DBS to cut office space by 20% in next few years

DBS Group will cut office space across its markets by 20 per cent in the next four to five years as it adopts a hybrid work model, CEO Piyush Gupta said yesterday.

South-east Asia's largest lender plans to give up about 2½ floors, or 75,000 sq ft, out of more than a dozen floors it occupies in Tower 3 at the Marina Bay Financial Centre in December, Bloomberg reported earlier this month.

DBS is also reportedly surrendering some floors in Swire Properties' One Island East tower in Hong Kong's Quarry Bay.

Mr Gupta confirmed at a briefing on the bank's first-quarter results yesterday that DBS is reducing its physical footprint in Singapore and Hong Kong.

DBS announced last year that it will allow staff to work from home for up to 40 per cent of the time.

"We are reshaping our offices to promote more participation and collaboration, but we will see some reduction (of space)," he said.

The move comes at a time when global banks are rethinking their use of offices after the Covid-19 pandemic fuelled a leap to remote working.

Citigroup is giving up three floors in Asia Square Tower 1, and Mizuho is cutting space equivalent to less than one floor in Asia Square Tower 2.

Mr Gupta said the pandemic has presented DBS with the chance to reposition itself.

It sees opportunities to grow its stake in Shenzhen Rural Commercial Bank as the Chinese lender eyes overseas markets to serve customers in areas such as international trade and foreign exchange.

DBS recently agreed to buy a 13 per cent stake in the privately owned lender for 5.29 billion yuan (S$1.08 billion) as part of its plan to accelerate its expansion in China's Greater Bay Area.

Mr Gupta said: "Some of the (Shenzhen Rural Commercial Bank) customers are getting to the stage where they want to do IPOs (initial public offerings) and increase their capabilities.

"The bank is very keen to start digitalising and that's one of the reasons they find us an attractive partner. We bring digital capabilities, international presence and some capital markets capability."

He noted that the Chinese bank is an "attractive economic investment" with a strong compound annual growth rate, return on equity and capital adequacy.

Mr Gupta said the bank is open to looking at assets Citi is giving up in Asia that could be incremental to its franchise.

He said: "The process hasn't started yet and in due time, we will take a look at those assets.

"I want to hasten to add, though, that we're very disciplined. The economics must make sense, we must make sure we have the capacity to be able to do it... if it winds up to be a bidding frenzy, you might not see us in the middle of that."