DBS rules out job and salary cuts but is cautious about hiring and bonuses

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DBS rules out job and salary cuts but is cautious about hiring and bonuses

DBS chief executive Piyush Gupta said today that DBS has not been retrenching staff because of the Covid-19 crisis. His comments, which were made as DBS announced a 29% fall in year-on-year profits, echo those of Standard Chartered CIO Andy Halford yesterday and follow similar statements from the likes of Citi and Goldman Sachs.

Moreover, the business outlook section of Gupta’s presentation does not anticipate future redundancies. And unlike most other banks, DBS has now also ruled out pay cuts for the foreseeable future.

Nevertheless, expenses will be tightened this year. “Bonuses will be aligned to earnings” (which suggests they will be cut) and “discretionary non-staff costs” (e.g. travel) will be reduced.

Unlike Asia-focused rivals HSBC and Stan Chart, DBS doesn’t have a recruitment freeze in place – but it is now only “hiring judiciously”, according to Gupta’s results presentation. This suggests fewer job offers will be made and that extra rounds of approvals are likely to be needed for each new vacancy. DBS still has 302 Singapore-based jobs on its website, about 12% of which were posted in the past seven days.

This being his first earnings release since Covid-19 became a global pandemic, Gupta dwelled in extra detail on employment issues. There are big variations in remote working according to job function. Globally, about 99% and 90% of DBS’s developers and relationship managers, respectively, are working from home. By contrast, over 70% of traders and more than 50% of operations staff (DBS did not provide exact numbers) are working remotely. Singapore’s circuit breaker laws allow critical staff in financial services to remain in the office, and other banks have also kept some ops and trading employees on site.  

DBS set aside S$1.09bn to cover potential losses from the coronavirus pandemic, which triggered its 29% decline in net profits to S$1.17bn. DBS remains exposed to sectors that have been hit hard since the coronavirus outbreak, such as aviation and oil and gas. Excluding these allowances, however, DBS recorded record profit (up 20% to S$2.47bn) and revenue (up 13% to S$4.02bn).

The bank has not published a detailed performance summary for Q1 on its website, so the usual quarterly information about headcount, compensation costs and performance by department is not available.

However, if you want a job at DBS as it hires “judiciously” in 2020, you probably stand the best chance if you’re a technology professional. About 45% of the firm’s current openings are for tech or analytics jobs, and Gupta’s presentation suggest that tech projects will be among the investments “prioritised” even as DBS cuts costs.

There was a “significant uplift in digital activity” in the opening quarter as consumers and companies increased their use of DBS’s online platforms during the pandemic. In online equities trading, for example, Q1 fee income rose 131% to S$34.8m compared with the fourth quarter. Total turnover on the bank’s eFX Dealonline system was up 23% year-on-year.

DBS’s tech team were also busy rolling out new or enhanced digital products aimed at tackling customer demand driven by the pandemic. These included “guided conversations via chatbot for Covid-19 corporate and retail relief measures” and “tele-advisory for online financial planning”.

Interestingly, DBS has used its tech capabilities for contact tracing (presumably for staff who’ve been in contact with people with the virus) and to track office occupancy during the outbreak.

Like other banks in Singapore over the past three months, DBS has also boosted its cyber security frameworks, creating “additional layered controls to block or mitigate attacks”. As remote working kicked in from early February, DBS experienced a staggering 88-fold year-on-year increase in VPN usage in the third quarter. This month DBS employees held 1.2m virtual meetings, a nine-fold rise.

Have a confidential story, tip, or comment you’d like to share? Email: smortlock@efinancialcareers.com or Telegram: @simonmortlock

Image credit: unsplash

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