Post-LVB integration, DBS aiming to treble growth in 5 years: MD & CEO

Surojit Shome, MD and CEO of DBS Bank India, said having crossed the Rs one trillion business (deposit and loans) mark in September, the bank is looking to grow 3x in five years

Singapore-based DBS Bank completed two years of the merger of Lakshmi Vilas Bank with its wholly-owned subsidiary in India. Earlier this month, it completed IT integration of over 500 branches that gave it a platform to ramp up business. Surojit Shome, managing director and chief executive of DBS Bank India, tells Abhijit Lele that having crossed the Rs 1-trillion business (deposit and loans) mark in September, the bank is looking to treble its growth in five years. Excerpts:

DBS Bank just completed two years of its amalgamation with Lakshmi Vilas Bank (LVB). Is the integration in areas such as systems complete? How would that support business?

It’s been a hectic two-and-a-half years, starting with Covid. Then, beginning in August 2020, we were invited to examine the proposal. After some deliberations and a lot of back and forth, it (merger) was eventually done on November 27, 2020. So, in less than two years, we’ve completed nearly 95 per cent of the entire project.

I call it three-tier integration. The first is physical integration, which is networking all the branches and upgrading or rebranding them. Earlier this year, all branches were integrated into a single network. There were some products that Lakshmi Vilas Bank had, which DBS Bank did not, such as gold loans. As a result, we needed to strengthen our core banking capabilities. So first, we upgraded our core banking, and then we switched over.

So were happy to report that as of early December, all 530 branches and ATMs have been rebranded and connected. As a result, a large portion of the physical and technological integration is complete. It will stabilise over the next 30 to 60 days.

What about human resources or concerns of LVB employees and their integration with the DBS global network?

After hours of training, approximately 3,500 people have been retrained in all the new systems. We have rolled out at least three major new systems, including one that allows our branch staff to service customers. So, in 2023, we are well-positioned from a platform perspective to be able to grow. While we are already growing, now we can grow on an integrated basis.

We completed the people integration in October, which means we signed a five-year bilateral agreement with the (LVB) union for all the clerical and subordinate staff.

We also switched our entire organisation, including unionised employees as well as officers, from defined benefits to defined contributions. So for the entire pension, we made a big provision of about Rs 600 crore — some at the inception and some over the last two years.

Following integration, what is the outlook for growth and medium-term goals?

We want to grow three times in five years. That would be what my shareholder would expect me to do and only time will tell whether we’ll get there. There is no reason why we should not increase our market share, which is currently low.

The bank is more confident now to deliver the same experience across all branches. I can deliver all of my products in 356 cities. It means that when a customer says “I want to open an account here and in Singapore”, the bank will be in a position to service both inbound and outbound requests.

While LVB gives access to retail and small and medium enterprise customers, DBS has been serving large companies and multinationals. How do both segments look like for growth?

We now can concentrate on our growth aspirations and ensure our large corporate business continues to do very well. We’ve taken it a step further after Covid and have been able to use digitisation to help both local and multinational corporations. Many were struggling because their offices had few visitors. So there was a significant benefit in the supply chain.

We’ve managed to grow large corporate and mid-corporate businesses, and that continues to be our focus and supply chain now with our branches. As many as 525 branches are spread across 350+ locations, which effectively cover most of India for our large corporations.

DBS is believed to have crossed the Rs 1-trillion benchmark. What has contributed to this business?

The offshore sector is growing faster and a lot of trade finance has actually moved to the larger market. People are now using dollar financing, buyer’s credit and so on. Because oil prices have gone up a lot, that is a preferred route for many of the large importers or oil-linked delivery commodity types. So that’s on the large corporate side. We also want to continue to grow our SME business, which is obviously linked to our ecosystem, both international and domestic, but by using data and a larger footprint on a common platform.

Is the 525-branch network adequate to serve digital banking network?

When we took over, we had 600-plus branches and another 400 or 500 outlets. We saw inefficiencies, such as branches being too close to each other or a branch in a remote area underperforming.

So we did three things. We merged some branches, we shifted some from arterial roads to where they fit our brand, and we renovated existing ones.

In the top major 20 cities we will have deep presence. Everywhere else, we will make sure we are able to provide the underpinnings to be able to do SME and consumer businesses.