2021 Overview

In a year marked by continued headwinds from Covid-19, low interest rates and market uncertainties, Consumer Banking/ Wealth Management demonstrated its resilience by delivering healthy results. This was a result of our disciplined cost management, increased productivity through digitalisation and pivot towards fee income. As business momentum grows and the economic recovery takes hold, we continue to build out our franchise footprint and grow our ecosystem and partnership plays, so our customers can bank seamlessly with us, wherever they are.

Consumer Banking/ Wealth Management: Strong fee income growth cushions macro impact

Despite the drag from 2021 headwinds, we were nevertheless able to deliver robust earnings for Consumer Banking/ Wealth Management with higher non-interest income and lower allowances. Our total income came in at SGD 5.32 billion, a fall of 8% against last year, while strong cost discipline kept our expenses flat. Net profit before tax fell 5% to SGD 1.92 billion.

Net interest income fell 24% to SGD 2.55 billion as the low interest rate environment extended into 2021. The impact was moderated by the strong recovery in Singapore housing loans and we maintained our lead in mortgage market share. We continue to be circumspect about providing unsecured loans amid the challenging environment which resulted in lower balances in Singapore and Indonesia.

Non-interest income was strong, rising 14% to SGD 2.77 billion. Income was buoyed by higher fees from investment, bancassurance and cards, as consumer spending began its return to pre-pandemic levels, and investments continued to climb across our key markets, growing by 14% and reaching SGD 2.22 billion in record income.

The bancassurance business saw double-digit growth and maintained its leading new business market share in Singapore. Annualised premium sales in our life insurance business reached more than SGD 1.04 billion in new sales volume, with general insurance premiums growing by more than 19%.

Overall, we see promising signs of recovery in the region and are well-placed to support our customers.

Wealth Management: Growing to new heights

Our wealth management franchise continued to build on last year’s strong fee income performance, with non-interest income rising 17% to SGD 1.88 billion. Investment AUM increased by 20% to SGD 153 billion and total AUM rose 10% to SGD 291 billion. Overall, wealth management income declined 5% to SGD 2.73 billion as net interest income fell 32% to SGD 848 million due to net interest margin compression. The wealth franchise now represents 19% of group income.

We continued to grow the range and diversity of our wealth products, with 2021 being a transformative year for our in-house managed investment products. The launch of DBS Barbell Income Fund, DBS I.D.E.A Fund and DBS ESG Focus Note drove robust funds growth and revenues, and AUM from in-house managed investment products more than doubled to SGD 10 billion. Our alternatives proposition was also strengthened with expanded offerings from top-tier private equity (PE) fund managers, increased deal flow in our PE Access programme, and the establishment of the PE Hybrid platform which combines referral and custody.

We also expanded into the mass affluent segment with our unique DBS Treasures proposition in Singapore, which provides access to our industry-leading digital platform, sophisticated offerings and holistic approach to wealth management across investments, protection, legacy planning, liability management, and more.

In May, we introduced Asia’s first bank-backed trust solution for cryptocurrencies via DBS Trustee for private banking clients. The offering builds on DBS Digital Exchange’s proposition, providing security and transparency for crypto-assets with institutional-grade safekeeping and custodial services, and robust due diligence on the chain source. The solution enables clients to integrate cryptocurrency assets into their wealth succession plans.

In October, our Hong Kong franchise and Postal Savings Bank of China (PSBC) launched a partnership to participate in the Wealth Management Connect scheme. The partnership aims to contribute to the acceleration of economic development in the Greater Bay Area (GBA) by leveraging the advantages of both banks to bring geographical and risk diversification to investment portfolios of GBA customers. The partnership will introduce an entirely mobile-first digital customer journey, from applying for the account to transacting investments and monitoring portfolios.

Our wealth management business was also recognised in 2021 as “Most Innovative Private Bank in the World”, “Best Private Bank for Use of Technology” and “Best Private Bank for Digital Client Solutions” by Global Finance, and “Best Private Bank for Family Offices – Asia” by Professional Wealth Management.

