DBS Bank SWOT & PESTLE Analysis

Strength

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Weakness

1. NPA in oil and gas exposures: DBS bank has been plagued by major exposure to weak oil and gas services. The bank had a total of SGD 5.1 billion of exposure in the sector as of 2017 of which it has recognized SGD 3.0 billion as non-performing on a conservative basis. In 2017 bank took the step to accelerate the recognition of residual weak oil and gas support service exposures as non-performing to remove uncertainty regarding its asset quality. As of 2020, the oil prices have collapsed amidst the Covid-19 pandemic and OPEC-Russia fallout and this will further impact DBS’s residual exposure in the sector.

Opportunity

1. Expansion plans in India and Middle East: DBS rolled out its wholly-owned subsidiary DBS Bank India Ltd in March 2019. Spread across the next 1.5 years, DBS plans to launch 100+ customer touch-points in 25 cities as it has presence in India for over quarter of a century. DBS bank India has acquired around 2.5 million digital customers wherein more than half of them have engaged through a savings account with the bank. DBS will aim at collaborating with industry leaders such as BigBasket, the largest online grocery market in India and Paisabazaar, the biggest loans and cards marketplace in India; Plans to launch digi Insurance and digi Loans to make deeper inroads into India, are also on the cards. In November 2018, DBS declared its five-year expansion plan in the Middle East. The Company plans to make its Dubai office a strategic hub for the GCC clientele who want to have access to the wider Asian market. Over the last seven years, DBS Private Bank has accomplished a fiscal growth rate of 20% in total revenues and is aiming to triple its revenues over the next five years. The bank will focus on ultra-high net worth individuals, family offices, and sovereign wealth funds with whom DBS can offer bespoke investment products.

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Threat

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Political

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Economic

1. Economic uncertainty or downturn in South Asia can adversely impact financial services business: The global economic environment is becoming increasingly dynamic with changes in banking regulations, security and dataissues and trade policies. Tensions in the South China Sea region, North Korea region or US-China trade war may impact the stability of the South East Asian region. Any economic uncertainty or downturndue to changes in the above factors or other macroeconomic factors may adversely impact DBS’s business.

2. Singapore economy likely to be stable: Singapore’s economy is expected to clock steady growth at around 3% in 2018 as per economic survey and the forecasts by the Ministry of Trade and Industry (MTI). The European Union-Singapore Free Trade Agreement (EUSFTA) is also expected to be in force by 2019 which will enable greater commercial engagement between the regions and promote economic growth. These trends augur well for DBS and its business growth.

Social

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Technological

1. Investments in technology for improved efficiency: DBS Bank is one of the major player in the financial services world that has effectively leveraged the power of technology. In 2016, DBS adopted cloud-based productivity technology tools for its business which will help in increased staff mobility and cut down on travel costs.

Legal

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Environmental

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