SINGAPORE - Shareholders of DBS Group Holdings yesterday quizzed directors at its annual general meeting on issues ranging from the consequences of a United States interest rate hike to possible SG50 shareholder perks.
More than 450 shareholders attended the meeting, at the NTUC Centre, lasting nearly two hours.
The first question was on how DBS' net interest margin would be affected as the US Federal Reserve mulls over when it will lift rates - a move which had been expected as early as June but is now seen as more likely later in the year.
The Singapore Interbank Offered Rate (Sibor) and Swap Offer Rate (SOR) - to which about 80 per cent of DBS' Singapore-dollar loans are estimated to be pegged - are highly correlated to the benchmark Fed funds rate.
Chief executive Piyush Gupta noted that DBS would benefit from a rate hike but said when that might happen is anybody's guess. "Our own view is that rates will increase very, very slowly. I personally don't expect more than one hike this year, if at all."
The three-month Sibor was at 0.89 per cent yesterday, a fall from its rally at the start of the year when expectations of a US rate hike were high. Mr Gupta expects it to stay in that range.
Noting that a weaker Singdollar usually lifts the Sibor, Mr Gupta said: "In the last few weeks, the Singdollar got to $1.39 (per US dollar), and it's corrected back all the way to $1.34, $1.35. I think the Singdollar weakness will stay in that range."
Another shareholder asked if DBS plans to expand into Myanmar. Local competitors United Overseas Bank and OCBC were granted licences to operate there last year - and OCBC opened its Yangon branch yesterday.
"We are obviously quite interested in expanding our franchise in Myanmar," replied Mr Gupta.
"It is our understanding that the Myanmar government might reopen for another round of licensing some time in the near future. If that happens, we would be interested in applying again."
Meanwhile, DBS has been financing Myanmar corporates from offshore, "and in fact over the next three to five years that's where the biggest opportunities are likely to be", he added.
Another question was on whether DBS plans to revisit acquisition opportunities in Indonesia or abroad.
Mr Gupta said the group is "not keen on looking for acquisitions in the short term".
He emphasised that the group's digital strategy will be its main focus for now.
"You're seeing around the world, fewer and fewer people go to branches. More and more people do (their banking) online.
"And if that is the case, to do a big acquisition of a large branch network might be to fight yesterday's battles instead of fighting tomorrow's battles."
Other shareholders wanted to hear more about dividends. One noted that DBS has "done a lot" for SG50, but not so much for shareholders.
"So maybe you can look into this and give us something extra for SG50," he said to applause.
DBS chairman Peter Seah pointed out that the group's dividend rate has increased in recent years, while Mr Gupta only smiled.
This article was first published on April 24, 2015.
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