Consumer Banking: Becoming more intelligent, intuitive and invisible

We aim to become an intelligent banking (IB) powerhouse that delivers hyper-personalised advisory and engagement to our customers. IB harnesses advanced analytics, machine learning (ML) and artificial intelligence (AI) technologies to deliver insights and ‘nudges’ to our customers through our digital channels, to simplify banking and help customers better manage their money. The introduction of IB has also resulted in incremental revenue, with more than 30 million nudges generated every month to customers across our six key markets.

In April, DBS NAV Planner, one of the world’s most advanced financial planning solutions, added an AI-powered digital investment advisory feature to help investors determine and meet regulatory requirements, before investing amid market volatility. This led to a four-fold increase in customers who completed their investment journeys. AUM of digitally-managed investments (digiPortfolio, InvestSaver ETFs and online unit trusts) also grew by 52%. DBS NAV Planner now has 2.6 million users and is part of our commitment to help one million customers get insured and invested by 2023. It also garnered 80% of participants on SGFinDex – the world’s first public-private open banking initiative.

We continue to build on DBS digibanking, our digital banking proposition which provides two intuitive apps to fulfil all our customers’ banking and lifestyle needs. Customers can conduct their everyday transactions via DBS PayLah! – which is partitioned from banking accounts – and easily switch to DBS digibank for banking, for greater security and peace of mind. DBS PayLah! can be used to book tickets and rides, pay expenses, access rewards, and to scan to pay at more than 180,000 points. In 2021, DBS PayLah!, which now has 2.2 million users, added Takashimaya and Shopee as partners. Transactions have also surged by 69%.

DBS Remit saw another year of exceptional growth, with remittance volumes rising 24%. From Singapore, customers can remit to more than 50 destinations in 19 currencies, on a near real-time or same-day basis with no fees. DBS Remit is also available to customers in Hong Kong, India and Indonesia.

We launched our digital consumer finance platform in China in 2021 with promising early results. We have integrated with two major ecosystem platforms and plan to add more strategic partners. Our partnership-led strategy gives us access to China’s large and growing consumer lending market even as we evolve our data analytical capabilities to enhance customer engagement and our offerings. Within the first year of business launch, we have digitally disbursed more than SGD 700 million in loans.

The amalgamation of Lakshmi Vilas Bank (LVB) into DBS Bank India Limited has been successful and integration continues to be on track, having achieved our first-year targets. LVB’s expanded branch network and larger retail customer base – where we can overlay our world-class digital banking and build a sticky deposit base – has improved the mix of our deposit and loan books. We maintain our expectations of being earnings accretive within three years.

Helping customers to live more sustainably

To encourage customers to adopt sustainable living habits, we rolled out a slew of green offerings in 2021. We introduced DBS Green Solutions, a suite of green retail offerings which includes a green renovation loan, incentives to switch to green energy and Singapore’s first green car loan. DBS was also the first in Singapore to launch an eco-friendly credit card. The DBS Live Fresh card is made of recycled PVC (polyvinyl chloride) and rewards sustainable purchases.

In March, in line with our sustainability agenda, DBS Private Bank committed to have more than 50% of our AUM in sustainable investments – defined as rated BBB and above by MSCI ESG Ratings – by 2023. Following efforts to guide and engage clients on sustainable investing, client interest surged and this target was quickly met in October, two years ahead of time. AUM in sustainable investments now comprises 53% of our portfolio.

In June, DBS Indonesia introduced the Green Savings Account, where customers can contribute towards a sustainability cause by automatically donating a portion of their savings interest. Run in partnership with social enterprise KRAKAKOA, all donations collected are distributed in the form of fertilisers and seeds, and sustainability training for 1,000 cocoa farmers in Indonesia.

In October, we launched LiveBetter – a one-stop digital platform integrated into DBS digibank where customers can easily access eco-friendly tips, donate to green causes and invest in sustainability-themed funds. In 2022, LiveBetter will also have the industry’s first autonomous carbon calculator. It automatically generates carbon footprint profiles and insights based on customers’ spending.

What we look forward to in 2022

The acceleration of digital adoption across the world triggered an irreversible shift in how people live, work and play. At the same time, with the intensifying climate crisis and increasing inequality, we believe technology can play a crucial part in contributing solutions towards the common good. This belief is integrated in our business strategy, exemplified in the decisions we make, and ever mindful of the communities and environment in which we operate. In 2022, we will continue to create and support innovative solutions that yield positive impact.