In 2002, DBS focused on integrating the newer components of our Pan-Asian banking franchise. We made further progress in building long-term competitive advantages, while at the same time adjusting our investments and resources to uncertain market conditions. We took steps to limit our downside risks, and are now well positioned to benefit from a recovery in regional economies.
Few banks in Asia have invested in capabilities to ensure that they remain relevant to customers in the developed and emerging Asian markets in the post financial crisis period. Indeed, many international banks have withdrawn or downsized their Asian operations with the first sign of trouble. Yet even in these uncertain times, DBS seized on opportunities to lead.
•   We continue to differentiate DBS through our embrace of good corporate governance, risk and credit management, and compliance.
•   We are setting DBS apart through our strong retail distribution capabilities in both Singapore and Hong Kong, the two best-regulated financial markets in Asia.
•   We maintained our market leadership in Wealth Management, Investment Banking, and Treasury and Markets.
•   We are consolidating our technological and operational platforms to capitalize on a larger customer base throughout ASEAN and Greater China. We are achieving better economies of scale, reducing unit costs, and becoming a cost-efficient service provider.
Progress in Building Competitive Advantages
To stay relevant in increasingly deregulated banking markets, we must have strong competitive advantages in key areas.
One unique DBS strength is our dominant deposit franchise and broad distribution network in Hong Kong and Singapore. We will complement this enormous capability to reach customers by deepening and broadening our range of products and services that meet the needs of our different retail segments. Examples of successful product launches during the year are "Cashline", "Growth", "Swing", "Surf", "mc2" credit cards, among others.
With expanded geographical reach, DBS has achieved critical mass that enables us to deliver products and services cost-efficiently throughout the region. When we engage our market specialists to develop new Wealth Management products they can now address a broader audience across the region.
DBS has multiple funding cost advantages. Our large savings deposit base provides us with a stable source of low cost funds. Additionally, DBS?strong Aa2 credit rating from Moody’s, the highest rating achieved by a bank in Asia, supports our established access to the international capital markets, another source of lower cost capital funding. The current low interest rate cycle has constrained DBS?interest earnings from the deployment of its surplus funds, but the Group is positioned to benefit from any upturn in the interest rate cycle.
Some banks in Asia may have under-invested in their technology, people, and infrastructure as the early 90’s boom enabled banks to prosper without having to make expensive investments. Sooner or later, most banks in Asia will need to ramp up remedial investments just to bridge the gap with leading best practices. By contrast, DBS has continued to make measured investments in technology, people, and infrastructure and should be much further along the investment curve than many smaller banks in Asia. Though our long-term approach to investments has been a challenge during the current economic downturn, we are better positioned at the industry’s forefront for the resurgence of Asia.
Leading with Corporate Governance     Leading with Corporate Governance
Progress in Building Competitive Advantages
DBS > DBS Annual Report 2002 > CEO's Report