DBS' Tan Su Shan has ambitions to grow assets in the wealth management business 45 per cent within the next three years to $51 billion.

Since she joined Singapore’s DBS Bank just over a year ago as managing director and group head of wealth management, Tan Su Shan has barely paused for breath. 

The Oxford and Harvard-educated mother-of-two was hired last July from US rival Morgan Stanley, where she was the head of private wealth management for South East Asia. She comes loaded with accolades, having previously held senior roles at Citi Private Bank and worked on the corporate side of ING. And in a week when one of the highest-profile women in wealth management, Sallie Krawcheck, was ousted from her role at the top of Bank of America Merrill Lynch's wealth management division, it is refreshing to see a female leader in what is a woefully under-represented sector. 

Tan Su Shan

Fourteen months into the role, Tan is upbeat and excited when we discuss her progress at Singapore’s largest bank. She has a lot to smile about, after a set of buoyant first half results for DBS. First-half 2011 earnings rose 23 per cent from a year ago to a record S$1.5 billion ($1.3 billion). Although, disappointingly, wealth results are not broken out, the bank said in a statement that fee income from wealth management achieved "double-digit percentage growth as initiatives to develop these businesses gained momentum." The group’s strongest-ever first-half results are a validation of the bank’s Asian strategy and its ability to execute well, said a spokesperson.

Tan told this publication  that last month DBS was crowned Asia’s safest bank for the third consecutive year, in the Global Finance 20^th annual ranking. DBS is rated "AA-" by Standard and Poor’s, the only Singapore bank with such a rating and a huge draw for cautious clients, said Tan.

But there is much work ahead. Tan has ambitions to grow assets in the wealth management business an eye-watering 45 per cent within the next three years from $35 billion to $51 billion. To achieve this she is implementing what she calls “the wealth continuum” - a holistic model of private banking combining transactional banking, wealth management and investment advice, loans, internet banking, family office, philanthropy and trust services and concierge. "DBS private bank is not a stand-alone entity - it involves many platforms and people within the entire bank to offer the best possible solutions to our clients," she says. 

The Four P’s

Future growth will stem from a simple principle, says Tan. This is what  – in her self-confessed management consultancy speak - she calls the Four P’s. “We have been very busy growing our four P’s: People, Products, Platform and Privileges,” she tells me on a phone call from Singapore.

The first P is evident from the aggressive recruitment of lieutenants since she herself was hired by chief executive Piyush Gupta. Lim Say Boon was brought in as chief investment officer from Standard Chartered, then Oliver Crespin as chief operating officer from Citi Private Bank.

Next, she recruited various country heads including Hemal Khanna and Gayatri Ahuja, who joined the team to head up the non-resident Indian segment, from ABN Amro and DBS Treasures respectively. Frances Boon was appointed to run one of the Singapore teams, Geraldine Low joined as a senior private banker and Wee Yan Hann as a senior regional product manager. Lawrence Lua stepped in as the head of the Southeast Asia business while Chan Kwee Him was appointed country head of Indonesia. 

Former UBS advisor and philanthropy veteran Terry Farris was recruited to spearhead the family office advisory business. Around the same time Tan hired Stanley Puah and Tan See Wee from HSBC to manage the Singapore-based Indonesia team, and Bryan Goh as head of alternatives from a London-based role.

At the same time, DBS has lost a number of good people. The battle for talented bankers is fierce in Asia, admits Tan, and many banks will pay over the odds to hire bankers with ready-made books of business. Last month a team of three senior private bankers headed by Terence Seow was poached by rival Bank of Singapore. In July veteran banker Edwin Lim was recruited by JP Morgan as managing director, market manager for Greater China. 

Asia-Centric Investing

On the next P, Tan says the bank is making its products more Asia-centric, from where the bulk of its client hail. Within Asia, the fastest growing regions are China, India, Singapore, Hong Kong and Indonesia. The bank's expansion mirrors a massive acceleration of wealth creation in Asia. According to the Capgemini and Merrill Lynch Asia-Pacific Wealth Report 2011, the region's HNW population surpassed Europe’s for the first time last year, expanding 9.7 per cent to 3.3 million.

In 2009, HNW wealth in Indonesia stood at $80 billion, up by 30.6 per cent year on-year. Last year, Asia was home to six of the world’s ten fastest-growing HNW populations, led by Hong Kong (33.3 per cent) and Vietnam (33.1 per cent). Moving forward, emerging Asia will be the main engine of growth in the Asia-Pacific region, believes Tan. But each country has specific - and very different - investment tastes. 

