTCOMES The activities Met
Slide 69: MtJs enable speed and agility
01 MtJs enable speed and agility Performance Cells • Performance Cells (PC) are cross-functional teams Value Map & organised horizontally and aligned on common KPIs Control Tower • Workflow Workbench enables orchestration of work and ease of collaboration within the PC Continuous Innovation Listenin
Slide 70: Continuous Listening & Experimentation enable Innovation at scale
Continuous Listening & Experimentation enable Innovation at scale Continuous Listening Experimentation Innovation • A ritual of regular interviews with • Leveraging Data and AI/ML • Innovation is embedded and customers on their experiences models to rapidly test and accelerated within PCs with DBS s
Slide 71: Ecosystems
Technology is leveraged uniquely to scale growth 03 Cloud API SR Ecosystems AI/Data E Blockchain SRE Talent Bench 71
Slide 72: Industrialising AI/ML across the bank
02 Industrialising AI/ML across the bank Consumer Banking Finance Everyday Banking Outlier detection Wealth Management Financial forecasting Institutional Banking Human Resources SME Lending Recruitment Early Warning Credit for Large Corporates Career Development Treasury & Markets Operations Algo T
Slide 73: Digital payment fraud prevention
Digital payment fraud prevention Background Solution Outcome Uplifted effectiveness ▪ Increased frequency of AI / ML models trained on 300+ features from 24% 5x better increase in loss prediction rate vs pure scams against 10 databases on prevention rules-based fraud detection customers’ accounts be
Slide 74: Driving economic value in CBG through cognitive banking
Driving economic value in CBG through cognitive banking Background Solution Outcome 200+ AI / ML models 2x Economic value generated year-on-year leverages on ~16k of data features ▪ Customers wanted to be engaged more Next Best Nudges $95.5m $200m effectively with relevant economic value economic va
Slide 75: Ecosystems
Technology is leveraged uniquely to scale growth 03 Cloud API SR Ecosystems AI/Data E Blockchain SRE Talent Bench 75
Slide 76: Scaling ecosystem partnerships
03 Scaling ecosystem partnerships Bilateral relationship Ecosystem play New Way of Working Partners Growing Objectives Acquiring Increasing balance sheet customers engagement & fee income Lending Supply Chain Financing Strategy CBG Payments IBG Cash Management Wealth Management FX 76
Slide 77: Consumer finance partnerships
CBG example Consumer finance partnerships A leading payment platform in India with over 11 million credit card customers 1 2 3 4 Pre-approved loan Customer applies Loan disbursed to Customer repays shown to customers for loan & receives designated the loan confirmation accounts Multiple data KYC / A
Slide 78: Supply chain financing partnerships
IBG example Supply chain financing partnerships A leading logistics platform in Greater China; part of JD.com 1 2 3 4 Target merchants Merchant receives Merchant requests Merchant repays / applies for financing confirmation and opens for drawdown and draws down account with DBS account gets funded t
Slide 79: Value captured from ecosystems
Value captured from ecosystems Customer acquisition Balance sheet growth Deepened engagement # of partners # of customers (m)1 EOP secured & unsecured assets ($b)3 PayLah! rankings 1.8 6.8 c. 30% c. 65% CBG 58 55 59 of total of new 0.8 customers 3.7 bookings Exited ex-SG ex-SG #1 #1 Net promoter sco
Slide 80: Looking ahead…
Looking ahead… Managing through Journeys Data/AI Ecosystems CBG & IBG revenue Business impact ($m) 1,500 Financial impact ($m) 1,600 700 800 61% 350 400 178 222 75 115 35 54 MtJ Non-MtJ FY20 FY21 FY22 FY23 FY24 FY25 FY20 FY21 FY22 FY23 FY24 FY25 Excluding Private Bank and Treasures Private Economic
Slide 81: Credit Risk Management
Credit Risk Management Soh Kian Tiong Chief Risk Officer
Slide 82: Reimagined credit process to drive scale and effectiveness
We have reimagined our credit process to drive scale and effectiveness PROCESS Origination Underwriting Portfolio management ENABLERS Cloud-native Non-traditional AI/ ML architecture data Customers Loans NPL ratio OUTCOMES 11% 16% 1.5% to 1.1% (11.0 million to 12.3 million) (SGD 362 billion to SGD 4
Slide 83: New tech architecture yields efficiencies at scale
