DBS has released it first quarter results: net income is up 26%, helping the firm’s shares to continue their rally. But what do the results mean for jobs and careers at the Singaporean bank? Here are some of the key points you need to know.
3,400 people have joined DBS in just 12 months
While the vast majority of these staff weren’t poached from rivals, this is nevertheless a 15% year-on-year rise in employees and takes DBS’s headcount to 25,731. The surge was mainly fuelled by the incorporation of ANZ staff into DBS. In 2016, DBS acquired the Australian bank’s retail and wealth units in Singapore, Hong Kong, China, Taiwan and Indonesia. By February this year employees from all five markets had been integrated into DBS’s workforce. Technology “insourcing” (as DBS calls it) also explains some of the headcount increase. As we reported last year, the bank has been moving development jobs in-house, having previously used third-party IT vendors.
Pay per head is…down
Although onboarding all these new employees has obviously increased staff costs at DBS (they are up 14% year on year), costs per head – total employee expenses (such as salaries and bonuses) divided by total headcount – are down 4%. DBS spent $30,508 on its average employee in Q1, down from $31,839 the previous year. What explains this decrease? DBS has successfully retained many of ANZ’s well-paid private bankers and priority bankers, but the bulk of the transitioning ANZ staff work in less lucrative retail and support roles. Moreover, the ex-ANZ workforce also includes employees in China and Indonesia, not just people in the high-cost markets of Singapore and Hong Kong.
You’ll want to work in fixed income
Treasury markets is the hottest (albeit the smallest) of DBS’s three main divisions to work in right now. The unit – which incorporates structuring, market-making and trading – saw its pre-tax profits double year on year to $112m, according to the DBS Q1 financial report. Within treasury markets, fixed-income professionals have outperformed their equities counterparts. Total income in the division rose 33% to $249m “as higher contributions from interest rate activities more than offset lower income from credit activities”.
Wealth management is still growing (and hiring)
Wealth management was a standout performer within DBS’s leviathan consumer banking and wealth management division, which generated $1,359m in first-quarter income, up 17% year on year. While DBS doesn’t separate wealth and consumer revenues, it does note that a rise in fee income across the firm in Q1 was “led by” a 49% year-on-year increase in wealth management fees to a quarterly record of $331m, “from higher bancassurance and investment product sales”. DBS has steadily expanded its workforce of wealth management relationship managers. Its headcount of RMs in its Private Bank and Treasures Private Client units increased from 300 in 2016 to 354 in 2017, according to Asian Private Banker.
Bread-and-butter bankers led the way in institutional banking
Income in institutional banking inched up 3% from a year ago to $1,358m. This was not, however, due to the performance of staff working in advisory or capital-markets roles. DBS attributed the rise to “higher cash management income”.
You might want to transfer to China
As DBS encourages staff to work in other locations, China now appears to be a prime destination. The ‘rest of Greater China’ region (i.e. Greater China ex-Hong Kong) may have only contributed 9% ($278m) of DBS’s total income in Q1, but that was a 34% increase from a year ago. Net profits in the region, meanwhile, doubled to $74m. Improved trading income, higher loan volumes and the ANZ integration were some of the factors behind the bank’s success in China.
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