“Unlike a lot of banks who have a global CIO, we wanted an Asian CIO who could really focus on giving clients what they want. Asian clients invest differently to those in Europe and the US and want products designed with this in mind," said Tan.  

“European clients tend to have longer time frames and a more diversified portfolio. Asian wealth is newer and Asians are still in creation mode, so usually have shorter time frames and more concentrated positions. A lot of their net worth could be concentrated in their own businesses or single stock that they control. Asians usually prefer a more advisory or 'self-directed' mode of portfolio management and like to trade capital markets. Europeans tend to favour discretionary management,” she explained.

In light of this differentiator, DBS has launched a number of Asia-centric products include an Asian two–year mezzanine debt fund - unusual, says Tan, in its brief time-frame. Also recently launched is a long-short fund, and a variety of private equity funds and club deals. The new CIO Lim Say Boon combines different strands of tactical and strategic asset allocation expertise from the economics team, FX treasury and markets team, and DBS Vickers Securities, the firm’s brokerage arm. “We have a good pipeline of deals,” said Tan.

New platforms

Tan’s leadership team have been busy implementing her third P – platforms.

Last month COO Oliver Crespin launched DBS’ new internet banking platform, the latest step in the bank’s bid to attract the generation of “young, mobile clients who see the world as a global village”, says Tan. Furthermore, DBS opened an entrepreneurs account for start-ups – to help new firms access affordable banking services and benefits, including subsidised business insurance plans.

Meanwhile, Terry Farris set up a family office and philanthropy platform. The new platform is aimed at families in transition, moving wealth from the first generation entrepreneurs to the second generation and leaving legacies. “This is where corporate banking marries up with personal banking, as many of our clients are entrepreneurs looking to safely transfer their business to their offspring,” said Tan.

Tan says the family office business will be a key component of building assets under management by nearly 50 per cent over the next three years. An estimated 70-90 per cent of high net worth individuals in Asia are business owners and many are looking for advice on succession planning to pass a business to an heir. But before they commit, Asian clients need a trusted long-term relationship, says Tan, which stands DBS in good stead. "DBS was born in 1968 but our retail days as the Post Office Savings Bank go back nearly 140 years. All these long term relationships date back decades and the brand is very important. To be part of that wealth planning legacy is crucial to nurture those relationships which will be cemented over generations," she said.

The red carpet treatment

The final P – privileges – is a growth area Tan is particularly proud of. The private bank divides clients into three segments according to net worth:  'Treasures', which serves affluent clients with assets ranging from S$200,000 to S$1.5 million, the recently launched division: ‘Treasures Private Clients’covering clients with a net worth of S$1.5 million to S$5 million, and 'Private Bank', where clients have over S$5 million. Tan says the sweet-spot lies in what she calls ‘mega-wealth’ - S$100 million to S$1 billion - but DBS’ lower net worth clients are made to feel just as valued as their billionaire peers. DBS is the first local bank to actively target this segment, whose collective wealth is expected to total over $100 billion by 2013.

“If you are a private banking customer you get a card identifier which entitles you to red carpet treatment, including preferred rates, a concierge, access to the best golf clubs in Asia, the DBS Luxury Airport Lounge in every terminal in Singapore where you can relax and have a glass of champagne. We will even send a DBS limo to pick you up from the airport. We want to pamper our clients from the cradle. It creates a strong loyalty,” said Tan.

The holistic wealth continuum is what Tan says is setting DBS apart from its peers, with the ability to give clients anything they want. “Even as a very large bank DBS is not siloed. We have the resources to provide the whole package, which is unique amongst Asian players,” she added.

The future

Tan believes the bank is in a strong position to increase market share further. Opportunities abound in offshore-onshore banking in countries like India and China, where international investment is restricted and domestic volatility is high.

She plans to add to the bank's 350-strong wealth management staff, particularly in North Africa, Europe and the Middle East, but will not give numbers. "We hire the right people as they come along, and not just from the private wealth space. I like to think laterally. We have hired people from investment banks and asset managers before."

And in another of her favourite management consultant-esque acronyms, she says the next few months will be focussed on the three "E's" - EMEA (Europe, Middle East and Africa), EAM (external asset management) and ECM (equity capital markets). The future is bright for DBS, but no amount of jargon can make up for strong results and stable management.