Ben Charoenwong, an associate professor of finance at the National University of Singapore, responded that it was worthwhile to take into account the effect that the problems had on customers when asked if the penalties were acceptable.
Many Singaporeans, some of whom may not conduct business with any other institutions, turn to DBS as their” go-to bank ,” according to him.
The price to those customers is the given economic transactions, he said,” if they are able to obtain their funds or procedure payments.” It appears that the( penalties ) and additional capital requirements appear to be minor from that perspective.
RHB Bank study researchers stated in a research statement released on Thursday that the management team at DBS could provide more information on the effects of MAS ‘ regulatory action when its third-quarter results are made public.
The analysts wrote, referring to operational and capital expenditure,” but the immediate impact appears to require higher opex( conformity cost, tech spending, and capex.”
The experts told CNA differently,” In our view, the effect does not signify too much of a loss to DBS.”
PLANS FOR Learning
Five analysts told CNA they were aware of any future consolidation plans, suggesting that the ban on new business ventures over the next six months may also have a minimal effect on DBS.
According to Mr. Thilan Wickramasinghe, head of Singapore studies at Maybank,” We observe that the team has been concentrating on integrating LVB( Lakshmi Vilas Bank ) and Citi Taiwan mergers as well as guiding for higher income.”
” To us, this suggests a limited appetite for any material( mergers and acquisitions ) in the near future ,” he said.
In late 2020, DBS acquired Lakshmi Vilas Bank in India, and in August of this year, it finished acquiring Citi’s client banking division in Taiwan.
After the six-month window, MAS will assess DBS’s progress and may decide to extend the duration of the measures, change the more capital requirement, or get further action.
No A BAD IDEA, No FINE DBS
Dr. Patrick Thng, a former chief knowledge officer for funding and government at the World Bank, noted that MAS did not impose any punishing economic activities on DBS.
It’s never a bad idea, he said, because they asked DBS to use the funds to address their equipment issues rather than fining it and taking it.
” I do think that’s very admirable, to some extent, I praise MAS.”
According to DBS CEO Piyush Gupta, the bank will allocate S$ 80 million( US$ 58.6 million ) to improve system resilience.