New tech architecture yields efficiencies at scale Flexible and collaborative Automated financial spreading Front to back Unified platform workflow and analysis digital connectivity 48% Reduction in 30% preparation time for Reduction in credit application preparation time for financial analysis 17 P
Slide 84: Catalysing origination and portfolio management with data
Catalysing origination and portfolio management with data Non-traditional Traditional data data Ready-to-use real-time data Origination Portfolio management • Underwrite new segments/ markets • Deploy advanced analytics to • Strengthen fraud detection drive early warning 84 84
Slide 85: New origination powered by data and analytics
At scale new origination powered by data and analytics New Markets Data Underwriting Model Traditional • Financials Digital credit • Payslips scoring models • Credit bureaus • Tax information Customers with inadequate traditional Impute income credit data • Lack of credit history but with rich digit
Slide 86: Capacity for growth as we access new segments
Capacity for growth as we access new segments Consumer banking ecosystems (Unsecured lending) Corporate banking ecosystems • Instant credit decisioning via real-time APIs • Ability to onboard thousands of suppliers within minutes • Scale consumer lending with minimal incremental costs • End-to-end d
Slide 87: Strengthening fraud detection amidst growing business
Strengthening fraud detection amidst growing business Data Detection mechanism Traditional AI/ML model • Rule-based engines • Black List • Credit Bureau • Application Electronic = • 12% reduction in false positives Non- verification • Reduce false positives • Reduced identity traditional theft by sy
Slide 88: Early warning enabled by predictive models
Early warning enabled by predictive models; shorter time to enhance existing models Big data CRANE – Early Timely alerts for > 73,000 warning models borrowers > 700,000 network linkages traced > 13 million payments + Iterate and learn with additional factors, e.g. macroeconomic data, = Instances of
Slide 89: AI/ML enables more proactive monitoring
AI/ ML enables more proactive monitoring Scoring model Risk Analytics Methodologies Model A (Medium enterprises) Model B (Small enterprises) + At-risk customers Customer linkages For review Extracted features ADA 89 89
Slide 90: Network-based analytics captures risks hard to identify manually
Network-based analytics captures risks that are difficult to identify manually Transaction data + 44 instances of potential Risk factors round-tripping identified Network-based analytics Sample insights • Auditor A serves multiple = borrowers with high and medium risk Flag at-risk • PQR Pte Ltd has
Slide 91: Looking ahead
Looking ahead … Continue to Penetrate Sharpen tools to power productivity new markets drive portfolio effectiveness 91 91
Slide 92: Consumer and SME
Consumer and SME Shee Tse Koon Group Head, Consumer Banking Group & Wealth Management
Slide 93: Agenda
Agenda 01 Where we left off: Digital outperformance continues 02 What we have done: Enhanced our digital proposition to reduce cost, grow revenue, and gain market share 03 Where we are going: Grow customer wallet share 93
Slide 94: Agenda
Agenda 01 Where we left off: Digital outperformance continues 02 What we have done: Enhanced our digital proposition to reduce cost, grow revenue, and gain market share 03 Where we are going: Grow customer wallet share 94
Slide 95: Recap of our 2017 thesis: digitalisation drives superior performance
Recap of our 2017 thesis: Digitalisation has led to superior financial and operating performance Consumer and SME (Singapore, Hong Kong) How we changed the business Superior returns on Digital segment Acquire • Ecosystem strategy for wider outreach • Data-driven digital marketing and search Digital
Slide 96: Digital customers continue to outperform Traditional customers
Digital customers continue to outperform Traditional customers Consumer and SME (Singapore, Hong Kong) Engagement via digital Income via digital Product holdings multiple of digital vs. traditional Income multiple of digital vs. traditional 3.1 2.0 2.0 1.6 15 16 17 18 19 20 21 22 15 16 17 18 19 20 2
Slide 97: Agenda
Agenda 01 Where we left off: Digital outperformance continues 02 What we have done: Enhanced our digital proposition to reduce cost, grow revenue, and gain market share 03 Where we are going: Grow customer wallet share 97
Slide 98: A comprehensive digital proposition in Singapore
