DBS AGM: Board quizzed on Sibor, SG50 perks

SINGAPORE - Shareholders of DBS Group on Thursday quizzed the bank's directors on a range of issues ranging from the consequences of a US Federal Reserve rate hike to the possibility of SG50 shareholder perks, at the bank's annual general meeting (AGM).

A few hundred shareholders attended the meeting, which ran for nearly two hours at the NTUC Auditorium.

The first question was on how the expansion of DBS's net interest margin would be affected as the Fed continues to delay an expected US short-term interest rate hike.

DBS chief executive Piyush Gupta answered: "If rates increase, we will get a benefit. When will that happen is anybody's guess."

"Our own view is that rates will increase very very slowly. I personally don't expect more than one hike this year, if at all."

Responding to another question on whether DBS plans to revisit acquisition opportunities in Indonesia or elsewhere, Mr Gupta said that the group is "not keen on looking for acquisitions in the short term".

He emphasised that the group's digital strategy will be its main focus for now.

"You're seeing around the world, fewer and fewer people go to branches. More and more people do (their banking) online. And if that is the case, to do a big acquisition of a large branch network might be to fight yesterday's battles instead of fighting tomorrow's battles."

Another shareholder wanted to know Mr Gupta's outlook for the Singapore interbank offered rate (Sibor), which is used to set floating-rate mortgages here.

"If the Sing dollar weakens, that normally results in a lift in the swap offer rate (Sor), and Sibor goes up," said Mr Gupta.

"In the last few weeks, the Sing dollar got to $1.39 (per US dollar), and it's corrected back all the way to $1.34, $1.35. So I think the Sing dollar weakness will stay in that range, and if it stays in that range, it's unlikely that Sibor or Sor will go higher from where they are.

The three-month Sibor was at 0.89 per cent on Thursday, while the three-month Sor was at 0.83 per cent on Wednesday.

 One shareholder noted that DBS has "done a lot" for SG50, but not so much for shareholders.

"So maybe you can look into this and give us something extra for SG50," he said to applause.

DBS chairman Peter Seah pointed out that the group's dividend rate had increased over the recent years, while Mr Gupta only smiled.

marilee@sph.com.sg