Tan Su Shan a good candidate for DBS CEO, a signal to not overlook female leaders: Observers

SINGAPORE: Having spent more than a decade being involved in key parts of DBS’ business, Ms Tan Su Shan is a good candidate to take over the reins from CEO Piyush Gupta when he retires next year, observers said following the bank’s announcement on Wednesday (Aug 7).
Ms Tan is set to become the first female chief executive officer of Singapore’s largest bank in March 2025. That could be a signal to other companies not to overlook female leadership, according to Professor Lawrence Loh of the National University of Singapore’s (NUS) Business School.
With OCBC also headed by a female CEO, more companies may sit up and take notice, Prof Loh pointed out.
“They (may) say if DBS can do it, why don’t we? Why can’t we?” 
That said, Prof Loh added that her gender was not a topline factor in DBS’ decision. “Looking at her credentials, there’s more than enough merit.”
Banks try to get the best candidate, regardless of their gender, he said. “At the highest level, everything should be by merit.”
Other candidates were also experienced, but it may be that Ms Tan had more exposure to different portfolios and performed well in each of them, said Prof Loh.
Currently the head of DBS’ institutional banking group, Ms Tan was named deputy CEO on Wednesday. She will shadow Mr Gupta for the next seven months or so until he retires after 15 years in the top job.
DBS’ share price fell 0.24 per cent in Thursday trade.
At a press briefing, Ms Tan said she is a Singaporean who was born in Singapore, and that her first bank account was with POSB.
Prof Loh said it is very heartening that a Singaporean from within the ranks could become CEO.
“I mean she literally started off as an intern, at the bottom of the bottom,” he said with a laugh.
Ms Tan’s first internship was with DBS, and she worked for Morgan Stanley and Citigroup before joining DBS in 2010.
But he said it is unlikely that being local was one of the selection criteria.
“Banking and related services (are) extremely globalised,” he said, adding that competition is worldwide.
OCBC Singapore strategist Carmen Lee wrote in a note that the appointment of Ms Tan was “not completely unexpected” and months of market speculation has been put to rest.
“We do not expect this change to have a significant impact as Su Shan is an internal candidate with more than a decade of working experience with the group and familiar with two of its key business pillars,” she wrote.
The Singapore research team at RHB also pointed out that Ms Tan would be familiar with the bank’s culture, team and customers, which would help with continuity.
“We think this internal promotion should bode well for the group,” the report said.
“While some tweaks and fine-tuning to the strategy can be expected, we think it is unlikely that there would be any major shift in the direction ahead,” it added.
Mr Thilan Wickramasinghe, Maybank Securities’ head of research in Singapore and regional head of financials, said Mr Gupta leaves behind a “transformational legacy” and a bank with a very strong digital offering.
Asked about the multiple service outages in recent years, he said disruptions are natural when so much technology is being deployed – even for tech companies like Microsoft.
“I think (Mr Gupta) will be remembered more from the transformational angle of this very large organisation, more than the disruptions,” Mr Thilan told CNA’s Asia First programme on Thursday.
As a successor, Ms Tan is likely to bring continuity and stability to the bank, but Mr Thilan highlighted some challenges she will have to face.
The first is a structural slowdown in North Asia, especially in China and Hong Kong where about a third of DBS’ book is.
Meanwhile, the United States Federal Reserve is expected to cut rates soon, and other central banks are likely to do the same.
“Managing the banking business, which has enjoyed phenomenal margin growth over the past couple of years, to a point where margins are going to start to come down – that will be one of the key challenges that she will need to manage,” Mr Thilan said.
Prof Loh said Ms Tan will have to “burn the candle at two ends”.
He said that means she has to “fortify internally” by ensuring there are robust systems to weather possible disruptions, and “expand externally” by doing more on the investment banking, wealth management and insurance, beyond 
If interest rates start to come down, banks’ interest-based income will fall, he said.
“So banks, not only DBS, should now be seriously augmenting other income streams.”