A comprehensive digital proposition in Singapore. Fully embedded in the customer journey Account Account services services Card Payments and Merchant Payments services collection services Home Financial Digital planning planning Digital onboarding lending Remittances Digital Foreign Files and invest
Slide 99: Digitalisation has lowered cost-to-acquire and cost-to-serve
Digitalisation has lowered cost-to-acquire and cost-to-serve Digital onboarding Digital transactions Financial outcomes Increased digital channel share, Increased active digibank rate, Lower cost-to-acquire per with shift from desktop to mobile and digital transaction volume account Digital onboardi
Slide 100: Network and servicing transformation have reduced costs
Network and servicing transformation have reduced costs Phygital banking Call center servicing Financial outcomes Manned touchpoints optimised Manned calls reduced through Lower branch and call center through reduction in branch arrivals digital-first servicing costs ($) Demand volume (m) 5.18 16% -
Slide 101: Democratisation of wealth through data and AI/ML
Data and AI/ML have enabled access to new segments: Democratisation of wealth DBS digital advisor Financial outcomes 1 One-stop tool for financial planning Higher investment Higher investment AUM ($) income ($) 2 Open banking for holistic view of customers’ financials CAGR +13% 3 Hyper-personalised
Slide 102: Redesigning the Treasures business has increased wealth revenue
Redesigning the Treasures business has increased wealth revenue RM performance Customer engagement Financial outcomes Higher RM productivity Deepened engagement through Higher Treasures investment & # of clients per wealth manager Next-Best-Nudges insurance income ($) % customers who received nudges
Slide 103: Ecosystems and marketplaces enabled customer acquisition and stickiness
Ecosystems and marketplaces have enabled customer acquisition, extended distribution and improved customer stickiness Increased mortgage sales with Property Marketplace Increased ubiquity of PayLah 16 23M Avg monthly % contribution to total 1.5M logins 5.7 2.4M mortgage sales # of PayLah! 2,070M 0.8
Slide 104: Digitalised SME operating model has scaled up
The digitalised SME operating model has scaled up acquisition, transaction and engagement and enabled access to new segments Acquire Transact Engage Increased digital onboarding Increased SME customers and lending Increased activity on IDEAL receiving digital nudges 99 91 80 88 Active rate Customer
Slide 105: Higher revenue, fee income and balance sheet growth
This has given rise to higher revenue, fee income and balance sheet growth Loan balances FX revenue Customer revenue Increase in unsecured loan book Increase in fee revenue per Increase in revenue per ($) customer ($) customer ($) +48% +24% 4X 2017 2022 Growth in share for micro- SME unsecured loans
Slide 106: Agenda
Agenda 01 Where we left off: Digital outperformance continues 02 What we have done: Enhanced our digital proposition to reduce cost, grow revenue, and gain market share 03 Where we are going: Grow customer wallet share 106
Slide 107: Opportunity to grow customer wallet share
Opportunity to grow customer wallet share especially in investment and insurance Product holding Investment and insurance holding of digital customers 64% of digital customers hold only 1 87% of digital customers Encouraging growth in product. Opportunity to grow wallet yet to hold investment or cus
Slide 108: This is DBS Digibanking
This is DBS Digibanking. Distinctive. Comprehensive. End-to-end. Deposit Where we left off: Digital outperformance 01 continues Payments Banca #1 What we have done: Our robust digital market share CPF IA & 02 proposition has spurred cost reductions Mortgage SRS and revenue growth Growth in micro SME
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Slide 110: Private Banking
Private Banking Joseph Poon Group Head, Private Banking
Slide 111: Bolstering wealth AUM growth with our Private Banking franchise
Bolstering wealth AUM growth with our Private Banking franchise … 23.7 NNM ($b) 11.2 8.1 291 297 Wealth AUM ($b) 264 246 Rest of Wealth 220 206 214 218 HNWI1 172 188 142 152 2017 2018 2019 2020 2021 2022 1. HNWI refers to High Net Worth Individuals including PB, TPC and Treasures customers with AUM
Slide 112: Differentiated client engagement
