StockTalk (5.23): DBS Aims for Ambitious Growth Targets Amidst Global Banking Challenges: Can it Deliver?
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StockTalk (5.23): DBS Aims for Ambitious Growth Targets Amidst Global Banking Challenges: Can it Deliver?
DBS, Singapore's largest lender, recently announced its ambitious targets of a 15-17% return on equity (ROE) in the medium term and earnings of over S$10 billion within the same timeframe, driven by its strong balance sheet and technology capabilities.
However, DBS shares have fallen 8.8% year-to-date amidst a high-interest rate environment and concerns over recent bank collapses globally. The banking industry has faced several challenges since March this year. These events have increased investor anxiety and made investors more cautious about investing in the banking industry.
Despite these challenges, DBS remains confident in its digital transformation journey, which began nine years ago. The Group Chief Information Officer and Head of Technology & Operations stated that building technology capabilities takes time, but it is critical to remain competitive in the long run.
Have you heard about the digital transformation measures of DBS? As investors, how do you view DBS' ambitious targets and ability to navigate challenges in the banking industry? Will it drive the transformation of the entire banking industry in Singapore?
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Moogoorooloo : DBS is unlikely to go down the path of banks the likes of SVB or Credit Suisse or FRC. In fact, DBS is one of the safest banks in the world. Backed by a strong management team and a solid track record, DBS should be able to achieve what it set out to do. I don't think the targets are overly ambitious.
ZnWC : Digital transformation in banking means lower cost in operation due to increase in efficiency.
DBS Group Holdings is considering an expansion in Dubai, making South-east Asia’s biggest lender the latest financial company to explore scaling up in the Middle Eastern business hub.
Whether in digital transformation or global expansion, I'm confident that DBS will succeed. But I hope DBS will not forget it's core business that is internet banking. It was reported that recently DBS experienced 2nd downtime time in a year. To beat it's competitors, DBS needs to regain the confidence of it's reliability and security.
GodSpeed289 : DBS has been at the forefront of digital innovation in the banking industry by investing heavily in technology and focusing on customer-centric solutions to provide a seamless banking experience. Notably, DBS has also formed strategic partnerships with fintech companies and tech giants to drive further innovation. By embracing technology and digitalization, DBS aims to improve operational efficiency, expand its customer base, and create new revenue streams. The extent to which DBS's initiatives will drive the transformation of the entire banking industry in Singapore depends on various factors, including the responsiveness of other banks, regulatory frameworks, customer preferences, and the overall pace of digital adoption rate.
EYSY : As much as the 15-17% ROE looks ambitious, I would think the executives in the bank would not put a number that they cannot deliver as their compensation ties to the target.
The question is how? What's their strategy to achieve the 15-17% ROE? Think home loans would reduce this year with the higher ABSD. Unless it's justifiable through new market expansion. If not, think it's unlikely to achieve the growth.
kind Dolphin_7635 : staying within DBS's strengths, to be regional is always better than being "global bank" !
Don't get into American market as we can see from experiences of many banks like HSBC, Credit Swiss, non-American banks.
Excessive aggressive will pay a price..
American don't like anyone to challenge them..