Singapore’s largest bank, DBS Group, posted a record net profit for 2021, alongside its chief executive officer Piyush Gupta seeing a 48 per cent jump in his annual salary.
Mr Gupta earned S$13.6 million in 2021. That’s $4.4 million more than the S$9.2 million he banked in 2020. His cash bonus alone was 4.3 times his basic pay.
Not bad, huh? Especially when you consider that his bonus was slashed by 27 per cent in 2020, taking his total pay packet that year down from $9 million in 2019 to $6.95 million.
But 2021 was a bumper year for the bank and the banker. His total compensation comprised a base of S$1.2 million, a cash bonus of S$5.2 million and shares worth S$7.1 million. Another S$75,462 tagged as a “non-cash component” was also included.
“Since becoming CEO in November 2009, Mr Gupta has transformed DBS into a leading bank with multiple engines of growth, solid digital leadership, and a dynamic culture that embraces innovation,” DBS said in its annual report released on Wednesday (Mar 9).
“This led DBS to deliver its best year ever in 2021, not only in terms of financial performance but also across a range of key scorecard goals.”
DBS came roaring back from the economic fallout of the Covid-19 pandemic to score a record net profit of $6.80 billion in 2021, 44 per cent better than in 2020. Return on equity was 12.5 per cent, the second-highest in more than a decade, said the company.
“This achievement was all the more remarkable given ongoing challenges in the operating environment. With Covid-19 in the second year, global interest rates remained at rock-bottom levels,” said DBS.
What didn’t go so well for DBS was the embarrassing 40-hour outage of its digital services from Nov 23 to 25 last year, frustrating many customers who were denied access to those much-touted services. DBS has more than five million retail customers in Singapore.
The watchdog Monetary Authority of Singapore did not fine DBS but it did require the bank to add substantially to its regulatory capital.
Mr Gupta told CNBC that 2021 was “one of the best years” he’s seen. “That has been a solid year, perhaps one of the best years I’ve seen in a long time. And that includes a very robust growth in the balance sheet,” he said.
In the annual report, he said that apart from Singapore and Hong Kong, DBS needs to be more deeply embedded in the markets in which it operates – China, India, Indonesia and Taiwan.
“While we are relying on digital expansion in these markets, our experience has shown that a digital-only strategy has been difficult to monetise adequately, and a ‘phygital’ (digital coupled with appropriate physical scale) approach results in better customer selection and path to profitability,” he said.
DBS expanded its operations last year by acquiring Citigroup’s consumer banking business in Taiwan. It also bought a 13-per-cent stake in Shenzhen Rural Commercial Bank, becoming the company’s single biggest shareholder.
“Our confidence in meeting this ambitious goal stems from five steps we took before our pledge that establish a clear line of sight over short and medium-term milestones,” he said.
He was referring to steps that include gaining greater confidence around possible transition pathways for different industries./TISG