DBS CEO Welcomes China Fintech Clampdown After Ant Scrutiny

DBS Group Holdings Ltd.’s top executive welcomes the increased regulatory scrutiny of financial technology companies in China and elsewhere in Asia, saying it will create fairer competition with banks that have been subject to stricter oversight.

“Over time you will start getting a more level playing field, and you’ll start getting a proportionate and even regulatory response to all participants in the market,” Chief Executive Officer Piyush Gupta said in an interview with Bloomberg Television on Thursday.

Gupta spoke after being asked for his view on the shelving of Ant Group Co.’s initial public offering in China as regulators seek to level competition between fintech giants and traditional banks. Ant and other firms in recent years have grown their financial services on the mainland and beyond, including in Southeast Asia, where DBS is the largest lender.

“Our view has been in the past that many technology companies have been able to benefit from the arbitrage of not having the same regulatory regime and supervision overhead that banks do,” Gupta said. “And so as we get to that stage that’s actually helpful to us.”

Curbing Growth

China’s top banking watchdog is doubling down on a push to rein in financial technology companies such as Ant, promising to eliminate monopolistic practices and strengthen risk controls in the industry. Ant and other firms such as Tencent Holdings Ltd. have built dominant positions in payments and online consumer lending over the past decade, free from the oversight applied to traditional financial companies.

Chinese regulators this month outlined new rules to curb the rapid growth and leverage at the nation’s more than 200 micro-lenders, putting a surprise halt to Ant’s $35 billion IPO.

Ant, along with Tencent-backed Sea Ltd., has applied for Singapore’s digital banking licenses, which could pit them against major rivals such as DBS. Over the past decade, Gupta has spent billions of dollars upgrading DBS’s technology and digitalization in anticipation of growing competition.

“Where we are today in our core markets, we are reasonably confident that we have what it takes to compete,” Gupta said.

Expansion Plans

India’s central bank this week asked DBS’s India unit to take over a capital-starved lender in the South Asian nation, in a deal that will see DBS India Ltd. pump in 25 billion rupees ($336 million) in fresh capital in Lakshmi Vilas Bank Ltd.

While declining to comment on the plans due to pending regulatory approval, Gupta said the deal won’t impact DBS’s dividend payment. China, India and Indonesia are key regional markets the bank is expanding into, he said.

In China, DBS recently got approval to set up a brokerage venture where it can own 51%. The bank will partner with “a couple” of local firms, Gupta said. without naming them. The lender is also growing its presence in the Greater Bay area of southern China and Hong Kong, and will target consumer finance.

Future of Work

Like most major global banks, DBS is also adjusting its policies on workspace and staffing due to the Covid-19 epidemic. All of DBS’s 29,000 employees will be allowed to work remotely for as much as 40% of the time to address changes brought upon by the epidemic, the company said this week.

Asked whether DBS plans to keep all of its office space and staff in all regions, Gupta said there will be no retrenchment program.

“I’d imagine that in the next 5-7 years, our overall real-estate footprint will be a tad smaller than what it is now,” he said. With “the reskilling agenda, and then the natural attrition when people retire and move on, I think will be able to get to the workforce profile that we need.”

©2020 Bloomberg L.P.

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