… through our differentiated client engagement Income Recurring fee Growing new client base ($b) (as % of fee income) 1.7 25% 20% 1.4 1.1 15% 12% 3-year NTB acquisition over 2017 2020 2022 2017 2020 2022 total client base Dominant SG SFO1 Cost-to-income ROE market share2 (%) (%) 48% 46% 46% 30% 33%
Slide 113: Top tier private bank in Asia outperforming on return on AUM
We have become a top tier private bank in Asia and we outperform on return on AUM Top 10 ranked private banks in Asia 2022 Return on AUM1 (bp) AUM USD'b 1 UBS Global Wealth Management 437 101 2 HSBC 305 3 Credit Suisse AG 165 4 DBS 162 5 Morgan Stanley PWM 143 Asia average 70 6 Standard Chartered Pr
Slide 114: Scaling-up through our 3P Strategy
Scaling-up through our “3P” Strategy Phygital Proposition Arming RMs with data to re-define client People experience Shifting focus from Sharing curated, actionable insights, Transactions to Advisory aligned to client risk-profiles Training across Managing wealth holistically, Building dig
Slide 115: Phygital: moving from physical
Phygital Moving from physical … Transaction RM preparation Client engagement processing Pain points / Inefficiencies given Generic “One-size-fits-all” Non-integrated systems, challenges / multiple databases and approaches with rapidly with total reliance on RMs bottle necks information overload outd
Slide 116: To Phygital to redefine client experience
Phygital … to “Phygital” to redefine client experience Arming RMs with the power of technology and data to re-define client experience Deliver nudges 1 Systematically delivering 2 hyper-personalised research Data and AI/ML and insights via nudges .. continuous refinement AI / Machine learning Client
Slide 117: Data and AI/ML at the core of client engagement
1 Data and AI/ML at the core of client engagement 1 Curating deep data insights to develop bespoke recommendations “Next Best Nudges” 16,000+ curated Predicting needs and data points interests • Individual client profile • 30+ AI/ML models 2a generating • Portfolio / product personalised nudges hold
Slide 118: AI-assisted hyper personalized nudges to clients
2a AI-assisted hyper personalized nudges, sent directly to Deliver nudges clients at the right time to allow “Self-directed Execution” directly to clients Equity 52-week high/low AI / Machine learning Client’s demographics / needs / objectives and preferences Client’s portfolio / transaction history
Slide 119: Creating awareness of market events impacting client holdings
2a Creating “Awareness” of market events impacting client’s Deliver nudges directly to clients holding and portfolio risk appetite ... Gold as a portfolio hedge 3 Mar 2023: Gold still has its sparkle 8 Sep 2022: Gold for long play 16 June 2022: Investing in commodities Series of timely nudges 119
Slide 120: Arming RMs with real time information
2b … arming RMs with real time information … Deliver nudges to RMs Client Connect 120
Slide 121: Arming RMs with real time information
2b … arming RMs with real time information … Deliver nudges to RMs CIO model portfolio Client Connect 121
Slide 122: Informed discussion between RM and client
3 … leading to informed discussion between RM and client Facilitating contextualized conversations ‘Next Best Nudge’ + ‘Next Best Conversation’ Strong interest for Gold Client’s portfolio asset allocation in gold is below the model portfolio for her risk profile (Aggressive). She has engaged highly
Slide 123: Driving value from Phygital
4 Driving value from ‘Phygital’ Implementation and Feedback >1.4m nudges sent Nudge Library Higher uptake of Better utilization of Increased client actions on legacy planning early-matured investments unrealised gain/loss nudges 123
Slide 124: Redefining Private Banking for a new era
Redefining Private Banking for a new era – personalised, sophisticated and AI-powered solutioning Traditional private banks Bringing together the best of both worlds Digital-only platforms Future-ready Wealth Managers Innovative Products & Solutions Phygital platform ‒ AI/ML powered insights ‒
Slide 125: Fundamentally changing how we engage our clients
Fundamentally changing “how” we engage our Clients… …demonstrating “real” Client / Business outcomes 125
Slide 126: Global Transaction Services
Global Transaction Services Tan Su Shan Group Head, Institutional Banking Group
Slide 127: Digital transformation enabled efficient, scalable Transaction Banking
