Tan Su Shan
2018 was a good year for Consumer Banking/ Wealth Management. Despite a more challenging environment, we recorded growth across all products and services. We concluded the integration of ANZ’s retail banking and wealth management business across five markets in Singapore, Hong Kong, Mainland China, Taiwan and Indonesia. These contributed significantly to the strength of our businesses in these markets. Though this was a large and complex integration, the resulting value capture was game-changing, particularly for our consumer businesses in Indonesia and Taiwan.
Total income for Consumer Banking rose 21% to a record high of SGD 5.65 billion, while our cost-income ratio further dropped to the low-50s. Net profit before tax grew 23% to SGD 2.39 billion. Wealth Management income rose 26% to a new high of SGD 2.66 billion, with assets under management (AUM) growing 7% to SGD 220 billion.
Net interest income grew 26% to SGD 3.60 billion with higher loan and deposits volumes for all our markets, especially in Singapore and Hong Kong, and for our private banking segment. In Singapore, we continue to lead the deposits market. While our Singapore property market transactions slowed in the second half of the year post government cooling measures, we upheld and grew our mortgage market share. Indonesia and Taiwan continue to deliver strongly partially due to customer balances migrated from the ANZ integration.
Non-interest income rose 13% to SGD 2.06 billion from higher fees from investment products, bancassurance and cards. While the first half of 2018 delivered record investment sales volumes, the second half slowed due to weaker market sentiment and volatility. To help our clients navigate the challenging market conditions, we focused on investment product solutions which provided downside risk protection and regular income, while advocating for greater investment diversification. Our discretionary portfolio management proposition saw strong AUM growth of close to 50%. We also continued our product innovation efforts around Environmental, Social and Governance, private equity and liquid alternative solutions.
The bancassurance business gained further market share in Singapore, solidifying our leadership position. Annualised premium sales in our life insurance business grew by 36% and exceeded SGD 1 billion in new sales volume for the first time. We launched more than 35 new product solutions in partnership with Manulife. We successfully commenced our 15-year partnership with Chubb for general insurance solutions across five markets, launching product solutions such as TravellerShield on DBS PayLah! and CyberSmart.
Our wealth franchise continues its strong performance, representing 20% of group income, and with five markets seeing double digit growth.
We had a successful year in industry accolades. We were accorded “Best Private Bank for Innovation” and “Best Private Bank in Asia” by Professional Wealth Management/ The Banker, “Best Wealth Manager, Asia” by The Asset and “Best Private Bank for Entrepreneurs” by Global Finance. DBS iWealth was also ranked first globally for having the best post login client experience for wealth management apps by MyPrivateBanking (now Cutter Wealth).
Our digital focus applies across our wealth franchise. Clients acquired online within our Treasures and Treasures Private Client (TPC) segments increased by 23% to more than 27,000. In 2018, DBS iWealth was launched in Hong Kong and a simplified Chinese version was also introduced. We became the first bank in Southeast Asia to roll out a service — DBS Wealth Chat — that allows wealth clients to connect, exchange ideas and transact with their relationship managers via popular instant messaging platforms.
With our ANZ acquisition, we had enough client demand to launch our TPC proposition onshore in Indonesia and Taiwan. Including Singapore and Hong Kong, TPC is now in four markets.
We successfully completed the ANZ integration in February 2018. Business momentum has been strong across the board. The cards business, particularly in Taiwan, has shown solid growth potential with record approval and retail spend numbers. We have also significantly increased the productivity of incoming ANZ relationship managers. As per our forecast in 2016, this deal was value accretive within the first year of integration.
In India, we have acquired 2.3 million digital customers, 50% of whom have a savings account with us. We continue to expand our digibank partnerships with companies such as BigBasket — India’s largest online grocery market, and Paisabazaar — India’s largest loans and cards marketplace. We also introduced digi Insurance and digi Loans, where customers can get loans disbursed into their accounts in just five clicks.
We have had a strong start in Indonesia, attracting more than 400,000 digibank users since August 2017. We are building our consumer finance and wealth management capabilities, to provide a unique digital value proposition. We are also looking to work with telecommunications and lifestyle lending partners to accelerate our business growth.
Our relentless focus on digitalisation is driven by the desire to make banking invisible so that our customers can enjoy a lot more of their lives, with a lot less hassle.
We developed multiple ecosystem partnerships to enable customers to seamlessly fulfill their needs. To this end, we have signed strategic partnerships with leading industry players such as GOJEK, Carousell, Sistic and BigBasket.
In Singapore, we have launched marketplaces on our website with listings of cars, properties and electricity retailers. We also introduced an InstaRewards feature within the DBS Lifestyle app so customers can offset purchases with their DBS Rewards points. DBS PayLah! remains Singapore’s leading mobile wallet with more than one million accounts and has integrated partners such as Golden Village, Chubb and Chope into its platform.
We became one of the first in Singapore to enable seamless online multi-currency settlement. We introduced online fund investment capabilities, so customers can purchase and redeem funds, and be matched to funds and unit trusts suitable for their risk-profile. DBS Remit, which offers same-day free transfers to 47 countries, recorded solid growth in Singapore and was also launched in Hong Kong.
We made a foray into chat banking with Foodster — Southeast Asia’s first bank-led retail chatbot. Launched in partnership with startup Every Botty, Foodster allows customers to order and pay for their meals seamlessly via Facebook Messenger and DBS payment channels.
In Hong Kong, we launched a ground-breaking card onboarding journey. Customers can get a credit card approved, and start using it from their mobile phone in minutes, as well as get access to DBS Omni, our credit card companion app.
In Taiwan, we launched the DBS Card+ app and acquired more than 200,000 users. We enhanced our digital onboarding capabilities, allowing customers to open an account to apply for a credit card online in minutes.
Data is at the centre of everything we do as we work to become a data-driven company. We are running experiments using third-party data to develop predictive models that enable consumer finance loan underwriting. Our work in areas such as sentiment classification and topic extraction is also promising, allowing us to identify key areas for improvement.
Journey thinking has become essential to understanding how to engage our customers. For example, to understand millennials, we conduct extensive customer immersions and prototyping sessions to ensure we are addressing real needs and providing real solutions. In Singapore, we built online communities focused on helping millennials with financial planning and money management. We also introduced My Financial GPS, an in-app holistic financial adviser to help millennials manage their budgets and achieve long-term financial life goals.
My colleagues and I started on this journey with a shared vision to put DBS firmly on the world map. The global accolades are testament to how much we have since achieved. Total income for Consumer Banking/ Wealth Management has more than doubled from SGD 2.07 billion in 2010 to SGD 5.65 billion today. We are now ranked in the top six among wealth managers for Asia (ex-China onshore) AUM.
I will look back on my eight years in Consumer Banking/ Wealth Management with a tremendous sense of pride and gratitude. As I move on to my role as Group Head of Institutional Banking, I am confident that the business is in good hands with Sim S. Lim and ready to scale even greater heights!
Tan Su Shan
Consumer Banking/ Wealth Management
DBS Group Holdings