A hallmark of DBS has been its innovative approach to banking. As an upstart bank run by a young and driven team, DBS constantly introduced new financial products and services, and devised unconventional ways to solve challenges.
Former DBS Chairman S Dhanabalan, who was part of the original team that established the Development Bank of Singapore, talks about the entrepreneurial spirit that drove the bank.
In the years following our establishment, DBS introduced various financial instruments and services, which were non-existent in Singapore.
We were the first to start a financial house to focus on bill discounting. We formed merchant banks with many partners.
We did the first Eurodollar financing for Shell, Brunei in 1972, which was a big item. DBS was the lead manager, with 10 other local and foreign banks, in arranging a consortium loan amounting to USD 27.5 million to finance the construction of a natural gas liquefaction plant in Brunei.
We decided to go into factoring with one of the largest factoring companies in the world, Heller Factoring of the US. We went into equipment leasing. That’s another story – the idea of putting up a 50-storey building.g with Orient Leasing, which was the largest Japanese leasing company, and persuaded UOB to come on board with us.
When automated teller machines (ATMs) first became known, we wanted to install them. However, the idea that people would be prepared to take money out of a machine and have their account debited was completely new, and we didn’t think people would accept it.
We discussed putting ATMs within the banking hall, so people would have confidence that if something went wrong, there would be someone to appeal to. But we never had to do it, because people got used to ATMs very quickly.
We were approached by multinational corporations to partner with them to launch new products and services in this part of the world.
Beyond the financial sector, we were also among the most aggressive developers of property.
We had within DBS a division called the Property Division, staffed with engineers, architects and property marketing people, because we were developing the DBS Building.
That’s another story – the idea of putting up a 50-storey building. We built the tallest building at that time in Shenton Way.
Then, we built the first multi-storey shopping centre, Plaza Singapura, which opened during the oil shock. Oil prices went up, the economy went down, and we could not get people to rent space!
I recall going to Japan to look for a large anchor tenant for Plaza Singapura. I was introduced by the securities firms, such as Nomura and Daiwa, to various retailers. They listened to me politely, said they would look into it, but never responded.
I did not even see Yaohan – the large Japanese supermarket which eventually became Plaza Singapura’s anchor tenant – because they were outside Tokyo. However, Nomura knew them and convinced them to come to Singapore to start something here.
We managed to persuade Yaohan to take the entire basement levels and part of level one. They blazed a completely new trail as the first supermarket to cater to Asians. They had great success.
But there was one problem: due to the state of the economy, the rest of the floors were empty. It was important to bring the crowds in even if they did not buy anything, but just came to look around.
I discussed with the Property Division and, in the end, the bank decided to offer whole shop unit space at SGD 1 per month, for people to display their wares there, as a showroom. Later, the economy picked up and we discontinued that.
What was the force that drove us to make these decisions and plans?
In those days, we did not have the Monetary Authority of Singapore. Banks kept to certain codes of conduct as members of The Association of Banks in Singapore (ABS). In our first decade of operations, we didn’t join the ABS, so we didn’t look to them to tell us what we could or couldn’t do.
Most of the things we did turned out well. One or two didn’t, but those were part of the learning process, and we did better subsequently.
From the get-go, we were a young group with no background in banking, prepared to try new things and not burdened by our history. The Finance Minister, more or less, left us to do what was necessary. It was a very entrepreneurial approach.
Was it scary breaking new paths? Ignorance is bliss! We were not fully conscious of the magnitude of the tasks, the risks we were taking.
S Dhanabalan was part of the pioneering team that set up the Development Bank of Singapore in 1968. He left the bank in 1978 to take up office as Senior Minister of State for National Development, and held various portfolios while in the Cabinet. He returned as DBS Chairman from 1999 to 2005. He was previously Chairman of Singapore Airlines, Temasek Holdings and the Singapore Labour Foundation. In 2015, he was conferred the Order of Temasek (First Class), Singapore’s top civilian honour.