Digital transformation enabled efficient, scalable and profitable Transaction Banking $197b ~5,000 110m transactions >300m API calls GTS deposits New cash mandates ($1T value) on IDEAL from 7m (2019) 2022 2017 – 2022 2022 2023F Enabled digital E2E supply chain Revenues ($b) Cost-to-income (CIR) Retu
Slide 128: We have leapfrogged established players in our key markets
We have leapfrogged established players in our 6 key markets1 Coalition Greenwich “Voice of Client” – Market Cash Management Trade Finance Penetration1 21% 28% 2017 1st 2nd 3rd 4th 5th 1st 2nd 3rd 4th 5th 30% 39% 2022 1st 2nd 3rd 4th 5th 1st 2nd 3rd 4th 5th 1. Source: Coalition Greenwich “Voice of C
Slide 129: Rapid growth in digital economies in Asia
The Backdrop: Rapid digitalisation in Asia and the rise of digital economies Asia has seen rapid growth in digital economies, powered by big shifts on both demand and supply side • Global trade shifts & increased intra-Asia • Demand shift to online Pacific flows • Voluminous, transactional level pro
Slide 130: Paradigm shift in transaction services
Leaning into these trends We have made a paradigm shift in transaction services to enable customers’ digital transformational journeys Architecting Leveraging real-time Intelligent information product processors rails on demand 24X7 availability, scalability & Instant transactions and Instant reconc
Slide 131: Digital channels and API connectivity enable client transformation
Real-time information delivery & customisable interfaces Our digital channels and API connectivity enable our clients’ business transformation 1 DBS digital channels – web portal and app 2 Embedded finance – via clients' digital channels Customisable interfaces Our APIs & micro-services power and
Slide 132: Instant fulfilment and real-time payment capabilities
Payments & collections We handle high volumes via instant fulfilment and real-time payment capabilities Easy to integrate, high throughput & optimised Enable instant fulfilment use cases for speed & costs which other banks cannot easily do Architecting product processors High concurrent throughput &
Slide 133: Growth in payments business
Payments & collections – outcomes & impact Growth in payments business: clients value our ability to perform convenient and efficient transfers 1 Strong growth in domestic1 2 & Low value cross-border2 3 Industry leading fee growth, payments... payments driven mainly by payments (transaction count, i
Slide 134: Supply chain finance: platform-led and anchor-led growth
Supply chain finance (SCF) SCF: Our API and core processing capabilities powered our growth via a platform-led & anchor-led approach Connected to platforms & anchors …to power growth Developed multiple use cases across various Business Processes # of anchors & # of SCF spokes1 1 Logistics Finance pl
Slide 135: Increased market share gains and relevance of GTS to Group
Summary of outcomes & impact Increased overall market share gains and relevance of GTS to Group 1 2 3 Increased penetration across DBS’ 6 Significant contributor to Group Increasingly an important source of key markets1 & distinctive in helping income funding for the Group clients through the pandem
Slide 136: Play Video
Play Video 13 6
Slide 137: Treasury & Markets
Treasury & Markets Andrew Ng Group Head, Treasury & Markets
Slide 138: T&M outperforming industry peers
T&M is outperforming industry peers across income, cost-efficiency and ROE +8% FICC and equity product revenue CAGR growth between 2017 to 2022, vs. industry at 6% Cost-to-income ratio and return on equity outperforming industry benchmarks Revenue (FICC + EQ) ($b) Cost-to-Income (CIR) Return on
Slide 139: Multi-year digital transformation across T&M
We successfully drove a multi-year digital transformation across the entire T&M business T&M business 4 Leveraging data and AI/ML FX MtJ ILMA 1 5 2 Creating Digitalising multi-asset Digitalising our ecosystem pricing and structuring internal distribution capabilities RMs / ICs (IBG / CBG) Advisory,
Slide 140: Digitalising multi-asset pricing and structuring capabilities
1: Digitalising multi-asset pricing and structuring capabilities to drive volumes Foreign exchange Derivatives Co-located FX rate engines for 60x faster price response using cloud Graphics Processing Unit (GPU) farm low latency pricing, powering Streamlined E2E workflow for auto-pricing and ex
Slide 141: Digitalising distribution internally and externally
