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

DBS plans to give up about 2½ floors of the space it occupies in Tower 3 of the Marina Bay Financial Centre in December.
DBS plans to give up about 2½ floors of the space it occupies in Tower 3 of the Marina Bay Financial Centre in December.PHOTO: ST FILE

SINGAPORE - 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 and redesigns its work spaces to encourage more collaboration, chief executive Piyush Gupta said on Friday (April 30).

South-east Asia's largest lender plans to give up about 2½ floors, or 75,000 sq ft, out of the dozen floors it occupies in Tower 3 of 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 Friday's media briefing on the bank's first-quarter results 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)," said Mr Gupta on Friday.

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

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

DBS posted a 72 per cent jump in first-quarter earnings as business forged ahead on all fronts with faster loan growth and record fee income. Net profit for the three months to end-March rose to $2.01 billion from $1.17 billion a year ago - the first time quarterly earnings crossed the $2 billion mark and the first growth in more than a year.

Mr Gupta said the Covid-19 pandemic has presented opportunities for DBS to reposition itself and seize opportunities for the future.

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$1.09 billion) as part of its plan to accelerate its expansion in China's Greater Bay Area.

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

Asked if DBS is keen to acquire assets Citi is giving up in Asia, he said the bank is open to looking at those that could be incremental to its franchise, especially in countries where it has an existing presence.

"The process hasn't started yet and in due time, we will take a look at those assets. I also 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," said Mr Gupta.

Besides creating new lines of business, DBS will also continue leveraging its technology capabilities, he added.

"I'm convinced that a big opportunity is to be part of the new digital infrastructure that are going to come into place as the world progresses into digital trends."

DBS will issue security tokens and extend trading hours to 24/7 on its Digital Exchange in the coming months.

It is also actively looking to bring in more banks so a wider range of currencies will be part of the new blockchain-based platform Partior - a collaboration between the bank, JPMorgan and Temasek.

"If we can do that, then that will essentially give us the ability to be an important part of an infrastructure that could actually be game-changing for the way payments happen."