Piyush Gupta's remuneration as chief executive officer of DBS Group Holdings Ltd. was decreased by S$4.1 million ($3 million) following the lender's series of digital banking disruptions in 2018 and subsequent censure by the central bank.
As one of the top paid executives in the nation, Gupta earned S$15.4 million in total compensation in 2022. The pay drop was disclosed on Wednesday along with DBS earnings. The group management committee's variable remuneration was reduced by 21% from the previous year as a result of the outages that caused ATM and payment transactions to stop throughout the city-state last year.
During an earnings briefing, Gupta stated, "We've taken accountability." "I believe that to be a beneficial aspect of governance." Despite DBS's record-breaking full-year performance, there were pay fallouts. In 2023, the bank's net profit surpassed S$10 billion, surpassing its medium-term goal. It reported an 18% return on equity. In addition, the lender increased its final dividend and suggested issuing bonus shares, stating that it saw chances to give shareholders a bigger return this year.
DBS shares outperformed the city-state benchmark stock index, rising as much as 2.8%, the highest level in the previous six weeks.
Yeap Jun Rong, an IG market analyst, stated in a note regarding the salary reductions, "The heavy punishing move highlights the management's commitment to minimize future disruptions." Yeap added that DBS's dividend yield levels are far higher than those of its competitors, establishing standards for others to meet.
The largest lender in Singapore said in a statement on Wednesday that net profit for the three months ended December 31 increased by 2% to S$2.39 billion ($1.78 billion), excluding one-time items. This contrasts with the S$2.44 billion average forecast provided by Bloomberg News's panel of analysts.
The first of the big Singaporean banks to release results is DBS, which demonstrates how its strong performance—which has been driven by high interest rates - may have peaked as rates are predicted to drop this year. Later this month, rivals Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. will release their results.
Following a string of disruptions to digital banking services, the Monetary Authority of Singapore prohibited DBS in November from purchasing new business ventures and from diminishing local branch and ATM networks for a period of six months.
The steps came after DBS's online banking services were repeatedly and severely disrupted last year. Gupta apologized to clients and told them the bank is taking "utmost priority" to resolve the problems. Customers should anticipate improved service dependability as well as additional payment and inquiry channels in the event of problems, DBS stated on Wednesday.
Since taking over as CEO in November 2009, Gupta has used both organic expansion and acquisitions to extend DBS's operations into Taiwan, mainland China, and India. In terms of assets under management, the bank's wealth management division is currently among the biggest in Asia thanks to his efforts.
According to Gupta, the bank should maintain its success in the upcoming year despite the expectation that interest rates will decline and geopolitical problems will not go away. Further, as per Gupta, the bank should maintain its success in the upcoming year despite the expectation that interest rates will decline and geopolitical problems will not go away.
Here are other specifics on the DBS findings:
- The commercial book's net interest margin decreased to 2.75 percent in the fourth quarter compared to the prior quarter.
- Due to increased wealth management, card, and loan-related fees, as well as the amalgamation of Citi Taiwan, net fee income increased by 31% over the previous year.
- Net fresh money inflows drove a 23% increase in wealth management assets under management to a record high of S$365 billion.
- Higher funding costs caused the total income of the Treasury markets to drop by 45% from a year ago.
- Bonus issuance based on the proposed ratio of one bonus share for every ten ordinary shares owned.