2: Digitalising distribution internally and externally to improve transaction lead time and drive seamless customer service Internal distribution DigiMarkets transaction count since launch in 2017 Reducing transaction lead time from 6-8 mins to 1 min1. 147k Covering pre-trade check and post-trad
Slide 142: Applying Algo for risk warehousing and trading efficiency
3: Applying Algo for risk warehousing and improved trading efficiency FX Algo Improving competitiveness on external venues, via predictive pricing Increased scalability and productivity via in-house built auto-hedging strategies Achieving optimal strategies through continually iterating on tra
Slide 143: Leveraging data and AI/ML across sales and trading
4: Leveraging data and AI/ML to drive benefits across both sales and trading Scaling up Managing event- Tiering FX experimentation driven leads dynamically Sales • Predicting customer’s propensity • Feedback loop optimised to • FX tier margins managed across to trade based on price sensitivity impro
Slide 144: AI/ML to improve pricing, client reactivation, personalised marketing
4: Leveraging data and AI/ML to improve pricing, client reactivation, and personalised marketing AI/ML-driven experimentations and campaigns ✓ Past transaction history 1. Pricing optimisation “Have you booked your USD/SGD rate? Analysis of real-time clicks and transaction behaviours Prioritise and
Slide 145: Drive ecosystem agenda: FIX Marketplace
5: Drive ecosystem agenda to improve our capabilities and value proposition FIX Marketplace Capabilities Achievements since launch1 Digitalized and streamlined Direct order placement origination workflows and allocation for investors S$20 b Trade volume (SGD) Automated documentation Real-time book u
Slide 146: Well-positioned for sustainable growth driven by growing customer base
Well-positioned for sustainable growth driven by growing customer base +9% cagr growth in sales revenue (S$b) from 2019 to 2022 since digitalisation ramp up +9% cagr -1% cagr 1.71 1.65 1.51 1.23 1.19 1.20 1.27 1.15 2015 2016 2017 2018 2019 2020 2021 2022 146
Slide 147: Leverage data analytics to drive capital efficiency
Continue to leverage data analytics to drive capital efficiency Data analytics accelerating disciplined deployment of capital to ROE accretive opportunities DBS ranked 2nd on capital productivity improvement, with 2x asset growth and 1.4x revenue whilst maintaining stable RWA Increase in Revenue
Slide 148: Digital transformation will strengthen and enable value unlocks
Digital transformation efforts will only strengthen with time and enable multiple value unlocks Deepening digital Externalising Accelerating Driving FIX capabilities in Digimarkets Transactional Marketplace structuring and FX MtJ adoption warehousing Enhancing product Offering the omni-channel Imple
Slide 149: Growth Market: India
Growth Market: India Surojit Shome Country Head, DBS India
Slide 150: Scaling in growth markets: India deep dive
Scaling Agenda in growth Recap of our 2017 thesis: digital technologies were creating a unique opportunity markets India deep dive Testing the digital-only approach in India clarified the need for a wider physical presence for better results Our phygital evolution allows us to tap growth oppor
Slide 151: Recap of our 2017 thesis: digital technologies created opportunity
Recap of our 2017 thesis: Digital technologies were creating a unique opportunity Shifting to a balanced business mix with a more stable funding profile 2016: Launch of India’s first mobile- only bank for Consumers 2017: Partnership Launch of e-payments integrated with accounting software for SMEs 1
Slide 152: Testing the digital-only approach in India clarified need for physical presence
Testing the digital-only approach in India clarified the need for a wider physical presence for better results Liabilities Expanded physical >10M digibank App downloads and >400K SME leads through Tally partnership network required for — However, high drop offs in ‘digital-only journey’ increased
Slide 153: Our phygital evolution allows us to tap growth opportunities
Our phygital evolution allows us to tap growth opportunities Access to attractive market opportunity with annual revenues of S$200-250b p.a. growing at ~10% >90% phygitally accessible via expanded network ~70% targeted via expanded capabilities 2005 Large Corporates & FIG 525+ branches across Financ
Slide 154: Accelerating SME and consumer businesses while deepening corporate business
