Singapore’s DBS Bank Ltd aims to deepen its presence in key Asian markets toward 2020 to take advantage of the region’s increasing domestic consumption, exports, investments and adoption of new technologies, chief executive officer Piyush Gupta said in Taipei yesterday.
The regional lender seeks to grow business in Taiwan, Hong Kong, China, India and Indonesia, as well as at home in Singapore, with a focus on large corporate banking, while expanding operations with small and medium-sized enterprises (SMEs) on regional platforms, Gupta said.
Additionally, it targets developing its regional wealth management business, he added.
The strategy is in line with the region’s rising importance in global economy and the four major trends that are to drive growth, the chief executive said, adding that the financial sector is to play a key role in the evolution and his firm will not sit on the sidelines.
Asia offers a huge growth opportunity and will take the lead in driving the global economy as 2020 approaches, given its surging GDP growth, Gupta told reporters after the bank’s first large conference in Taipei.
The region equaled about 40 percent of the US economy in 2000, but is set to catch up in 2016, and is expected to overtake the developed market by 17 percent in 2020, Gupta said.
Asian markets also gain increasing relevance in domestic consumption, as countries like China and India shift from serving as “factories for the world” to broadening the marketplace, he said.
Chinese customers accounted for 47 percent of last year’s global luxury market — valued at US$217 billion — DBS research showed.
DBS research also forecast that Asia will generate 60 percent of global luxury market revenue in the next decade.
Asia’s ongoing economic integration will accelerate intra-Asian trade, which may triple to US$11 trillion by 2020, with China continuing its dominance and Singapore maintaining its second-place ranking, the research report said.
The trend is also expected to lead to such a rise among Asian multinational corporations and SMEs that half of the world’s biggest companies are likely to be based in emerging markets by 2025, the research report forecast.
Meanwhile, urbanization is expected to drive infrastructure investment needs, as half of Asia’s population is likely to have moved to cities by 2020, placing huge demands on energy production and transmission, telecommunications, transport and other infrastructure systems, Gupta said.
Asia’s total infrastructure investments amounted to US$8 trillion in 2008, with US$4.1 trillion going to energy sectors, US$2.5 trillion to transport sectors and US$1 trillion and US$0.4 trillion spent on telecommunications as well as water and sanitation respectively, the research found.
The figures are bound to rise significantly, providing business opportunities for different industries — including the banking sector, Gupta said.
Furthermore, Asia sets the pace for the adoption of new technology, as contract hardware makers build their own brands and prove to be serious players, DBS said.
Regarding capital expenditure, DBS plans to spend US$200 million on digital investments over three years, he said.
“If firms do not get the [digital] transition right, they die,” Gupta said.
DBS plans to continue to strengthen brand awareness in Taiwan, as a survey last year showed that 84 percent of respondents knew about the lender, compared with 38 percent in the know in 2009, DBS Taiwan general manager Jerry Chen (陳亮丞) said.