Our strategy: accelerating SME and consumer businesses while deepening large and mid corporate business Business Income segments Strategic priorities 2022-26 cagr Large cap & Deepen relationship with large conglomerates and industry leaders ~10% FIG Expand MNC franchise by leveraging Asian corri
Slide 155: Three-pronged execution plan
Our three-pronged execution plan: enhance digital proposition and leverage our expanded physical presence 1 2 3 Continuing to build out the Leveraging expanded Scaling ecosystem digital platforms and physical footprint to deliver partnerships by leveraging Managing through Journeys new products, inc
Slide 156: Building digital platforms and MtJ for scaled onboarding
1. Building digital platforms and MtJ for scaled onboarding and straight through processing Increasing digital adoption 1M digibank retained customers and 1.4M LVB 12K SFW customers and 70K LVB customers Increasing share of digital transactions across customers being migrated being migrated th
Slide 157: Leveraging expanded physical footprint
2. Leveraging expanded physical footprint to deliver new products, increase client acquisition and deepen relationships Branch integration Assets Liabilities All branches rebranded and Gold loans: 300+ locations on Initial savings account balance2: upgraded scalable new technology platform Phy
Slide 158: Scaling ecosystem partnerships
3. Scaling ecosystem partnerships by leveraging our digital capabilities and national footprint Unsecured lending1 (S$m) Co-branded credit cards in Gold loan1 (S$m) 180 force (‘000) 800 300 120 700 24% 200 3.0X 60 Monthly 100 600 acquisition up 7X - - 500 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun'22 Se
Slide 159: Accelerated growth of Consumer and SME businesses
Aspiration for the franchise: accelerated growth of Consumer and SME businesses Loan book mix1 Deposit mix1 By 2026: Overall loans to grow S$ S$ S$ S$ S$ S$ 2.2x 4.0b 8.3b 18.6b 6.1b 9.5b 19.2b — Consumer and 6% 7% 14% SME loans to 20% 18% 19% 35% 14% grow at 40% cagr 15% 16% 11% 15% 100bp NIM 2
Slide 160: Sustain 25-30% income growth for improved cost-income ratio and ROE
Aspiration for the franchise: sustain a 25-30% income growth for improved cost-income ratio and ROE DBS India financials (S$m)1 By 2026: Total income ~1.4b projected to grow 2.5X Total income Net profit projected to grow 3X LVB acquisition Cost-income ratio to improve from 78% to 551 57% Subsi
Slide 161: Scale profitably to be a leading bank in India
Aspiration for the franchise: scale profitably to be a leading bank in India Mar’23 loan book (S$b) HDFC 257 ICICI 164 AXIS 136 KOTAK 51 INDUSIND 47 To be amongst the top YES 33 10 private sector banks in India FEDERAL 28 IDBI 26 IDFC FIRST 24 BANDHAN 17 . . . . DBS 8 16 161 1
Slide 162: Closing Remarks
Closing Remarks Piyush Gupta Chief Executive Officer
Slide 163: Piloted new engines of growth
Piloted new engines of growth ▪ Cross-border low-value payments ▪ Digital Asset Ecosystem ▪ Blockchain-based payments ▪ Climate Impact X (CIX) ▪ Mezzanine fund ▪ Software services 163
Slide 164: Piloted new engines of growth
Piloted new engines of growth Cross-border, low-value payments Digital Asset Ecosystem Volume (S$b) Revenue (S$m) DBS Digital DBS Digital DBS Security Exchange Custody Token Offerings >40 >300 >50% growth >50% growth 24 195 20x $80-120m Investor Revenue by Growth in 2023 2025 2022 2025 2022 2025 164
Slide 165: DBS – A different kind of bank
DBS – A different kind of bank ▪ Built a set of best in class regional businesses (GTS, PB, T&M) and now building depth in local businesses (SME, Consumer) in priority growth markets ▪ Outperformed in core markets and built data driven underwriting capabilities required to scale in our growth market
Slide 166: Disclaimer
Disclaimer Important notice This presentation has been prepared by DBS and is solely for information purposes only and for your use, and on the basis of your acceptance of this disclaimer and does not purport to be a complete description of all material terms. This presentation is not a prospectus o
Slide 167: Disclaimer
Disclaimer Forward-looking statements This presentation includes forward-looking statements (“Forward-Looking Statements”), including statements made orally by DBS’ management. These Forward-Looking Statements are or will be based upon numerous assumptions regarding the DBS Group's present and futur